March 13th, 2014, 7:06 PM. White smoke begins to emanate from the chapel following the fifth ballot of 115 cardinal-electors. Now the one billion plus Catholics had a new holy pontif, Jorge Mario Bergoglio of Buenos Aires — now Pope Francis.
No one will ever really know what took place during the Conclave that lasted two days. No doubt a selection was made with the best interests of the church in mind… with a few careers advanced and/or set aside in the process. The only information available to the waiting public: smoke signals at the close of each ballot.
For millions of retail traders trying to determine the direction of the market, they are no better off than those of us watching our television keeping an eye out for white smoke. By the time it arrives, decisions have already been made and those on the inside (the institutions) are the only ones in a position to profit.
Catching a falling knife, standing in front of a speeding train, buy low and sell high, these are just a few of the terms used (some flattering, others not) to describe the art of trading reversals. If successfully identified and executed, it can be one of the most lucrative trades that exist.
Whether you like them or hate them, day traders and algorithmic system traders, commonly referred to as “algos,” are here to stay.
Both groups of traders bring additional liquidity to the marketplace, which is a positive.
Most traders know that we tend to be better in interpreting the left-hand side of charts, but it is the right-hand side that normally gives us problems. As we approach the traditionally weakest six weeks of trading in the year, from mid September to end October...
The Forex market has evolved faster than any other financial market in history. According to the Bank for International Settlements, the central bank for central banks, average daily turnover on the world’s foreign exchange markets reached almost $1.5 trillion in 1998, increased to $1.9 trillion of daily trading in 2004, and skyrocketed to an unprecedented level of almost $5.3 trillion in 2013.
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