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> Most of the time we do know when an important event is scheduled. We know
> when and where Greenspan will speak but we may not know what he is going
to
> say or how the market will react to it. We know when the Fed is meeting.
We
> know when the employment reports are scheduled. We know the dates of the
> government crop reports, the CPI, the money supply, the corporate earnings
> reports and on and on. As technicians we also know when volatility is
> abnormal. You are right that we obviously can not avoid the shocks that
we
> don't know about but I think we can avoid more than most traders suspect.
Surely if a system trader stands aside from the market on all of the above
occasions, he no longer has a system. I see my choices as taking my signal
and risking 1% which on a report day may be a bit larger, which I can
handle. If I choose not to trade and miss out on a potentially large move,
what then? What if it turns out to be the trade of the year? I find nothing
more destabilising than missing a winning trade. It's a bit like making that
one exception to a diet, very habit forming.
I feel if you are worried about volatility on these days you are probably
trading way too large to begin with.
Andrew D
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