As the market nears the highs, the general public begins to hear a steady onslaught of destiny day forecasts, along with their counterparts, who call it the start of a new bull market. At the moment you can go to the bookstore and find many books that predict the end of the fractional banking system, some of which will go as far as predicting the end of modern civilization as we know it. You can find the announcement of a new bull market in several print magazines and many popular websites. Here's my perception of the situation: Things are never as good as they seem, and things are never as bad as people think.
The truth of the matter lies somewhere between these two extremes.
Because the short-term traders that the market goes to have little impact, at least commercially. Of course, the direction and speed of any market movement can have a profound effect on our privacy. However, for now, let's stick with the trade.
As the market approaches the highest values of all time and the P / E ratios are on the high side, I think a prudent trader would be cautious when trading at all possible highs. Trading in breakthroughs at all-time highs is a tough business. The logical assumption would be to trade on the short side, right? No.
As a trader we are charterers and a sensible approach to this uncertain market would be to trade what you see in the chart just like you always do. There may be price hikes, both long and short, which should remind me that powerful trading forces on both sides make their own plans for possible market outcomes. However, we are graphic traders and we are still striving to understand what the chart and market context shows.
So, do you have to change your trading style for all the hoop we hear?
The right course, in my opinion, is to continue trading as you would every other day; but I would have an idea in the back of my mind that these are times of heightened emotion and will trade with the conservative side of things. Stick to your trading plan and be aware that unusual up and down movements are already part of the trade equation.
As you may have read, just when everyone is convinced that the market should fall, it goes up. Sometimes it breaks out on the long side, this is called going up the wall of anxiety and the market can go up the wall of anxiety for much longer than your futures account can withstand. On the other hand, there is a lot of opportunity for a downward jump as bearish traders begin to explore any weakness in the market. It is your job to follow the course and be aware that these are high-risk moments and be careful about avoiding high-risk futures trading.