This is what the FOMC statements used to do, bring back the volume and volatility in the market. Many traders as soon as a year ago used to trade the afternoon session during the FOMC statement.
The markets have been in a lull for the better part of eight months.
The United States and most of the global economy has been stagnant since the initial crisis of 2001. After the additional crisis in 2008 things got even worse and we haven’t officially recovered.
Companies like Lehman Brothers have caused severe ripples through the global financial system. Follow that with the endless tirade of negative news there isn’t anything to shock the system anymore.
Day traders thrive on inconsistency, uncertainty, and surprises.
Everyone knows that Europe is a mess. Relationships are always perfect in the beginning but then all parties want their own way.
For those paying attention Japan has been a disarray for over 10 years. How are they going to innovate without the United States and invading anymore?
The United States is a mess but inside the closet, it’s time to come out America.
The world is ending, Subway doesn’t really have 12 inch sandwiches, and Starbucks and Google aren’t paying taxes. It is all horrible, we get it. Investors have also stayed out of the market as well.
This causes a psychological expectation which is the reason why the volume and movement in the markets has been low. Enter the FOMC statement and a volatile Italian election that could cause ripples through Europe (and the world) and voilà, instant volume and volatility.
Many traders don’t realize that more is learned in the slow moving low volume markets. It gives everyone time to develop their skill in the market by controlling emotions and psychology.
Bad habits are developed in fast-moving markets because there are more opportunities.
Imagine the power of being able to stay disciplined when the market is moving slow and then carrying that discipline over to a volatile high-volume market. A trader could start by making a few hundred dollars to thousands in an instant.
We prefer to teach the Congressive Trading System when the markets are in this state to ensure that traders are prepared for anything. This is one of the reasons it is an optimal time to start trading.
Stay profitable my friends
Click here to see the complete list of Market Recaps