In general, the word storm has a negative connotation. Something sinister, unkind, dangerous, destroying and sweeping away.
But the fact is not always the case. I give an example of a hurricane in the sea.
For ordinary people who can not swim, of course the waves are something dangerous. It can drag us into the middle of the sea until we drown.
But for lovers of water surfing (surfing) a storm of waves is needed. Even until there is technology that can make artificial waves.
At this point we understand that something that is considered negative, bad and dangerous can actually be useful, depending on how we respond to it.
Back to the topic of trading...
The meaning of a storm in the trading world is a large market movement, a wide range, a long, long one-way trend and relatively difficult to reverse (minimal reversal).
Based on my experience and observations, this condition is HELL and a MASS GRAVE for most traders. Why ?
Because many floating loss positions are held or are not disciplined in Stop Loss, or users of the averaging martingale method are bleeding more and more floating blood. Moreover, previously not calculating and preparing money management for its durability so that accounts are killed more quickly by long trends.
I used to be like that too. Every time there is "STORM WAVES" then I MC. But over time I found a way to anticipate it. However, that doesn't mean I've never been hit by a storm again.
There is still the possibility of being hit, but more able to survive, not fall first and be able to end it with a profit. There is HIS RECOVERY strategy.
Speaking of hurricanes, there are many sizes. Small, medium and large storms. The bigger it is, the less often it is. More frequent are small and medium storms.
Big storms ALWAYS start with small storms, but small storms DO NOT ALWAYS become big storms.
A long trend ALWAYS starts with a short trend, but a short trend DOES NOT ALWAYS be a long trend.
The size of a big storm in my opinion is if there is a trend movement of more than 300 pips and NO REVERSAL / RETRACE / CORRECTION at least 50 pips.
If it's still less than 300 pips and the reversal is more than 50 pips, I think it's a moderate storm.
Tips: Trading that is very safe in my opinion is WAIT when the big storm comes, just enter the position so that the possibility of us being dragged from the start is very small.
For lovers of swing / reversal strategies, wait when the price moves as far as 250 pips before entering a position. In my experience, after a trend of 300 pips very often a fairly large reversal occurs.
However, this method has a weakness, namely the timing of entering positions is very rare because large storms are relatively rare.
The simple formula in trading, the more often you enter the market, the lower the probability of profit. The less often we enter the market, the higher the probability of profit because we only enter the highly opportunity condition.
Another way to make trading safer is to use the smallest lot at the beginning so that we can survive if at any time a big storm comes. We didn't die first. Furthermore, being able to do recovery with a rather large lot so that the end result is WIN.
This requires the ability to manage lots, money management and good risk management.
The point is, at the beginning, don't "attack" first, don't waste bullets, don't be over confident, don't get a big lot first. PATIENT use a relatively small lot first. Then when the "storm" comes, it's time for us to use a large lot to "reply" as well as get a big profit.
In the end, a hurricane can be a blessing or a disaster depending on ourselves. How is the ability to respond, anticipate, prepare and anticipate the storm.
Markets are like the SEA which provides a lot of fish in abundance, but can be washed away if we are not careful.
THERE IS NO GOOD OR BAD MARKET, ONLY GOOD OR BAD POSITION.
THERE IS NO GOOD OR BAD STRATEGY, ONLY GOOD OR BAD TIMING.
Please SHARE If Useful.
CONSISTENT AND OPTIMAL PROFIT GREETINGS.
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