Make no mistake, market volatility here to stay for the time being, it is part of the bigger picture, not just a manifestation of the holiday period when liquidity thins. When liquidity dries up, as has been the case over recent months, volatility increases. The markets are in a time capsule of uncertainty as the dynamics of the world at large are being re-calibrated.
From a technical point of view thin liquidity renders indicators less reliable, creating erratic price shifts and gaps which the indicators cannot cope with, as they are not forward looking but lagging. When sudden whipsaw moves are more common during the summer making traders’ lives more challenging. Mental nimbleness is of the essence, so is the ability to stay out of the judgements of what is in front of you. In this context different aspects have to be looked at that make up the rich canvas of our (trading) psychology.
You may not know it, but you are to a large extend processing information as your personal beliefs which has nothing to do with you personally. You are judging your uncertainty, your insecurities and doubts as if they where designed by your own personal belief systems, however they are mostly just a feedback mechanisms of the collective consciousness which you mistake to be your own. Learning to differentiate between your own beliefs and boundaries and when you are tapping into the boundaries of other traders and the world at large is vital for trading success. It is even more vital during challenging trading periods of market volatility.
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