Except for the rare well-funded prodigy, most traders aren’t ten year olds. Yet the simple advice you would give to a child on Halloween can translate to even the most seasoned traders.
If you are looking to make the markets less spooky this season, here are some trading tricks that can potentially translate to financial treats.
Beware of Fear and Greed Lurking in the Shadows
Just like the kid who has FOMO (fear of missing out) about not being able to attend the cool costume party at the popular girl’s house, traders often exhibit the same behavior. When a market makes headlines in the media, it doesn’t necessarily mean you should jump in and trade it just because everyone else is. While you may occasionally make money trading a newsworthy event, you have to have tools to find out if the major move has already happened. By the time the network ghosts and goblins start blabbing, it may often be too late.
Don’t Eat the Entire Candy Bowl
More isn’t necessarily better when it comes to trading. Nor is shoveling 25 random fun size candy bars into your face. You want to be able to take only the trades that fit your specific trading style that have the highest probability of success (or only eat the Reese’s peanut butter cups if that’s what you like). Depending on what type of trader you are, you need to find technical tools that are suited specifically to you.
Don’t Wear a Janet Yellen Costume
While a Super Mario costume may be a hit at the school’s parade, a Mario Draghi costume would not. Yes, dressing as a central banker probably won’t win any costume contests, but it is imperative to remember that Yellen and Draghi exert a tremendous influence on global markets. Their mere utterances have the ability to move not only FX pairs and interest rate futures, but markets across the globe.
Therefore, during Halloween, or any time, traders need to approach the markets from a global perspective. A central bank induced move in the EUR/USD or the price of gold will often impact individual stocks. The trick is how to quantify the influence these markets have upon one another. If you try to do it on your own without the help of the proper trading tools, you’ll have about as much success as trying to pass off raisins as a “fun” replacement to Halloween candy.
Don’t be haunted by your past results. It isn’t too late to turn things around and end the year by gobblin up some tasty profits. Following these simple yet satirical steps will make trading a bit less spooky this Halloween season.
