Dealing with unusual market conditions

Now and then the market does ‘unusual’ things. Recently for example:

> Multiple consistent strong green days across the US equity market.

Unusual. Not unheard of, but certainly not your typical trading rhythm. A pattern that is ‘not typical’ can be tough to trade…

Why?

Well, it’s not something you’re familiar with, so getting a feel for the next move can be a lot harder. Two days up, follow through on day three, stall at 6 pm and reverse to end at the opening print. That’s bread and butter stuff.

But 7 up days in a row. What the f*ck am I supposed to do with that?

Buy it?

No thanks. Feels like a chase.

Sell it?

Na, not stepping in front of that train.

So what then?

The answer… If in doubt leave it alone.

Accept you missed the entry, the edge has gone, but this unusual condition (whatever that may be) is going to spawn some good trades over the next few weeks. Get to work planning those trades.

“Ok, so I missed this drive, how about a pullback, buying the first or second red day on a reversal pattern?”

What about an exhaustion sell?

Double top?

Buying next time it breaks the prior day’s low?

There are all sorts of ideas you can formulate. The main theme here is if you are struggling to get a grip and trade unusual patterns, that’s cool. Step aside and strategise your next move.

Let the Instagram boy’s chest beat about how they knew this was coming and made £85. Oops I mean £85k…

It can’t harm to study the move and figure out how you can trade it better next time it happens. Just don’t give into the urge to find something, anything to trade. We both know that’s deadly.

Play YOUR game and be the best you can.