HOW DO WE DEAL WITH THE UNKNOWNS?

The excitement in trading forex is endless.

Look at the GBP/JPY movement today, over 433 pips in just a matter of 12 hours. If you opened a long position this morning at 9am (local time), you would have bagged over USD4000 by 9pm local time here (considering you opened a 1 standard lot). Imagined if you opened 10 std lots... USD40,000 bro in less than a half day.

Yeah yeah yeah... Easy said than done for sure. At the moment you could have opened that position, the trend and the likelihood of the pair was going down. So how could anyone supposed to know that the pair would make a sudden reversal by 9am? Could anyone tell?

Hence, the complexity and uncertainty remain as it is. We are talking about trillion of dollars transaction inclusive of hyper buying and selling activities by the banks, forex tycoons and traders like you. Not to mention billion of dollars on hard cash transactions due to global trading activities. It could turn to your favor, or it could turn against you anytime. Chances are you may get it wrong. Are you willing to take the risk?

So, how do we deal with these unknowns? If we are always remain in the dark, then how can we make profit in this market? Simply by guessing or gambling?

One way or another, in my opinion, yes we do have to guess. But for sure, we need to make an intelligent guess that is base on facts, figures and likelihood.

Hence when dealing with the unknowns, we have to take into account its probabilities of either going up, down or sideways. Definitely there are risks involved and you can never be 100% sure, but chances are better if you could carry out a good analysis on your own.

My advice, do not be too technical or fundamental in your approach. We have to consider both.

Why? The answer is simple. It is because the market is made of human being and hence humans behavior are quite dynamic in nature. There are certain patterns for sure like mentioned in Elliot Wave Theory. But during certain crazy days when panic or over-optimistic conquers the market, anything can happen.

Just one useful reminder - don't try to outguess the market force too much. At times, the best thing to do is simply do nothing & follow the flow... but of course, be extra cautious with its volatility and brutality... ;))

Surely the market have no mercy on your account... it doesn't even know you are there...