The Market Has Changed!…What Should I Do??

Sophia Todorova has a background in teaching and psychology, and as such relishes the idea of assisting new traders on their journey to Forex trading success. Technical Analysis is her passion. The charts speak, and she listens.


The Forex market is susceptible to changes taking place world-wide, whether it relates  to the state of economies, instability due to political tension, or the type of extremely unfortunate natural disasters which shook Japan. During this period, the market reacts and we as traders are more vulnerable than ever. In order to stay sharp, and not fall victim to the market, we need to adapt. Adapting requires flexibility on our part in being able to adjust trading strategy and/or trading instrument(s) to give us an advantage. For instance, if you are a trend trader, and have difficulty trading ranging or choppy markets, and your favourite currency pair has changed, you might need to practice trading a new currency pair until your pair has returned to ‘normal’.

Many traders advocate focusing on one or two trading instruments only. That logic certainly has its merits, as it takes time to get the ‘feel’ for the way a pair moves, and to learn appropriate placement for stop losses and profit targets, as this can vary greatly from one instrument to the next. However, survival in these market conditions demands adaptability, so if your currency pair(s) has changed and currently does not lend itself to your usual trading strategy, there are three choices, as I see them: (a) Adopt a new strategy that is appropriate for the pair’s movements; (b) Look for other instruments that your trading strategy is more suited to; (c) Do not trade. If you are unwilling/unable to change your trading strategy, and/or your trading instruments, there is always the option of standing aside until you like the market again. Actually there is another option…While taking some time off from trading, you could use the time to experiment/test with other strategies that would give you more flexibility in the market.  Also, it might not be a bad idea to reduce position sizes if you feel the least bit uncomfortable.

Thanks for your time. Please leave your own comments on ways/ideas you have to cope with the changing markets. Safe trading! 🙂

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