Trading During High Volatility Market

Trading During High Volatility Market

If you are starting to invest in Forex, you need to know that volatility is one of the biggest risks for traders, especially novice traders. This applies when they get a very large profit at one time but also accompanied by a risk that is not less great at that time.

Trading on the forex market is very vulnerable to volatility. For example, the market moves with high volatility when the Indian market session is opened. At that time the price moves up and down or in one direction with quite strong and fast, can be in a matter of seconds or minutes.

Impact of Economic News

Traders who follow economic developments will understand why the market moves so extreme. As a Stock trader, you must know the level of impact of a news item on a currency. For example, you can trade normally when there will be news with moderate impact. But before news that has a big impact, it is very important for you to increase your awareness such as by placing a tight stop loss or reducing the use of lots. Because if we analyze the direction of the price, the loss will not be too large.

Difficult to Open Trading Position

One of the things you need to know is that there may be a delay when entering open positions when the market is moving with high volatility. Such movements are very difficult to be captured directly by the broker system, so sometimes the broker will delay or cancel your order.
That is because when the market moves with high volatility, the computer system in the broker's price feed cannot keep up with the real market price at that time, so when certain times such as when news is released, the orders you place sometimes do not match the prices you want at that time and it is very reasonable.