VIX index to gauge the market's anxiety level. It could be refered to fear as well as greed whatsoever.
Although some trading approaches and definitions for equity market couln't be apply to cryptocurrency market or might be apply to some extent. A Pump and a Dump as for high volatility interval sound more natural for trading crypto. Anyway the reading is good to think again about a trading's strategy and making decision.
Topic: TRADING IN UNCERTAIN TIMES (Read 562 times)
Sometimes trading is as risky as as gambling if you didn't know but the only difference is you can get a partial amount back rather than losing everything like it happens in gambling. I used to gamble a lot and have lost 0.4 btc i know it's less but more me it's a lot , if you do trading wisely and don't get greedy profits are certain otherwise what you mentioned in your title will happen
The trading might look like gambling but these two are really different things, while trading we have to be really patient and not trade based on our emotions. Trading is really uncertain and things can move in bad ways and we don't have such a power that would pump the price back at our target that we want to make a profit.
Not to mention, we pick when to enter and when to leave. Its not up to a random number generated by a computer. You can improve the odds of success drastically by backtesting your strategy. Gambling doesnt provide you those options.
Sometimes trading is as risky as as gambling if you didn't know but the only difference is you can get a partial amount back rather than losing everything like it happens in gambling. I used to gamble a lot and have lost 0.4 btc i know it's less but more me it's a lot , if you do trading wisely and don't get greedy profits are certain otherwise what you mentioned in your title will happen
The trading might look like gambling but these two are really different things, while trading we have to be really patient and not trade based on our emotions. Trading is really uncertain and things can move in bad ways and we don't have such a power that would pump the price back at our target that we want to make a profit.
Sometimes trading is as risky as as gambling if you didn't know but the only difference is you can get a partial amount back rather than losing everything like it happens in gambling. I used to gamble a lot and have lost 0.4 btc i know it's less but more me it's a lot , if you do trading wisely and don't get greedy profits are certain otherwise what you mentioned in your title will happen
While there is truth to the claim that trading is uncertain, there are always time where we can be certain which way investments turn out. By doing research and analysis, it is possible to see beyond the current valuation of a investment.
Nothing is certain but with hard work anything is possible.
Nothing is certain but with hard work anything is possible.
Trading is completely uncertain. We need to be prepared enough analysing the market to make a perfect move, only then it's possible to make a better profit buying and selling the proper altcoin and other digital assets at the right time.
Many amateurs traders think that they can be certain in analyzed trading opportunity and at the end loss heavily because trading is a very high uncertainty game. Professional traders know they can't predict future price of an asset perfectly but using experience and proper money management in trading. 
Trading is completely uncertain. We need to be prepared enough analysing the market to make a perfect move, only then it's possible to make a better profit buying and selling the proper altcoin and other digital assets at the right time.
Uncertainty will always be present not just in trading. Others see it as an opportunity to gain profit. But I think this separates a casual trader from a professional. Professional trader love the uncertain times, they see something on it that a casual traders can't. They have this uncanny ability to see and "predict" And this is only gained through experience in uncertain times.
There are some good points here. Uncertainty is something that we have to deal with not just in trading but everyday in life. I know a trader that actually makes more profit when the VIX is high because the price moves are bigger. Uncertainty to trading is like water to life. It is something that is elemental to trading. if there was no uncertainty, there would also be no profit opportunities either.
The problem of trading in uncertain times crept up on the Mentor Program Alumni forum and I have been thinking about my answer. The original answer I gave is shown below –
I think one of the things you need to be able to do is to define what uncertainty is. If you opt for volatility as a proxy for uncertainty then you see something quite interesting. The VIX which is known as the fear index and should reflect uncertainty is actually at sitting somewhere near its long term average, indicating that the players who make up this index don’t actually see any uncertainty and are not asking for an increase in the risk premium they demand. The same is true if you look at the historic volatility in the Dow which is also sitting at a 9 year low. From my perspective is the issue is not uncertainty in markets but uncertainty in decision making that is brought about by listening to external sources. If you switched off the news and all the associated commentary and simply looked at markets what would they tell you?
What has caused me to think further about this overnight is the notion of what actually is the uncertainty that is being referred to. Is it a true physical uncertainty or a psychological perception brought on by exposure to the narratives of others? I had a look at Wikipedia for a more formal definition of uncertainty and it gave the following –
Uncertainty is a situation which involves imperfect and/or unknown information. However, “uncertainty is an unintelligible expression without a straightforward description”.[1] It arises in subtly different ways in a number of fields, including insurance, philosophy, physics, statistics, economics, finance, psychology, sociology, engineering, metrology, and information science. It applies to predictions of future events, to physical measurements that are already made, or to the unknown. Uncertainty arises in partially observable and/or stochastic environments, as well as due to ignorance and/or indolence.
You will notice that the definition holds at its core the uncertainty inherent in predicting future events. In fact the science of probability is based around trying to deal with the fact that the universe is an uncertain place. However, uncertainty is the default setting in trading – the outcome of all trades is unknown until they are closed. It is this uncertainty that gives us the potential to be profitable, investments that have known or certain outcomes have no risk premium attached as such they offer little in the way of return (think bank deposit). This definition is therefore of little use in unpacking the notion of a change in traders uncertainty quotient. Granted we can respond to changes in volatility and we have tools to measure this but this is a reasonably common occurrence in trading and there are strategies that can be put in place to deal with this. In fact very basic position sizing and volatility based stops self-correct to deal with this sort of problem.
So I am drawn back to the idea that what actually changes is the tone and intensity of the narratives that people surround themselves with. This ever increasing crescendo of noise is bound to take an effect on peoples psyche particularity at present when the world appears to be spinning out of control. However, notice I used the expression appears, I used this term because appearances and reality are not the same thing. What brings some equilibrium back to the noise of others is as always context, the markets tell a completely different story. Whilst the breathless gibbering that is the media may consider the present to be the most troubled time in history and need to shout about it at every opportunity neither that markets nor history itself would agree.
This is the most salient point for traders with regards to what is considered uncertainty. Uncertainty is the environment within which we operate as a broad observation but beyond that it is actually the markets themselves that define what actually uncertainty is and they can do this by readily accessible metrics. When volatility and in turn risk premiums increase then we can say that uncertainty has increased. However, even here people try inject their own primitive narrative into events as the VIX which is a widely known measure of volatility is referred to as the fear index when it is nothing of the sort. However, this is the natural human desire for drama, we all have a friend or relative who is addicted to drama and those in the news media, particularly the financial arena and prime diva’s. So if you find yourself believing that uncertainty has increased but markets don’t agree then you will need to do something about what leaks into your brain.
Author: Chris Tate
Article reproduced with kind permission of: Tradinggame.com.au
Traders’ Mindset: Advfnbooks.com/books/insights/index.html
I think one of the things you need to be able to do is to define what uncertainty is. If you opt for volatility as a proxy for uncertainty then you see something quite interesting. The VIX which is known as the fear index and should reflect uncertainty is actually at sitting somewhere near its long term average, indicating that the players who make up this index don’t actually see any uncertainty and are not asking for an increase in the risk premium they demand. The same is true if you look at the historic volatility in the Dow which is also sitting at a 9 year low. From my perspective is the issue is not uncertainty in markets but uncertainty in decision making that is brought about by listening to external sources. If you switched off the news and all the associated commentary and simply looked at markets what would they tell you?
What has caused me to think further about this overnight is the notion of what actually is the uncertainty that is being referred to. Is it a true physical uncertainty or a psychological perception brought on by exposure to the narratives of others? I had a look at Wikipedia for a more formal definition of uncertainty and it gave the following –
Uncertainty is a situation which involves imperfect and/or unknown information. However, “uncertainty is an unintelligible expression without a straightforward description”.[1] It arises in subtly different ways in a number of fields, including insurance, philosophy, physics, statistics, economics, finance, psychology, sociology, engineering, metrology, and information science. It applies to predictions of future events, to physical measurements that are already made, or to the unknown. Uncertainty arises in partially observable and/or stochastic environments, as well as due to ignorance and/or indolence.
You will notice that the definition holds at its core the uncertainty inherent in predicting future events. In fact the science of probability is based around trying to deal with the fact that the universe is an uncertain place. However, uncertainty is the default setting in trading – the outcome of all trades is unknown until they are closed. It is this uncertainty that gives us the potential to be profitable, investments that have known or certain outcomes have no risk premium attached as such they offer little in the way of return (think bank deposit). This definition is therefore of little use in unpacking the notion of a change in traders uncertainty quotient. Granted we can respond to changes in volatility and we have tools to measure this but this is a reasonably common occurrence in trading and there are strategies that can be put in place to deal with this. In fact very basic position sizing and volatility based stops self-correct to deal with this sort of problem.
So I am drawn back to the idea that what actually changes is the tone and intensity of the narratives that people surround themselves with. This ever increasing crescendo of noise is bound to take an effect on peoples psyche particularity at present when the world appears to be spinning out of control. However, notice I used the expression appears, I used this term because appearances and reality are not the same thing. What brings some equilibrium back to the noise of others is as always context, the markets tell a completely different story. Whilst the breathless gibbering that is the media may consider the present to be the most troubled time in history and need to shout about it at every opportunity neither that markets nor history itself would agree.
This is the most salient point for traders with regards to what is considered uncertainty. Uncertainty is the environment within which we operate as a broad observation but beyond that it is actually the markets themselves that define what actually uncertainty is and they can do this by readily accessible metrics. When volatility and in turn risk premiums increase then we can say that uncertainty has increased. However, even here people try inject their own primitive narrative into events as the VIX which is a widely known measure of volatility is referred to as the fear index when it is nothing of the sort. However, this is the natural human desire for drama, we all have a friend or relative who is addicted to drama and those in the news media, particularly the financial arena and prime diva’s. So if you find yourself believing that uncertainty has increased but markets don’t agree then you will need to do something about what leaks into your brain.
Author: Chris Tate
Article reproduced with kind permission of: Tradinggame.com.au
Traders’ Mindset: Advfnbooks.com/books/insights/index.html
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