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Forex Strategy Video: What the Next Market Collapse Will Look Like

January 20, 2014

John Kicklighter

Talking Points: ** Market collapses, crashes and crises grab our attention for the level of impact but are very unusual ** A trading strategy should look for high-probability events, but we should also have crises plans ** After years of leverage-backed build up, a 'risk aversion' wave now could be dramatic but short-lived Market crashes (also termed 'collapses' and 'crises') fascinate the masses due to the destruction they wrought. For traders, these events can wipe out accounts or they can represent opportunities of epic returns. Yet, despite the attention these events grab; it is important to recognize that they are as abnormal as they are extraordinary. For a trading approach that is predicated on consistency and high probability events, positioining for crisis-like events is a fool's errand. However, being prepared for these events and possible unfolding can help us avoid serious risk and take advantage during a fast-moving market situation. We discuss market crashes in today's Forex Strategy Video.

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Source: DailyFx

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