Do Markets Change?

Palindrome said:
I hear this term all the time, curious what others think...If anyone cares.


Yes... Correlations change, Volatility changes, trends change, price changes etc.

In my opinion most markets simply do the same thing over and over and over again. They make the same patters over and over again. These patters are identical from one market to the next.

I look at charts from 40 years ago, they trade very similar to the way markets trade now.

So I guess another question, do markets move the same way they have always moved?

Perhaps this is a pointless post, but I am curious if others feel the same way I do, because I don't see any difference in the way markets move today vs 20 years ago.
More...
Palindrome,

Are you talking about market changes from day to day, week to week , year to year, hour to hour, minute to minute?

Why are you asking this question?

Please be more specific?

Why do you care if the market is changing for?? The goal is to make money everyday trading.
 
"the markets have changed" is usually an excuse for the inevitable failure of a half-baked strategy. Even a poor strategy can generate a lucky run of results but blaming its failure on some invisible but so powerful market change is lame.

Leaving aside the tech indices, it would be great to be proven wrong using charts on this.
 
depends on how you define market change.

Yes markets do change.
sometimes two financial instruments are correlated. then suddently they become anti correlated.
sometimes market is sensitive to news. then it become immune to news.
sometimes market is trendy, sometimes not.
sometimes market could be moving in organised manner. then it could change to jerky spiky movement.
etc etc

but one thing never change.
Market always provide opportunities. It is up to us to grab it.
 
A good trading system changes too.
A very good one will follow the changes in the market so that the effect of changing markets is more or less neutralized.
 
carrer said:
The market behavior (price action) doesn't change, but volatility does.

That's the reason why some strategies work all the time and some work only for a short period of time.
More...

carrer,

Very true. For example, currently I use a 20 tick stop loss for all my trades, if the market starts trading widly with huge range bars, I will start taking alot of losses. It is my responsibility and job to make a good decisions when this happen. More then likely I will not trade, or change the way I trade.

This is what happen in the /ES market in the beginning of the year with big range bars. Alot of automated (maybe even discretionary) strategies loss alot of money, because the strategies were not tuned or programmed for large price movements.
 
You must log in or register to reply here.
Back
Top