Although I ‘ve for ages been professional dealer, mainly e-mini trading in the past eight years, I consider myself an amateur monetary history buff, also. I could find no time in history (such as the melancholy) where central bankers have controlled interest rates by flooding the market with money to the decree we’re now experiencing. Actually, I recently read an article in regards to a fresh economical area entitled “zero interest rate policy.”
Zero interest rate policy describes our present central banking dichotomy. We’re hovering our chopper overly high as principal bankers strengthen, repeatedly, the money supply under the guise of elaborate anachronisms like QE1, QE2, systemic twisting as well as a number of other anachronisms which fundamentally mistake any reasonable human being. In the event the abovementioned metaphor seems nonsensical and improbable because all the variants are non-affiliated as well as the means for every variant results in an unwelcome end, then I consider there is a pretty firm handle on our present economic situation and policy. In a nutshell, we’re careening down an unknown course as well as the outcome is quite much in question.
Oddly enough, I’ve been trading pretty much the exact same manner I always have; though in the trunk of my head I’ve laid out far more crisis eventualities than before. I believe every dealer needs to be ready for sudden and inexplicable marketplace movement in the forthcoming year. While the marketplace has been anything but explosive of late, I believe this stagnation is the calm ahead of the storm.
Following the precipitous drop from the outburst of the housing bubble along with the ensuing credit crisis, one might have believed the typical American citizen would you’ve participated in serious deleveraging of their private debt.
As an e-mini dealer, I feel you need to continue trading in your normal fashion with contingency plans nicely placed. It’s my estimation that mechanical trading systems is likely to be the very first to fall to the wayside as this market heats up since the market price activity will become, sometimes, illogical and hard to trade using conventional marketplace premises. However, discretionary dealers should do somewhat better if they’re ready to stay adaptable within their marketplace premises and integrate that flexibility in their trading style. Additionally, I believe we must embrace some exceptional points of view in the marketplace as distinct international flashpoints must be thought about in a few kind of hierarchical type.