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 Post subject: Market Globalization and Volatility
PostPosted: Wed Dec 12, 2012 8:17 am 
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Joined: Sat Jan 10, 2009 1:06 pm
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Location: Canada
The following reply occurred @ http://www.elitetrader.com/vb/showthrea ... ost3699766

International Monetary Fund - 1944
Eurodollars overtook CDs as a short term market in the 1980s
Crude Oil Futures - 1983
European Central Bank - 1998
Gold futures seems to have been around forever

Therefore, I don't use the electronic trading era involving the Emini futures as the benchmark for globalization involving the markets for traders.

I saw markets globalization in the early 1990's involving other futures trading instruments that were benchmarks although in reality it had occurred prior to such. Yet, when globalization of the markets became well known to the typical mom & pop investors via the start of the electronic trading era...institutional traders were already taking advantage of such long before the electronic era when the "small trader" showed up to the game via the electronic era due to the exchanges (e.g. CME) creating new trading instruments for "small traders"...birth of the Emini Futures and many other exchanges around the world began to make mini futures products along with brokers making these trading instruments from other countries available to "small trader" clients.

Thus, globalization of the markets was a well known fact to institutions and traders long before the electronic era but just not on the radar of those with small trading accounts until the electronic era.

As a trader, I really don't care about market direction except for the duration I'm in a trade. Yet, I do care a lot about volatility because I use a volatility base trading method. There are many other different trading instruments in the world to trade (thanks to globalization of the markets) that have nice volatility when my favorite trading instruments lack volatility.

That's the great thing about volatility...it doesn't go up or down for every trading instruments in the world "at the same time" even though markets are globalized. Therefore, if someone say that trading sucks or the markets are in ruins...that's someone that's married to their trading instrument and unwilling to adapt via switching to different trading instrument that's more suitable for trading.

My outlook for the next several years are poor volatility (low volatility that's in a tight trading range) IF issues involving global economies remain the same or similar. Yeah, we'll have a week here and there of volatility spikes but nothing that will change the overall volatility for the year.

Obviously I want to be wrong due to the fact I want good volatility in the markets in general...more trade opportunities for us retail traders without putting our favorite trading instruments on the shelf while trading other markets.

Best Regards,
M.A. Perry
Trader and Founder of WRB Analysis (wide range body/bar analysis)
Image@ http://twitter.com/wrbtrader and http://stocktwits.com/wrbtrader

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