What a year 2011 was for the markets! Who would have ever thought the markets were going to be this wild? Just when we thought the markets were just breaking above downsloping trendlines or breaking above resistance levels, some event like the eurozone sovereign debt crisis, followed by the failure of the Congressional super committee to reach an agreement in cutting the US government deficit, overshadowed anything positive and brought in another massive selloff.
I, for one, have never experienced a market like this before. I always thought of markets as either trending or in a trading range, but right now, we have a market that doesnít fit into either category. I have to say, though, that it added a lot of excitement to the markets and made them much more dynamic.
Trading in this type of a market taught me some very important lessons, the most important of which was to gain better control of my emotions. In this type of market, you have to close your positions by the end of the trading day. Thereís no telling which way the markets will open the following day, so you cannot hold on to a position, hoping that it will continue moving in the direction you want it to.
Another important lesson I learned was to be comfortable making small returns. So instead of letting greed control me, I got to a point where I would close my positions once my profit target was met. Thatís not to say that I didnít have any feeling of anxiety while I was trading. Itís just that those feelings of anxiety were short lived. Now I just hope I donít forget those two lessons when the markets return to some sort of normalcy, if there ever is such a thing.
It will be interesting to see what 2012 brings. Will we see more of the same? Is this the changing face of the markets? That remains to be seen, and we hope to bring you different methods, techniques, and strategies you can apply to the markets, whether they continue to swing wildly or they show obvious trends or trading ranges.
If you havenít done so yet, I encourage all our subscribers to renew their subscriptions before the end of 2011. We are now giving you access to all three of our publications, plus access to 30 years of archives. We thank you for your support. Without you, we would not be able to celebrate our 30th anniversary.
We wish you a happy and prosperous 2012.
Jayanthi Gopalakrishnan, Editor