Risk appetite has always been associated with 'Tolerance levels' of traders willing to accept certain levels in price swings to take a profit or get hit with a loss in exchange for the gain and exposure in each trade.
Most of the time, basis of these parameters are from the daily trading range and average price change depending on the approach that each trader intends to use while being exposed in the market. With a wide price range and a short term price objectives set as targets in either direction; most traders will take the position the way they see fit their respective trading time frame.
Proper Positioning before an event risk or a lack of one would be an appropriate strategy. By the time prices move contrary to the position taken; traders would then have ample time to make adjustments needed that conforms with the prevailing market changes. On the other hand when such trade position is on the right side of the market, then being ahead of the market makes more sense compared with the rest of the pack. The flexibility to be able to adjust risk tolerance levels at the appropriate time makes it much easier for traders to be on the right side of the trade more often than not.
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