How can forex profits vary so much from month to month or week to week?
Reduced Leverage
Leverage is reduced when testing forex trading methods in order to reduce risk. High leverage magnifies both gains and losses. When testing a trading method, it’s crucial to focus on risk management and ensure that potential losses are controlled. Lowering leverage helps in this regard by reducing the size of each position and limiting the impact of adverse market movements, however, profits will also be less when leverage is reduced.
Forex Cycles
The forex market has been around for decades. And it has a certain “cycle” with less good, good and very good months. Typically January to April are the less good months, May and June are good, July is not as good, August most of the world is on vacation and it is very slow. September to the middle of December are the best months in a year. That means there is generally higher activity or volitility in the market in the best months and lower in the less good months.
Endotech’s AI has been making profit in all months and that’s incredible.
Forex trading needs volatility to create more trade opportunities. Take a look at these volatility charts for Spring 2023. Any low performance is not the AI … It’s the environment the AI is operating in. That’s a pretty major worldwide drop recently in Forex volatility in multiple currencies. I haven’t checked but I would bet that not much is very volatile right now (precious metals, crude, stocks) if all currencies are having that massive downward volatility effect (meaning there is no movement up or down to create trading opportuities). In reality Daisy is still performing exceptionally well in a pretty crappy environment.
What this signifies is that people all over the world are pulling money our of banks (or currencies) and putting it into something else. There is clearly a lot of instability in the world, When consumer confidence falls, it leads to lower consumption.
The Dow Jones Industrial Average touched its lowest level in over four months. Crude oil futures dropped under $70 a barrel to a 15-month low amid escalating recession concerns. The 10-year Treasury yield was down about 16 basis points. Bond yields have fallen sharply over the past week amid growing expectations the Fed may be tempted to hit pause on further rate hikes.
Shares of Credit Suisse sank to a record low after its largest shareholder declined to offer more support to the troubled European bank after it reported problems with its financial reporting. The prospect of another bank failure further riled investors already shaken by the recent shutdown of Silicon Valley Bank and two other U.S. regional lenders.
We should be thankful that Daisy is doing so well in these conditions.
Volatility can be beneficial for trading because it creates opportunities for traders to profit from price movements. When a market is volatile, it means that the price of a currency pair is fluctuating rapidly and unpredictably. These movements can create trading opportunities for traders who are able to identify and act on them.
For example, during periods of high volatility, traders can use technical analysis tools such as trendlines, support and resistance levels, and indicators to identify potential entry and exit points. They can also use fundamental analysis to understand how economic news releases and geopolitical events may impact the currency markets and make trading decisions accordingly.
However, it is important to note that high volatility can also increase the risk of large losses if proper risk management techniques are not implemented. Therefore, traders should always use appropriate risk management strategies such as setting stop-loss orders and using proper position sizing to manage their risk exposure.