End of Year Volatility

Market Summary and What to Expect.

We wanted to address the current market climate in Forex and Crypto. Our current fund will focus on those two areas, with greater emphasis on Forex. End of year and the beginning of the year tend to have the most volatility, comparatively. Add major fundamental news such as Brexit and the whole landscape changes dramatically. What does this mean, exactly?

Big wealth management funds are liquidating significant positions adding tremendous bearish pressure on the market. This pressure can cause capitulations and result in retailer traders following the trend. Come to the start of the year, big money will re-enter at the minimum of the bear cycle, effectively driving the price back up. This leaves retail traders at the short end of the stick once again. We can see that this occurs historically at the end of each fiscal year.

Introduce extreme speculation with a relatively new instrument such as BTC and other crypto-assets, and you get complete pandemonium. We can see an extremely bearish trend continue as BTCUSD falls below significant support zones, placing price as of writing back to $4,800. Consequently, the remaining crypto assets follow suit.

Now we introduce macroeconomics, such as Brexit. The current climate surrounding the British leaving the EU is creating tremendous uncertainty in the market. Even the most statistically accurate technical analysis is being undermined by the unpredictive nature generated by Brexit. Each time the UK Prime Minister speaks, you can most certainly expect the unexpected. What can we do?

This is where the mind of a contrarian comes into play. An average retail trader tends to follow based on emotion. A skilled trader is much more quantitative. Sporadic movement in the market can certainly threaten even the most secure trading strategy, but implementing proper risk management can effectively mitigate loss, especially in the current climate at the end of the year.

What Can We Expect

We are not financial advisors, nor do we pretend to play one on the internet. However, we strongly suggest that you only invest with money that you are comfortable losing in a worst-case scenario. That number is subjective based on your own monetary status. That could be as much as $100,000 or as little as $10.00. Either of the two is perfectly fine and a great start in your professional investing career. Take the volatility into consideration and also consult with your financial advisor before entering into a capricious environment such as Crypto or Forex.

Disclaimers aside we can certainly expect drawdowns and losses, and potentially more than usual. This is all part of the trading nature. Do not be fooled by alluring marketing. No one is producing 100% accuracy with ridiculously lucrative returns, not even in a bull market. Even our bots have limitations. When our bot was introduced to the real world market, its performance dropped significantly.

This is where we employ you to take a step back and look at the macro picture. We will have drawdowns, we will have losing days. Shoot, we may even have losing weeks. What is most important is the Net-Net, MoM and YoY. It is easy to be distracted by the micro-level perspective when trading. I know many who are eager to give praise on a good day or a good week, but even quicker to lash out when a day or week proves to be unfruitful. This all comes with the territory when investing in a volatile instrument.

If you want to experience massive gains that are reserved for the ultra-wealthy, you must also be willing to deal with the minor consequences that are attached.

I think you get the gist of my point by now:

  • Invest ONLY what you can afford to lose,
  • Expect drawdowns, losing days, and weeks (it is a part of the game), and
  • Lastly, do not panic! If you follow step one and expect step two you will be golden.

Items to be aware of for potential volatility

20th November

  • 02:30: AUD — Monetary Policy Meeting Minutes
  • 09:00: CHF — Trade Balance
  • 17:00: EUR — German Buba President Weidmann Speaks

22nd November

  • 01:30: JPY — CPI, Overall Nationwide

23rd November

  • 09:00: EUR — GDP Detailed
  • 15:30: CAD — CPI

Final Thoughts

Closing thoughts on the end of the year market. Be a contrarian, and think differently. If you want to leverage the same wealth-generating tools used by the esoteric and the elite, then you must also be prepared to incur a little loss and experience extreme moments of volatility. Fundamentals, at times, will make the most accurate technical analysis obsolete. It is okay, technicals always prevail. We are excited to exit 2018 with such momentum as we enter 2019 with intense force and velocity. We are honored and humbled by each and every one of you, who have continued to support us and participate in this long never-ending battle against unethical and tyrannical banking institutions. These entities have predicated their entire existence on monetizing on our peril. It is time that we leverage decentralized technology to place the power back in our hands. We are excited for the year to come and look forward to exceeding your expectations on what PlutusX is capable of.

Best Regards,
Angel Mondragon & the PlutusX Team