Forex Trading on Volatility vs Crypto Surges

Forex Trading on Volatility vs Crypto Surges

In a Crypto Bull market, or in a Crypto Rally, a feature of this market is that Coins, driven by news or random confluences of sentiment may provide rapid changes in value in a relatively short time frame. These sharp moves up may have been building for a longer time frame, but the intense action may be seen over a matter of hours or less. The Coin may surge in value to hit a peak and then drop sharply back to where it began, perhaps a few days before. Is there something like this in the Forex market ?

Forex is a complex market, where fluxes in relative valuation, driven by news and liquidity produce patterns that can be traded. These include well structured trends, and ranges. A feature of this market is a trend which may have a relatively well defined beginning, middle and end (well defined after the event). These may have been building in a basing pattern for an extended period of time, or a shorter and from here a trend can emerge. This has some similarities with the Crypto surge. However the Forex trend can be seen as more structured.

To match the intense volatility of the Crypto surge, then one may look to News Trading. Here liquidity can induce intense volatile moves. However, these moves driven by a news release, as a pre-specficied time, may tend towards oscillations. In some cases they can produce sharp moves within the space of a minute or so. This is a much shortened time frame than a Crypto surge.

Trend ends may have chart based indications such as candlestick patterns and technical indicator signals

So there are types of patterns which can match but also differ in certain respects. A Crypto surge may seem to a Forex trader like something which is not to be trusted, as it does not look like a Forex trend in some respects. However they are real and to some extent trading on Forex volatility may indicate some kind of clue about where the surge will end, but not where it begins.

This is critical, as at the end point, the Crypto can spill out all its gains, very quickly. It should be noted that this is a different kind of event than a Hodl trade, which just assumes an upwards direction, and uses dips to manage the trade, which is of course rather like Forex trading on longer term trends. However this approach can come undone if there not an overall direction in the market, upwards, as the dips become part of the structure of the flow down.

The problem with Crypto surges is that they are random in their ocurrence, by their very nature, as they relfect traders piling onto positions and then exiting them. So it is driven by the core random event of a kind of mass confluence of sentiment. To some extent so is Hodling, but Hodling has a rational basis to it, given the longer term direction of the Crypto market, where perhaps the surges can be seen as a potential positive along the way.

Are Forex trends driven purely by sentiment ? They seem more to be wrapped in rationality, as they are driven by pattern matching, either by human traders or computer programs, but at their heart they are as random in appearance as the Crypto surge.