Fading Traders

The low volume low volatility has continued throughout the summer.

And I hear many traders say that “there’s just no opportunity for traders”.

It got me thinking of a story I heard from Trader Dante.

He once said he’d heard of a trader who had another trader complain to him about being signed up for an fx guru’s trades who consistently lost money.

This trader then got all the details, messaged the “fx guru” and asked if he could get a discount for a year.

Once signed up, he then took the exact opposite trade that the fx guru published. As this is currency, it’s easy to go the other way.

And because the fx guru consistently lost, the new trader consistently won just by mirroring his trades.

All because one trader complained he couldn’t make any money following this guy.

Both the original follower and the new trader had the exact same information from the fx guru but only one of them made money.

Sometimes opportunities are there but you might not see them.

And it’s similar to when people complain about the summer lull.

The summer lull means less eyes on the market, and that means there can be mispricings.

Mispricings can often be a great way to trade.

For example, here’s Gulf Keystone (GKP) the other week.