I have learned, in the short period of trading I have done, some differences between a market with a lot of liquidity and one with less or little liquidity.
In the first case, price increases are more likely to occur. In the second, however, it is less likely.
If and when it occurs they could be moderate or extreme, to be followed later by a relapse. Or if there are no increases, a stronger or weaker sell-off.
This could be dictated by many factors, some, or one. Very simple in general, although it might seem more complex.
However, whether it is because of news or investment preferences, when there are events of some impact-especially in the markets-prices change, and by a lot.
But, in any case, prices fluctuate and certainly once they can no longer go in one direction, they turn in the other.
So a simple strategy might be to place small orders–even less than 1 percent–of one’s capital, on two or three positions that we deem suitable.
However as liquidity changes, then the conditions change.
If we want to open three positions at 0.1% predicting one direction more likely than the other, then most of the orders we could place and set them according to that idea.
And the losing ones-which are currently unsuccessful-could be closed later, when they will yield their fruits.
All of this is without forgetting overnight fees (that keep positions already active in the markets, until the markets reopen). That in itself should not be a problem if the costs are reasonable. In fact with the same or other investments we should be able to cover them.
Just as with other expenses associated with trading.
