Here I will write a nice correlation between two kind of sports - Fishing and Trading (Yes from different point of view trading is not only the process of making money but currently I see it as a different kind of online gaming sport) What Fishing Is - This is the process where you have prepared a few things, bait, tools (cord, fishing tackle net and other).

Similar in trading are the instruments (indicators, charts and others).
The main object in the fishing is the fish. For me the main object in the trading is the volatility. Why? Because like for the fish you have to wait whole day (some times weeks or even moths) just for several seconds to few minutes of huge market movements The problem with the volatility is that is can be very hard to recognize it correctly and like in the fishing you can catch a small fish instead of the big one. In trading you can make two things either take the profit before the huge movement in your direction or it can be false volatility with several rangy movements which must be very carefully avoided.
The problem is who is the fish, you or the market. The market is setting several baits so that you stay away when the real movement comes. If you want to be the fisherman than you must really wait before entering position because the fish you catch can be a shark which can eat you on the board of your boat Or in trading you can get caught in a huge draw down and taken deep in to the ocean of the huge loss. The real volatility happens very rarely. It can be hunted by several ways. Usually it comes several days before interest rate or inflation announcements. The market becomes very calm without any real movement and then boom skyrocket. The nice thing about the great volatility is the surprise it comes with no predefined time. If you are trying to hunt it during the exact moment of big announcement it is wrong because big banks are well prepared that there are a lot of naive traders waiting exactly for this. I will give several examples of recently happened strange and enormous volatilities - First it was the announcement by SNB that they will lock EUR/CHF to level 1.2. Than about 3 years later they remove it (September 2011 - January 2014) Both of this events were predictable and I am still suffering that I didn't used all the signs which were obvious for this to happen. Other two events which I will mention are very recent - Brexit and USA presidential elections.

Both made few people very rich and huge number of losers because it was a big surprise but predictable. I have some strange filing that bookmakers have made coordinated efforts for this to happen but we will never know. With that being said I will give 2 important advises. When you see the volatility don't jump in it blindly with greedy eyes because the loss will be imminent except you are lucky. Try to avoid huge leverage preferably 1:1 - 1:5 or smaller (which means with micro account better stay away at all). In the end I will cite definition of volatility - liability to change rapidly and unpredictably, especially for the worse. You see everything I have written explains the terminology. If you want to trade normally and avoid volatility it is important to know what fundamental events are upcoming and especially in the last several months it is important to watch for possible speeches of central banks.
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