Sandy Jadeja explores upcoming trading opportunities.

The year 2011 will not be forgotten quickly. It was a turbulent year that gave investors a rollercoaster ride. Uncertainty about the economy and rising unemployment has affected people deeply, leading to global civil unrest.
Given the circumstances, the markets have held up surprisingly well. Although we have had sharp declines, a recovery has brought prices back to a point where a continuation to the downside next year is possible.

In 2007 there were very nasty falls; the recovery took two years, and even then did not exceed the high of 2007. Similarly, it seems the year ahead has many challenges. But along the way there should be plenty of opportunities for traders, who will be able to capitalise on short-term movements. The key will be flexibility.

For nimble traders, the opportunities will be on both the bullish and bearish side. There should be plenty of volatility to satisfy the appetite of swing traders. We will need to watch out for sudden ‘flash crash’ movements – by definition these catch traders off guard. Therefore attention to risk management will be essential. Maintaining a smaller position size, rather than overtrading an account, will help prevent large-scale damage...

Excerpted from an article originally published in the Jan/Feb 2012 issue of YourTradingEdge magazine UK. All rights reserved. © Copyright 2012, Your Media Edge Pty Ltd.
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