When the market starts moving its likely to be very volatile

As I’ve mentioned recently, structural changes in the interbank FX market are having a huge effect on volumes and volatility. This period of sideways boredom also has the effect of driving professional and retail traders alike to seek their fortunes elsewhere. In other words, liquidity is getting poorer.

But something unexpected always happens if you just wait long enough. When it does, we will see a mad scramble by real money and speculators to get on the move and they will struggle to get their orders filled if liquidity is bad.

There are some trades in the market which are already quite mature and they will be particularly susceptible if/when that big black swan flies in.