Chasing The Market
Imagine you have been given an order to buy 200 million USDJPY. You look at a chart of the USDJPY price over the last hour and observe that it has trended higher.
Based on this trend would you:
•Trade aggressively to ensure you complete the order quickly before the market can move further against you?
•Trade patiently, aiming to capture some mean reversion?
•Ignore the trend entirely when deciding how fast to trade?
Different traders may have different instinctive reactions when thinking about that situation.