The key to trading this market: trade structure

There is no doubt that November is providing ample opportunity in many asset classes to profit. However most managers I speak to are not making the most of it. Why? Simple its all to do with trade structure. The markets intraday volatility at present is extremely high. This means that in order to profit by get your direction right an investor must have time their entry to a trade extremely well or set a stop loss that allows enough room to handle this daily noise. The real key is to structure trades that minimizes this noise or in other words avoid the over crowded obvious trade. Let me give you a simple example. Lets say your analysis is that the euro should weaken against sterling. Putting on a short EUR/GBP trade would be entering a market where the daily volatility is high due to the amount of professional market practitioners trying the same trade. However due to the Swiss National Banks policy of pegging CHF to the Euro, a less crowded way to exploit this view and have the Swiss National Bank on your side is to go long GBPCHF. This methodology of lateral thinking in trade structure can be applied to all markets and asset classes.