Tips in a Volatile Market
Rather than fear a volatile market, I like to embrace it, dance with it and profit.
- Always buy time. it reduces stress when you know you can let market forces vacillate the stock and the price will likely naturally come to you. Plus, you have time to repair, if need be.
- Keep your reserve well funded. If I have $20k in my account, I would trade only about $2-3k of it, holding back the rest to fix a position if/when necessary to reduce my cost base.
- Pay attention to the setups. Nowhere is it more important than in volatile markets, where sensitivity to news is highest, both up and down. Never be hasty or neglectful.
- Pull the trigger. Be aggressive when necessary. The market does not wait for anyone. When it’s time, hustle and get your buy filled. Immediately put it up for sale and don’t be greedy.
- Exercise patience. This is always key but more so in volatile markets. Prices can and do turn on you in a big way. Sometimes you just need to stay calm and let the storms pass.
- Watch your FOMO. Fear of missing out… there will always be another trade right around the corner, should you miss one. High volatility can be like shooting fish in a barrel.
- Watch your greed. Prices can turn on you quickly and leave you hanging fast enough to make your head spin. Know your exit price and stay the course; wait for the next setup.
- Invoke the services of your mentor. Our morning Teach and Trade Workshops (Trading Room) are second to none… those heavily involved make money and have the most fun!
There is plenty of profit to go around to all who learn to trade with it than against it.
If you are experiencing calamity at the calls or pain at the puts, contact us to get set up now!
Hugh Grossman
Head Trader, DayTradeSPY