Avoid ‘Doom And Gloom’ Of Volatility

2020-03-06 | Simpler Trading Team

A trader’s delight rolled on as the market mayhem continued Friday.

The volatile environment was like a beacon for live trading moderators in our online chat room.

As the market opened down heavily again and then attempted to claw up into the close, moderators voiced expectations there may be no end in sight.

Technicals repeatedly showed ticker prices rising to expected levels before suddenly failing again.

The cautious consensus is that conditions will likely worsen before recovering. Moderators showed how they worked to avoid holding positions through the weekend because the market could turn any direction to start next week.

The overall strategy is to maintain a cash position as needed while taking advantage of short-term strategies to make money trading the volatility.

While our moderators are excited to take action in this market, it’s understood that it’s not for everyone.

Immediate goals are to find a setup within a comfort zone, execute the trade, and take gains as available. Discipline can guide a trading plan so everything moves at half speed, even if it means literally sitting on your hands and maintaining cash.

Expectations are the market volatility will possibly last several quarters.

Traders are encouraged to avoid the “doom and gloom” and focus on current conditions as a wide-open trading opportunity.

We Saw: a volatile market continuing on its own path — 

  • Authorities calling for calm against the coronavirus
  • Into the close surge on this rollercoaster
  • Coronavirus near home — SXSW event cancelled in Austin

We’re Watching: … our cash position and alerts for setups —

  • Our habits: change as needed to build discipline
  • How the market pans out over the weekend
  • Signs for how long this volatility will extend

Discover more about trading volatile markets -- learn how the “squeeze” guides traders.