Less Can Be More When Fishing In Volatility

2020-07-27 | Simpler Trading Team

This week opened with the Dow regaining more than 100 points, tech darlings leading gains, gold rocketing to an all-time high, and another $1 trillion government stimulus infusion on the way.

All the positive events follow a dismal gap down last week.

Volatility continues to be the “certainty” in this wild market.

So what’s a trader to do?

First thing, don’t wade into this raging river without a plan. Make sure risk tolerance is well-defined. Be prepared to spend most days like you’re fishing for catfish: sitting on the bank waiting for a bite of the action.

Focus on directional bias (curb emotion and don’t be reactive to the market), discipline (have a plan in place and stay out of the rapids), and trade less (there’s no requirement to constantly have a trade in the works).

Simpler’s traders are limiting the number of trades to target higher probability setups — they simply ignore anything that doesn’t fit their plan. There’s always another trade setup coming into play.

With 20 days of trading each month, there isn’t much room for error in this volatility.

If you could limit trading to fewer days a month yet still grow your account (like one of our senior traders who boosted gains by 5x in July), wouldn’t that make sense?

The key is taking advantage of day-to-day opportunities that fit within a well-defined trading plan.

We Saw: a welcome uptick across the market — 

  • TSLA pushing ever higher
  • Gold pushing to an all-time high
  • Whispers of elevated investor greed

We’re Watching: continuation of earnings opportunities —

  • Setups to trade and exit quickly for gains
  • For a comfy spot on the fence when Wild West volatility breaks out
  • Setups in: ROKU, TSLA, PTON, SPX, LULU

Learn to target precise entries and exits with “divine” tools — take a look at high-probability chart analysis.