Practice Now To Handle ‘Funky’ Market

2021-04-22

What do you do when the market is in a funk… and so is your trading plan?

The stock market has been all over the place in recent weeks — gapping down, rallying to new highs, pulling back, and rallying again. This is a wild, “funky” phase of the market that is unpredictable and uncertain to new levels.

Risk lurks around every corner, leaving many traders out of their comfort zone with trading plans that don’t fit this market movement.

Instead of twiddling our thumbs on the sidelines as we wait for calmer waters, how do Simpler’s traders make use of their time?

There is an old saying, “practice makes perfect,” so why not? There is never a “perfect” way to trade, but all traders can benefit from practicing what they know works, learning new skills, and planning for their return to more active trading.

Some ways to practice include:

Here’s an example of how practicing, learning, and training pays off:

TG Watkins, Director of Stocks at Simpler Trading, applies his “DVR” practice when the market is too “funky” for his style of trading. He makes the most of his idle time.

Like many traders, he uses an online trading platform. His platform (like most) has helpful information and a tool that allows traders to backtrack what happened to a ticker over a set period of time in the past — much like hitting rewind, then play on a DVR.

This allows him to review the ticker, all the action associated with it, analyze all he’s seeing, and then practice applying his trading style, strategy, and tools during that “rewind” period.

How has this helped TG? Well, he applied this “DVR” practice early in his career and it helped him along the way to becoming a full-time trader. In the last year TG has achieved multiple million-dollar days… and he’s still practicing.

Studying the past (and practicing trading), can develop confidence when dealing with the future.

We Saw: Selling sent stock market into downward spiral — 

  • President’s administration rolls out higher taxes
  • Market spooked by negative news
  • Honey badgers report strong earnings

We’re Watching: Level and depth of this panic run —

  • What discounts this dip may create
  • Waiting for clearer picture, not forcing anything
  • Setups in: FB, UNH, AMZN, TSLA