Time For Caution To Stay Afloat

2020-04-23 | Simpler Trading Team

There’s a simple message that can shed some light on this choppy market:

It’s easier to trade the tide than try to find a single boat staying afloat.

The indexes trade with relatively more predictability compared to specific tickers that can rise and fall like a tidal wave.

The market has been uncertain, even treacherous as it keeps trying to rally against the hard-hitting reality of worldwide economies faltering.

As people hope for and work toward reopening the economies traders should consider their positions.

Simpler Trading online moderators are following basics to navigate the market turmoil:

  • Assess the market on a day-to-day basis with plans to trade in shorter terms
  • Consider taking gains before profit targets are met
  • Avoid having too many trades open
  • Maintain a strong cash position
  • Know your personal risk vs. reward tolerance

Many questions remain unanswered, i.e. pandemic effects, oil troubles, unemployment, world economy, and it will take months or longer to get answers. And the worst may be yet unseen.

Traders who stay prepared while waiting and watching as the markets shift may be better positioned to take advantage of opportunities.

We Saw: markets pushing to rally but falling flat — 

  • Oil rallying over 40% in two days
  • Gilead Covid-19 treatment not showing promise
  • More bad unemployment numbers

We’re Watching: … and waiting for the next market twist —

  • With caution headed into Friday
  • Whether hope and the Fed can sustain markets
  • Any crazy moves in the NFL draft (and do they matter?)

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