When Market Is Crazy... Take A Break?

2020-10-20

The market environment has changed dramatically in a short time and traders should consider adapting trading strategies to get through the final quarter of a crazy year.

What worked for many traders just a few weeks ago in August and September has proven risky lately.

Market conditions into the close of summer opened opportunities for big gains off big moves. Many of Simpler’s traders hit their annual goals before Labor Day. Since then growing uncertainty and a wildly cycling market present greater risk to traders.

Current trading possibilities aren’t showing that it’s the time for “Oh, I’m going to make some huge bets here.” One of the key trading tenets at Simpler is that we’re not in this game for the euphoria of winning off big plays, we trade every day to gain profits.

If this was bodysurfing, we’ll ride a series of safe, 3-feet waves into shore and avoid any 90-feet, “killer” waves that bring everything crashing down.

No need to make trading harder than it has to be.

The big elephant in the room for traders is the nervousness and uncertainty of the upcoming U.S. presidential election. It’s like an earthquake offshore and no one is for certain if the shock will send out a wave to be surfed or a tsunami that rips through everything.

Many unknowns surround the election — economic stimulus, Covid-19 vaccine, worldwide economies — that even though there will be trading opportunities some of Simpler’s traders are slowing down, taking a breather, and watching closely how the market reacts.

Such a wild, and amazing, year has created opportunities for significant profits and traders want to keep what they have gained.

With all the uncertainty, a trading plan the next couple of weeks might be to sit back and enjoy a little J.O.M.O. — Joy Of Missing Out. Be open to whatever the market may be offering, but no need to take on any risky challenges.

We Saw: Market rebound after bad Monday — 

  • Market reacting loosely to any stimulus news
  • NFLX no so cute after earnings report
  • Key sectors show promise

We’re Watching: For good vibes amidst uncertainty —

  • Avenues to slow down, wait, and watch
  • Opportunities if market offers them
  • Setups with low risk