Fundamental analysts have never had such a wide variety of mixed opinions, while technical analysts see their carefully placed levels and stops thrown to bits day-in and day-out. No matter what your trading instrument is, you need to buckle up.
There are a few main ideas which you can use to ensure that you take advantage of volatility and stay on the winning end of it and not get sucked into picking tops and bottoms. Here are the ones we think are best:
1. Time your entries better.
The entry point is all the more important if you see a chart going all over the place. Careful with support and resistance lines and try to keep up with the overall trend.
2. Patience is key.
Don’t panic if you see price go a few points against you in these times. Trades are not expected to go easy from beginning to end so be prepared for wild swings. Remember your plan and the reasons for which you entered.
3. Stop loss is a must.
Because of the wild swings, never set a trade without a stop loss. You should follow this rule all the time, but it is even more crucial during volatile times.
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4. Let your profits run.
Due to the nature of a volatile market, you can never accurately predict how long a certain impulse will last. If you’re in a winning position, secure a part of your winnings or at least be sure to break even, while letting your profits roll.
5. You are not your results.
One losing day does not make you a bad trader. Especially in volatile markets. There will be people who win and people who lose every single day. Learn to take both wins and losses along with their lessons, but don’t take them personally. You are not your trading record.
6. Money beats ego.
At the end of the day, it doesn’t really matter if you’re right or wrong, if you predicted how the market will move correctly or not. Your job, as a trader, is to make money, and you should do exactly that.
Don’t stress over a small loss. Re-analyze, re-enter, and win. Your results will speak about your trading career, not the number of times you were right or wrong.
If you keep these small pieces of advice in mind while trading, we are sure that you can manage to overcome even the hardest markets.
At the end, you know very well there is no winning formula in trading. It all requires hard work, and sometimes this work has to take place in less-than-ideal conditions.
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