Recently, the volatility has been away from the chart. We are watching the swing of triple digits in stock, and the market is getting the real taste of wild ride that comes with a president who makes the game changing announcements almost daily daily. These measures not just shake the US economy – they send waves to global markets.
If one thing has been far away for the past few weeks, it is not going anywhere. It is no longer optional to learn how to visit these unexpected markets – this is a need.
After living more than some chaos market cycle, I have raised some hard -earning lessons. And let me tell you, trading during the most fluctuations is nothing like the YouTube videos that have been promised that you can convert $ 500 overnight to one million.
Markets do not easily grow from one level to another. Volated Mike Tyson is like the quote:
“Everyone is planned until they put a corn on the face.”
Lesson No. 1: Reduce your size
If you are trading leakage products like Forex or CFD, you may lose half your account in minutes during fast markets. If you are trading props accounts, the limits of your drain can be targeted rapidly. That is why rule number one is easy: Cut your position size.
Yes, I’m serious. For example, trading micro -contracts may feel ridiculous, but trust me – it will be your best decision when the markets get grass.
Certainly, there are traders there who flourish in volatility, and gain massive benefits by increasing size at the right moment. But let’s be real: You are probably not one of them. Most traders believe that they are the next George Soros, but in fact, we are all just George Costanza.
Unless you are trading on a micro size, your account may not make lunch time.
Lesson 2: Extend your stop and goals
Fast moving markets require major stops and wider goals. A good rule of thumb: For every 1 % on average daily limit, extend your stop and goals to 0.5x.
For example:
If the stock market’s usual daily range is 1 % but changes to 5 %, your stops and goals need to be expanded through a 2.5 factor.
It’s not a perfect science, but like duct tape, it works enough to keep you in the game.
Lesson No. 3: Turn off your robot easily
Retail trading robots or EAS are not designed for high volatility markets. Even if they choose the right direction, they will often stop before they have the opportunity to do trade work.
There is nothing worse than seeing your robot five times in a row – in the trade you should make money. This is a certain kind of torture that only extreme markets can provide.
When things go crazy, the trade is less than a strategic game and more frequency trading pinball is mostly of the machine. Ironically, when machines occupy the market, the best step is to close you.
It is not time to show up the fluctuations markets. The greatness is the short -term, the winning win, and the losses are brutal. Survival should be your first goal.
If you make it a storm, you will be feeling much better.
Be careful, be disciplined, and most importantly, be in the game.
