How do I trade and make a profit in a highly volatile market?
TRADINGFEATURED
"If you can’t identify your trading edges with confidence in the current market conditions, simply do not trade it"
Although the markets have looked a lot cleaner most recently. There will always be periods where the market does not look the best or offer the highest quality setups.
Here are a few tips on learning how to trade in unfavorable market conditions :
Practice extreme patience. Sometimes the best position in the market during that time is no position. If you can’t confidently identify your trading edges in the current market conditions, simply do not trade it.
Granted it may take more experience but when you can identify the market is not the cleanest, reduce the number of trades you would normally take to reduce losses.
Set realistic targets. Trading when the market is unfavorable is not the time to hold trades forever. Be grateful for the gains the market is currently giving you until more favorable setups appear to hold positions longer potentially.
Reduce your risk. If you can identify the shift early enough, reduce your risk per trade until the market is more aligned with your current edge. This will also help you maintain your psychology through any losses in this period by keeping them extremely small.
Credit: Quora