How to trade better when the market is volatile?

How to trade better when the market is volatile?

In recent years, commodity and currency markets have fluctuated wildly as the world received waves of the Covid-19 epidemic that turned everything upside down. This makes finding profits more difficult for traders.

The frequency of market madness occurs more when just news of a virus mutation can easily blow your account like a horrible nightmare. So in this article, I will share with you how to trade better when the market is volatile.

Systematize thinking and trading methods

Emotions are every trader’s biggest enemy. It distorts the brain’s memory and logical thinking, causing us to make hasty and inaccurate decisions. Trading in volatile market conditions is easy to get emotional. If a trader lets that happen, he/she can go into a “trading frenzy” and quickly lose out.

To control your emotions well, you must systematize your thinking and trading method. Use a trading log to record the following essentials.

  • Reason for entry
  • Positions management
  • Emotion management

And the things that you learned from each order

Systematize thinking and trading methods
Systematize thinking and trading methods

Then review the log regularly. This will help you understand your trading process and what needs to be improved to trade better in the future when facing a volatile market.

Select trading opportunities carefully when the market is volatile

The strong volatility of the market has a terrifying magic power. It makes traders (especially inexperienced ones) take risks to make profits. This recklessness, in many cases, leads to the burning of the account in just a few short minutes.

Select trading opportunities carefully when the market fluctuates
Select trading opportunities carefully when the market fluctuates

When trading in volatile market conditions, you need to remember that every profit opportunity comes with the possibility of losing money. Therefore, it is essential to consider the risk tolerance and reliability of trading opportunities. Don’t trade all the signals you see. Try to select the best signals for trading. Besides, you also need to make sure that the profit and loss ratio of the signals is reasonable.

Should enter orders with the same trend when the market fluctuates strongly

If the market is volatile but there is a clear trend, please wait patiently for the entry point of the same trend at the pullbacks (retracements). Don’t be greedy to trade against the trend unless you are a professional trader. Trend trading is the easiest way to gain profits in a volatile but clearly trending market.

Use trend trading method when the market is volatile
Use trend trading method when the market is volatile

When the market has no clear trend (sideways), you can place 2 pending orders as follows.

1. Place a safe UP at the support level

2. Place a DOWN order right at the resistance level with a carefully calculated risk.

If 1 of the 2 orders match, you can cancel the other order.

How to trade with pending orders
How to trade with pending orders

Always manage your orders in the best way regardless of the market

Many people believe that “place an order and forget” is the best method when trading in Olymp Trade. This is completely incorrect. Your trading success is not just about how you place your orders but it depends on how you manage orders.

Always manage your orders in the best way regardless of the market
Always manage your orders in the best way regardless of the market

When the market rages, order management becomes even more urgent and important. You can exit a running position earlier when you see the price about to reverse to keep your profits. But if you leave it to go freely, sometimes the price will drop straight to the entry point, or even the stop loss. Therefore, don’t just think about placing orders when trading, but always aim to manage orders well.

No FOMO – Stand out when the market is volatile

The market will still be there year after year. Opportunities will still abound. Therefore when you cannot place an order at an attractive price zone, be calm and do not blindly chase the volatile market. Waiting patiently for another obvious opportunity is the best you can do in this situation.

It sounds very paradoxical. But one of the best ways you can use when the market is very volatile is to stand by and watch. Skilled fishermen will not go out fishing during a storm. Let the market quiet down again and it’s not too late to make money. And when the market is stormy, stay out to protect the results earned earlier.

Stay out when the market fluctuates
Stay out when the market fluctuates

A few suggestions you can do when you are out of the market. Review your trading history to gain more experience. Learn new knowledge or make a trading plan… Don’t rush into trades when you can’t guess what happens next.

Summary

Between the loss of money and loss of opportunities, which do you choose? It must be the loss of opportunities. No one chooses to lose money because that is the purpose of your trading. However, there are still people who choose to lose money in exchange for opportunities to make more money in a fast-paced market.

Be alert to things you don’t know well about. Stay away from them kike the way I advise you to stay out when the market is volatile. Make the right choice on your trading path!

Join the Olymp Trade Club Signal Group: https://t.me/olymptradeclub19

How to trade better when the market is volatile?
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