My dad – a retired stock broker – used to say, “Money talks, and bullshit walks.” With so much bullshit (from the business media) out there, I figured it was time to share some trading tips for surviving this market.
And what a market it is. We face so much anxiety every trading day. From trade issues with China (and now the EU) to the impeachment inquiry, slowing global and US economies, questions about how Fed policy might adjust – if you want to hide under the covers, I don’t blame you.
As traders, we want resolution to these issues. Instead, use this tips to guide you.
Trading tips for surviving this market
Listen to the markets, not the pundits
Money can certainly be made in this market, but you have to be careful. Before you make a trade, ask, “Am I paying attention to the signs of the market or some pundit’s opinion?” If it’s the former, take the opportunity. If it’s the latter, walk away.
The US economy may look like the best house in a bad neighborhood, but our markets are no “safer” than others right now.
Don’t embrace volatility
Price action has been all over the place because of trader uncertainty. Given the potential for big price moves up or down, volatility has risen sharply. (Remember, higher volatility means a wide range of movement – not just downward movement.) On top of that, volatility can be expected to move more than 1% on a daily basis.
How are you supposed to hedge against that? You can’t.
Take a conservative approach
In this land of uncertainty, risk management is key to surviving. I abhor risk at all times – it’s why I’ve been successful trading options. Never ever take a trade that you can’t afford to lose.
It is better to wait for the right pitch than swing for the fences on curveball that is clearly in the strike zone. Be patient! These trading tips for surviving in this market will help you – use them!