Looking at how markets have behaved in these conditions in the past gives us an idea of what to expect, how to prepare, and most important how to exploit these moves.
- Review your risk strategy. Take a look at all of your current positions and double check your exit plan. If you are using stops, look at how recent moves have impacted those stops. Is it time to tighten them up? If you are able to watch the market closely, consider removing stops. With the elevated volatility wild swings can trigger a stop on a quick drop and take you out at the worst time. If you can watch the market closely, keep the stops in place.
2. Long-term vs Short-term. If you have diversified your investments, you most likely have positions you are holding on a more long term basis in addition to your short term more frequent trades. The market has historically trended upward in the long-term in spite of drops and crashes. Look at your long-term positions and consider adjusting your position size to ease the impact of a drop. Smaller positions during a drop mean less losses.
3. Trade the Drop For Gains. Options are a perfect way to make this market work to grow your account. While it looks like we are headed for a drop, options allow you to generate income no matter which way the market moves. This is even more true when volatility is higher as it is right now.
Don Fishback has put together an excellent guide to using options in this current market. He starts at the begging and takes you step-by-step through trading including which strategies work in specific trading conditions. You can grab a free copy here.
Keep learning and trade wisely,
John Boyer
Editor
Market Wealth Daily
© 2021 Tradewins Publishing. All rights reserved. | Privacy Policy | Terms and Conditions | Contact Us
Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by TradeWins. For additional information on auto-trading, you may visit the SEC's website: All About Auto-Trading, https://www.sec.gov/reportspubs/investor-publications/investorpubsautotradinghtm.html
TradeWins does not recommend or refer subscribers to broker-dealers. You should perform your own due diligence with respect to satisfactory broker-dealers and whether to open a brokerage account. You should always consult with your own professional advisers regarding equities and options on equities trading.
1. The information provided by the newsletters, trading, training and educational products related to various markets (collectively referred to as the "Services") is not customized or personalized to any particular risk profile or tolerance. Nor is the information published by TradeWins Publishing ("TradeWins") a customized or personalized recommendation to buy, sell, hold, or invest in particular financial products. The Services are intended to supplement your own research and analysis.
2. TradeWins' Services are not a solicitation or offer to buy or sell any financial products, and the Services are not intended to provide money management advice or services.
3. Past performance is not necessarily indicative of future results. Trading and investing involve substantial risk. Trading on margin carries a high level of risk, and may not be suitable for all investors. Other than the refund policy detailed elsewhere, TradeWins does not make any guarantee or other promise as to any results that may be obtained from using the Services. No person subscribing for the Services ("Subscriber") should make any investment decision without first consulting his or her own personal financial adviser, broker or consultant. TradeWins disclaims any and all liability in the event anything contained in the Services proves to be inaccurate, incomplete or unreliable, or results in any investment or other loss by a Subscriber.
4. You should trade or invest only "risk capital" money you can afford to lose. Trading stocks and stock options involves high risk and you can lose the entire principal amount invested or more.
5. All investments carry risk and all trading decisions made by a person remain the responsibility of that person. There is no guarantee that systems, indicators, or trading signals will result in profits or that they will not produce losses. Subscribers should fully understand all risks associated with any kind of trading or investing before engaging in such activities.
6. Some profit examples are based on hypothetical or simulated trading. This means the trades are not actual trades and instead are hypothetical trades based on real market prices at the time the recommendation is disseminated. No actual money is invested, nor are any trades executed. Hypothetical or simulated performance is not necessarily indicative of future results. Hypothetical performance results have many inherent limitations, some of which are described below. Also, the hypothetical results do not include the costs of subscriptions, commissions, or other fees. Because the trades underlying these examples have not actually been executed, the results may understate or overstate the impact of certain market factors, such as lack of liquidity. Simulated trading services in general are also designed with the benefit of hindsight, which may not be relevant to actual trading. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. TradeWins makes no representations or warranties that any account will or is likely to achieve profits similar to those shown.
7. No representation is being made that you will achieve profits or the same results as any person providing testimonial. No representation is being made that any person providing a testimonial is likely to continue to experience profitable trading after the date on which the testimonial was provided, and in fact the person providing the testimonial may have experienced losses.
8. The author experiences are not typical. The author is an experienced investor and your results will vary depending on risk tolerance, amount of risk capital utilized, size of trading position and other factors. Certain Subscribers may modify the author methods, or modify or ignore the rules or risk parameters, and any such actions are taken entirely at the Subscriber's own election and for the Subscriber's own risk.
|
No comments:
Post a Comment