Does a trader want this volatility?

Discussion in 'Strategy Development' started by Sky123987, Jan 23, 2008.

  1. Just wondering if in general volatility is good for a trader. I'm kinda against it a bit as I'm still picking up trades, probably a bit more, but not that much more, but I feel I can't put on too much size and my swings are HUGE... as yes they are bigger swing but I don't feel it increases your expected value.

  2. I personally love volatility.
  3. This is dependent upon your trade signals and their performance when volatility changes.

    Some strategies don't like high volatility market conditions as in poor performance.

    Other strategies are suitable for high volatility market conditions as in improved performance.

    I like this type of's more profitable but comes with more stress.

    I find myself taking longer breaks from the market to cool off.

  4. I haven't found that the expected value per shares of really any strategies does better if (volatility is High). Because volatility is high I have to reduce my size...

    but that's cool for you guys liking the volatility :)
  5. in the way i trade volatility is taken into account and it defines my stops and targets, last 2 days my targets were huuuuuuge.

    ill take this kinda volatility every day
  6. just my opinion but you may not be picking the correct trades. you may be going after stuff too early and at points where risk is too high and reward is not high enough. sorry if that is vague but i can't really explain it any better without specific examples from you. i know i certainly have no problem putting on more size in more volatile markets and still being able to keep my risk/reward in line with what it should be.
  7. Nope


    I'll second that. I enjoy the volatility, but it is much more stressful when your stop is now an average of 25-30 ticks instead of 15.


    Today I traded like a total piker, I am not going to blame increased volatility, though must admit that the spikier the price action becomes the more difficult it is to stay with a trade. What didn't happen today, crikey that is a good question that I have asked myself when reviewing today's chart with a relaxed mindset afterwards.

    Yesterday it was kind of obvious to expect higher than normal volatility and I made a decision to stay away during the RTH, although I did come back in the afternoon when the smoke has settled and made some nice gains. Today I made a judgmental error of going in straight of the bell, I forgot that today is day number 2 after the critical FED's intervention and that we could be in for more panic selling. In the end of the day a 0.75% cut does confirm that there are problems with the economy, sometimes it helps to use common sense in this game.

    Basically what happened is a classic "trend day kill all counter trend set-ups", due to purservience and belief in method used I still managed not to lose that much, but it was a heck of a mental challenge more than anything else. Like Mark said it becomes more stressful and in my case stress was to do with my belief being tested upon continuous losses.

    So, do I like increased volatility? Yes, when I am on the right side and No when I am not :)

    I will add one more thing which I found to help during days like today, which relates to countertrend trading mainly and of course mainly to me :) When price runs away like a runaway train it IS better to wait it out and get back to the screen when the smoke settles nearer to lunch time or near the end of it.

    Some random thoughts here.
  9. markus26



    Nothing better then feeling like a piker to re-focus your head. I always found I trade extremely well after days like that. We all have them some times.

    I for one like moderate volatility... the past 2 days had more then I typically care for. I am always ok sitting on the sidelines when the markets are having trouble digesting economic news.

    As said earlier, it really depends on the trader and the strategy being used. I tend to not enter new trades (just keep a close eye on any existing ones) on days like today and just keep a journal documenting the actions of the market for future reference.

    Good trading,

  10. Today I made 7.11 points
    and yesterday 2.243 points.

    x1000 shares is very sweet!

    Today I could have tripled the amount so could have made over $20k but stuck to my tried and true method.

    Amazing how many newbies on this site looking for a handout. lmao.
    #10     Jan 23, 2008