Huge spikes in market volatility can be exciting, fun, and profitable. They can also lead to disaster. Here are three simple suggestions for managing your trades and yourself in volatile times. 1. Have a plan. Know in advance where you are getting in or out – and be clear that you are okay with hitting your target or TAKING YOUR STOP. (A client of mine just went through this, buying a stock since it is a great company and was so far down. His stop was passed in the overnight and then he was in the hole more than he planned.) Be clear what your options for exiting are – even the down side option. We get excited about the possible quick or massive gains and then seem to forget that price could actually go the other way. 2. Breathe. Try not to rush in from a place of panic. Breathe, slow down, and get strategic. Create the plan discussed in step one and follow it. Deep slow breathing steadies the mind, brings the brain more oxygen, and creates clarity. Conscious slow breathing is simple AND effective. 3. Sit back and observe yourself. Are you calm, or over excited about make a killing. Notice your thoughts (greed / fear) and sensations in your body (pounding heart, tight shoulders, etc.). If there is a great trade that is strategic and has a solid plan, great. Go for it. If you don’t have a plan, but your mind is rushing you into action, use this opportunity to start to notice. . . how much are you not aware of what is happening inside your body and mind when you trade. See my blog for more articles on how important it is to become aware of your thoughts and feelings while trading.
A trader should be sideline (not trading) in this market condition unless they have prior trading experience in high volatility market conditions involving "limit downs" due to a global crisis. wrbtrader
I'd argue now is the time to panic. Your experience isn't going to save you from getting locked limit down and end up owing 2-3x your max loss when the market predictably explodes lower due to resting orders on the ask waiting to close.
Last time I panic...I came out of a coma and didn't recognize any of my family members in the room with me and I thought I was in another country at a University hospital. Prior to the above panic and many years earlier...I was in the military at a party the night after Jump school graduation. A fight broke out and I started punching anyone that got near me. If I panic in this Corona Virus market condition, I'm sure its not going to be pretty like the prior panics. Hopefully this time I can stay on my feet. wrbtrader
wrbtrader--panic can be so easy to go to. Takes discipline and choice not to go there. Same with the virus! We all have a choice. We don't HAVE to panic as a response!
thank God for women...excuse the sexist comment...….I am taking your photo at face value.....which on the internet is dangerous I am 62 years old and I do not remember a time when governments have acted similarly in reaction to a situation. i think it is possible to avoid infection by staying a fair distance physically and to keep disinfecting your hands. but that begs the question why is it spreading so fast?
if a trader is not comfortable with market conditions, for any reason/s then yes. that is the biggest advantage in this business of trading/investing: you can just not do anything. your choice.
yah what's the rule: over brexit we turn off. because we have not many examples of this sort of event. but you could also imagine many such events to run simulations over and therefore become an expert at trading them