Trading volatile markets

Final Quarter – Trading Volatile Markets

I’m back from a well deserved rest. Although different to other years as we stayed in the UK, it was still nice to not pressure myself with having to do things computer, blog or trading related.

Obviously I kept an eye on the markets as did I my fledgling Amazon business but that was it.

I did start to read my paperback… but as I found it so amazingly interesting it did keep the cogs of my brain turning.

So I bought myself another paperback [my favourite Science fiction and fantasy book called Magician] and relished every page.

So what’s in store for the run up to December?

Well, I will be modifying and creating some day trading strategies and will get them into an actual trading system for the start of the new year.

Vince Stanzione

As always I’ll be waiting for Vince to give the buy signals in October as that’s a staple of my trading activities. You can read more about that strategy here.

Vince also thinks that the markets will be volatile in September. whilst i have no reason to disagree with him, I still see plenty of opportunity to trade and indeed make profits.

How to Profit Trading Volatile Markets

If you factor in the predicted volatility when you are trading, you’ll see that you can still easily make money from the markets.

One way to account for this volatility is to lower you stakes by 3/4 and only use a single moving average as entry and stop loss. This will help reduce your stress levels when trading as you shouldn’t panic to much if a position goes against you sharply. 

  • So if you are trading £10 go to £2.50
  • Use a really simple strategy like trading the 200 day SMA
  • Go long when the price is above the 200 day simple moving average
  • go short when the price is below the moving average.

That may sound too easy… but don’t knock it. You’ll be following the trend, accepting of any volatility because of your smaller stakes and be on the right side of the price most of the time.

Trading volatile markets

Always opportunities to trade, but wait and try to take the best ones.

Whatever is happening in the news or world there will always be [for the foreseeable future] a price in/on the stock market.

Yes we have elections, brexit, immigration issues… but we also have growth, strength and the world of opportunities called the internet. All these factors are what makes the world go round.

Another way to look at it is, it’s these types of factors that ultimately create the market price.

Making money from the markets is all about waiting.

I’ve said it before, the money is in the waiting and it’s one of my favourite stock market quotes.

You need to wait for the right trade to present itself. And once you have found the right trade you then need to wait until you have taken as much profit as possible. And that also stands true if you are trading volatile markets.

[Just thinking about it, thats a great name for a book on trading “PLAYING THE WAITING GAME”]

Anyway, there’s always going to be up’s and downs during the waiting, in volatile conditions or not. You just need to go with it and you’ll be fine.

10 years from now.

Vince Stanzione advised all that were at his seminar that we should be planning our financial strategies for over the next 10 years.

It’s good advice.

But why is this considered to be good advice?

Well, because of time. Changing your perception of time when it comes to creating wealth [and most other goals] can become your biggest of allies.

Chipping away with a sound strategy over 10 years and reinvesting your profits will likely see a much better result than trying to make your retirement fund in a year.

Creating wealth is a journey, it takes time. And I assure you that if you don’t take action, a year from now you’d have wished you started today.

A year from now

Think Longer Term for all Business Ventures

That goes for any business that you are in or thinking about.

My new Amazon business is something that I can really get stuck into for a duration. It is in itself a trade that i can add to and build upon. I use my profits to buy more physical stock.

The value of that stock might not go up and down in price like it does trading the markets, but it is still stock I own.

With one of the products that I have started on amazon with, I have sold nearly all my first 100 units that I ordered. I used the profits from the sales to buy 200 units more.

This equates to having turned my initial investment of $300, into physical stock worth $2900 [sale price is £10.97]

How much I can turn that into will obviously be limited by demand. But once I reach that demand level I will buy other products with the profits and then rinse and repeat.

Some products I buy might not sell so well, others will sell much better. Over 10 years of doing this how many products will I have that are making money? Lots hopefully.

Amazon has been growing over the last 20 years, I truly believe it’s going to be here for at least another 10, 20 and beyond. I’m happy to use a 10 year strategy on this

If the stock market disappeared tomorrow

If the stock market ceased to exist tomorrow I’d still be in business with this approach… vice versa I’d still be in business if Amazon disappeared tomorrow.

And if they both disappeared on the same day then I think there’d be much more to worry about than making money.

So in summary

If trading, follow the trend, use 1/4 sized stakes and keep it really simple, buy over the 200 day SMA and sell below the 200 day SMA as an example.

And if building any sort of trading portfolio or physical business, remember that in 10 years time you’d of wished you had started today.