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Market Updates Coach's Playbook volatility Trading Education

How To Safely Navigate Changes In Volatility - The Coach’s Playbook

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Topstep traders took full advantage of the historic volatility the last few months. Year to date we’ve funded more than 1400 traders, which is more than we did in all of 2019! It’s not slowing down either, these markets are still providing opportunity. However..

Volatility is starting to taper off, so your chances of catching a few big moves every day are getting smaller. The market is changing rapidly, so it’s time to get back to the basics and start tightening up your trading strateg

Here’s What Our Coach’s Have To Say 


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Down But Not Out

There’s no telling whether or not we will get another round of big market swings. This year has been full of historical anomalies, so anything is possible. For now though, you have to follow the trends, and the trend is telling us that volatility is heading lower.

There’s going to be a period of adjustment any time you have to change up your trading style, so you have to be careful that you don’t burn yourself out of the market making the transition. You need to start monitoring your expectations for each trade and roll with the punches. At the very least, we hope that the last few months have taught a lot of you the simple lesson of getting out of the market when you’re wrong.

Get Back To Work

The basic day trading concepts, like following the trend, are important to keep in mind in these situations. When volatility is low, the trend is your friend!

Shorter time frame levels will eventually start coming back into play, so you shouldn’t expect to hit a home run on every trade anymore. You probably scaled down on your position size over the last few months, but this is not the time to start scaling back up yet. Make sure you have an effective risk management program in place before putting those big trades on again.

We’ve said this a hundred times, and we mean it now more than ever; you should always have a reason for getting in the market, and you should know where you’re getting out before you get in. 

Stay on your toes and expect the unexpected, trade well!

 

Posted by TopstepTrader on April 28, 2020
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