December 2018 saw a major surge in market volatility, with the S&P 500 plunging more than 14% at the bottom and the VIX jumping over 68% at its height in the month. While things have settled down some since the start of January, the spectre of volatility looms, everpresent, raising the question: how do you deal with it?
44.66% winning trades.
Average winning trade of $511.79.
Average losing trade of $263.90.
These statistics may not seem remarkable, but disciplined trading compounds in a very short amount of time. These are stats from Gabriel F., a funded trader in Spain. Gabriel accumulated $26,266 in profits over 33 trading days since November 1 in his Funded Account®.
Here's what Gabriel is doing so well right now.
This is an incredible trading environment. Yesterday's moves in U.S. equity, interest rate and forex markets offered tremendous opportunities. This is a time when traders have to adjust their strategy, says Peter Davies of Jigsaw Trading.
Peter recently sat down with Topstep's Eddie Horn to talk about how to trade volatility — from someone who has been involved in markets from before the 1999 tech boom and bust. Peter offers tactical advice for traders, including what the absolute worst adjustment you can make in heightened volatility is and how you can improve your performance each and every day.
Hello, my name is Jason Love, and I am the Founder and Lead Trader for the Oil Trading Group.
As a way of quick background, I have been affiliated with TopstepTrader in one capacity or another since 2012. I have been a funded trader, educator and webinar presenter. I strongly recommend TopstepTrader to all the traders with whom I come in to contact. Even if the trader has no intention of becoming a funded trader, I advise them to take (and pass) a Trading Combine® prior to risking their own funds.
The reason for this is quite simple: if you can pass a Trading Combine using TopstepTrader’s parameters, then you will be in a better position to handle your live trading account and, ultimately, in a better position to make money trading futures.
That’s why, from time-to-time, I will also enter a Trading Combine and trade it live in front of my trading room audience. The purpose is to demonstrate live what we talk about all the time: the fact that the number one job of a trader is to preserve capital. Making money is secondary to preserving capital.
Here are three things I did to pass my latest Trading Combine in 15 days.
Trading can be frustrating. Perhaps never more so than when you think you are seeing the market clearly and yet, you can't seem to take advantage.
That was the topic of a post on Topstep's private Facebook community, where Lee A. said:
"I'm again having the comical problem of being 100% correct in directional moves, yet getting stopped out or filling entries that go nowhere. And just found myself upside down once again today and had to cut a trade at a big loss. Can anyone share some wisdom?"
The post hit a nerve within the community, particularly given the recent volatility that has some traders wondering how to adjust their styles in a new environment. So, Performance Coach Dan Hodgman and our Content Manager Mark Meadows got on Facebook Live to talk through their recommendations for adjustments traders should make to continue to make money trading futures. Enjoy.
Why have we been saying that markets right now are full of opportunities? Because volatility plus risk management can equal big profits. Take just one example, Jacob B. in Utah, who started in his TopstepTrader Funded Account™ on October 1 and amassed a healthy amount of profits and a $7,000 withdrawal check by the end of the month.
What can you learn from how Jacob managed his account and took advantage of what the market gave him?
You may know Annie Duke as the World Series of Poker Tournament of Champions winner in 2004. But you don't make more than $4.2 million in lifetime earnings on the professional poker circuit without knowing how to make decisions and manage risk.
For Annie, that's been a lifetime passion — and one that she is pursuing more than ever now that she is retired from professional poker.
In this interview with Topstep's Eddie Horn, Annie details why our decision-making is flawed and how we can change the way we approach problems to reach better decisions. Annie takes complex topics like "resulting" and "hindsight bias" and breaks it into easy-to-understand pieces that will improve your trading.
Today, we continue our September series about how to get better trading every day. And like so many lessons, this one focuses on what you can learn from someone else's missteps. Before there were crises at Bear Stearns, Lehman Brothers or MF Global, there was Long-Term Capital Management (LTCM).
(The irony of the collapse of a hedge fund called "Long-Term" should not be overlooked.)
Though LTCM was run by Nobel Laureates and geniuses, it made one trading mistake that cost it big, leading to a rescue 20 years ago. In the rescue, LTCM partners' capital, which once stood at $1.9 billion, was wiped out completely.
Was I planning on relating trading to Tiger Woods' epic 2018 comeback today? No.
Maybe I am doing it because I was caught watching The TOUR Championship in the office yesterday and said it was for "research." Or maybe there really are some parallels that you should take into your trading.
You're just going to have to read on to find out.
Overtrading. It's a bad habit.
Sometimes, we make trades for the simple fact that we are in front of our computers and the markets are open. Then, we hold onto those trades and make them positions — it's a vicious cycle that often ends up in losses and ties up capital that we could be using when the market does present an opportunity.
So, instead of placing that next trade when the market isn't there, here are four things to do instead.