≈ 4 tips for high volatility. ≈
Volatile markets provide a challenging backdrop for swing traders. As a result, the odds of getting whipped out of trades increases, and seemingly top-shelf setups suffer a high failure rate. To make the best of a less-than-ideal situation, consider the following:
First: if in doubt, stay out. There will be a delightful uptrend on the other side of all this drama. Playing it safe on the sidelines allows you to keep your financial and emotional capital intact, so you’re ready to rock when better conditions return.
Second: trade smaller. While adverse conditions persist, consider making smaller bets to minimize how much damage can be done to your account.
Third: be more proactive with bearish trades. Since bearish patterns are multiplying, now’s the time to play if you’re willing to embrace the short side.
Fourth: consider higher probability trades like credit spreads that don’t require as much precision and benefit from the elevated volatility.
We’ll continue to spotlight the best patterns in our Scouting Reports but realize that choppy market conditions make swing trading more difficult, regardless of how picture-perfect the setups are.
Chart of the Day
Stocks and Rates
Here’s another look at how interest rates are moving markets. Note the strong correlation between the ten-year yield and SPY. To make the relationship easier to see, yields have been inverted. When the red line is falling, it means interest rates are actually rising. In short, falling rates have been bullish for stocks this year, while declining rates have been bearish. I’ve said this before but will repeat it. If you want the stock swoon to stop, then root for rates to chill out.
Video of the Day
Onboarding With Coach Frank
Each week Coach Frank walks new members and visitors to Tackle Trading through all of the features that Tackle Trading has to offer. Watch the video above if you want to check out last night’s onboarding session with Coach Frank.
Today’s line up
Traders Lounge 11 AM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Halftime Report 12:30 PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Coaches Show 8:30 PM EST
Join us every Tuesday at 8:30 PM EST for the Coaches Show! Tonight Coach Gino and Greg will be hosting the event.
Financial freedom is a journey
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