Volatility in the market is very high – but volatility is what the savvy trader uses to make a profit in short term trading. Trouble is, volatility is a two edged sword – it can make your day – or it can neuter you – depending on how you handle it. We spend a lot of time watching the market and trading. There are two types of volatility we watch for – the usual volatility of a given market – and the unexpected volatility. The usual volatility is our friend when handled correctly. The unexpected volatility is our enemy and is to be avoided as much as possible. The usual volatility is what we trade  – as described in See the Music of the Market. The unusual volatility is caused by fundamental events – some expected – other unexpected. We stay out of the market when expected events are about to0 happen – and exit ASAP if we are in the market when an unexpected event happens. Trading is a bit like poker – and Kenny Rogers said it best  “You got to know when to hold ’em,  know when to fold ’em, know when to walk away and know when to run”.

 

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See the Music of the Market

The unique trading method that is Trading Between the Lines