Trading in current market conditions is hard – there is no getting away from that fact. But how has your trading plan or style changed as a result?
As traders we continually need to tweak our trading plan to take advantage of current conditions. Currently we are facing small trends sometimes only days and periods of uncertainty.
Lets look at a couple of things that you should be doing in the current uncertain times;
- Keep stop losses further away, this will also force you to take smaller positions sizes to maintain your important risk management rules.
- If the market you are trading does continue to be profitable increasing your position can be viable – remember to use appropriate risk strategies.
- Be patient – wait for the trade to identify itself, to not try to pick every change of direction. If there is no trade today, there will be one shortly.
- Remove all lines from your charts and reapply – this allows you to revisit the charts with a new perspective.
- Investigate different markets – if you normally trade shares or cfd’s, look at forex or commodities – remember to control your risk and exposure.
- Always trade with the strongest trend.
- Be willing to accept smaller profits on your trades, gone are the days of weekly or monthly short term trades – short term trades are being currently measured in days or even hours.
- Lock in profit as your trade improves, this requires more attention but it is essential in current conditions.
- Draw a line in the sand – if you are suffering losses, identify a level in your account where you will stop and take a break – everything looks different after a week or so of inactivity, hopefully this will allow you to refocus and make smarter trading choices.