Source: Deal Theory

A volatile market is not as pleasing as a trending market because it's harder to grasp and more difficult to think about than trends, yet shocks are the norm in the market.

The market has been in a volatile state for most of the time, and only for a few, showing a clear trend. The essence of a shock is the balance of power between time and space or light trading, and the time and place where the shock occurred has different meanings. However, handling shocks has also become flexible due to the randomness of shocks. There is no fixed routine; some are just principled thoughts.

For the average investor, if they want to form a trading system during the period of shock, they can start from the following perspectives:

Define your own shocks and trends

Identifying shocks and trends is the first step.

What is a shock, what is a trend; what conditions are signs of an oscillation and require vigilance, what conditions are the probable probability of a shock, what conditions are confirmation of the shock; what conditions are signs of the end of the shock, what conditions are likely to end the shock, and what are the confirmation of the end of the shocks. What instruments, Dow, moving averages, trend systems, or other indicators are used.

This step isn't difficult,There is a clear difference between trends and shocks in terms of indicators. The initial performance may require repeated observation and confirmation, but once the market is determined, all that is needed next is specific operation techniques.

Observe the cycle to determine the impact of shocks on operation

This cycle is volatile, so for the previous cycle it is likely only part of the trend, and for the next cycle there may be several periods of trend. Therefore, different treatment methods are required for different cycles.

To operate this cycle, the strategy is to use high and low suction and shock trading with an oscillating tool; operating the previous cycle, following the general trend, trend trading with trend instruments; operating the next cycle, following the trend trend and trading trend.

The location where the shock occurs is different, and the processing results are different

A volatile market with resistance support positions is likely to take direction.

Generally speaking, this place should have already entered the market before the shock has been recognized. As the market repeats and again, the volatile market gradually comes to light. If there is a stop loss at this point, then wait patiently for an opportunity to enter the market at the end of the shock.

A shock at the end of the market usually means that the next reversal is imminent. In gold or foreign exchange, pay particular attention to fluctuations in the top or bottom range at the end of the market. Usually, a big yang line or big yin line breaks through the fluctuation, creating the illusion that the trend continues, then the price slowly falls back until it swallows up the Sun or the big yin.In the face of the market anyway, don't hesitate to enter the market right away and stop losing to the top.

The shock that occurs when holding a position is handled according to the size of the risk

If the new warehouse was first built, there was a shock, indicating that the timing was not well grasped. Because warehouse orders fluctuate in the volatile market, at this time, either set a time stop loss or set a price stop loss.

If the warehouse receipt is out of danger and can protect itself, but it fails to meet the target, then handling it depends on the situation in the midst of shock. If it's in the early stages of the shock, then you might as well get on the field as soon as possible; if there are signs that the shock is over, then you might as well hold on and watch.

Trading in volatile markets is extremely difficult. In particular,Too much participation in the volatile market took energy, confidence, and patience, leading to a lack of preparation and poor performance when trending opportunities arrived, and the gains outweighed the losses.

However, the difficulty lies in the fact that volatile markets and trending markets are seamlessly connected, and there are no obvious hints; the key to using trading strategies correctly is to prepare in advance. It is impossible to assert that a volatile market is difficult to make a profit because of personal experience, while trending markets are easier.

There may be people who exclusively use volatile markets to profit, but as long as the long-term capital curve performs well, there will be no problem. However, for most successful traders, the main part that actually contributes to profit is trending markets.Traders who do volatile markets must pay extreme attention to the role of stop-loss, and must never give up on stop-loss due to frequent shocks. In this way, once characteristics are reversed and trend opportunities appear, this is the biggest risk.

But shock is a friend not an enemy. Seen from another perspective, shock is nothing more than a failed breakthrough. Not every time the earth's crust collides, a major earthquake occurs, but every major earthquake is derived from an ordinary crustal collision. So, you need to keep betting and betting on every breakthrough that ends up being a fake breakthrough, and that's fine. Shock is an effort and a struggle that wants to develop into a trend, but unfortunately, he has failed, that's all.When he works hard, you open positions to support him; if he fails, you stop losing and leave him. It's a very calm strategy; it has nothing to do with mood.

On the other hand, thanks to these shocks, otherwise it's too easy for this market to make money. It's the shocks that sweep away the losers. Remember, it's not you who beat your opponents; it's the market that helps you get rid of them. It's easier said than done, but it's a bit more difficult.

This market is impermanent; impermanence is the Buddha's view. If you think of impermanence as a problem, then the problem is unsolvable. Because you're fighting him and want to surrender to him. And if you accept impermanence and hug him, then naturally he won't be a problem, and all of your worries will go away.At this point, you will discover that in fact, a simple moving average can achieve stable profits, but you have ruined everything yourself.

edit/lambor