Adapt or Get Stopped Out
- Posted by TheArmoTrader
- on December 12th, 2011
One thing I have learned from experienced traders who have been in the game for years is that you need to learn to adapt. Just like in the wild, if you don’t adapt, you will get wiped out. Just this year, there has been 3 different trading environments in which I had to adapt to.
- Up to June, the market was mostly in a grind up buy the dip mode. Intraday volatility, if not in the correct stocks, was very limited. I had to make a lot of my plays based on relative weakness and strength.
- From July to about October, we saw heavy volatility and heavy volume. I had to adapt my size and timeframe.
- From October on, while volatility decreased (but not gone away), I have had to adapt to the gappy and news-driven market. I try to use the gaps to my advantage (mean reversion,trend day,etc). On the other hand, the fact that we see some type of rumor or denial at least once everyday, I’ve began to use a lot more hard stops. So that way, if I am short and a rumor comes out, my stop will quickly hit, faster than what I can react to.
(h/t to @HFTalert for picture/chart)
The information in this blog post represents my own opinions and does not contain a recommendation for any particular security or investment. I or my affiliates may hold positions or other interests in securities mentioned in the Blog, please see my Disclaimer page for my full disclaimer.blog comments powered by Disqus
Jerry "TheArmoTrader" Khachoyan is currently an active trader, investor, market commentator, and Finance-Twitter participant. He started being involved with financial markets in September of 2008. He concentrates on using technical analysis and an understanding of macro to determine his trades and investments. He graduated UCLA with a degree in Political Science in 2013. The stock market to him is one of the greatest inventions by man.
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