Amazing volatility - Will it last?

To the guy who said it's simply a matter of sizing up when volatility is lower and it's the same thing:

Wednesday 3rd of March:

I'm counting 10 major swings for a total sum of roughly 180 points.

Friday 5th of March:

I'm counting 3 major swings for a total sum of roughly 60 points.

Translation:

Wednesday provided roughly 3 times more trading opportunities and points available.

Looking further back, you'll find days that don't have even ONE single 10 point swing for the entire day and with a range below 10 points. You may very well see the main move happen in the first hour or two and then go nowhere for the rest of the day.

What this really means is that Wednesday 3rd had 10 times more trading opportunities than such a narrow range day.

It goes without saying that it's not a matter of just sizing up when volatility dries up.
 
Most traders do not have the same strategy nor use the same strategy the same way.

Simply, strategies perform differently when volatility changes and you can exploit such via position size management.

Some traders perform better via sizing up when volatility is low and then sizing down when volatility is high...the number of trade opportunities correlates too. In contrast, some traders perform better via sizing up only when volatility is higher and then sizing down when volatility is low...the number of trade opportunities correlates too.

Why ? Its simple...different trade strategy and/or different type of trader.

I'm in the latter group...I prefer to increase my position size when volatility is increasing and then lower my position size when volatility is declining.

That's why I keep hammering that trading is more than about trade signals. You gotta know how you tend to perform when market conditions change and you need to know how to exploit such...knowing when to increase/decrease your position size is an excellent way to exploit key changes in markets although there's other ways I've seen discussed at this forum.

On the flip side for discretionary traders (traders not using automation)...if the price action is "too fast"...you better know what you're doing to minimize poor entries, poor exits, missed opportunities and so on especially in high volatility market conditions.
 
Last edited:
Laissez Faire said:
To the guy who said it's simply a matter of sizing up when volatility is lower and it's the same thing

Wednesday provided roughly 3 times more trading opportunities and points available.
More...
So you're essentially admitting if you multiplied your size x3 on Friday you could have replicated your 180 points from Wednesday. When I read "to those who know what they're doing" in one of your posts it was obvious you're a clueless piker.
 
The OP's question is kind of untimely, since we have had this volatility for 2-3 years now... he should have asked this 2 years ago...

So so far it has lasted...
 
Pekelo said:
The OP's question is kind of untimely, since we have had this volatility for 2-3 years now... he should have asked this 2 years ago...

So so far it has lasted...
More...

Is that really true?

Too busy to take a peek at the moment, but I'm seeing the last two trading days (not counting today) and I'm seeing:

Tuesday 16th: 22 point range and two major swings: 14 down, 20 up.

Wednesday 17th: 24 point range and only one major swing equalling the daily range.

Still pretty good for a day trader, but not nearly the same volatility as some other recent days. I would expect the above to be more normal.

But hell, I won't be complaining if 20 point ranges has been the norm for the last 2-3 years. Has it?
 
Pekelo said:
I spoke the truth. You might wish there was an index or something that measures volatility...
More...

Being cheeky or serious? I assume you may be referring to the VIX, which I don't happen to know much about other than the fact that it may not be very accurate for tracking actual volatility.

I track volatility for my chosen instrument (ES) in several clever ways, but my price database is currently not updated. It will be in a month or so and then I'll come back to this thread and see if your 'truth' was the truth.

I do however suspect that they volatility I was referring to when starting this thread has NOT been the norm for the last 2-3 years.
 
You must log in or register to reply here.
Back
Top