Trading during high volatility

[Wide Tailz]

1. What is "HSR"?... and 2. False breakouts are among your best friends.!!

Horizontal Support & Resistance.

The False Breakout situation has been the reason I joke about reversing my buy and sell buttons! It's totally true on short time frames. Everything reverts, over and over again, all day long. But I can't do it. Just don't have the mentality for it.

 

[schizo]

Anybody here halve their size and double their stops to account for these kinds of conditions? Wondering what kind of strategies people tend to use.

Yes, that's what you should be doing in a high vol market. But you also need to know with some degree of certainty where the price will go. There's no room for second thought when the damn price is moving so fast. So if you've never experienced a bear market before, just close shop and stand on the side line until the dust clears.

Lastly, always honor those stops. Otherwise, you will get burned.

 

[Dollardogs]

Some of the sessions these last few weeks have been too wild for newbies and even where more experienced players would choose to stay out.

Personally, I sized down to micros in start of the week, but increased size a bit yesterday as the pace was more controlled and predictable.

I prefer volatility a tad lower than some of the days we recently had.

Yeah it totally threw me, and I'm def still a relative newbie, been daytrading for 2 years. It just out and out kicked my ass this month. So rattled I had 2 dumb fatfingers. Oof! Didn't help that I had coincidentally sized up recently either.

 

[maxinger]

Past couple weeks have been nuts and murder on my system. I tried using my usual stops on a few of these days where the initial balance was double or even triple normal size, and it just cuts me to ribbons. The ideas were right, and even a 1.5 sized stop woulda allowed the trades enough breathing room to survive.

Anybody here halve their size and double their stops to account for these kinds of conditions? Wondering what kind of strategies people tend to use.

I day trade futures.

When the market environment changes, we have to adapt to it.
A few days ago, I had to double my max STOP.

 

[Sekiyo]

You don’t trade ZN the same way you trade NQ. Adjustments have to be made according to the underlying’s current depth & market (volatility).

 

[Handle123]

I reduce size up to 75% and reduce timeframe, targets can double, I use fairly large risk in futures regardless stays the same. My daily goal doubles but fairly small, as aiming for consistency.

 

[Laissez Faire]

Yeah it totally threw me, and I'm def still a relative newbie, been daytrading for 2 years. It just out and out kicked my ass this month. So rattled I had 2 dumb fatfingers. Oof! Didn't help that I had coincidentally sized up recently either.

Yes, at 2 years you're still a newbie. I believe we must go as far back as the covid plunge in 2020 to see anything which resemble the action we saw on some of the days over the last two weeks.

This was a 10 % correction on SPX so far (assuming it's over), but the speed of it and the volatility makes it more like a mini crash.

If I didn't have experience trading this type of environment and having taken losses myself in the past, I probably would not have sized down appropriately or been able to trade it. I'm green for the last three weeks, but I made more money 3 weeks back as I had more size on and the market was more predictable/well behaved.

Rest assured, plenty of newbies probably blew their accounts over these last two weeks, so if you managed to stay in the game, you're doing well.

PS: I scroll Twitter from time to time and I was impressed by a gal there who said she hadn't taken an entire trade last week as the volatility was beyond her comfort zone. That impressed me. The ability to stay out and not trade is so important. A key to success in this game is having the patience and discipline to only enter when you have a solid signal/set-up or whatever you use.

 

[Dollardogs]

Yes, at 2 years you're still a newbie. I believe we must go as far back as the covid plunge in 2020 to see anything which resemble the action we saw on some of the days over the last two weeks.

This was a 10 % correction on SPX so far (assuming it's over), but the speed of it and the volatility makes it more like a mini crash.

If I didn't have experience trading this type of environment and having taken losses myself in the past, I probably would not have sized down appropriately or been able to trade it. I'm green for the last three weeks, but I made more money 3 weeks back as I had more size on and the market was more predictable/well behaved.

Rest assured, plenty of newbies probably blew their accounts over these last two weeks, so if you managed to stay in the game, you're doing well.

PS: I scroll Twitter from time to time and I was impressed by a gal there who said she hadn't taken an entire trade last week as the volatility was beyond her comfort zone. That impressed me. The ability to stay out and not trade is so important. A key to success in this game is having the patience and discipline to only enter when you have a solid signal/set-up or whatever you use.

To put it in context, my interest in markets started March 2020 with the crash, got me intrigued. I was dumb enough to try trading at all as early as June 2020. I got serious by 2022 enough to day trade every day for the past 2 years, serious enough to quit my day job as of a month ago (long story that involves my partner needing to relocate for work). Fast forward to August 2024, and I got what I hope is my last expensive tuition lesson. Holy shit what a week! Putting some system stops in place this weekend which should prevent this ever happening again, but I'm sure the market will have plenty of other curveballs for me down the pike.

 

[Laissez Faire]

To put it in context, my interest in markets started March 2020 with the crash, got me intrigued. I was dumb enough to try trading at all as early as June 2020. I got serious by 2022 enough to day trade every day for the past 2 years, serious enough to quit my day job as of a month ago (long story that involves my partner needing to relocate for work). Fast forward to August 2024, and I got what I hope is my last expensive tuition lesson. Holy shit what a week! Putting some system stops in place this weekend which should prevent this ever happening again, but I'm sure the market will have plenty of other curveballs for me down the pike.

One other thing you could consider is a brokerside enforced daily loss limit. I know Ninjatrader at least have it. Can help you from going on a complete tilt and recover your senses until the next day.

It's incredible how much damage can be done in just a few hours or even minutes in this game if you lose your shit.

Losing money is a choice.

Most people make that choice with overleverage or trading when they shouldn't be trading. Worst case is a combination.

 

[Dollardogs]

One other thing you could consider is a brokerside enforced daily loss limit. I know Ninjatrader at least have it. Can help you from going on a complete tilt and recover your senses until the next day.

It's incredible how much damage can be done in just a few hours or even minutes in this game if you lose your shit.

Losing money is a choice.

Most people make that choice with overleverage or trading when they shouldn't be trading. Worst case is a combination.

Good advice, thanks. I'll look into that option for sure. My system is systematic enough now that I didn't worry about "tilt" as much as I normally would have, but it's funny how the market is like water. It can find the slightest crack. So what ended up happening from the pressure is mechanical errors: misentering trades then freezing etc etc. I'd actually be up on the month slightly if not for just a couple unbelievable fatfingers. Size + conditions I think just made my brain melt.