What is Volatility?
-The magnitude of the change
-It is independent of direction, it refers to the change of ups and downs
Why is it Important?
-The more volatile the market is, the crazier it gets
-Trends are harder to spot when they are more volatile
-Swing trading becomes riskier
-It is better to stick to day trading during high volatility days or months because you want to lower your risk on those days
What to do on High Volatility Days:
-Inverse ETFs (e.g. BGZ, SKF, TZA, FAZ)
-They are opposite of the market
-They are more stable than one specific stock.
-Can trade off of 15 minute or 5 minutes charts (day trading charts)
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I'm gonna tell you what the deal is:The big $ Trump haters are churning . Trump wins election leads to momentary downturn. Then dow goes on major run until right before the State of the Union then it goes down in a major way and now it's up and down. Today (6/26) Dow's up a little before noon (CT) then runs up to almost + 200 and then ends the day down 98??? For what?It seems over the past few months many downturns start around noon central time. Is this when left coast liberals are getting out of bed and calling their man to sell. I don't put anything past these one worlder Soros minions.
Amazing videos, Sasha, super-insperational stuff! =D
Here is something slightly of topic I'm been thinking about though: assuming you don't borrow money, or trade on margin or do any other risky stuff like that - could one, as a trader, ever lose more then 100% of the money you invest in a stock?
Say, for example, that a company has a big debt on them. Would one, as investor, become responsible for paying that debt if one invested in that company?
Or, are there any situations where one might have to pay tax on one's investments, even if one has only lost money on every trade?
(not the most positive mindset, but hey! It's always safer to know what the worst case scenarios are)
Ah... that's unfortunate.. well, guess I'm off to paper trading then for quite a while before putting any real money on the line.
Alos, thanks for the reply and for making great free educational material =)
Ah, I see. Thanks for your reply =)
Also, another thing that struck me today about commission fees. If/when I ever start trading with real money (still a looooong way there, but oh well) I would prefer to be able to start with really, _really_ small numbers. Like in the tens of dollars, at most.
Thing is, if I've understood things correctly, the commission fees just for making the trades are usually around 5$ - 10$ per trade, which would make it really difficult to make back those fees when working with this small amount of money.
Do you know if there are any brokers who base their commission fees of percentage of invested money, or if there is any other way around this problem?
Really good Sasha. On day trading - you get in on a stock - it's seems to be doing well so you decide to set a trailing stop and move onto something else. What % do you like? Especially on a high volatility day? Just a quick opinion would be cool. Thanks Sasha!
Thanks Sasha. Because - I don't know- I have never actually used a trailing stop I am not real sure how it works- that's first. My assumption is- as the stock increases the trailing stop follows the stock and so the "stop" changes with the stock at a %. So if you are more concerned about finding another trade you can set an "auto pilot" scenario with the first trade - a trailing stop. Not sure that is correct. If I'm in a trade and it has already made about $100 (day trading) I am usually pretty strict about my stop. I'd rather let the stop get me out of the trade and then move on to something else than lose the $100. So I guess I'm looking for a stop that will hold the profit yet increase if that trade continues up - but if the market was to drop suddenly AND my attention is on a different trade I will keep my profit. My understanding is a stop loss is set by you as you watch the trade but a trailing stop will follow at increase but get you out at a % so you can "automatically" set a rule in place w/o actually be at the computer or you are busy with another trade. I usually just do it mentally and watch the money when I am doing it manually. My understand could be off ---
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