{"id":9482,"date":"2011-09-23T15:00:40","date_gmt":"2011-09-23T19:00:40","guid":{"rendered":"http:\/\/club.ino.com\/trading\/?p=9482"},"modified":"2011-09-23T12:05:00","modified_gmt":"2011-09-23T16:05:00","slug":"post-downgrade-volatility-4-tips-for-trading","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2011\/09\/post-downgrade-volatility-4-tips-for-trading\/","title":{"rendered":"Post-downgrade Volatility: 4 Tips for Trading"},"content":{"rendered":"<p><img loading=\"lazy\" decoding=\"async\" class=\"alignleft\" src=\"\/img\/sites\/ino\/email\/2466.jpg\" alt=\"\" width=\"200\" height=\"150\" \/>Today's guest blog post comes from our friends at <a href=\"http:\/\/lightspeed.com\/\">Lightspeed<\/a> Trading. This original post debuted on their <a href=\"http:\/\/lightspeed.com\/?page_id=8958\">Active Trading Blog<\/a> on September 20th, 2011. In this post, Lightspeed shares 4 tips for trading in a time of great volatility and uncertainty. Enjoy!<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>-------------<\/p>\n<p>There is no question that  this is a superior environment for active trading. The \u201cfear index\u201d VIX  recently hitting 50 combined with ultra wide swings provides traders  with numerous opportunities for profit. These moves are triggered by the  economic confusion that seems to be affecting the entire global system.  The Eurozone debt crisis, Standard&amp;Poors\u2019 US downgrade, and whether  or not Ben Bernanke will institute QE 3 all add to the inherent  volatile nature of the stock market. However, these same moves that lead  to outsized profits can also result in heavy losses for traders not  skilled and prepared for the volatility. This article will provide 4  critical tips for dealing with market volatility.<\/p>\n<p><strong>Tip 1. Stay Nimble<\/strong><\/p>\n<p>Not getting married to any one position is a key for success in volatile  markets. In fact, it\u2019s a key for success in any market condition.  Trading skill combined with a robust trading platform can enable savvy  traders to quickly take profits or cut losses within ultra volatile  environments.<\/p>\n<p><strong>Tip 2. Fade the extremes<\/strong><\/p>\n<p>Buying after a very sharp decline and selling after a sharp rise can be a  tactic for profiting in heavy volatility. Just take a look at a recent  daily chart of the DJIA or S&amp;P 500 to see an example. The snap back  rallies and the subsequent plunges are custom made for fading.<\/p>\n<p><strong>Tip 3. Use options<\/strong><\/p>\n<p>Options can be a powerful tool to use in volatile markets. A strategy  known as a straddle can be used to profit from sharp moves, even if you  don\u2019t know the direction. A classic example of an excellent time to use a  straddle strategy was prior to the pending S&amp;P downgrade. No one  knew for certain what way the market would move after the rumor became  reality, creating the perfect straddle environment. This strategy  provides profits if the underlying instrument moves substantially in  either direction. Straddles are the simultaneous buying of a Put and a  Call at the same strike price and expiration date. This position has the  trader covered in the case of the economic surprise, bullish or  bearish. Just keep in mind that the subsequent move must be aggressive  for the straddle to profit. You are betting on the magnitude, not  direction, of the move.<\/p>\n<p><strong>Tip 4. Ride the trend<\/strong><\/p>\n<p>If you are able to recognize a solid move in one direction, jumping on  board can lead to profits. This so called trend trading can work nicely  for short term traders, as many moves even in volatile markets can last  for several days or longer prior to reversing.<\/p>\n<p>-------------<\/p>\n<p>***The views and opinions expressed in this post are that of the  featured Guest Blogger. This post does not necessarily reflect the  INO.com\u2019s own views. All trading involves a level of risk. Individuals  should fully understand risks before entering the market. None of the  information contained in this post should misconstrued as advice or any  sort of solicitation to buy, sell or otherwise invest in any fund,  company or security. <em> <\/em>***<\/p>\n<!-- AddThis Advanced Settings generic via filter on the_content --><!-- AddThis Share Buttons generic via filter on the_content -->","protected":false},"excerpt":{"rendered":"<p>Today's guest blog post comes from our friends at Lightspeed Trading. This original post debuted on their Active Trading Blog on September 20th, 2011. In this post, Lightspeed shares 4 tips for trading in a time of great volatility and uncertainty. Enjoy! &nbsp; &nbsp; ------------- There is no question that this is a superior environment [&hellip;]<!-- AddThis Advanced Settings generic via filter on get_the_excerpt --><!-- AddThis Share Buttons generic via filter on get_the_excerpt --><\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[4067,4068,4069,4070,4066],"class_list":["post-9482","post","type-post","status-publish","format-standard","hentry","category-general","tag-eurozone-debt-crisis","tag-sp-downgreade","tag-tips-for-trading-in-a-volitile-market","tag-trading-in-a-volitile-market","tag-us-downgrade"],"yoast_head":"<!-- This site is optimized with the Yoast SEO Premium plugin v23.4 (Yoast SEO v23.6) - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Post-downgrade Volatility: 4 Tips for Trading - INO.com Trader&#039;s Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wwwtest.ino.com\/blog\/2011\/09\/post-downgrade-volatility-4-tips-for-trading\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Post-downgrade Volatility: 4 Tips for Trading - INO.com Trader&#039;s Blog\" \/>\n<meta property=\"og:description\" content=\"Today&#039;s guest blog post comes from our friends at Lightspeed Trading. This original post debuted on their Active Trading Blog on September 20th, 2011. In this post, Lightspeed shares 4 tips for trading in a time of great volatility and uncertainty. 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