While market volatility can easily throw the world into a panic, there is one place that can benefit from all this chaos -the trader sector. To put this idea into perspective think of ships and boats. Ships and boats are afraid of waves because they want stability; surfers on the other hand hunt for waves, as do traders. Traders look for volatility- no volatility usually means no opportunity. That doesn’t mean go buy stocks today since the stock market is so volatile! All this means is that opportunities will open up for traders due to market volatility.
The S&P 500 moves the same amount it usually does in a day in just 30 minutes and causes traders to leave.
If the volatility increases this means traders should reduce their leverage and be careful, but that’s not saying to stop trading altogether.
Actually, this is the best time for traders that are alive and still in the market for two main reasons:
1. The volatility era
Now that the market is experiencing volatility traders should reduce their leverage and identify the new patterns as well. There are lots of correlations in the markets and now traders can finally identify them using price-driven trade ideas or any other method and just trade them.
2. Less competition
Many big players like hedge funds and significant algorithmic trading companies just gone (this is part of the volatility, they are clearing all their positions) – its mean that many players that were competing with us on the same profit – just gone.
