As you’ve probably heard or seen, the market has super low volatility with not much going on. This is a bad thing for the traders, as we are constantly looking for action to profit off of.
Above I’ve added a graph of the volatility index VIX. This shows how the volatilty has dried up like an african river during drough season. Yes, there are some spikes here and there but that is basically all you are getting. No big buying or selling.
Whenever there is some sort of overall sentiment prevalent in the market, there tends to be a lot more action. In today’s market however the overall sentiment is that noone seems to know what is happening. Everyone is sort of waiting something to happen and does nothing meanwhile.
This leads to this calm water situation.
My action plan given the existing market conditions
The best thing to do is to work like a sniper. You now need to aim for only the perfect set-ups and expect that there will be less volatility and momentum with strategies that depend on them. Take your profits sooner if momentum is your choice of set up.
So to sum up, trade like a sniper and only put your money into plays that are the most like a “sure thing”. Otherwise the market may play a trick on you.
This is what I’ve been doing and it has been working great so far. Your overall earnings may not suffer from this, despite trading less. Now you are able to really focus on the few plays that exist and try to play them perfectly.