I have not been trading much over the last week or two, mainly because these markets are very volatile and I am seeing lots of whipsaw (markets not trending in any one direction). If you are not paying close attention to your positions and have your stops too close, you will feel very frustrated as you are stopped out of many positions, causing a string of undesirable losses.
For a very aggressive trader, you can play these wild swings if your fast and watching the markets. Being short or long can kill you in this market. If you look at many charts, you have big up days followed by down days, and with the crazy volatility right now, if you are caught overnight with the wrong positions, you can easily lose 5% overnight as stocks gap. Being 90-100% cash right now is fine, its a neutral position and capital preservation should be your number one goal!! Be patient and wait till the market presents good opportunities before you capitalize on it, but until then just go relax and read up on some trading books or something away from the markets.
For a very aggressive trader, you can play these wild swings if your fast and watching the markets. Being short or long can kill you in this market. If you look at many charts, you have big up days followed by down days, and with the crazy volatility right now, if you are caught overnight with the wrong positions, you can easily lose 5% overnight as stocks gap. Being 90-100% cash right now is fine, its a neutral position and capital preservation should be your number one goal!! Be patient and wait till the market presents good opportunities before you capitalize on it, but until then just go relax and read up on some trading books or something away from the markets.
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