Changes to Make to Handle the Volatility

I've had a few requests from students on what else to do to handle the new volatility. Here's a couple more ideas.

One of the main issues for discretionary traders is the SPEEED.

I don't know about you but I can't trade off the usual range bar charts in this environment. Also, my algos have been getting more slippage and with the increase in the number of bars printed in a day with those range bars, the slippage is taking a lot of profit away.

One compromise is to go back to those "old fashion" time based bars. They're not so old fashioned now. But I make the timeframe very short, say even 30 seconds.

 

Another thing I do is backtest for what is the largest target I get with winning trades about 90% of the time. I make that T1 and exit half my position. I've mentioned in a previous post that I have cut my size. I then have T2 and T3 each of which scales out 25% of the original position. T3 can be far out if you add a trailing stop that kicks in after T1 has been filled. 

Finally, with algos, I have several that trade the same symbol with non correlated strategies.

Trade safe, Trade Smart and Trade often to let the math of your edge to work.