High market volatility, trading features

The time of various crises and stock market crashes is a time when someone loses, and someone earns entire fortunes.

The main distinguishing feature of any crisis is the high volatility of the market, the price either rapidly falls to the bottom or rises sharply.

The volatility indicator itself characterizes the volatility of the price of a certain market asset; it shows how much the price has changed over a certain period.

Determining how quickly the price is moving is quite simple by looking at the chart of a currency pair or other asset.

You can read more about this term here - http://time-forex.com/terminy/volatilnost-foreks

At the moment, there is just such a situation in the markets when it is easier to say that the exchange rate has changed not by the number of points, but by the number of percentages. At the same time, a downward trend is observed on most charts.

This looks more clear with specific examples.

For example, not long ago the Russian ruble exchange rate fell against the US dollar by 10% or 68,000 points. This can be called high volatility.

Many traders have a question: Is it worth trading at such moments, because price changes are so rapid that you may not be able to cope with the fast trend?

It’s definitely worth trading, but the main thing is to take into account some of the specifics of the situation and be as careful as possible.

Features of trading with high volatility

There are several rules that will help you save your money during a changing trend, and with some luck, make good money:

Bad news, close long positions - this is the basic rule that must always be followed.

The more global the situation, the longer the quotes will fall and it is better to immediately close all purchase transactions rather than hope for the best. Don't forget about the correction - even when the market collapses, there is always a correction . Therefore, even a sell trade during a downtrend can lead to losses if you open it before the price rollback:

Less Leverage – Using high leverage is very dangerous at the moment.

The price moves quickly, and the resulting price gap may not allow your stop loss to be triggered. Incorrect operation of indicators - the market is more susceptible to the influence of news, for this reason some indicators in trading terminals may give false signals.

Limit the number of orders - during periods of high market volatility, it is better to abandon strategies that use a large number of simultaneously open orders.

When trading, it is advisable to be personally present at the trading platform screen and personally monitor changes in the market situation.

High market volatility has never been an obstacle to successful trading, but it requires maximum composure and caution from the trader himself.