Start the conversation
Navigating some of these extreme price swings in the market can be pretty daunting to a lot of people - even downright confusing.
Now we'll probably see this volatility continue as we wait to see what happens in The Fed's meeting on Tuesday.
We'll also likely continue to see some uncertainty in the markets surrounding President Trump's next steps for his aluminum and steel tariffs.
But whether the market swings 1,000 points down or 500 points up, there's a surefire way to survive these markets - and turn a fast profit, too.
Check out this simple little volatility trick...
Plan Your Trade and Trade Your Plan
This sounds easy enough - and it is.
But there's a little more to managing your trades than you might initially think...
Trade management involves using price and time targets to maximize your profits and minimize your losses. And the best way to do that is to establish these targets first.
Your price target is the price you need the stock, exchange-traded fund (ETF), commodity, or whatever you're trading to hit in order to capture profits. Your time target is the time frame in which you need to hit your price target. You can set both of these targets easily by looking at a stock's past price moves and patterns and eyeballing the time frames in which the price moves you need to happen.
When you've got your plan in place and stick to your guns, you can feel confident about what you're doing and can set yourself up to make money no matter if the markets go up, down, or sideways. It also allows you to remove the emotion from trading and investing that can potentially sabotage your profit opportunities. It gives you control of the markets instead of leaving you at their mercy.
You shouldn't change the way you trade regardless of the market temperature. So shut out the FOMO, the talking heads, the flashing red headlines, and the constant dialogue about the "next big market crash" - and follow your rules and strategies.
The profits will come quicker than you can imagine.
But that's not the only little trick to success.
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
It's easy to know your rules once you get into a trade - but knowing which position is best to take can be harder.
Don't worry - I've got you covered...
To start, you need to pre-determine your maximum risk level.
Next, you need to figure out how much capital you're comfortable risking.
Once you nail that down, the next thing you need to do is set a stop-loss approach.
A stop loss is a tool that lets you automatically get out of a trade if it starts losing too much in value. In other words, it lets you cut your losses short - which is always a nice thing to fall back on.
Once you've got your stop loss, you'll want to determine your position sizing.
This simply means deciding ahead of time how many shares or option contracts you can take on for the trade.
And lastly... adapt your trades to your account size.
But if you have a huge trading account - with, say, $250,000 allocated to stock and option trading with the same 2% ($5,000) risk per trade rule - consider trading cheaper stocks, or using options strategies instead.
Here's an example of why...
When a tech company introduces a next-generation breakthrough, its share price can explode.
Take Amazon.com Inc. (Nasdaq: AMZN). Today it's the dominant force in retail. This stock truly took off in 2006, after the company released a disruptive technology that made it the dominant force in an entirely different industry... cloud computing. Back then, it was a $15.5 billion company that was trading in the mid-twenties a share.
Today, its market cap is over half a trillion dollars, and its share price has soared 4,294%.
The following year, two other famous tech firms would launch next-generation technologies... Apple Inc. (Nasdaq: AAPL) unveiled its first iPhone, and the era of the smartphone began. Like Amazon, Apple was already an enormous company sporting a market cap of about $106 billion.
Today, this company is worth in the neighborhood of $900 billion. And AAPL stock has shot up 1,016%.
Around the same time Apple released that first iPhone, Netflix Inc. (Nasdaq: NFLX) made a game-changing announcement of its own.
Those mail-in DVD envelopes had already transformed Netflix into a $1.3 billion company. But then Netflix unveiled its online, on-demand movie service. It was the deathblow to companies like Blockbuster and Hollywood Video.
And since then, Netflix's value has kept growing and growing, hitting $85 billion - rewarding shareholders to the tune of 4,903%.
Now, an obscure Congressional mandate that's being fully enforced on April 1 is about to unleash a massive cash grab... and a potential 3,982% sales surge for one tiny tech firm.
Once this goes live, you could have the chance to reach millionaire status this month. Get all the details here... while there's still time.
The bottom line is...
Following these rules, and sticking to your trade management strategy once entering the position puts you in a great position to succeed.
So stick to your guns, follow your rules, be patient, and know the profits are coming.
Up Next: Stay Ahead of Wherever the Money Moves
Today, money moves quicker than ever.
As we saw in this recent pullback, it can change direction in the blink of an eye.
But market pullbacks are all par for the course. And with my powerful invention, you can capture triple-digit gains in four days or less, no matter where the markets head next.
The post Volatility's Back - But This Little Trick Can Save Your Next Trade appeared first on Power Profit Trades.
About the Author
Tom Gentile, options trading specialist for Money Map Press, is widely known as America's No. 1 Pattern Trader thanks to his nearly 30 years of experience spotting lucrative patterns in options trading. Tom has taught over 300,000 traders his option trading secrets in a variety of settings, including seminars and workshops. He's also a bestselling author of eight books and training courses.