Is this market driving you nuts? Because I can’t stand it… The trading environment we’re in right now is what I like to call a “chop shop” market. No matter what type of trader you are — bull, bear, commodities, volatility, etc. — the stock market is dishing out huge losses like you wouldn’t believe. So it’s the perfect time to start covering strategies for trading choppy markets.
Whether you’re a macroeconomic type of person or like to specialize in crypto, I can almost guarantee there’s a good chance you’ve gotten your butt handed to you at some point in 2022 — due to some type of violent trend reversal.
So anyone who’s been trading this tape… or trading for decades like me… will tell you it’s one of the hardest we’ve seen in a long time.
However, there are still a couple of ways to extract cash out of the chop shop…
3 Strategies for Trading Choppy Markets
The first thing you need to do is cut down your position size and only deploy measured bets on how much you’re willing to risk on any asset.
The next thing you need to keep in mind is you can’t have too long a view on any particular thing. Do you think oil is going to go to $150 or $160 a barrel? That’s great, but you can’t stay married to ideas or positions like this for too long — you’re going to get shaken out of it at some point.
For example, when I take a look at the S&P 500’s chart year to date, a couple of things stand out to me… I can see that at the start of the year, we were trading at normal levels — which was followed by a sell-off — and then the Russia-Ukraine crisis tanked the market.
But now, the S&P 500 is having this inexplicable move back up to 4,600 as interest rates are rising.
Everyone knows what higher interest rates do to growth stocks and the market — rates go up and the stocks go down.
But that’s not happening this time.
Instead, rates and stocks are going up. And the traders that expected stocks to fall are getting smacked around.
But those aren’t the only traders getting smoked. Watch the video below to learn more about the top strategies for trading choppy markets — it’s crazy enough to make anyone go as bald as I am!
And the last thing you need to do is figure out a way to profit off short-term moves… Be more active… Have a system that delivers you returns in an uncorrelated way to the market and assets.
Luckily, I have a system that does just that…
Watch the video below to learn more about strategies for trading choppy markets.
And as always, send any topics you’d like me to cover to jeff@joyofthetrade.com and stay ahead of the markets, especially these choppy ones, by subscribing to our YouTube channel.
P.S. Learn more about the system I just mentioned here.
