One of the challenges this summer is that volatility is changing day to day. That’s catching out a lot of traders that attempt to follow the same technique each day.
“I was doing great till Wednesday and I gave it all back”
You know the deal. Quite often, after experiencing this a few times, people give up on their method. But it wasn’t the method that was bad, it was the lack of adjustment for market conditions.
In this Group Therapy session video, we discussed this from a few different perspectives.
1 – Actually predicting volatility – in other words, having an understanding of where people may react OR slow down. So you are ready for it.
2 – Using correlated markets to see what volatility is doing in the moment.
We don’t use the concept of ‘day types’ for obvious reasons. Just look at this year, we’ve had a lot of days with a slow start that pick up at 10:30. What’s happening is volatility shifts throughout the day, so trying to slot an entire day into a single ‘type’ is problematic.
In the video, there’s also some live order flow analysis with an iceberg order- we took a look at how you get a ‘pop’ from these events and how they also give you a price to ‘lean on’.