We all know that trading the volatile state of the market is the most difficult task for retail traders. Still, some professional traders are making big profits by executing quality trades in the volatile market. They are not breaking the rules of money management nor taking aggressive steps. They are using some smart approaches to find the best possible trade signals in such complex market conditions.
You may think becoming good at trading the market during intense volatility is not possible for a novice trader. However, if you follow some basic rules, you should be able to trade the volatile market just like a pro trader. Let’s see the process by which we can become good at trading the volatile market.
Table of Contents
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Selecting the asset
Trading the market when it is in a volatile state requires strong asset selection skills. You can’t make money just by trading the major pairs in the volatile state. You need to know about the nature of the volatility. If you suspect that the market is going to move in both directions, you should not trade such assets. Usually, this phenomenon is more common during press conferences. Check the economic calendar and learn more about the nature of the news release. Based on that you should select your asset and make yourself prepared to deal with the market.
Develop a scalping strategy
To trade the volatile market, you need a professional scalping strategy. Without having strong knowledge of scalping techniques, you will never learn to execute high-quality trades in the most complex state of the market. You might be thinking future investment is all about a conservative approach, but it’s not. To make some big profits, you need to cross the line. Learn about the scalping and position trading system. Once you know this advanced trading technique, get a professional demo account. Use your knowledge to create a simple scalping strategy so that you can take the trades during the volatile state of the market.
Knowing about the trading session
Without having a strong knowledge about the trading session, no one can become good at trading. You may think that you can beat the market and become a millionaire by taking the trades during the overlapping trading session. To make money in such a condition, you need to have the skills to predict the severity of the volatility. During the normal overlapping session, you might not experience heavy price movements. Based on your trading session, you also need to pick your asset. For instance, if you take your trades in the EURUSD pair, you must be taking the trades during the European or the New York trading session. Unless you do that, you will never find profitable trade signals.
Learn price action strategy
One of the easiest ways to become good at trading the volatile state of the market is to use the price action trading strategy. By using the price action trading method, you should be able to execute high-quality trades with a high level of precision. Learn about the different formations of the Japanese candlestick patterns and execute your trades in the demo account. Once you gain confidence with your demo trading performance, you may try to trade with real money. However, you need to be concerned about your risk management approach. No matter how good you become at using the candlestick patterns, you will still have some losing trades.
Managing the losses
To trade the volatile state of the market, you should have extreme courage. You should never be upset to accept a few losing trades. Learn to trade the market with managed risk and take your trades with a strategic approach. Stop risking more than 2% in any trade as you never know the results of each trade. Follow a safe protocol and stick to the long-term trading technique strategically.
