Thoughts on recent Market developments and how to stay on top of the volatility

Hey traders, a more personal note in my final contribution to MarketPulse.

Trading can be quite chaotic and confusing, particularly when the world seems like its burning every day.

Some headlines come and sound Market changing, but it turns out that everything is priced in and nothing changed – One of my favorite X poster, Conksresearch (a great follow for good content and laughs), will always say – Nothing ever really changes.
So the lesson here is not to get lost in the narratives, and try to be critical on if a news is really regime changing or not.

Sometimes a news will be regime changing, hence, it is important to stay nimble and flexible.

At the end of the day, traders should always be concerned about two things, paying their bills and surviving in the game.

The best thing that allows traders to do this is to actually follow the charts and not the narratives or their own biases (the best traders spend a lifelong adventure trying to avoid doing so).

Watch out for your sources, follow the right people but most importantly, make your own judgment and question your biases!

InvestingLive.com is a great resource to consult when you don't know where to look.

Never underestimate the long-run – Ups and downs in trading are extremely common, but the best traders always made sure to survive long enough throughout these downs to eventually succeed.

Despite all the promises from the gurus driving Lamborghinis, trading is rarely a short-term success story.

Even if you do manage to become rich enough of off one trend, you have to make sure to be able to repeat this again without burning your account(s).

With time, you will be able to recognize larger trends as they develop, be able to counteract your own thoughts that prevent you from doing what's right, and make sure to always protect your bread-making ability.

And when you see a pattern that you have seen hundreds of time and prepared yourself to capture the opportunity, you can use the right amount of risk to juice it to the best of your abilities.

Sometimes, months of struggles can be erased in a few good trades or days, so it is important to survive to be able to meet these opportunities – Hence the importance of not burning your accounts before doing so.

Size is one of the most important element in this aspect – You should read Best Loser Wins by Tom Hougaard (legendary trader who always made his work public and free) as it covers a lot of the traders' psychology in that aspect.

As John Keynes said, one of my favorite quotes: "Markets can remain irrational longer than you can remain solvent."

As humans, we tend to have a very strong instinct of when things are wrong.

But in Markets, overconfidence, algorithms, stop losses and positioning can extend an unsustainable trend for much longer than most can imagine.

Still, this is more of an opportunity for traders than a flaw – Participating in extreme trends, like the ones seen in Stock Markets, can generate very strong trading signals.

Trends are strong when they actually arrive, so fading them can be costly.

When they break, of course, you will also have to have your own sets of rules to be able to not fall in a large trap.

This comes back to timing: Make sure to respect the Market when it tells you something. If you're not comfortable with a trend, don't force it – there will be thousands of new trends to capture.

And when things change, be ready to change your mindset with the new flows.

We tend to be obsessed by the short-term while forgetting the longer-run.

The only thing that I will mention here is to check out Weekly charts (at least once or twice a month) and Monthly charts (2-3 times per year) for you to see if any large divergence is occurring, so you can prepare yourself in the event of a large change.

This can also help you to spot trends you had completely failed to spot.

Success in trading is often found by those who think differently than the masses – Get familiar with your process, make sure it is consistent, strong, and sustainable, but most importantly, don't forget to question things and innovate to make sure to always be ahead of the pack.

For those looking for a great website to visualize Markets – Check out Finviz!

This was my final piece for MarketPulse. Thank you for all who enjoyed the posts since a bit more than a year – I wish you success in the World of Trading and a long life in Markets.

Don't forget to follow me on X (link below), send me messages for any questions and you can check out my website if you want to stay in contact.

Safe Trades!

Follow Elior on Twitter/X for Additional Market News, interactions and Insights @EliorManier