Warrior Trading Blog

Market Volatility & Swing Trading

Market volatility is normally a very healthy, predictable and welcome compnaion to the stock market and its price action. There are times however, where things can get pretty testy, beyond the traditional events like Fed announcements and earnings events. A perfect and recent example of that is the 2016 presidential election. The markets thought one thing and the results proved to be something else completely different. This kind of divergence caused an extreme whipsaw in market volatility around the world. In the end, by the open of the next US stock market session, there was much ado about nothing and, the US markets ended up closing just off the all time highs, only to see the Dow Jones make new highs later in the week.


So, what does market volatiltiy mean for swing traders? It is GREAT if you trade options like we do. It means you can ride the whipsaws and buy implied volatility when it is low, and sell implied volatility when it is high. A very basic tenet of options trading that we cover in the course. This past week, we anticpated this whipsaw and intentionally sidelined ourselves from any directional positions until after the election. We did take an earnings trade on PCLN, which ended up being a 100% winner, if you held til the close on Friday! Market volatility has a way of benefitting the prepared, and prepared we were. Take a look at the video recap of the trades from the past week below! Also, you can see the entries and exits, as they are alerted in our chat room, via SMS text message and via email.


Swing trade results


Weekly Swing Trade Recap Video for the Week of November 11, 2016

As always, if you have any questions about any of the content in the video or about swing trading, options, or trading in general, don’t hesitate to email us, [email protected]