Breaking headline news: Trump asks US trade representative to consider $100 billion in additional tariffs on Chinese products.
Just when we have an easing of trade tensions, this has flared up again... shortly after US officials calmed down fray nerves following China's retaliation. Now eyes would be on China again for further retaliatory moves.... I remain bearish short term as these would likely continue until such time both sides come to the table and negotiate a final outcome or till we have a very strong earnings reporting season. That said, it has been difficult to trade the Market and stops need to be put quite wide away due to the increase in volatility. A strategy that I have used prior was to place stops at 1 ATR or near recent candle stick highs in my short term swing play and to take profit when a 2 times risk returns has been achieved. Now, I take profit at 1 times risk return and while stops have been placed based on my prior strategy, I shift my stops to 0.5 times risk when I have momentum moves in the direction of my trade. I am also quicker to cut when daily candles / patterns is contrary to my position. So far all trades have been short and I tend to initiate short positions when the market trades higher and take profits after a strong overnight move lower. As such, my holding period has shortened to 1 week and I am trading very nimbly... Please share how you are coping with this increased in volatility if you are a short term trader. Do you increase your stop loss distance, trade more nimbly or trade shorter time frames?