Does Market Volatility Impact Day Traders?
To be sure the level of volatility in nearly every market segment in recent months impacts all investors. Buy-and-hold investors and day traders are all concerned about or aware of drastic swings in market values. Notable impacts from such volatility include:
- Commodity prices are dropping – even precious metals such as gold and silver have cooled in value and demand by investors.
- Oil is at an unbelievably low price – below $30/barrel – largely due to oversupply. New production sources and extraction methods such as fracking combined with continuing Middle East production levels has created a glut that generates happy consumers at the gas pumps, but certainly does nothing to help oil company profits.
- Tech sector companies that are highly-respected and highly-valued are yielding lower profits – or even losing money.
- Global economies are stagnating or even slumping. China is a perfect example – the second-largest economy in the world has experienced a slowdown that is expected to continue into the foreseeable future. This means reduced consumer spending in nearly every category from luxury items to automobiles and entertainment in the Chinese economy.
Day traders who have the experience to monitor these factors and interpret them successfully can make profits from such down markets. Analysis of trends and common sense observations can transform market volatility into opportunities for trading profits.
How to Make the Transformation from Market Volatility to Profit
It’s not only professional day traders who have the insight and knowledge to profit in today’s markets. Individual day traders can realize profits during these times as well. Historically there is an upside to every downturn. Recognizing the right move at the right time is what day trading is all about. Even a small percentage in gains is money in your account so don’t hesitate to move when the indications present themselves.
Market trends and indexes help day traders determine when individual stocks or sectors are anticipated to move up or down. Detecting that a stock has bottomed out signals the time to buy and benefit from the ride back up. Set your limit loss value in advance to avoid significant losses should the value continue to decline.
Consider the opposite reaction from declining stocks. Declining oil prices certainly make investors wary of diving into petroleum-producing company stocks unless you believe they truly have bottomed out. On the other hand, low oil prices present other opportunities due to lower gasoline prices that provide expendable income for consumers. Potential uses of those funds may be:
- Automobile and truck purchases
- Luxury items such as leather goods, jewelry, and fashion clothing
- Vacations – recessionary times have made many workers desirous of family vacations and trips they could not afford in harder times. Hospitality sectors could potentially reap the benefits.
Each of these categories – and more – is a potential target for day trader profits. Using analytical tools to track trends that pinpoint the right investment opportunity will enhance the probability of day trader success.
Market Volatility and Day Traders
Day trading can be a profitable activity not only in bull markets, but also in bear conditions. Recognizing opportunity and making trades at the right time are the keys to success. A full-service online broker who facilitates access to real-time information and analysis tools will help ensure efficient and profitable trades.
SureTrader is a leading online broker with tools and news sources for accurate analysis and lightning-fast trade execution. SureTrader provides friendly and courteous support available to our clients on a 24×7 basis to answer any questions and resolve problems.
SureTrader’s desktop and mobile applications ensure timely and flexible access to SureTrader services – iOS and Android platforms are each supported. Global access to services enables quick and easy trades even in after-hours trading.
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Disclaimer: SureTrader Blog is not intended for U.S. persons. Stock information is not to be viewed as buy or sell recommendations.