Hands Down, the Best Way to Trade Today’s Stock Market Volatility Successfully: Cash Out & Buy Physical Gold & Physical Silver
By JS Kim
Wednesday, 24 October 2012
Hands down, the best way to trade stock market volatility day today is simply not to do it, cash out, and purchase hard assets, in particular, precious metals. Attempt to trade stock market volatility given how rigged every market in the world is today, and you will eventually get burned, and likely burned badly. Of course it is very possible to trade market volatility and also make loads of money but in order to do this, one has to wait until near-perfect set ups exist and as every trader knows, the enemy of most traders is patience and most enter in and out of markets way too frequently. Thus, the opportunities still exist to trade volatility but since markets today are way less “free” than they were even just five years ago, the dangers of doing so are more marked and more leveraged against the retail trader and more in favor of the behind-the-scenes manipulator. For example, sometimes the trades will go in the direction many believe as in the huge declince of Facebook since its overpriced IPO, but at other times, stocks such as Chipotle Mexican Grill (NYSE:CMG) can be hyped and overvalued for months on end as long as hedge fund managers and trading algorithms decide to pump and support the stock. Thus, stocks whose shareprices are artificially pumped and supported by algorithms will not decline gently but instead, come crashing down when the decline finally begins (CMG’s shareprice has lost about 45% in just the past four months). However, most retail traders simply are not willing or are simply too trigger-happy to wait weeks, and sometimes even months for that near-perfect setup. Get sucked into these volatile markets, the bulk of volatility which is artificially created by computerized algorithms and has nothing to do with supply and demand dynamics and economic strength and weakness, and you will lose. Today, the weakest companies can rise for months on end and the strongest companies can fall for months on end because trading algorithms have seized control over stock markets and made honest and integrity and economic soundness moot principles in the short term.