http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect Trading the Stock Market Yo-Yo Effect ABC News reports that oil is heading lower and Barrons wants you to buy any of ten supposedly undervalued stocks. Falling oil prices drag stocks downward and the prospect of higher US interest rates as early as next month scares emerging markets. And all this while stocks rise and fall. Unlike long term investors who look to rationalize the market, traders make money trading the stock market yo-yo effect. Stock Volatility Years ago we wrote about trading high volatility and low volume. That was in 2010 as the market was still struggling to recover from the 2008 crash. Here is a sample of the thinking at that time. trading high volatility and low volume in today’s stock market should come with a warning, “kids, don’t try this at home.” certainly many hedge funds are currently sitting out the market volatile moves. the sorts of economic and political indicators that the people who manage over a trillion and a half dollars in assets watch seem a bit crazy these days. although leaders at the canada summit agreed to austerity measures it is uncertain how soon and how much and where such fiscal cutbacks will occur. the final shape of financial services regulations is not yet clear. although asia seems to be leading the world out of the recession the exact size and shape china’s future growth prospects is also unclear. the fact that hedge funds as a group lost nearly twenty percent of their invested capital just two months ago has taken the edge off of many traders’ zeal. the fact that folks are trading high volatility and low volume is a function of few traders willing to commit their funds to the market and the lower liquidity that goes with low volume. technical analysis can be more risky when numbers are smaller making the pure technical traders wary.

1. Trading the Stock Market
Yo-Yo Effect
By www.ProfitableTradingTips.com

2. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
ABC News reports that oil is
heading lower and Barrons wants
you to buy any of ten supposedly
undervalued stocks.

3. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Falling oil prices drag stocks
downward and the prospect of
higher US interest rates as early
as next month scares emerging
markets.

4. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
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5. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
And all this while stocks rise and
fall. Unlike long term investors
who look to rationalize the
market, traders make money
trading the stock market yo-yo
effect.

6. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Stock Volatility

7. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Years ago we wrote
about trading high volatility and
low volume.

8. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
That was in 2010 as the market
was still struggling to recover
from the 2008 crash.

9. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Here is a sample of the thinking
at that time.

10. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
trading high volatility and low
volume in today’s stock market
should come with a warning,
“kids, don’t try this at home.”

11. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
certainly many hedge funds are
currently sitting out the market
volatile moves.

12. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
the sorts of economic and
political indicators that the people
who manage over a trillion and a
half dollars in assets watch seem
a bit crazy these days.

13. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
although leaders at the canada
summit agreed to austerity
measures it is uncertain how
soon and how much and where
such fiscal cutbacks will occur.

14. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
the final shape of financial
services regulations is not yet
clear.

15. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
although asia seems to be
leading the world out of the
recession the exact size and
shape china’s future growth
prospects is also unclear.

16. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
the fact that hedge funds as a
group lost nearly twenty percent
of their invested capital just two
months ago has taken the edge
off of many traders’ zeal.

17. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
the fact that folks are trading high
volatility and low volume is a
function of few traders willing to
commit their funds to the market
and the lower liquidity that goes
with low volume.

18. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
technical analysis can be more
risky when numbers are smaller
making the pure technical traders
wary.

19. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
trading high volatility and low
volume can be very profitable but
it is the risk of substantial losses
that is keeping many traders on
the sidelines these days.

20. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
trading options with a strategy
such as using straddles in the
recovery market may be a better
choice than trading stocks
directly in high volatility and low
volume.

21. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Since that time it has become
clean that China cannot continue
the rapid pace of expansion that
it held for decades.

22. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Straddles are still a good
approach when the market is
volatile.

23. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
And technical analysis is still the
tool of choice for day traders
trading the stock market yo-yo
effect.

24. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Short Term Profits
Instead of a Long Term
Crystal Ball

25. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Anyone who can clearly see the
future can profit greatly from a set
of well-chosen stocks.

26. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
But the future is easier to predict
in the shorter term.

27. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
And very often available profits
can be obtained by being in the
right stock (or shorting the right
stock) at just the right time.

28. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
Trading the stock market yo-yo
effect is how day traders make
their living.

29. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
With solid technical analysis tools
it is not necessary to fully
understand the forces that move
the market.

30. http://profitabletradingtips.com/profitable-trading-tips/trading-the-stock-market-yo-yo-effect
One need only use statistically
accurate tools that predict where
the market yo-yo is going to go
up or down and how soon.