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Stocks have slowly but steadily crept higher since the start of the new year, and by most metrics I track, it looks like this trend is set to continue into the near-term future.But already this year, I’ve heard stories of traders blowing up their accounts due to the market’s volatility. But when you zoom out and realize that the Dow only corrected around 7% from its last all-time high, it’s painfully obvious that these traders were taking way too much risk.But today, I want to talk about the nature of this volatility that we’ve seen, because it’s different from what we’ve seen in recent memory. Here’s what I mean… 

When in Doubt, Zoom Out
We’re in a trading environment where headline risk is the highest it’s been in years. The thing to understand with this volatility is that it’s mainly on an intraday level. In other words, we’ve seen several days marked by weak opens and strong closes.This is part of my obsession surrounding closing prices. I consider it the final score of the day. It’s also why most of my trading centers around it, especially with the Trinity Trade. If you’re having trouble coping with these intraday price swings, and you find yourself selling early before stop losses are triggered, it’s probably a good idea to reduce your position size. Remember, if you can’t win small, you’re not going to win big. And even then, any leverage that you take on in your account should be minimal. In this world of abundance in which we live, less is more.Drawdowns are an inevitable part of trading, but the most important thing is to not let those periods change how you trade. Many will try to revenge trade and quickly make back the lost money, not realizing they’re taking even more risks in the process.You can’t just think about dollars in this business, you must think about time as well.As long as the math behind your system checks out (mine has a breakeven rate of 25%), you can sit back, relax, and just keep playing your hand in a calm, cool, and collected manner.Trading is a skill that needs to be trained like anything else, and unfortunately, just showing up isn’t good enough. There is a better way to do things, and that’s what we try to focus on here at TheoTrade.More By This Author:The Charts Say We’re On The Edge Of A Move
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