Volatility trading strategies can be very profitable. As an example, we show you an equity curve that only trades when volatility is above what is “normal”. We use a 200-day moving average as a filter for when we want to enter a trade. Because the volatility picks up when investors are “panicking”, we only look at trades when the SP 500 is below its 200-day moving average. When volatility picks up, even short trades become very profitable! This article discusses different aspects of volatility trading strategies. Why volatility? In order to make money trading, you need prey.
One of the prerequisites for trading is volatility. No volatility, no prey. No prey, no gains. Thus, it might pay off to trade during panics, stress, and volatility. It might be scary, but it’s normally during these times you can make decent profits. Here you can find more than 200 trading strategies similar to the above strategies. (We have made potential trading strategies based on volatility.
