Well although derivitive traders welcome volitility,there have been some events that have taken even day traders by surprise and this has been a difficult time to profit from some of the moves such the so called"thick finger" US move.
In trading derivitives over any time -span it is always wise to keep a stop-loss in place.As the market becomes more volatile it is usually better to tighten the stop-loss.
At the moment the South African market almost slavishly follows the Dow which in turn follows the relationship between the US Dollar and the Euro.When the Euro weakens against the Dollar the shares come off on the Dow and then the reverse of course i.e. When the Euro gains against the US dollar The DOW and NASDAQ shares strengthen.
Another index one can watch to see when trading in about to become very volatile is the VIX.The higher it goes the more skittish traders are about buying.
All the major RESOURCE SHARES are now at the bottom of their STOCHASTIC INDICATORS and most have made false starts at recovery.Do look at other indicators before deciding to go long such as the RSI and watch for narrowing of the Bollinger Bands and of course moving averages. The share looking the best at the moment is ACL
Banks were at their best on Thursday last week to SHORT and now you It would seem as if they still have some way to run before reaching the bottom of the Stoch.Perhaps NED and OML would be good prospects for shorts,if the rumour about a take-over is not confirmed in the next couple of days.
ALWAYS REMEMBER TO KEEP YOUR STOP-LOSSES IN PLACE IN CASE THE SCERANIO DOES NOT TURN OUT AS YOU EXPECTED.
