How to avoid the volatile market when doing trend trading?
This is a question from a friend, who said: "We are doing trend trading, and the volatile market is hitting us back and forth. Can we avoid it perfectly?"
The answer is: This is an ideal state, which is impossible in reality. The effective way is to follow the trend honestly.
Why do you say that?
All those who do trend trading want to avoid the volatile market. It is best not to do it when it is volatile, and get on the train when the trend comes. There is no cost and big profit. Just imagine, this is possible. If you don't participate in the volatile market, how can anyone know when the trend market will come? If it really comes, you may not have a chance, because profit and loss come from the same source, volatility is cost, trend is profit, and profit without cost is difficult to last long. Similarly, no strategy can digest all the market conditions. Strategies have their own advantages and disadvantages, and they are all based on giving and taking.
The solution to volatility is position management. For trend traders, the principle of profit is: the profit of the trend minus the cost of volatility, follow it with the position you can afford, and then, before the trend comes, it is still there.