[Keep an eye on volatility to manage your trades better]

Here’s the thing:

The market moves in volatility cycles—from a low period of volatility to high volatility, and vice versa.

This means if the market is in a low volatility environment, it’s a sign the market is about to make a big move (and you want to be prepared for it).

Here’s an example…

Let’s say you went long on the 4-hour timeframe and the market quickly moves in your favour.

Also, you noticed the daily timeframe has formed a buildup, a low volatility price pattern which looks like a “squeeze”.

So, what do you do?

• Hold your trade with the hopes that if volatility expands, it does so in your favour

• Exit your trade at the nearest swing high as the market might reverse against you

• I don’t know

For me, I’d hold my trade because there’s a huge profit potential if volatility expands in my favour.

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