Volatility in trade: There’s nothing to dislike about it!
Novice traders usually dislike volatility. Variable uptrends and downtrends give them jitters. Volatility demands attentiveness from you all the time, so that you don’t lose out on profit making opportunities at any given time.
On the parallel lines, risk aversion is important as well. Traders just bet on whether risk aversion is up or down – constantly tracking alterations in risk aversion.
The only truth of the game is that if risk aversion is not in place, there is no point trading – bourses become insignificant just as “fixed deposits.”
Volatility is an indicator that tells how variable an asset is over a given period of time. People generally detest their investment worth changing dramatically over long time.
But, more the volatility, better are your prospects in the stock market. How?
A stock market lacking in volatility is similar to a graveyard where souls are missing from bodies. The stocks or other financial instruments become bereft of souls and hence, trading opportunities cease to exist, as prices hardly move.
As already mentioned, the fixed deposits can’t be traded as their prices don’t change much over span of time.
A wise trader is one who can devise good strategies to buy during uptrends and sell during downtrends. It depends how well you strategize and make the most of the volatility in prices.
So, more the amount of fluctuations in prices, greater opportunities lie with you to make money – provided you have a wise head resting on your shoulders.