One of the most common questions that I get on this channel is: Charlie should I quit swing trading now that the overall market direction is uncertain. with market rattling tweets, yield curve inversions, and a bunch of other news catalyst events, it is very hard to buy undervalued positions if they just keep going down because of the overall market conditions. Thus, many people are finding it hard to be consistent. So in this video, we are going to be covering first, how to handle swing positions that you already in.

when the market corrects, or when the market takes a turn for the worst. - we're going to be talking about how a rotating market a market they can't really pick direction can actually be a valuable thing for us. As traders, it provides us with opportunities. And lastly, we are going to be talking about why I personally tend to focus more on short term positions when the markets overall direction is uncertain, as well as what sort of short term positions that I personally see value in and all I ask is that you hit that ravishing like button to help us out with the YouTube algorithm.

And also don't forget to consider subscribing for more short, sweet and simplified videos on how to trade the stock market. Ok, so to start, let's go ahead and answer the first question: If you have already taken a swing position in a stock prior to a massive market move and then experienced one, what should you do? Well, let's take Docu, for example. this is a stock that I've spoken a decent amount about on this channel because of its history of overreactions and over selling and returning to its fair value. So let's say you acknowledge the setup and bought in it for signs of recovering from oversold.

You know that the stock has a previous history have always been a good deal. After buying in and oversold and selling out had overbought. So you execute on that and then boom. the yield curve inverts and all of a sudden everyone is rushing to sell.

Everything in the overall market gets beat down. or you execute on the swing trade and then boom Trump tweet. Something about a trade war and the market gets beat down or moves up rapidly based on the nature of the tweet or any other news catalyst of any sort. Well, what should you do if you're already in a position when this happens? Well, my answer is for the vast majority of swing positions do nothing.

If you are properly setting up trades and properly identifying patterns of undervaluing positions, then a change of market direction should be treated as any other news catalyst driven play. It's impossible to say whether or not a change of direction will continue. just like it is impossible to say whether or not Donkey will repeat the pattern and go back to overbought now. I Do want to be clear: doing nothing is not the same thing as holding and hoping you can do nothing only when and if you set up a sufficient plan beforehand.

The way that I personally set up my swing trades is to set up a specific point at which all sell out regardless of what happens. For example, if I'm taking a position in docu based on previous patterns of overreactions and recovering from oversold entry points, that means it makes sense to exit only when the pattern breaks. I might say to myself, okay, well if we break below this previous support, then all exit or if I took a position in two directional strengths above our long-term resume line, then I'll say okay, well if it breaks directional strength by going back under the long-term red s the male line, then all exit. But the point is, you need to have a concrete entry point in a concrete exit point and if you do this beforehand, then it should be a problem.

If the market turns against you, you are making a plan beforehand and thus executed on it. If things don't go according to plan, the market direction change, a market direction change, or even a massive stock Direction change based on some sort of catalyst is completely out of your control. and thus, when you're making your plan, you have a concrete entry point in a concrete exit point and the exit point. There's two parts to that.

There's what's going to happen if it does what you want, and there's what's going to happen. If it doesn't do what you want, you need to have a concrete point in which you get out in both situations. And moreover, if your stock is genuinely oversold or unfairly discounted at the point you take your entry point, you'll often find that it gets beat down less than the rest of the market. For example, Doc, you did not have two strikes to break back up, but it also didn't get beaten down either.

That doesn't mean that it won't ultimately go down, but it does speak to the quality of the setups. Okay, now question two: should you open these swing trades when the market has got beating down? We know that whenever there is volatility, there is opportunity for us to get in that discounts. So the logic does. Why not just buy in when everything is crashing and this is how I've always felt.

However, the problem is that this isn't always going to be the case, and buying in for a short term position when everything is crashing only really works and it's only really profitable when the overall market is up trending. Overall, there is eventually going to be a point where the market Direction switches back downwards and in which case your positions may close. Unprofitable. So how is it that we can mitigate the risk of this? Well, first off, do not take positions based on the fact that the overall market is discounted, but instead of valuate the individual stock that you are looking to trade on, if we are looking at AMD on a day where the market as a whole was beat down, we can then see how its price action responds after market beat downs.

does it respond with the market or against the market. Most positions that get beat down with the market will go up with the market as well. so tracking back previous price action, informing your hypothesis based on previous patterns will be helpful. AMD has a long history of providing not only entry points at oversold, but also a pattern of providing clean run ups of direction.

For example, buying in upon a clean upper direction has almost always led to clean run ups of direction that then allow you to sell out at a validation under our blue SMA line. So upon discount, we could take the opportunity to buy in at another below fair value entry point and ride the upward potential. And this is where there's some opportunities when it comes to Orchid discounts. and if it just so happens that the market direction continues to drive down long term pulling AMD with it, then we can simply sell out.

When the pattern breaks, breaking previous rejections support would be a solid exit point in that situation. Again, we have a concrete entry point in a concrete exit point and we get out regardless. and in the situation we could say okay, well when the pattern breaks, then it makes sense to get out. And in this situation, a point of that could be previous rejection support when it rejected the downtrend.

Okay, so now for my final point: if you are uncertain of the overall market direction, you'll often find more success simply trading off the volatility in shorter term positions. Your energy is often not going to be as well spent in swing trading as it would be in some volatility driven ETFs and commodities that do well and bad during certain market changes. Let me, market direction becomes more rapidly changing. It makes more sense to focus more effort on shorter positions because they move faster and that provides faster realization of profit.

That means that you are going to want to take advantage of these opportunities while also having a chance to micromanage your positions. And when it comes to day trading, another big advantages that you simply have the ability to monitor for points of confirmation and validation much more effectively than you deal with longer-term swing trades When market conditions move rapidly, that means that the price action run ups are a lot faster and will have cleaner run ups over the SMA line. Take J nugs inverse J DST J DST ran up as Gulf got beat down, but it allowed us to buy in at confirmation point, a very clean confirmation point and sell out at an aggressive validation point below our blue SMA line. But let's just say that you were playing cautious and you bought in at confirmation and simply held out until we closed below our SMA line.

You would have taken most of the move and this was almost a painless position. Compare this to tying up your money in a swing position and you can already see why. During a market downtrend, it's often going to be very smart to focus your efforts on day trading positions. But anyways, folks, this was a short rundown on my take on swing trading during uncertain market conditions.

The key with this video is to explain that if you want to do anything with the stock market, you always need to have a plan I Do really appreciate you taking the chance to watch this video and I do hope that you got some value for your time. I Want to remind you if you'd like to follow more of our videos in the future, make sure you hit that subscribe button. And of course, if you have any questions, feel free to reach out to us below or on the free zip trader circle Facebook group link in the description. Anyways, folks, have a great day and I'll see you in the next video.