Follow Your Rules, But Not Over a Cliff! | Seth Freudberg

Seth Fruedberg explains various strategies to employ in volatile markets. The key is to have a trading plan and follow it. It is important to take your stops. However, sometimes it is best to be completely out of the market. Knowing when to simply exit is a key to longevity. Fruedberg teaches students to follow their plan but acknowledges he would have lost much more money in the volatility markets of March if he took every one of his trades. Ralph Waldo Emerson wrote, "Foolish consistency is the hobgoblin of small minds." For traders that means that while they should follow their rules, they shouldn't follow them in a suicidal manner. Fruedberg says that when the VIX spiked above 30 for several days he decided to exit some of his trades.