Trading volatile markets without losing your head

When oil jumps three percent in an hour or gold breaks a record, it is tempting to jump in. Volatile days are where most beginners lose the most money.

The first thing I change is size. If a market is moving twice as much as usual, I trade half the size, so my risk in dirhams stays the same even though my stop is further away.

Second, I check the calendar. Interest rate decisions, oil producers' meetings and US jobs data all cause sharp moves. If a big release is due within the hour, I usually wait for it to pass.

Third, I let levels do the work. On fast days, the previous day's high and low and the weekly open often act as support and resistance. I wait for price to close beyond them rather than chase the first spike.

And sometimes the best trade is no trade. Missing a move costs nothing. Chasing one can cost a month of careful work.