What Trading Will Look Like In 2023

Our world is changing.

And so has a stock market price-action look and feel.

If you look at the chart of the S&P from 2013 to 2017 you can see a stark difference.

Let's take a look at the new world of stocks. 

The average daily volume was around 100 million shares a day and in 2017 that average dropped a little too below 80 million shares traded each day.

There were a few hiccups along the way but generally the market traded in a nice gentle up-slope, occasionally bouncing off the 200 day moving average.

The four year gain was just a little over 93%.

Now, let's look at the next four years from 2018 to 2022.

Doesn't look so smooth.

The average volume spiked back up to over 100 million shares traded each day and while the market generally went up the price action was bumpy and erratic.

The percentage gain for those four years was only 52% compared to the 93% for the previous four year period.

Now let's look at this year.

Yes, the scale is different, but it's easy to see how erratic the market has become.

This year the S&P is down 15.5% and the NASDAQ is down 28.2%.

Trading volumes have been about the same as they have been.

But we're also seeing moving averages converge and then diverge with crossovers indicating even more trading chaos.

So what's a trader to do amongst all this chaos and uncertainty?

1) Recognize there's a new normal out there

2) Don't try to keep trading the same old way.

What worked really well in 2017 will not work in today's market.

As a trader, you probably have a lot of different setups and strategies in your trading arsenal.

Go through them one-by-one and ask yourself the question, "Will this trade setup bring me success or does it just point to a losing scenario?"

So let's look at a few of those scenarios.

The Buy And Hold Method

In this market, this method is not working.

Buying Options Based on Market Direction

Well, that can work but notice how short the time periods are. So you're in and out of a trade in less than a week a lot of times and you have to be paying really good attention to your trades.

Debit and Credit Spreads

Again, they're directional and you have to calculate how the market is moving day to day

Iron Condors

Now I did a bunch of them this year. They did fine, but the market also had slowed down and was going sideways.

Credit Verticals

Credit, or diagonal verticals rather, will do well.

So the main thing to keep in mind as you trade in this chaos is to make sure to match your trade to what is really happening.

And second, realize even though trading is rough right now. It won't be the same in just a short time.

The market changes day to day.

Becoming an educated thinker is the only way to navigate rough waters for incredible returns.

How have I fared in 2022?

On most people's scale, I'm doing really well.

As I write this our DATA class has just finished the eighth week of trading and my account is up about 52% through those eight weeks.

I will also let you know that I've struggled and I'm feeling a little discontented with my returns. I know that by most standards gaining 52% over a rough eight weeks of trading is considered phenomenal. But normally by the eighth week I've doubled my trading account.

Our next data session starts on Thursday, January 12.

But if you're brand new to trading or have minimal trading experience, I have a couple of suggestions for you to get started on the right foot.

If you're brand new to trading, grab our Options Trading Beginner Blueprint. The course is only $24.95 but it's going to set you up so you won't have missteps.

We have a whole journey of courses at Investing Buddies. To help you easily determine your starting point, take the quiz by hitting the button below.

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I love to trade. It's fun for me, and I believe it should be fun for you too. 

But I learned my trading over 20 year period through a lot of trial and error. Some of those errors were really painful. I want your journey to be a lot smoother, more concise and a lot less painful. So come join us at Investing Buddies!