By understanding that you need more capital on hand to trade volatile margins, you will have more staying power than the average trader. The trader using margin as a guideline will not be able to stay in the position. A trader who understands that volatile markets can have higher trading ranges than the exchange margin should be able to ride out the storm better.
TAKE NOTHING FOR GRANTED
IN A NUTSHELL
All in all, the most important thing to take away is that when the markets are volatile, traders need to reduce their risk exposure. While volatility may provide extraordinary profit potential, it also may lead to greater than normal risk. Traders need to manage this risk while still being able to take advantage of price movements in the market. By reducing their risk exposure, traders will be able to stay in the game and have the opportunity to go after substantial price moves.