Download the Schwab app from iTunes®Get the AppClose

A Trader's Mentality - March, 2019: Navigating Choppy Waters

Follow us on Twitter @Schwab4Traders. This blog updates the first Tuesday of the month; next installment publishes April 9th. 

The market’s day-to-day and week-to-week fluctuations can make a trader question their strategy, decision making and dedication to trading.  This can be particularly true when the market is transitioning from trending bullishly or bearishly to a choppy and volatile period.  When this occurs, a trader might find themselves struggling as they attempt to figure out this new normal. 

Traders often get comfortable trading a specific group of stocks and might be slow to move away from them, even when the charts are giving signals to do so.  If this describes you, don’t worry; you’re not alone.  A good first step can be to consistently monitor the various sectors of the market.  Keeping their levels and charts at the forefront of your mind will be helpful. 

If you’ve been trading stocks in the Biotech industry because the bullish trend was strong, you might be ill-prepared when the Healthcare sector breaks below a key level of support.  This unanticipated drop can be paralyzing.  Not only with thoughts on whether you should be selling your long Healthcare securities, but also with concerns about how you would invest this money should you sell them.  It can be helpful to remember that the market’s sectors often have inverse correlations.

  For example, when investors and traders are comfortable with risk, we might see the Consumer Discretionary sector rallying while Consumer Staples stocks might struggle, as they’re considered defensive in nature.  The implication is that when consumers have money to spend, they’ll buy homes, cars, phones, or other items that might not be necessities.  The flip side of that coin suggests that during times of market and economic uncertainty, investors will take a more defensive position; moving out of cohorts like Consumer Discretionary and Technology in favor of groups like Consumer Staples or Utilities. 

The relationship between the various domestic and international sectors of the U.S. markets is important to understand and monitor. Schwab Live Daily is set up to help you do this.  Each day, you can join Trader Talk in Today’s Market segments as Lee Bohl and I have a conversation about the broad market and what we’re seeing from the charts and news.  It can be a good way to stay apprised of the money movements into and out of the domestic sectors, which can be that first step towards finding your next trade.  Join us for a session soon!

View the calendar for our next session.

What You Can Do Next

  • Register for an upcoming no-cost webinar to dive further into trading topics that interest you.
  • Open a Schwab Trading Services account to access our best tools and services for traders.
  • Read more timely content from our other Schwab trading specialists 

Schwab has tools to help you mentally prepare for trading

Learn more >

Talk trading with a Schwab specialist anytime.
Call 888-245-6864
M-F, 8:30am - 9:00pm EST

Get 500 Commission-Free Online Equity and Options Trades for Two Years

Learn More >

Important Disclosures 

Examples provided are for illustrative purposes only and not intended to be reflective of results you can expect to achieve.

There is no guarantee that execution of a stop order will be at or near the stop price.

The information provided here is for general informational purposes only and should not be considered an individualized recommendation or personalized investment advice. The investment strategies mentioned here may not be suitable for everyone. Each investor needs to review an investment strategy for his or her own particular situation before making any investment decision.

All expressions of opinion are subject to change without notice in reaction to shifting market conditions. Data contained herein from third-party providers is obtained from what are considered reliable sources. However, its accuracy, completeness or reliability cannot be guaranteed.

Schwab does not recommend the use of technical analysis as a sole means of investment research.


Thumbs up / down votes are submitted voluntarily by readers and are not meant to suggest the future performance or suitability of any account type, product or service for any particular reader and may not be representative of the experience of other readers. When displayed, thumbs up / down vote counts represent whether people found the content helpful or not helpful and are not intended as a testimonial. Any written feedback or comments collected on this page will not be published. Charles Schwab & Co., Inc. may in its sole discretion re-set the vote count to zero, remove votes appearing to be generated by robots or scripts, or remove the modules used to collect feedback and votes.