Stock market trading is the art of learning, understanding the market, and making needful investment decisions. If you are confident about your market portfolio and your investment thesis, you need not have to worry about volatile markets affecting your portfolio negatively. If the volatility can affect your portfolio, then it becomes a risk. To mitigate the same, you should keep in mind certain factors that can increase the sustainability of your portfolio So that even temporary negative news for a particular stock won’t affect your portfolio in long term.

The first and foremost advice one should follow is to diversify your portfolio in various types of stocks such as growth stocks, blue-chip stocks, defensive stocks, penny stocks, commodities such as metal, oil, rubber and different sectors. You can also invest in other schemes such as fixed deposits, SIP (systematic investment plan), mutual funds, ULIPs to create a balance between growth (high risk) assets and defensive (low risk) assets to protect you from volatile markets.

Understand how much risk and loss you can withstand investing. If you have invested before, keep track of your investments. This will ensure that you won’t incur losses and help you do necessary portfolio corrections, which will negate the impact of volatile markets.

You should always keep your personal wealth and portfolio wealth separate, as the collapse of the portfolio can trigger your emergency funds. It is prudent to keep your liquid assets on the go and the stock market portfolio separate. This will also help you be calm in volatile situations and prevent you from making rash decisions that may be taken emotionally and in panicked situations. Emergency funds like Fixed deposits or liquid funds could be encashed quickly.

After you are confident that your portfolio is diversified, you can have a different emergency asset other than your portfolio to withstand any risk. You can gain from the volatile market by hedging in the same and profiting through it. You can deploy various strategies such as investing in trending stocks that swing in the intraday market, learning the candlestick chart and understanding when a breakout of the stock may happen while placing a stop loss to avoid mistakes that may result in huge losses. You can also trade in the future and option trading which will help you to take advantage of market volatility. Keep in mind what percentage of profit you wish to gain through this trading. Once you have achieved the profit, exit the trade without risking your portfolio any further. Before entering into trade predetermine your stop loss and profit. Remember don’t be greedy and believe in your strategy.

Thus, in summary, having a solid investment strategy in stock market trading requires meticulous research and patience, and risk tolerance. You can predetermine these volatile markets by keeping track of news that can easily create a ripple in the market. Create a defensive portfolio to withstand the same, and then trade the trending stock while keeping a stop loss to make profits even in bear market conditions.

Happy Investing!