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Investing strategies

Trading during volatile markets

It's natural to feel anxious about your investments when the markets are volatile. See how you can weather the market swings.
3 minute read

Points to know

  • Trading volumes are high during volatile markets.
  • Volatile markets can delay executions of trades.
  • Don't let emotions override the decisions you made for your long-term financial plans.

What to expect

Volatile markets are extreme and unpredictable. They're characterized by:

  • High trading volumes.
  • The inability of market makers and specialists to quickly match buy and sell orders.
  • The imbalance of trade orders in one direction.

Under these conditions, stock prices can change quickly and dramatically. Real-time quotes can lag behind actual market movements.

Trading tips

When you're placing trades in volatile markets, keep these points in mind:

Orders may be delayed

Your order may execute at a price significantly different from the quotes displayed when you entered your order.

Set prices to reduce risk

Placing a limit order allows you to set an upper or lower limit on the amount you're willing to pay or accept for a stock. There's no guarantee your order will execute.

See examples of how order types work

Watch for systems slowdowns

Because of heavy trading volume in a particular security or the market overall, you may not be able to place an order electronically or you may have difficulty reaching an investment professional by phone.


It's tempting to want to do something when markets are volatile. But that's exactly when you shouldn't act on emotion.

Take a step back and think about your long-term goals and asset allocation. Don't let the day-to-day market noise send you off course.

If your reasons for investing haven't changed and you have a diversified portfolio of stocksbonds, and cash investments, doing nothing is usually best.

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