Trader Tips
May. 13, 20256 min read

Capitalize on the Current Volatility

Tim BohenAvatar
Written by Tim Bohen Reviewed by Jeff Zananiri Fact-checked by Jack Kellogg

I talked yesterday about why we thrive on volatility as day traders.

We’re trading price action, not tickers. Remember that.

Buying the company for its fundamentals is for long-term investors, and that’s not what we’re focused on here.

And especially during April, plays on volatility have been our saving grace.

They’ve brought us big winners and continue to bring us big winners while the broad market went through its “Tariff Day” selloff and slow recovery. 

And now the market’s back. Soon, we’ll forget the April downturn even happened…

What we won’t soon forget is the event Nvidia’s CEO, Jensen Huang, is about to set off…

This could change everything.

Fortunately, my colleague and legendary trader, Tim Sykes, has a handle on it and knows exactly what you need to do BEFORE this happens.

Find out in his video below…

Volatility creates opportunity. Without big moves, we don’t have anything to work with. 

You might be asking, “Where did all this volatility come from in the first place?”

First, let me start with another question I get from a lot of traders:

“Should I trade with a cash account or a margin account?”

So what does this have to do with the volatility discussion?

Everything…

Once you remove the effect of investor reaction to headline noise, which is what we saw in April, margin trading is exactly what’s causing much of the volatility in the first place.

Margin and Why It’s Risky for New Traders

I know, I know…

Margin sounds exciting. You want to trade bigger, scale up faster, and maximize your gains.

But if you’re new, I urge you to avoid margin.

Why?

Because margin is like dumping gasoline on a fire you don’t fully understand yet. 

You think you’ll be disciplined. You say you’ll “trade small”… 

That is until that one trade comes along that feels too good to pass up. 

And now you’re over-leveraged, oversized, and emotionally wrecked.

Don’t worry, this isn’t all bad news…I’ll tie this all back to trading volatility along with some good news a little bit later…

So What Is Margin, Really?

Most brokers will give you up to 4-to-1 leverage. 

That means you can deposit $2,500 in a margin account and suddenly have $10K in buying power.

This sounds great until a trade goes against you… 

Now your losses are multiplied by four. 

Gains are amplified, but so are the losses. That’s the part most new traders ignore.

Why Cash Accounts for New Traders

If you’re new to trading, start with a cash account.

Here’s why:

  • No leverage (which is actually a good and safer thing early on).

  • No Pattern Day Trader (PDT) restrictions.

  • You can only trade with what’s settled, and that teaches discipline.

And guess what! With a cash account, you can still day trade all that volatility to your heart’s content…

Well within your risk tolerance, of course. 

Capitalize on all that price action the margin holders are creating…

And without the threat of larger-than-normal losses that leverage can create if the trade moves against you. 

Focus on Skills, Not Leverage

The goal in your early trading career isn’t to hit home runs. 

Your goal is to learn how to manage your risk, stick to a plan, track your trades, and grow your account consistently. 

You can consider adding margin once you’re consistent and seeing small, steady account growth. But not before.

What’s the best way to learn your strategies and practice them?

Have a great trading platform at your fingertips, like StocksToTrade. 

With STT, you can chart your stocks, apply your technical indicators, and practice your strategies in a paper-trading environment.

It has everything you need to stay ahead of the game, all in one place

And right now, you can get two weeks of both the STT platform and our Breaking News Chat service for $17.

Grab your 14-day StocksToTrade + Breaking News Chat trial today for only $17.

My Final Thoughts…

Just getting started?

  • Use a cash account.

  • Trade small.

  • Focus on learning the process.

  • Protect your downside.

  • And don’t rush the growth.

Volatility can be a gift, if you’re ready.

But if you’re over-leveraged and underprepared, it can be your biggest enemy. 

Respect the risk. Master the process.

For more trading advice, I hope you’ll be around this Thursday, May 15th, at 7 pm ET.

I’m going live for a special emergency market briefing with trading genius Jack Kellogg…

Why now?

Because Treasury Secretary Scott Bessent just dropped a warning that trade negotiations could drag on into June… 

And with Trump’s tariff pause ending in July, uncertainty is building fast.

Jack knows we’re staring down the barrel of a new wave of volatility, and he’s not backing off…

In fact, he sees a once-in-a-lifetime opportunity….

That’s why, during Thursday’s live event, Jack will show you how you can take advantage, too.

Plus, he’s giving away a FREE trade idea he believes has the potential to double by 2025, regardless of what happens with tariffs.

Over 3,000 people have already signed up to hear what Jack has to say on Thursday. Don’t miss your chance!

Reserve your spot now for the Trade War Lifeline Summit.

Have a great day, everyone. See you back here tomorrow. 

 

Tim Bohen

Lead Trainer, StocksToTrade

 

P.S.