We are about two months in since the market broke its longer term uptrend. With the break of that uptrend has come a sizable increase in the market’s volatility. There are trading opportunities up the wazoo. But one thing we have noticed about this volatility versus what we saw in the fall of 2008 is the time stocks spend trending intraday. The easier money was made in 08 hitting bids and paying offers very aggressively and getting out the second your position starting ticking in the other direction. We are not seeing that as much in our current market.

So how do you adjust your trading to deal with this type of volatility? First thing is to make sure you are not banging in/out of positions haphazardly. If you identify stocks as strong/weak then try to use the higher level of volatility to capture larger moves and not to write more tickets. Second, when a stock has broken its intraday trend and started moving in the opposite direction don’t fight the new trend and in fact try to find a spot to jump on board.

One of the toughest things most traders have to deal with is adapting their trading style to fit within current market conditions. But it is the one thing that allows for career longevity.

Here is an example of a stock many on the desk were trading early last week on the short side. My mentee popped by my office Wednesday morning bemoaning the fact that he didn’t make enough money short when it traded below 21.80. I asked him to make sure if it traded above this level that he got long.

Steven Spencer is a co-founder of SMB Capital and has been trading professionally since 1996. More of his trading and market commentary can be found here.