Turn Market Volatility into Strategic Opportunities!

Hi Folks!

Today I just wanted to give some quick thoughts on the current market and cover some straight forward strategies and mindsets in order to handle this volatile market head on!

First I'd like to give a quick update on the AoT Top Pick of the Week and how I've been navigating that strategy for the first 3 months of the year!

The AoT Top Pick of the Week printed a new YTD 2026 high of +22.93% as of last weeks close. In this post, I will share with you how the AoT community managed to significantly outperform the Nasdaq and S&P500, in such a consistent manner in the first 3 months of 2026.

At the end of 2025 I analyzed the Top Pick performance from 2025 to see where improvements could be made for the strategy going into 2026. I actually do this at the end of each year for the strategy but sometimes it can be hard to identify key weaknesses during consistent runs of strength. 2025 was very up and down for the strategy with larger than usual drawdowns which made it easier to see where the weaknesses lie. The main finding was the occasional 2 week hold modification to the strategy from time to time was the main point of weakness and in almost all circumstances the larger than usual drawdowns were produced inside of this condition.

I finished that post with this statement -

"In 2026, we'll be going back to the basic rule set of the strategy to get the strategy back into where it was in 2022 through 2024. Reducing the chances of deeper drawdowns and slippage. Eliminating 2 week hold modifications could be a great first step. Obviously market environments, VIX, and a wide variety of suitable weekly trades plays a big part in the strategy, which sometimes can be completely out of the traders control."

you can read that post in its entirety here:

https://www.artoftrading.net/post/2025-top-pick-of-the-week-review

So how have those changes worked out for the first quarter of 2026?

The modification to the strategy has been fully implicated into the 2026 Top Pick of the Week Strategy. In addition any chance that I get to sell into strength I take. Usually looking for 5% - 7% short term gains to sell half of the position into, immediately. Obviously this has worked very well since volatility in the market has been quite consistent so far for 2026.

The results speak for themselves. The Top Pick Strategy for 2026 is now sitting on a +22.93% YTD gain for 2026. This is a very strong start to the year for the strategy and will allow us to continue to put positions on in volatility with a cushion to work with, responsibly.

Here are the trades that have been taken each week so far for 2026.

You can find the entire 2026 Top Pick of the Week overview here:

https://www.artoftrading.net/post/aot-top-pick-weekly-update-2026

Ok, now lets get into some short term trading strategies and trades that AoT completed last week in order to finish the week strong!

I've always been in the boat of quality over quantity and taking a methodical and mindful approach to every trade that I take. Less has always been more and that is especially important in news driven, geopolitical, wishy-washy markets. Managing risk with less trading and netting PnL quickly on trades that work is my focus.

Two strategies that work especially well in markets just like the ones we've been experiencing are the R2G strategy, (specifically buying gap down weakness in strong trending stocks such as $AAOI, or $SNDK for example) and the Avalanche trade strategy. Where you look for strong trending stocks that sharply sell off at the open into 11AM EST, specifically looking for 5%, 7% and sometimes 10% - 12% moves lower in the first 90 minutes of the trading day.

We've talked extensively about these strategies in the official Art of Trading blog over the years but if you've like to refresh yourself with these strategies, with actual real world examples take a look at this previous posts here:

Now switching focus into my short term swing trading strategies, including the Top Pick, utilizing the same short term, hit and run style mindset. Taking a methodical, less is more approach, this is how I navigated last weeks trades.

Lets start with the Top Pick - $STX

I give AoT private members an overview with my plan leading into the week, with the Top Pick. Generally speaking I keep it simple. Usually highlighting the plan to manage the position into strength and then reevaluate from there. This was no different for $STX moving into last week.

Here was the general overview for $STX last week:

AOT Top Pick for this Week: $STX

$STX (long setup): A relative strength leader as the general has been pulling back and as indices steadily approaching oversold readings in NYMO and NAMO, we want to be in this leading name this week. 

Quick heads up: if $STX sees a quick bounce of 8% to 10%, I'll look to sell at least HALF, if not all and close the trade early.  

Targets: $425 and $460

It didn't take long for $STX to show that strength and as per the plan AoT members sold a partial into that!

The second portion was sold the very next day at $418.60. Again with a very simple and straight forward alert and approach. Nothing complicated.

The next point of focus from last week was the $AAOI swing trade that AoT private members took!

I had been stalking this idea for a few days, waiting for the stock to trade down near the 20 day EMA. Basically the plan was to buy into weakness after 5 strong days of selling and a reversal of 35% off of recent highs. This allowed for a low risk, high reward entry. A straight forward, simple trade!

The entry was taken about an hour after the open on March 17th on the back of a gap down open and on the 4th day of selling pressure. The stop was set tight enough to make the risk vs reward on the trade make sense.

Less than 24 hours later I took gap up strength to net the PnL!

A quick 7.5% gain on a very red and volatile day in the market!

Last week flowed quite well. I made a total of 3 trades: $STX, $AAOI and $NBIS and I was able to net fast, worthwhile PnL on each!

A dedicated AoT member shared some meaningful feedback as well:

A straight forward, mindful, less is more, focused approach has treated AoT well to start 2026! I look forward to sharing and updating trades as we continue to navigate this wild market!

Cheers and Happy Trading!