Volatility survival: Octa broker's top 6 rules for turbulent markets

Financial markets are never simple, but today's environment presents a dizzying array of complications. Sharp swings, sudden reversals and headline-driven moves have become the norm. What was once a profession demanding keen analysis and steady nerves now feels like navigating a minefield blindfolded. Octa broker outlines key themes that are keeping traders awake at night these days and is providing some advice on how to protect their capital and maintain a disciplined approach.

What's going on

Here's a snapshot of just a few ongoing developments fueling the turmoil.

1. The U.S. government shutdown. The ongoing U.S. government shutdown has effectively resulted in a fog of uncertainty, reducing market visibility for retail traders, institutional investors and the Federal Reserve (Fed) itself. Key agencies, including the Bureau of Labor Statistics, are closed. This means the market is operating without vital reports, such as the Nonfarm Payrolls (NFP), Consumer Price Index (CPI), Retail Sales, and even Gross Domestic Product (GDP) figures. Traders are left operating in an informational vacuum. Unable to gauge the true health of the economy, they are forced to rely on fragmented, secondary reports from private sources.
2. Geopolitical instability. Renewed tensions in the Middle East, even if temporary, are destabilising energy markets and undermining efforts at regional diplomatic de-escalation and peace-building. Furthermore, U.S.-China trade tensions are on the rise again, intensifying dramatically with the latest news on tariffs and restrictions on rare-earth exports that emerged last week. The diplomatic impasse that the world's two largest economies find themselves in threatens to reignite a trade war, rattling supply chains and risk sentiment. Indeed, the two countries' bellicose rhetoric has already hammered markets, with the U.S. dollar sliding against safe-haven currencies like the Swiss franc and yen, and major indices like the S&P 500 and Nasdaq suffering their worst daily drops in months. Within hours after U.S. President Donald Trump threatened to impose a 100% tariff on Chinese goods, risk sentiment collapsed. Investors fled equities, with the Dow Jones, S&P 500, and the Nasdaq down 1.90%, 2.7%, and 3.56%, respectively. In fact, for the S&P 500 and the Nasdaq, it was the worst daily performance since 10 April.
3. U.S. regional banks. Mounting problems in U.S. regional banks add yet another layer of instability. Stocks in the sector plunged sharply last week, with Zions Bancorporation dropping 12% after disclosing a $50 million third-quarter loss on problematic commercial loans. Western Alliance fell nearly 11% amid a lawsuit alleging fraud by a borrower, while Jefferies tumbled 9% due to exposure to bankrupt auto parts maker First Brands. These issues have revived investor unease about the stability of the broader financial sector, a discomfort not felt so keenly since the bank failures of 2023.

Trading in chaos

In this chaotic environment, markets are becoming increasingly unpredictable and volatile, with sharp moves occurring more frequently and with greater intensity. Liquidity can evaporate in moments, as seen in the recent 'Bloody Friday' selloff triggered by Trump's tariff announcement. On that day, the CBOE Volatility Index (VIX) spiked to its highest level since June, reflecting surging market anxiety. Cryptocurrencies endured a historic crash, with over $19 billion in leveraged positions liquidated in under half an hour. Equities, Forex pairs, and commodities are all prone to wild swings, often driven not by fundamentals but by unscheduled headlines—be it a presidential tweet, a geopolitical jab, or a surprise policy shift.

For retail traders, the key risk is reduced visibility in an uncertain market, which complicates decision-making. However, even with limited visibility and high volatility, traders can take steps to navigate the market more effectively. Octa broker, drawing on its experience serving retail traders since 2011, offers the following recommendations:

• Monitor private data. Since official data is locked up, traders should keep an eye on sources like ADP Employment Report, Challenger Job Cuts, Institute for Supply Management (ISM) reports, the Fed regional surveys, the Conference Board (CB) Consumer Confidence Index, and Case-Shiller Home Price Index and S&P Global Purchasing Managers Indices (PMIs) as substitutes, but be aware that they are imperfect. Specifically, S&P Global PMIs are due this Friday and will provide harmonised snapshots of economic health across major economies.

• Focus on central bank communications. Numerous Fed officials are scheduled to speak this week. With no hard data to analyse, their comments will be intensely scrutinised for any hints regarding their view of the current economic state, inflation expectations, and, most importantly, any changes to future U.S. monetary policy.

• Keep an eye on political negotiations in Washington. A surprise funding deal in Congress could abruptly end the shutdown, unleashing a wave of economic reports that have been accruing over the past weeks. In particular, a backlog of labour market data, including NFP and Jobless Claims reports, might flood the market on short notice, sparking massive, unpredictable volatility as traders scramble to digest overdue insights. This data deluge might reveal surprises—perhaps hotter-than-expected inflation or weaker job growth—that contradict current assumptions, leading to violent repricings.

• Trade technical trends. Despite a lack of clarity regarding fundamental market factors, traders can identify short-term opportunities by analysing technical market data. Trend indicators such as moving averages (MAs) can help confirm the potential local trend direction, while momentum indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) can gauge the strength of that trend. Support and resistance zones then offer clearer entry and exit points.

• Use lower timeframes. Concentrate on the 1-hour (H1) or 30-minute (M30) charts to capture intraday momentum without getting caught in overnight surprises. The risk of a sudden, game-changing headline is too high for long-term positions.

• Practice strict risk management. Now is the time to be mega-conservative. Sticking to this approach is crucial due to the risk of headline shocks. Always employ tight stop-losses and set realistic, modest targets. Avoid holding large positions overnight or into high-risk political announcements. Capital preservation is the primary goal in a chaotic market.

In conclusion, the financial markets of October 2025 are facing a perfect storm of data blackouts, resurgent trade hostilities, and instability in the banking sector. Indeed, the current environment demands that traders be highly vigilant and adaptive. With fundamentals obscured, chart patterns and position management become paramount. By analysing non-official data sources, paying close attention to central bank signals, and sticking to rigorous technical analysis and risk management rules, traders can navigate this turbulence and even come out ahead.

Disclaimer: This article does not contain or constitute investment advice or recommendations and does not consider your investment objectives, financial situation, or needs. Any actions taken based on this content are at your sole discretion and risk—Octa does not accept any liability for any resulting losses or consequences.

Octais an international broker that has been providing online trading services worldwide since 2011. It offers commission-free access to financial markets and various services used by clients from 180 countries who have opened more than 61 million trading accounts. To help its clients reach their investment goals, Octa offers free educational webinars, articles, and analytical tools.

The company is involved in a comprehensive network of charitable and humanitarian initiatives, including improving educational infrastructure and funding short-notice relief projects to support local communities.

Since its foundation, Octa has won more than 100 awards, including the 'Most Reliable Broker Global 2024' award from Global Forex Awards and the 'Best Mobile Trading Platform 2024' award from Global Brand Magazine.