The biggest key to profitable trading that few people think about is the management of volatility. Setting a stop loss at a level that keeps you in a winning trade but stops you out of a losing trade when proven wrong is the management of volatility.
Using a moving average crossover system is a way to capture a trend by filtering out much of the volatility of a single moving average by adding an additional moving average as a signal line.
The volatility of a market gives you parameters on how big of a position size to take due to the measurement of the potential of a move in price. The ATR is one tool for measuring this.
Volatility is what makes it difficult to get a good entry as price can plunge through support and stop you out or suddenly gap up and burst through resistance leaving you behind.
Volatility is a reflection of the level of uncertainty in the market and the extremes of fear and greed.
Trading systems, stop losses, position sizes, and the ability to let a winner run with a trailing stop are all basically the management of volatility.
The skill of sticking with a winning trend trade and not being stopped out after a good entry is the management of volatility.
Avoid being stopped out of a winning trade by ignoring the noise of price action that is not meaningful is the proper management of volatility.
The core of any traders profitability will be whether they can manage volatility over the long term.