Last month we followed the Nasdaq E-Mini futures and NZD/USD into historic volatility and crazy. We mapped and followed them calmly with simple swings the same way we always do, the only difference is that the swings were bigger. This is an important time to stabilize our practice of seeing markets calmly and objectively. I emphasize the word “follow” because there is a big difference between predicting and following. This Month we will follow the Dow E-Mini futures and EUR/USD.
When volatility changes so must our stops and we need to keep in touch with this. Here I review how to calculate stops using a simple Average True Range method (ATR) that I mentioned in Foundations of Trading Part 6 Risk Management. I also go over the current 20-minute currencies to show how to keep in touch with this volatility.