This webinar focuses on high volatility conditions, like those we’ve seen since the U.S. presidential election results. Traders are always faced with these questions:
• Is now the time to place a trade?
• Should I buy or sell?
• Once I’m in the trade, how much will the market move?
In the Mentorship Program that begins on Nov. 28, you can learn how to tackly all types of market conditions, plus receive all of our courses and software (including the Atlas Line and Trade Scalper). It’s the best way to save money and learn everything we have to offer. With early enrollment, we are providing the first week’s course (ATO / At the Open) ahead of time. Click here to submit your deposit and reserve your seat.
In this video, John Paul uses a CL (Crude Oil) chart to demonstrate how the ATR (Average True Range) can be used to gauge volatility as well as profit targets and stop losses. There is no need to change the ATR setting when switching between 1-min and 5-min charts. When the market is overly volatile, that would mean you have to increase the stop significantly, which increases the risk. This is why John Paul prefers to trade when the ATR is between 1 and 4 points. The election volatility pushed the E-mini and other markets well beyond normal risk levels. See the Atlas Line short trade at about 5:00 in the video. The ATR begins to exceed 6 points. When a single large candle appears (either red or green), John Paul often expects a retracement to occur. Don’t expect continuation. Very rarely do you find days that continue in one direction consistently. Markets like to go where they’ve already been, and in some cases, try to reach equilibrium. Be careful in relying on indicators. Once they “see” a large move, they can become erratic and provide very risky signals. The Atlas Line, in comparison, has rules to tell if the market is “exhausted” from making the big moves. Also, the exact rules for profit targets, stop losses, and trade management keep you objective during seductive, fast-moving market activity. Click here for more on the Atlas Line.
At about 14:40, John Paul shares the CL and the Trade Scalper. If you take a look at the Short trade at 42.82 and the accompanying signal triangle and text, you may assume this was a losing trade. The signal does indicate the entry price, but once you learn the rules, you’ll know how long to hold the trade. In this example, the rules dictated releasing the trade about three candles later (two after the fill), which would have been a winner. Fast moving markets are scary and it’s tempting to use a small stop. Remember that small stops can be hit before the big move even has a chance. Instead, John Paul increases the stop out of the regular fluctuating ATR range. At about 34:30, you can see a Trade Scalper long trade on the E-mini. The E-mini chart is revisited again at 1:03:00, so you can see what happens later. Click here for more on the Trade Scalper.