volatility Archives • Futures Day Trading Strategies

Posts Tagged Under: volatility

Stop Trading the P&L! Establishing a Proper Trade Exit Strategy

 

Read the Chart and do not Trade your P & L

The reason many traders fail when it comes to exiting trades is because they focus solely on the money they can potentially lose or win instead of making market-related decisions. This is also called “trading your P&L,” where traders completely detach themselves from their charts and market context and respond only to their account balance and the unrealized profits on their futures trading platform. (P & L stands for Profit and Loss)

Improving Profit Taking & Exiting Trades

Profit-taking or loss, or exiting trades in general, is arguably more important than entry timing because how you exit your trades determines the long-term outcome of your P&L. However, most traders don’t spend much time on developing their trade exit strategies and are often uncertain of even how to exit. This results in emotional trade management driven by impulsive decisions with no clear plan.

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5 Techniques for placing Stop Loss Orders

 

There are many questions regarding how to place stop loss orders and which technique to follow. Although no one single approach is better than the other, knowing your options and how to place a stop loss with different techniques is important. This article will go over the five most commonly used methods, in our opinion, for setting stop orders.

Please note that it does not matter how we define the trade entry in the examples below. They are just meant to provide context for setting stop loss orders.

Disclaimer:  The placement of contingent orders by you or yout broker, or trading advisor, such as a “stop-loss” or “stop-limit” order, will not necessarily limit your losses to the intended amounts, since market conditions may make it impossible to execute such orders.

 

  1. Moving averages

Moving averages are a popular technical analysis tool and they can also be used to place and manage stop loss orders. Usually,

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How to trade during different times and market periods

 

The way financial markets and prices of financial assets move often follows a certain rhythm and very specific rules. Furthermore, depending on the time of day and the general market environment, the way prices move can change significantly with very clear patterns.

 

Volatility, momentum and expectations

The reason why it pays off to be aware of the time of day you are trading in and the implications for financial markets is that you can often see significant differences in the way price move. An experienced trader, thus, adapts with his trading style based on the general market environment.

  • Changes in volatility are most obvious and financial markets often follow a specific rhythm that we will explore later. During the most active times, volatility often picks up strongly and then drops off in lesser active sessions.
  • The way momentum manifests on your charts changes with the amount and the size of financial players that join

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How to create a more robust trading method

 

A good trading method is much more than a set of entry rules. Whereas most traders would agree to this statement, only very few really internalize the true meaning while always blaming “bad entry signals” for their lack of success. In this article we show you which other aspects of a trading method need to be defined and how the individual components can help your trading become more robust.

 

What is a good signal?

There are dozens, maybe hundreds, different ways to come up with entry criteria for a trading method. Often, it’s not about whether certain parameters are “better or worse”, but how they are combines and applied to the charts. Here are a few principles that help traders create better trading signals:

 

  1. Price action and indicators

Most traders think that they have to choose between indicators and price action trading. However, the best traders know that they can combine the two

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How Renko charts can improve your outlook on prices

 

Renko charts are an often overlooked way of analyzing price data and charting markets. Renko charts eliminate the time component of trading and only focus on the price itself. Potentially, Renko charts can filter out a lot of the market noise and display the price in a much more organized way that is simpler to interpret.

 

Renko Charts 101

Conventional candlestick charts print a new candlestick every hour, 4 hours, day, week or another time interval the trader chooses as his period setting. Renko charts, on the other hand, are not time-based and they don’t use candlesticks, but “bricks.” A Renko chart prints a new brick every X points. A trader might set 1 Renko brick equal to 10 points which mean that the Renko chart will show him a new brick every time price has moved 10 points in one direction.

The screenshot below compares the same chart over the same

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