TRADING TIPS

How to Use ATR to Stay in Trades

Hubert Senters here. When you’re looking at trades, bonds or anything really you should always have an Average True Range indicator below your chart so that you can figure out like how this thing what’s the nature or what’s the personality so. Here I’ve got the 10-year note and I’ve been short it for about a day and a half two days now. And you see down here where it says Average True Range. It’s 0.8192. I’m just going to round that up to about a full point because that’s just make my math easier. So if I’m short. Let’s say I’m short right here at 133’07.5 then every day it’s going to have a range basically 80 percent of a point but I’m just going to call it a point. That way it keeps my head level going ok, I had the range of a full point today. Did I make anymore money? Is it stacking up on my P&L? Or is it goes to against me? If it goes against me I’ll get stopped at. So what I’m looking at stuff like that. Here’s what I’m looking at. So in this trade I am scrolling up and you can see I initially only risk $156. And yes, I usually leave the stop there for a couple of days just to see if I can get a nice good run out of it. So I usually like to risk $156.25 to potentially make a minimum of a thousand dollars. So I’ve got that. But earlier today I could have locked in $1531.25. But the range is still acceptable. I know it’s going to move in gyrations up and down some. Overall the consistent trend should be lower. And if I saty with this thing I’m not being able to make $8000 on the risk of a $156. Now, first thing Sunday I will move this. I will lock in or a $125 or couple of a hundred or $300 to $400. I don’t want that to turn into the negative because that will mess your trading psychology like oh my god, I lost a thousand. Now, I lost $156. That’s crazy. Why would someone do that? So I’ll prevent that first thing Sunday. So if you look at this you can see the range was 132’17 and then down here was 131’23 so 17 would be right down here so that’s exactly what it’s doing. It’s been doing basically 80 percent of a point or almost a point. I’m just saying a point because it’s easier for me to talk about. Johnny Seville rhymes with pebble. He’s going to be doing a special webinar Tuesday, March 9th at 8:15 PM EST on How to Predict Explosive Moves by Following Insiders! Good luck. Hope it helps. I’ll HYPERLINK you to the page. Hubert.

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