Successful trading is all about managing risk and reward. In this hour plus webinar, John Paul shows multiple ways to check if a trade is riskier than normal. If you use the Atlas Line, once such way is to check if the distance of the plotting, dashed line is far from where price has plotted. In the included live training, the distance calculation is explained in detail. Another way is to watch for news events. An economic news calendar, such as the one offered on the Day Trade to Win website or Bloomberg, will tell you when to expect financial news that may cause significant volatility. If a news event has occurred, expect to wait about 15 minutes until activity returns to normal.
Another way to control risk is to use multiple stop losses. NinjaTrader allows for only one stop loss. How do you do it? Close out the trade under certain conditions. For the Atlas Line, one such condition is if price closes on the opposite side of the Atlas Line. For example, if you're going short based on a Double Bar Short trade, and one candle closes above the line, then close out the trade. Another strategy is the time-based stop. If after four bars on a 5-min chart (20 min.) profit is not made, then close out the trade. This will result in a small profit, breakeven, or a loss that is smaller than the catastrophic stop. The catastrophic stop is there as a safety net in case of sudden volatility. At maximum, this stop is five points. Normally, it's double the ATR value, rounded down to the nearest whole tick. There's some great info here about trailing stops and working with multiple contracts / order quantity.
Another way to control risk is to use multiple stop losses. NinjaTrader allows for only one stop loss. How do you do it? Close out the trade under certain conditions. For the Atlas Line, one such condition is if price closes on the opposite side of the Atlas Line. For example, if you're going short based on a Double Bar Short trade, and one candle closes above the line, then close out the trade. Another strategy is the time-based stop. If after four bars on a 5-min chart (20 min.) profit is not made, then close out the trade. This will result in a small profit, breakeven, or a loss that is smaller than the catastrophic stop. The catastrophic stop is there as a safety net in case of sudden volatility. At maximum, this stop is five points. Normally, it's double the ATR value, rounded down to the nearest whole tick. There's some great info here about trailing stops and working with multiple contracts / order quantity.
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