Monday produced no trades at all and some EU countries had a bank holiday on the 11th November.
ATR(20) drops to around 100 as Friday's trading provides us with just 57 points trading range during my session
DAX volatility dropped further on Friday and using my session timing of 9:00 AM - 17:00 CET+2 (7AM - 3 PM CET) managed only 57 pips. in total.
The daily volatility has dropped to around 100 and this is normally where it bounces. The EA has held up well during the drawn down in vol and poised nicely at $52k to profit from the Santa Claus rally.
Our midday trade on Thursday was highlighted as we received over $70 positive slippage as trades scrambled to pick up our selling positions as we exited our traded.
We are waiting for vol to return.
On the week we traded 21 contracts for a nominal amount of USD 3.360.000,-
Profits were light this week at just $276.20 after commissions of $105
Some of our trades do suffer slippage and total spread of between 4 to 6 points which is a lot, however we are receiving positive slippage on the way out, as DAX is an illiquid market accentuated by short sharp burst of momentum trading. The chart opposite this comment shows a late entry and on this occasion we were fortunate to get filled on our first exit with the second and third contracts stopping out at BE +1 pip
Recent Price Action has been punctuated by huge running days of over 300 points followed by sleepy days where the Dax struggles to obtain even half of that amount.....
Day's Trading overall negative as CT provides a full winning trade followed by a full loser
DAX was lethargic today and using my session timing of 9:00 AM - 17:00 CET+2 (7AM - 3 PM CET) managed only 85 pips. in total.
The target daily volatility measured as the ATR(20) on the daily time frame is 200 pips per day, so we are well under this level, notwithstanding the fact my session is shorter than the full day.
There was a trade early in the day where we received a 6 point slippage on entry and three contracts which ended up as winners for $258,2 $323,2 and $200 respectively with good positive slippage on the first two contracts.
As so often at the end of the day we took a full loser just as Wall Street was about to get going for a $845 loss leaving us with a very modest loss of $63.6 on the day. With took 4 points slippage on the stop loss which took us negative on the day.
We traded 6 contracts with total notional value of just under one million USD at $963,960,-
Momentum based trading systems drink volatility like a high performance racing cars drinks petrol.
And as noted, volatility is dropping. Traders will never really know what the next catalyst will be that pumps volatility again, but there is a myriad of possibilities, including jaw boning by the ECB's Christine Lagarde, more clarity on interest rate rises in the US, or who knows maybe even China will walk into Taiwan on Christmas ever.
One thing is clear when the daily ATR(20) vol drops to around 70 there always seems to be a jump which takes us back above 100 .
Good days trading two trades booked over 6 contracts for $366 profit.....
CT on DAX 1st November 2021 DAX
Great day's trading today with two trades
The DAX gave us a one way ticket day today as it trended from the open until the close of our session.
With two trades and 6 contracts in play we trade a nominal of $963,960,-
There are no secrets in trading other than if you are trading momentum you need a market which moves.
When markets move trading systems draw up and when the volatility drops systems pull back.
Most markets oscillate between volatility bands, except when we get a situation like COVID 19 where the bands get stretched to extremes as market panic takes over.
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As the founder of Exact Trading, Paul has been actively trading the markets for over 30 years and specializes in the Forex Exchange markets with index and Crypto trading as well.
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