To add to such high volatility, we will have FOMC tomorrow morning.
THESE ARE NOT NORMAL MARKET CONDITIONS TO SAY THE LEAST.
If you normally trade 4 lots, I suggest you trade 1 contract or even just stay out of the market.
If you normally trade 50 lots, you may want to reduce your trading size to 10 lots.
Yes, the wide range provide many opportunities but they also provide the risk of getting your account wiped out.
SURVIVE TO TRADE ANOTHER DAY…..
When markets trade with such high volatility, one must understand the enviroment one is trading in, which is quite different from the environment of few weeks ago.
Ranges are wider, speed is faster and volume is higher. You must take that into account, adjust your trading accordingly and make sure that you set limits as far as your daily risk is concerned and don’t allow one trade or one trading day to wipe your trading account.
WITH THE INCREASING DAILY RANGES, IT WOULD BE WISE TO VISIT THE FOLLOWING LINK AND STAY UPDATED ON DAILY LIMIT MOVES, JUST IN CASE:
>>>Daily Limit Moves from the CME Group (.pdf)
>>>Daily Limit Moves from The ICE (.pdf)
LAST BUT NOT LEAST, WEEKLY CHART OF MINI RUSSELL 2000 FOR LONGER TERM VIEW:
Weekly Chart of the Mini Russell 2000 from August 8th, 2011
