NinjaTrader has a great feature built into the software called Market Replay and you can use it to learn and test different volatility levels.
These are my Grid Levels:
$1,000.00 - $2,000 account = $0.01 (Lot Size) = ($10) add 1 lot, keep adding until market rolls over and your position turns positive.
$5,000.00 - $10,000 account = $0.10 (Lot Size) = ($100) add 1 lot, keep adding until market rolls over and your position turns positive.
$10,000.00 - $20,000 account = $1.00 (Lot Size) = ($1,000) add 1 lot, keep adding until market rolls over and your position turns positive.
So, for example:
You open a trade long the AUD/USD and the market quickly moves against your position. You are now negative ($100.00) on this position. You add to your position one .1 lot. The market continues downward and you are now negative ($200). You add another making your position 3 long @ ($200). You continue this until the market rolls over and your position turns positive.
($100) = 2 lots
($200) = 3 lots
($300) = 4 lots
($400) = 5 lots
($500) = 6 lots
Continue this pattern until your position turns positive.
As you can see from the image above there are four charts open in market replay each containing an FX pair.
I use an ATM bracket with stop @ 20000 (A ridiculous number because I do not use stops in my trading) and a target of 200 pips (targets will vary with testing) Warning: testing different target levels with market replay can be very addicting.
I also have reverse at target checked so as soon as a position closes, one is opened in the opposite direction and the "Accumulation" process starts all over again.
Think of it as a martingale strategy but without doubling down. I simply add to my position with the macro understanding that the market will come back to equilibrium.
Test this in Ninja Traders Market Replay.
You can also use myfxbook.com to get an idea of a markets volatility range. Some markets swing really dramatic so you want to stay away from those unless you have a big account and like plenty of action.
Disclaimer: My trade model can use a large drawdown % because I do not use stops. This is why it is critical for me to understand a markets range, and to not overleverage. This is what I do...I watch volatility levels. I do not give a rats ass about an elongated candle showing momentum, a moving average crossover or any other scenario you can dream up. I stay in the markets 24/7. I am always building a position through accumulation.
I never have to break a sweat trying to figure out market direction. That crap will ware you down over a ten year span and not even necessary. I do know a guy that likes to pick direction daily but it is not for me. I just let the market wiggle around and pay me in the process. The key for me is understanding a markets range and to not overleverage in that market.
Ninja Traders Market Replay is the perfect tool for checking and testing a markets range.
Hope you got something out of this. Leave a comment below or sign up with our Live Trading Room to see the action five days a week.
Great trading everyone,