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Volatility Box – August 22, 2019

Trade reportAug 22, 2019
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Dealing With Hawkish Fed Comments

After muted volatility on Monday and Tuesday, it picked up today. Fed's Harker said that he did not see another need for a rate reduction, which sent the market into a frenzy downhill. 

The reaction from this news caused price to move into extreme ranges, stopping us out of all four of our index trades.

Losing is never fun, especially if you're competitive by nature. But it's a necessary and critical part of trading. The key is to minimize losses.

After getting stopped out, we switched to the Conservative Volatility Box, which saved us from four additional stop-outs.

We couldn't avoid the losses today. There is no magic ball that lets us know we are about to propel into 3 standard deviation plus territory, thanks to news.

But, the Volatility Box is the tool that let us recognize this, and quickly adapt to the current market conditions, with the click of a button. That's the power of using robust models that have been thoroughly backtested, and personalized for each specific market. 

We had a total of 4 trade setups today, for a net P/L of -$2,230. 

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