Most traders got destroyed. Here's why I didn't.
| The One Rule That Saved My Week
by Tony Rago | Hey Trader, | Wednesday morning, the NQ printed a first-hour bar almost 500 handles wide. | The DeepSeek selloff had arrived. Nvidia was down 17%. The tape was moving 10 points in a blink. And traders in my room wanted to know what to do. | My answer was simple: nothing. | "When the NQ gets a 50 ATR, it's just a no trade. Unless you are in a position and holding something, it is a no trade." | This is where most traders go wrong. They see a big move and feel compelled to participate. They watch 200 handles of downside and think they need to be short. They see a bounce forming and want to catch the reversal. | But wanting to trade and having an edge are two different things. | The Math That Matters | I use a five-point stop on the ES. Wednesday morning, we had a 10-point ATR. The rule books say your stop should be one and a half times ATR. | "Do you guys want to use a 15-handle stop on the ES?" | That question answers itself. | When your normal stop loss is smaller than the average bar range, you're not trading. You're gambling. The market will chew through your risk before the setup even has a chance to work. | "It's not a fear thing by any means. It's a risk thing. There is not opportunity." | What Real Discipline Looks Like | Someone in the chat caught a short that morning. Sold it at the open and rode it down for a massive winner. When I asked about it, they said there was nothing elegant about the trade. Just pushed the button and hoped. | "That's not an edge. An edge is your level identifying risk." | I could have done the same thing. Sold the breakdown, risked 15 points, and maybe caught a monster move. But that's not how I trade. That's not how I teach. | "Sometimes markets are like that. And it would've been an absolute monster trade. But that's not an edge." | Finding the One Trade | After the opening chaos settled, we waited. The ATR started dropping. The tape began to stabilize around the expected move low. | That's when I saw our opportunity. | We identified the 53 level on ES with the nine-day moving average providing support. Risk was defined. The setup was clean. | "I'll be stoked if we just find one solid trade together today. That's all we need." | We bought the 53. Watched it grind. Got our plus five when it tagged the 56. | One trade. Five points. No drama. | The Lesson for Your Trading | Wednesday could have destroyed accounts. Traders who forced entries during that 500-handle first hour probably gave back weeks of gains. Traders who sized up to catch the big move likely blew through their risk limits. | We took one clean trade and walked away green. | "We're gonna miss stuff and it's okay. But the one thing we don't want to do is say, oh well, it's always a dip. Buy, buy, buy. You're just gonna get crushed." | The methodology doesn't change based on market conditions. The levels don't change. The risk parameters don't change. | What changes is whether conditions allow you to execute with an edge. | When they don't, you step aside. You wait. You let the volatility settle until the math works in your favor again. | That patience is what separates traders who survive January from traders who blow up trying to catch every move. | Trade smart, | Tony Rago
Creator of the Golden Setup |
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