Today, in the live trading room, we had an interesting debate on what the magical trading number is for a moving average or the average true range stop loss indicator.  After all, there has to be a “right” number, right?

Magical Trading Number Does Not Exist – It’s About Consistency

There is no magical trading number for timeframe for trading futures, forex, or binary options if you are using indicators that are based on price, like the Trend Average True Range Stop Loss indicator, modified ADX indicator, Volume indicator and modified RSI indicator by THD.

For example, according to the CME website, the volume for Gold on 9/22/14 was 143,936.  If we believe there is a magical trading number then that means that over 100,000 traders need to agree on a number that works on all timeframes (not to mention agreement on the timeframe too).

Agreement for 100,000 traders?  Is that even possible?  I don’t believe it is — especially given the conspiracy theories that abound at any given moment.

Instead of focusing on what the magical trading number is, I focus on probabilities and risk to reward.  I showed this trade in the room this morning, on the Russell based on the 45 minute magenta peak and where did it go?  To the Trend Average True Range stop loss indicator (it did miss it by 4 ticks though).

Magical Trading Number

And, on Friday, we had seven ADX indicator magenta peaks on the Forex charts.  And, what happened? Click on the image and see.


Not to mention the Gold and Euro charts that had entries this morning.  So if there is a magical number, then I found it or I just use indicators like the Trend Average True Range Stop Loss or the modified ADX indicator, or the modified RSI indicator or volume indicators that are based on price, which makes needing a magical number a moot point.