u/Billbabaganz

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 6: Mindset, the “bible” you should have when you are trading

Every day you wake up with a different set of thoughts, a different mood, a different way of looking at the exact same chart — and none of it has anything to do with the market. It's just you, that day.

The version of you that looks at a chart at 9am after your coffee is not the same version that looks at it at 11pm before bed. One might feel confident and a little impatient. The other might feel tired, cautious, maybe even a bit doubtful. The becomes a variance when you are doing discretionary trading. You are hyped after your coffee, so you trade one way, you are tired at 11pm, and you trade a different way. That is the problem, that mindset change creates a variance in how you trade, which would drift the expected returns and results that you might have as you trade.

This is the problem nobody really warns you about. When you build and backtest your strategy , you are in a different mood and mindset. You are clear-headed, you have clear objective, you are looking at hundred of trades with zero emotional stake. That mindset is the one that actually knows what your strategy is supposed to do. But that's not the mindset you're in every time you go to actually place a trade.

So the real question is — how do you make sure the version of you placing the trade at 11pm, before you go to bed is operating with the same mindset as the version of you who built the strategy in the first place?

This is why I think every trader needs something like a personal "bible", a written reference of the mindset you had when you built your system. Not just the rules (that's your trading plan), but the actual reasoning and headspace behind it. Why you trust it. What you already know it'll do during a losing streak. What you told yourself about drawdown before you ever experienced it for real.

When you're tired, or emotional, or second-guessing a trade at 11pm, you don't rely on how you feel in that moment — you go back and read what you believed when you were thinking clearly. That's the whole point. It's not there to teach you anything new. It's there to pull you back to the mindset that already knows what to do, instead of the mindset you happen to be in right now.

That's the real value of it — consistency isn't about controlling your emotions in the moment, because you can't always do that. It's about having something to return to when your emotions are pulling you somewhere your strategy never agreed to go.

That's what i want to cover for this week's topic. Cheers

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 6: Mindset, the “bible” you should have when you are trading

Every day you wake up with a different set of thoughts, a different mood, a different way of looking at the exact same chart — and none of it has anything to do with the market. It's just you, that day.

The version of you that looks at a chart at 9am after your coffee is not the same version that looks at it at 11pm before bed. One might feel confident and a little impatient. The other might feel tired, cautious, maybe even a bit doubtful. The becomes a variance when you are doing discretionary trading. You are hyped after your coffee, so you trade one way, you are tired at 11pm, and you trade a different way. That is the problem, that mindset change creates a variance in how you trade, which would drift the expected returns and results that you might have as you trade.

This is the problem nobody really warns you about. When you build and backtest your strategy , you are in a different mood and mindset. You are clear-headed, you have clear objective, you are looking at hundred of trades with zero emotional stake. That mindset is the one that actually knows what your strategy is supposed to do. But that's not the mindset you're in every time you go to actually place a trade.

So the real question is — how do you make sure the version of you placing the trade at 11pm, before you go to bed is operating with the same mindset as the version of you who built the strategy in the first place?

This is why I think every trader needs something like a personal "bible", a written reference of the mindset you had when you built your system. Not just the rules (that's your trading plan), but the actual reasoning and headspace behind it. Why you trust it. What you already know it'll do during a losing streak. What you told yourself about drawdown before you ever experienced it for real.

When you're tired, or emotional, or second-guessing a trade at 11pm, you don't rely on how you feel in that moment — you go back and read what you believed when you were thinking clearly. That's the whole point. It's not there to teach you anything new. It's there to pull you back to the mindset that already knows what to do, instead of the mindset you happen to be in right now.

That's the real value of it — consistency isn't about controlling your emotions in the moment, because you can't always do that. It's about having something to return to when your emotions are pulling you somewhere your strategy never agreed to go.

That's what i want to cover for this week's topic. Cheers

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 5 : Understanding Candlestick Pattern - Part 2

So last week we covered Part 1 which talks about some hard truths with Candlestick Pattern

In Part 2, we will be focusing on an approach , and what I actually look for when building a strategy around candlestick patterns.

One thing worth knowing: a candlestick pattern isn't a signal on its own — it's a story. It's telling you what's going on. The pattern you're using to trade should mean something, or be delivering some kind of message. If it isn't, it's just a shape.

Here's what I'm actually looking for when try to come up with a strategy using a candlestick pattern

1. Is the candlestick pattern indicating a surge of volume coming in?
2. After the pattern forms, does price continue moving in the same direction over the next few candles?
3. How many times has this happened over the past few months? Pick a few different months across a few different years to see how repeatable it actually is.
4. Is the pattern forming the way I expect it to — is that extra volume actually moving price in the direction I believe it should?

At the end of the day, a candlestick pattern is just a way of visualizing the history of price movement. It's a tool to measure how price has moved — and you use that information to speculate on where it might move next.

After that, it comes down to mathematical probability: finding an edge that looks something like "53% of the time, when price behaves this way, it's a good indication the market is about to trend for the next few candles, and that's a solid trigger to enter."

When you're looking for an edge, this is the thought process to formulate — not "I saw a pattern," but "here's what this pattern is statistically telling me."

Every strategy has its own characteristics on how it should be built, and candlestick patterns should just be one puzzle piece within the bigger picture — something to help you define your trade entry, not the whole strategy on its own.

That's all i want to cover for this week's topic. Cheers

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 5 : Understanding Candlestick Pattern - Part 2

So last week we covered Part 1 which talks about some hard truths with Candlestick Pattern per below:

https://www.reddit.com/r/Forex/comments/1v34a88/a_babaganz_take_on_trading_week_4_understanding/

In Part 2, we will be focusing on an approach , and what I actually look for when building a strategy around candlestick patterns.

One thing worth knowing: a candlestick pattern isn't a signal on its own — it's a story. It's telling you what's going on. The pattern you're using to trade should mean something, or be delivering some kind of message. If it isn't, it's just a shape.

Here's what I'm actually looking for when try to come up with a strategy using a candlestick pattern

1. Is the candlestick pattern indicating a surge of volume coming in?

2. After the pattern forms, does price continue moving in the same direction over the next few candles?

3. How many times has this happened over the past few months? Pick a few different months across a few different years to see how repeatable it actually is.

4. Is the pattern forming the way I expect it to — is that extra volume actually moving price in the direction I believe it should?

At the end of the day, a candlestick pattern is just a way of visualizing the history of price movement. It's a tool to measure how price has moved — and you use that information to speculate on where it might move next.

After that, it comes down to mathematical probability: finding an edge that looks something like "53% of the time, when price behaves this way, it's a good indication the market is about to trend for the next few candles, and that's a solid trigger to enter."

When you're looking for an edge, this is the thought process to formulate — not "I saw a pattern," but "here's what this pattern is statistically telling me."

Every strategy has its own characteristics on how it should be built, and candlestick patterns should just be one puzzle piece within the bigger picture — something to help you define your trade entry, not the whole strategy on its own.

That's all i want to cover for this week's topic. Cheers

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 4 : Understanding Candlestick Pattern - Part 1

I'm sure you've seen the online content out there that says "follow this candlestick pattern and you'll be a millionaire" as the flashy headline. While they're giving you eye-catching content to get famous, they're not actually covering the core of it — the reality behind candlestick patterns.

Good news: they're not wrong. There are candlestick patterns that work — many of them. The bad news is, without understanding the meaning behind them, you're not likely to make them work for you.

Here's a hard fact worth thinking about. On a 1-hour timeframe, a year gives you roughly 2080 candles. Within those 2080 candles, you're going to see almost every possible candlestick pattern play out — and each of those patterns will have led to an uptrend at some point, and a downtrend at another. The same shape, opposite outcomes, multiple times over.

So if you're trading purely off "I saw a doji here, therefore price goes up" — that isn't going to make trading work for you. Because the pattern alone was never telling you the full story.

Imagine Warren Buffett walking into a press conference and saying "NVIDIA is about to form a hammer in a few minutes, so I'm placing a buy there." How silly would that sound? If the biggest players in the world aren't trading off candlestick patterns, why would you treat them as some kind of holy grail?

Candlestick patterns should only be used to refine your entries and exits — not relied on as the only building block in your entire strategy.

On Part 2 , we will focus more on how should we best use candlestick pattern, and what works need to be done on best utilising that to form a startegy.

That's all i want to cover for this week's topic. Cheers

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 3 : Journalling - why is it important, how should you journal

Journalling is about building discipline. It's something you do to reflect on yourself, to make sure you're not breaking your own rules, and to make sure you're trading the way you traded when you backtested your strategy.

It's also a reality check. It preps you before you start a new week, reminding you there's no fantasy get-rich-quick scheme here — get your mindset right before you enter a fresh week.

So what should you do , and how should you structure your journal?

3 things that i do when i journal:

1. Did I enter the trade the way I was supposed to?

Go through my trading plan, and review my trades to see if it matches it. You need to make sure you do not deviate away from your strategy.

2. Did my stoploss hit the way i expected it to?

This one's just as important. A comprehensive strategy should include a clearly defined loss scenario — not just a plan for winning. When you journal, you're checking that your stop loss played out the way that loss scenario was supposed to look. If something happens outside of that — a loss that doesn't match what your strategy anticipated — that's your signal to take the strategy back to the drawing board: readjust, backtest, and try again.

3. Exploring new ideas

This isn't about adjusting or changing your strategy, but is to come up a new idea to build new strategy. One thing that every trader needs to know, is there's no one strategy that fits all market regime, not for retail trader at least.

Every few years, or even few months, the market regime shifts. No strategy works forever.

Journal is to help with that, is whilst you are reviewing your trades, you gotta look for new ideas to continue to improve and adapt the market. Come up with new idea , build new strategy, backtest them and bring them to production again. Trading is no different to technology, you need to evolve to keep up with the ever changing market.

One last thing on journalling

The real habit we have to force ourselves to develop — which goes very much against human nature — is how we define what a "good" day actually is.

Having a good day is better than having a profitable day. That's the psychology that kills people. You can have a very profitable day purely out of luck, but that isn't necessarily a good day, and you shouldn't be happy about it or reward yourself for it.

You only reward yourself for a good day — a day where you were disciplined, where you entered your trade according to your plan, and where your trade got stopped out exactly as you envisioned. If that's what you experienced, then that's a good day.

So I can have 5 losses in a row by the end of the day, but if those 5 losses played out exactly the way I expected my strategy to lose, then I've had a good day.

That's all i want to cover for this week's topic. Cheers

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 3 : Journalling - why is it important, how should you journal

Journalling is about building discipline. It's something you do to reflect on yourself, to make sure you're not breaking your own rules, and to make sure you're trading the way you traded when you backtested your strategy.

It's also a reality check. It preps you before you start a new week, reminding you there's no fantasy get-rich-quick scheme here — get your mindset right before you enter a fresh week.

So what should you do , and how should you structure your journal?

3 things that i do when i journal:

1. Did I enter the trade the way I was supposed to?

Go through my trading plan, and review my trades to see if it matches it. You need to make sure you do not deviate away from your strategy.

2. Did my stoploss hit the way i expected it to?

This one's just as important. A comprehensive strategy should include a clearly defined loss scenario — not just a plan for winning. When you journal, you're checking that your stop loss played out the way that loss scenario was supposed to look. If something happens outside of that — a loss that doesn't match what your strategy anticipated — that's your signal to take the strategy back to the drawing board: readjust, backtest, and try again.

3. Exploring new ideas

This isn't about adjusting or changing your strategy, but is to come up a new idea to build new strategy. One thing that every trader needs to know, is there's no one strategy that fits all market regime, not for retail trader at least.

Every few years, or even few months, the market regime shifts. No strategy works forever.

Journal is to help with that, is whilst you are reviewing your trades, you gotta look for new ideas to continue to improve and adapt the market. Come up with new idea , build new strategy, backtest them and bring them to production again. Trading is no different to technology, you need to evolve to keep up with the ever changing market.

One last thing on journalling

The real habit we have to force ourselves to develop — which goes very much against human nature — is how we define what a "good" day actually is.

Having a good day is better than having a profitable day. That's the psychology that kills people. You can have a very profitable day purely out of luck, but that isn't necessarily a good day, and you shouldn't be happy about it or reward yourself for it.

You only reward yourself for a good day — a day where you were disciplined, where you entered your trade according to your plan, and where your trade got stopped out exactly as you envisioned. If that's what you experienced, then that's a good day.

So I can have 5 losses in a row by the end of the day, but if those 5 losses played out exactly the way I expected my strategy to lose, then I've had a good day.

That's all i want to cover for this week's topic. Cheers

Quick backround — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 2 : News Trading - My approach on trading news

Everyone has a different take on this. There are advises from online content that tells trader to stay away from news trading, saying that you will be stopped out easily if you are trying to trade the news.

My view to that is news drive price, provides volatility ,and those are what we need when we are trading. News tends to move price to one direction, it overwrites most of technical and psychological key levels, and break straight through them.

Yes, news can be scary — it doesn't respect any resistance, doesn't respect your Fibonacci levels, doesn't respect the trend lines you've drawn on the chart. But if you're able to make good use of it, it's a beast.

From my view, there are two type of news:

1. Economic News

This is your scheduled economic news, made available on most economic calendars. NFPs, CPI, GDP, FOMC minutes, etc.

2. Breaking/Live News

This is unscheduled news — very reactive, what people call breaking news. Things like elections, wars, tariff announcements, pandemics.

Each of these have it's own character, and the approach to them can be slightly different.

So what is my approach to trade these?

I use a trade concept called "News Drift". Meaning i don't trade when the announcement happen, i wait to see how the candle or price would react, and i trade the drift that follows.

The truth is, as a regular/retail trader that has no subscriptions to tools like Bloomberg Terminal , we will always be lagging behind institutional traders. We won't be able to react fast enough to capture the immediate direction of price in the seconds after the news is released. But a lot of the time (again, this is a probability measure, not a guarantee), there's a drift you can pick up after the main wave of the move — price will often continue in that same direction, and that's what I consider the "drift".

Think of it like an earthquake — you don't trade during the quake, you trade the tsunami that comes after. You won't capture the full move, but the aftermath gives you a clean reason to enter, and it usually gives you a decent read on direction too. That alone can be quietly profitable.

One last thing I want to cover — tthe characteristics and result of the news, and how they can support your decision on how to trade that particular event.

One key thing I've observed is that most of the time (keep in mind — most of the time, not all the time), price tends to move more aggressively when the result deviates far from what was expected. What I've found is that traders — institutions, the big players — tend to act a lot more when the result is unpredictable. You can clearly see some level of panic movement happening in the market during those moments. Those are opportunities. Volatility is what we should always utilize to make money, because volatility is what drives price.

That's all I wanted to cover on today's topic — thanks for reading.

Note for mods — I'd really appreciate it if this post isn't removed like my Week 1 post was. This is 100% written by me, not AI. i actually hours writing this myself, so appreciate if my effort can be acknowledged here.

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 2 : News Trading - My approach on trading news

Everyone has a different take on this. There are advises from online content that tells trader to stay away from news trading, saying that you will be stopped out easily if you are trying to trade the news.

My view to that is news drive price, provides volatility ,and those are what we need when we are trading. News tends to move price to one direction, it overwrites most of technical and psychological key levels, and break straight through them.

Yes, news can be scary — it doesn't respect any resistance, doesn't respect your Fibonacci levels, doesn't respect the trend lines you've drawn on the chart. But if you're able to make good use of it, it's a beast.

From my view, there are two type of news:

1. Economic News

This is your scheduled economic news, made available on most economic calendars. NFPs, CPI, GDP, FOMC minutes, etc.

2. Breaking/Live News

This is unscheduled news — very reactive, what people call breaking news. Things like elections, wars, tariff announcements, pandemics.

Each of these have it's own character, and the approach to them can be slightly different.

So what is my approach to trade these?

I use a trade concept called "News Drift". Meaning i don't trade when the announcement happen, i wait to see how the candle or price would react, and i trade the drift that follows.

The truth is, as a regular/retail trader that has no subscriptions to tools like Bloomberg Terminal , we will always be lagging behind institutional traders. We won't be able to react fast enough to capture the immediate direction of price in the seconds after the news is released. But a lot of the time (again, this is a probability measure, not a guarantee), there's a drift you can pick up after the main wave of the move — price will often continue in that same direction, and that's what I consider the "drift".

Think of it like an earthquake — you don't trade during the quake, you trade the tsunami that comes after. You won't capture the full move, but the aftermath gives you a clean reason to enter, and it usually gives you a decent read on direction too. That alone can be quietly profitable.

One last thing I want to cover — tthe characteristics and result of the news, and how they can support your decision on how to trade that particular event.

One key thing I've observed is that most of the time (keep in mind — most of the time, not all the time), price tends to move more aggressively when the result deviates far from what was expected. What I've found is that traders — institutions, the big players — tend to act a lot more when the result is unpredictable. You can clearly see some level of panic movement happening in the market during those moments. Those are opportunities. Volatility is what we should always utilize to make money, because volatility is what drives price.

That's all I wanted to cover on today's topic — thanks for reading.

Quick background — I'm a XAUUSD trader, day trading, and I've got a 9-5 job so I'm not someone who can sit and watch screens all day. I've lost money for the last 6-8 years doing this, and I recently rebuilt my whole approach to trading — since then I'm finally seeing better results.

So I figured I'd share what I've learned along the way — what works, what doesn't — one topic a week for the next 52 weeks.

Week 2 : News Trading - My approach on trading news

Everyone has a different take on this. There are advises from online content that tells trader to stay away from news trading, saying that you will be stopped out easily if you are trying to trade the news.

My view to that is news drive price, provides volatility ,and those are what we need when we are trading. News tends to move price to one direction, it overwrites most of technical and psychological key levels, and break straight through them.

Yes, news can be scary — it doesn't respect any resistance, doesn't respect your Fibonacci levels, doesn't respect the trend lines you've drawn on the chart. But if you're able to make good use of it, it's a beast.

From my view, there are two type of news:

1. Economic News

This is your scheduled economic news, made available on most economic calendars. NFPs, CPI, GDP, FOMC minutes, etc.

2. Breaking/Live News

This is unscheduled news — very reactive, what people call breaking news. Things like elections, wars, tariff announcements, pandemics.

Each of these have it's own character, and the approach to them can be slightly different.

So what is my approach to trade these?

I use a trade concept called "News Drift". Meaning i don't trade when the announcement happen, i wait to see how the candle or price would react, and i trade the drift that follows.

The truth is, as a regular/retail trader that has no subscriptions to tools like Bloomberg Terminal , we will always be lagging behind institutional traders. We won't be able to react fast enough to capture the immediate direction of price in the seconds after the news is released. But a lot of the time (again, this is a probability measure, not a guarantee), there's a drift you can pick up after the main wave of the move — price will often continue in that same direction, and that's what I consider the "drift".

Think of it like an earthquake — you don't trade during the quake, you trade the tsunami that comes after. You won't capture the full move, but the aftermath gives you a clean reason to enter, and it usually gives you a decent read on direction too. That alone can be quietly profitable.

One last thing I want to cover — tthe characteristics and result of the news, and how they can support your decision on how to trade that particular event.

One key thing I've observed is that most of the time (keep in mind — most of the time, not all the time), price tends to move more aggressively when the result deviates far from what was expected. What I've found is that traders — institutions, the big players — tend to act a lot more when the result is unpredictable. You can clearly see some level of panic movement happening in the market during those moments. Those are opportunities. Volatility is what we should always utilize to make money, because volatility is what drives price.

That's all I wanted to cover on today's topic — thanks for reading.

Quick background — I am a XAUUSD trader, I have a 9-5 job, so i am not a screen-watcher. After 6-8 years of losing money trying to "be disciplined" with discretionary trading, I rebuilt my whole approach around something boring, rule-based, and built to run without me staring at charts all day. I don't scalp — my background is day trading, and everything here is built around having a full-time job, not around having all day to watch price action.

I'm sharing what I've learned, one topic a week, for the next 52 weeks. This is Week 1.

Week 1 : ATR — how i think ATR should be used in trading

You've probably watched online content that talks about a certain candle pattern, shows you where to place a trade, and marks the stop loss and take profit on candles like this:

https://preview.redd.it/kwkyp3uznm9h1.png?width=250&format=png&auto=webp&s=544d70d167431ff873a8d366ef56cefd4f8dadf5

While trying to follow that pattern, the key thing a lot of people miss is: how do you structure this so it stays consistent every time you try to trade that pattern?

Take a look at these two charts — both XAUUSD, different years, same 1hr timeframe. Do you see any difference?

Left: June 2026. Right: July 2023. Both XAUUSD, both 1hr timeframe.

They look the same, right? But they're completely different.

July 2023 — candle body size: 550 pips

June 2026 — candle size: a whopping 7000 pips

This is what catches a lot of people off guard. A candlestick pattern from 2023 has a completely different body size to one in 2026. That spike candle you're seeing in those charts — even though they look the same — is actually a 13x difference in pips! If your trading plan isn't built to adapt — or doesn't have a dynamic way of adapting — you'll get eaten alive by this without even realising it.

From 2023 to 2026, the average candle range went from ~100 pips per candle to ~2000 pips per candle — a 20x difference!

If your trading plan can't adapt to that, you're in trouble. The worst part is you might not even notice, because the range doesn't grow overnight — it creeps up gradually. Unless you're actively paying attention, you won't realise it's happening. You'll just end up wondering why your trading plan has gotten worse, without realising you've been compromised the whole time.

So now we know the problem is, what should we do to solve this?

My approach to this, is Average True Range (ATR).

What is ATR?

According to Babypips, it's a technical indicator that measures the volatility of price — it shows you how much price has fluctuated, on average, over a given time frame. I won't go through the calculation or the textbook definition here — if you don't know what ATR is, look it up, there's plenty of material out there and it's pretty straightforward to understand.

Most traders learn this definition, glance at the ATR indicator, and move on. The mistake is not pairing it with your actual trading strategy and using it as a real input into your trading decisions.

How I actually use it
ATR is how I determine my stop loss and my lot size. This should be an automated process, and you should always be calculating this. Find yourself an ATR period that works with your strategy, determine your stoploss based on ATR value, instead of fixed pip values.

The honest truth is - stop loss of 500 pip value isn't gonna work for any strategy long term. Because 500 pips in 2023, is totally different in 2026. it might take 2 hours to move a price to 500 pips in 2023, but in 2026, it might just a matter of 3 minutes.

My strategy is built entirely around ATR:

• Stop loss set at 0.8x ATR or 1.5x ATR, depending on the strategy.
• Lot size calculated after the stop loss, so I'm only risking my defined % per trade

So what does that actually mean? A 24-period ATR tells you the average move over the last 24 candles. If I set my stop at 1.5x that, I'm basically saying "I need the market to move one and a half average candles against me before I'm wrong." With an ATR of 20 points (2000 pips), that puts my stop loss 3000 pips away.

How should you choose your ATR period?

This is something that rarely gets covered in a lot of online courses, or trading content. I am sharing this based on my personal experience - you choose your ATR period based on your trading style.

If I'm an intraday trader, I'm not interested in the average price movement over a 2-week period — when price has a huge spike or move, a 2-week ATR won't react fast enough to be meaningful for my strategy.

In the contrary, this might work well with swing trader, because they probably don't need the ATR to react as fast.They're fine with ATR sitting on a 2-week period — good enough to capture the broader move, without needing to react to every short-term shift.

Personally, I'm an intraday trader, so I want something that reacts fairly quickly, since my trades normally conclude within a day. My ATR needs to react on that same timeframe — so I've set it to a 2-day period, i.e. 48 on a 1hr timeframe. It's not too short where it overreacts like a 24-period on 1hr would, and it's not too slow like a 72-period on 1hr would be. 48 is my sweet spot for my strategy.

So how do you find what works for you?

Ask yourself these two questions:

1. How many candles does your strategy need to survive, based on your trading style?
2. Within how many candles do you need to know the price has moved against your strategy?

If you can answer these two questions, you'll have your answer on what ATR period and value you should be using.

That's everything I wanted to cover for this week's topic — ATR, why it matters, and how I personally use it. Thanks for reading.

Quick background — I am a XAUUSD trader, I have a 9-5 job, so i am not a screen-watcher. After 6-8 years of losing money trying to "be disciplined" with discretionary trading, I rebuilt my whole approach around something boring, rule-based, and built to run without me staring at charts all day. I don't scalp — my background is day trading, and everything here is built around having a full-time job, not around having all day to watch price action.

I'm sharing what I've learned, one topic a week, for the next 52 weeks. This is Week 1.

Week 1 : ATR — how i think ATR should be used in trading

You've probably watched online content that talks about a certain candle pattern, shows you where to place a trade, and marks the stop loss and take profit on candles like this:

https://preview.redd.it/kwkyp3uznm9h1.png?width=250&format=png&auto=webp&s=544d70d167431ff873a8d366ef56cefd4f8dadf5

While trying to follow that pattern, the key thing a lot of people miss is: how do you structure this so it stays consistent every time you try to trade that pattern?

Take a look at these two charts — both XAUUSD, different years, same 1hr timeframe. Do you see any difference?

Left: June 2026. Right: July 2023. Both XAUUSD, both 1hr timeframe.

They look the same, right? But they're completely different.

July 2023 — candle body size: 550 pips

June 2026 — candle size: a whopping 7000 pips

This is what catches a lot of people off guard. A candlestick pattern from 2023 has a completely different body size to one in 2026. That spike candle you're seeing in those charts — even though they look the same — is actually a 13x difference in pips! If your trading plan isn't built to adapt — or doesn't have a dynamic way of adapting — you'll get eaten alive by this without even realising it.

From 2023 to 2026, the average candle range went from ~100 pips per candle to ~2000 pips per candle — a 20x difference!

If your trading plan can't adapt to that, you're in trouble. The worst part is you might not even notice, because the range doesn't grow overnight — it creeps up gradually. Unless you're actively paying attention, you won't realise it's happening. You'll just end up wondering why your trading plan has gotten worse, without realising you've been compromised the whole time.

So now we know the problem is, what should we do to solve this?

My approach to this, is Average True Range (ATR).

What is ATR?

According to Babypips, it's a technical indicator that measures the volatility of price — it shows you how much price has fluctuated, on average, over a given time frame. I won't go through the calculation or the textbook definition here — if you don't know what ATR is, look it up, there's plenty of material out there and it's pretty straightforward to understand.

Most traders learn this definition, glance at the ATR indicator, and move on. The mistake is not pairing it with your actual trading strategy and using it as a real input into your trading decisions.

How I actually use it
ATR is how I determine my stop loss and my lot size. This should be an automated process, and you should always be calculating this. Find yourself an ATR period that works with your strategy, determine your stoploss based on ATR value, instead of fixed pip values.

The honest truth is - stop loss of 500 pip value isn't gonna work for any strategy long term. Because 500 pips in 2023, is totally different in 2026. it might take 2 hours to move a price to 500 pips in 2023, but in 2026, it might just a matter of 3 minutes.

My strategy is built entirely around ATR:

• Stop loss set at 0.8x ATR or 1.5x ATR, depending on the strategy.
• Lot size calculated after the stop loss, so I'm only risking my defined % per trade

So what does that actually mean? A 24-period ATR tells you the average move over the last 24 candles. If I set my stop at 1.5x that, I'm basically saying "I need the market to move one and a half average candles against me before I'm wrong." With an ATR of 20 points (2000 pips), that puts my stop loss 3000 pips away.

How should you choose your ATR period?

This is something that rarely gets covered in a lot of online courses, or trading content. I am sharing this based on my personal experience - you choose your ATR period based on your trading style.

If I'm an intraday trader, I'm not interested in the average price movement over a 2-week period — when price has a huge spike or move, a 2-week ATR won't react fast enough to be meaningful for my strategy.

In the contrary, this might work well with swing trader, because they probably don't need the ATR to react as fast.They're fine with ATR sitting on a 2-week period — good enough to capture the broader move, without needing to react to every short-term shift.

Personally, I'm an intraday trader, so I want something that reacts fairly quickly, since my trades normally conclude within a day. My ATR needs to react on that same timeframe — so I've set it to a 2-day period, i.e. 48 on a 1hr timeframe. It's not too short where it overreacts like a 24-period on 1hr would, and it's not too slow like a 72-period on 1hr would be. 48 is my sweet spot for my strategy.

So how do you find what works for you?

Ask yourself these two questions:

1. How many candles does your strategy need to survive, based on your trading style?
2. Within how many candles do you need to know the price has moved against your strategy?

If you can answer these two questions, you'll have your answer on what ATR period and value you should be using.

That's everything I wanted to cover for this week's topic — ATR, why it matters, and how I personally use it. Thanks for reading.

Quick background — I am a XAUUSD trader, I have a 9-5 job, so i am not a screen-watcher. After 6-8 years of losing money trying to "be disciplined" with discretionary trading, I rebuilt my whole approach around something boring, rule-based, and built to run without me staring at charts all day. I don't scalp — my background is day trading, and everything here is built around having a full-time job, not around having all day to watch price action.

I'm sharing what I've learned, one topic a week, for the next 52 weeks. This is Week 1.

Week 1 : ATR — how i think ATR should be used in trading

You've probably watched online content that talks about a certain candle pattern, shows you where to place a trade, and marks the stop loss and take profit on candles like this:

https://preview.redd.it/mwohswccfm9h1.png?width=250&format=png&auto=webp&s=5e5e759366ac59f001765283883f000d7266ccaa

While trying to follow that pattern, the key thing a lot of people miss is: how do you structure this so it stays consistent every time you try to trade that pattern?

Take a look at these two charts — both XAUUSD, different years, same 1hr timeframe. Do you see any difference?

Left: June 2026. Right: July 2023. Both XAUUSD, both 1hr timeframe.

They look the same, right? But they're completely different.

July 2023 — candle body size: 550 pips

June 2026 — candle size: a whopping 7000 pips

This is what catches a lot of people off guard. A candlestick pattern from 2023 has a completely different body size to one in 2026. That spike candle you're seeing in those charts — even though they look the same — is actually a 13x difference in pips! If your trading plan isn't built to adapt — or doesn't have a dynamic way of adapting — you'll get eaten alive by this without even realising it.

From 2023 to 2026, the average candle range went from ~100 pips per candle to ~2000 pips per candle — a 20x difference!

If your trading plan can't adapt to that, you're in trouble. The worst part is you might not even notice, because the range doesn't grow overnight — it creeps up gradually. Unless you're actively paying attention, you won't realise it's happening. You'll just end up wondering why your trading plan has gotten worse, without realising you've been compromised the whole time.

So now we know the problem is, what should we do to solve this?

My approach to this, is Average True Range (ATR).

What is ATR?

According to Babypips, it's a technical indicator that measures the volatility of price — it shows you how much price has fluctuated, on average, over a given time frame. I won't go through the calculation or the textbook definition here — if you don't know what ATR is, look it up, there's plenty of material out there and it's pretty straightforward to understand.

Most traders learn this definition, glance at the ATR indicator, and move on. The mistake is not pairing it with your actual trading strategy and using it as a real input into your trading decisions.

How I actually use it
ATR is how I determine my stop loss and my lot size. This should be an automated process, and you should always be calculating this. Find yourself an ATR period that works with your strategy, determine your stoploss based on ATR value, instead of fixed pip values.

The honest truth is - stop loss of 500 pip value isn't gonna work for any strategy long term. Because 500 pips in 2023, is totally different in 2026. it might take 2 hours to move a price to 500 pips in 2023, but in 2026, it might just a matter of 3 minutes.

My strategy is built entirely around ATR:

• Stop loss set at 0.8x ATR or 1.5x ATR, depending on the strategy.
• Lot size calculated after the stop loss, so I'm only risking my defined % per trade

So what does that actually mean? A 24-period ATR tells you the average move over the last 24 candles. If I set my stop at 1.5x that, I'm basically saying "I need the market to move one and a half average candles against me before I'm wrong." With an ATR of 20 points (2000 pips), that puts my stop loss 3000 pips away.

How should you choose your ATR period?

This is something that rarely gets covered in a lot of online courses, or trading content. I am sharing this based on my personal experience - you choose your ATR period based on your trading style.

If I'm an intraday trader, I'm not interested in the average price movement over a 2-week period — when price has a huge spike or move, a 2-week ATR won't react fast enough to be meaningful for my strategy.

In the contrary, this might work well with swing trader, because they probably don't need the ATR to react as fast.They're fine with ATR sitting on a 2-week period — good enough to capture the broader move, without needing to react to every short-term shift.

Personally, I'm an intraday trader, so I want something that reacts fairly quickly, since my trades normally conclude within a day. My ATR needs to react on that same timeframe — so I've set it to a 2-day period, i.e. 48 on a 1hr timeframe. It's not too short where it overreacts like a 24-period on 1hr would, and it's not too slow like a 72-period on 1hr would be. 48 is my sweet spot for my strategy.

So how do you find what works for you?

Ask yourself these two questions:

1. How many candles does your strategy need to survive, based on your trading style?
2. Within how many candles do you need to know the price has moved against your strategy?

If you can answer these two questions, you'll have your answer on what ATR period and value you should be using.

That's everything I wanted to cover for this week's topic — ATR, why it matters, and how I personally use it. Thanks for reading.