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Circuit-Breaker Trading Halts: What You Should Know

Volatility within the last couple of months has triggered days in which markets pause/halt trading temporarily to prevent a huge drop. There are three stages of halt that attempt to curb big drops. Level 1, a halt of 15-minutes, is triggered when the S&P falls 7%. Level 2, another halt of 15-minutes, is triggered when the S&P falls 13%. Level 3, a permanent halt for the day, occurs when the S&P falls 20%.

We have seen such activity in the past. For example, in 1987, the Dow dropped 22.6% one day.

As shown in the video, one can still trade these volatile days. In fact, the Atlas Line and Trade Scalper may excel at producing trading signals at opportune times (ahead of a big move down). During such volatility, you may want to use a 1-Minute chart with the Trade Scalper rather than a 2-Range chart. Be sure to use an ATM Strategy with larger values because you may not have enough time to adjust your profit target and stop loss once in a trade under fast conditions.

Do you expect this volatility to continue? Whatever the future may have in store for us, the Atlas Line, Trade Scalper, and other trading methods taught at have stood the test of time. Will the U.S. Treasury be an effective replacement for the Federal Reserve? At what point will the markets go back to “normal”? Is volatility the new normal? Do you want to see cryptocurrency accepted as part of an official U.S. currency? These are questions that can only be answered in time. Stay healthy and safe!

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