War changes the game.

War changes the game.

First and foremost, this is not business as usual. We are dealing with a war scenario that can escalate fast and become extremely violent in nature, and as such it is fully capable of producing a six-sigma trading event.

That reality brings us back to our typical, principle-based, top-down approach. The priority is not to chase a potentially emotional, news-driven move on the Sunday open. The priority is to prepare and rehearse for the tail-risk scenario.

Yes, one can build a directional view. Oil can break higher. EUR/USD can go lower. The dollar can gain strength. Many readers are perfectly able to fade gap plays. But in my humble opinion, this is the time to reduce exposure, cut trading size to half (or less), and, if possible, refrain from trading altogether.

Instead, invest in anticipatory work:

• Prepare for even more significant volatility.

• Check your backup scenarios.

• Rehearse hedge-play strategies.

• Make sure your operational setup is solid.

And above all, strengthen the psychological aspect for possible participation.

Take a day off. Be with your family and close friends. Stand for peace as a whole, with gratitude for what we have, and with hope that our species stops fighting amongst itself at some point in the future.

Then come back with a clear mind, and with the distinction of firm beliefs, and protect those beliefs by showing up prepared, with a risk mindset that is aligned with low-risk trading principles.

It is much more important to keep the powder dry and stay in the game than to try to take advantage of high-volatility scenarios.