How to Build a 6M Trading Plan Based on Volatility and Fundamentals
6M (USD/MXN futures) is not tradable without structure. The Peso moves too far, too fast, and too unpredictably for “winging it.” Your trading plan must be built around the two forces that control USD/MXN: volatility and fundamentals. If you ignore either, you will size wrong, enter wrong, hold wrong, and get blown out during random repricing bursts.
1. Start With the Volatility Framework
6M’s volatility is extreme. The ATR and swing distances you saw in 6M Volatility Profile are the core of your risk system.
Your volatility baseline:
- Daily ATR: 0.0600–0.1200 (600–1200 ticks)
- Hourly ATR: 0.0100–0.0200 (100–200 ticks)
- Pullback size: 80–150 ticks in trend
- Impulse legs: 200–350 ticks
If your stop size is smaller than the hourly ATR, your trades are already dead.
Set your ranges:
| Condition | ATR Behavior | Plan Adjustment |
|---|---|---|
| Compression | ATR falling | reduce size, avoid breakouts |
| Normal | ATR stable | take trend setups |
| Expansion | ATR rising | trade breakouts with wide stops |
Your entire plan starts with knowing whether volatility is expanding or contracting.
2. Identify Daily Directional Bias From Fundamentals
The Peso is fundamentally driven. You must know what is pushing USD/MXN before you attempt direction.
Check these daily before trading:
- DXY trend: strong USD = upward bias on 6M
- U.S. 2-year yields: rising yields = USD bullish
- Banxico expectations: cuts weaken MXN; hikes strengthen MXN
- Oil price direction: rising oil helps MXN
- Risk sentiment (ES, VIX): risk-off kills MXN
The full macro logic is in Fundamental Drivers of 6M. You should read it again.
Simple bias system:
- 3+ bullish USD signals → look for longs
- 3+ bullish MXN signals → look for shorts
- mixed signals → reduced size only
This prevents you from trading against the macro tide.
3. Build Your Session Timing Rules
6M has specific times when you should and should not trade. The contract is too dangerous to be active all day.
Best trading windows:
- 8:30–11:00 AM ET — clean trends, deep liquidity
- 2:30–3:00 PM ET — yield-driven repricing setups
Do NOT trade these windows:
- 12:00–3:00 PM ET — chop, low volume
- 7:45–8:30 AM ET — data-landmine zone
Your plan must define exactly when you take trades. “Whenever I feel like it” does not survive 6M.
4. Define Your Entry Criteria (Strict Only)
Your entries must line up volatility + fundamentals + structure. If any one component is missing, you skip the trade.
Your entry checklist:
- Directional bias confirmed (USD or MXN strength)
- ATR stable or rising (no trades in compression)
- Price respecting 20/50 EMAs
- DXY confirming the signal
- Volume Profile level nearby (HVN, LVN, or POC)
When all 5 align, you get a high-quality 6M entry.
Entry types you allow:
- Trend continuation: buy dips / short pops into EMAs
- Breakouts: only with rising ATR
- Reversals: only at major profile levels AND with DXY agreement
If you take anything else, you’re freelancing — and 6M will punish you.
5. Structure Position Sizing Off ATR
6M requires sizing based on volatility, not on what feels good. Use this formula:
Position size = (Account × %Risk) ÷ (Stop size in ticks × $2.60)
Stop sizes you should actually use:
- 60–80 ticks: scalp in normal conditions
- 100–150 ticks: trend setups
- 180–250 ticks: wide-stop swings
These are real numbers. Stop pretending 20–30 ticks will hold on a contract that moves 600+ ticks per day.
6. Build a Risk Protocol for News and Repricing
6M explodes during U.S. data and late-day yield shifts. Your plan must specify how you handle these exactly.
News protocol:
- No entries 10 minutes before major data
- No entries for 5 minutes after
- No holding losers into news
Late-day protocol (3–4 PM ET):
- reduce size or flatten
- expect 80–150 tick repricing bursts
- never re-enter after 3:40 PM ET
These rules exist because 6M can move violently with no warning at those times.
7. Define Exit Rules Based on Structure + Volatility
Your exits must match volatility conditions, not emotions.
Exit methods:
- Target = 1.5× ATR(5)
- Stop = 1× hourly ATR
- Trail only when ATR rising
Trailing stops during compression are how traders give back 70% of a move.
8. Build a Daily Routine Around This Plan
Every day, you follow the same order:
- Check overnight DXY + yields
- Mark liquidity levels on 6M
- Check ATR and volatility environment
- Assign directional bias
- Wait for proper trading windows
- Trade only if all criteria align
This routine eliminates randomness and panic entries.
Definitions for Screen Readers
ATR: Average True Range, a measure of volatility.
Directional bias: The expected direction of price based on fundamentals and macro conditions.
Repricing: Sudden adjustment in price caused by macro or yield changes.
Volume Profile: A chart tool showing where trading activity concentrated at each price level.
DXY: The U.S. Dollar Index.
Bottom Line
6M requires a trading plan built around volatility and fundamentals. If you don’t anchor your decisions to ATR, rate spreads, DXY, and session timing, you are trading blind in a contract that moves hundreds of ticks in minutes. This plan gives you a stable, repeatable framework you can actually trade without blowing up. The next article explains how U.S.–Mexico trade and remittances directly impact 6M price movement.