Using ATR to Size Trades in 6A AUD/USD Futures
Most beginners get smoked trading 6A because they size positions without respecting volatility. ATR fixes that. Average True Range tells you exactly how much 6A typically moves, which translates directly into how wide your stop should be and how many contracts you can safely run.
What ATR actually tells you
ATR measures the average movement of 6A over a set number of candles. Higher ATR = bigger swings = you need wider stops. Lower ATR = tighter structure = smaller stops. It’s the simplest volatility tool that actually works.
If you want more context on volatility behavior, see the 6A volatility clusters guide.
How ATR converts into a real stop-distance
The formula is simple:
Stop Distance = ATR × Your Stop Multiple
Most traders use 1× to 2× ATR depending on trend strength. For example:
- ATR = 0.0008
- 1.5× ATR stop = 0.0012
That’s 12 ticks. Since 6A is $10 per tick, your risk per contract is:
12 ticks × $10 = $120 per contract.
How to choose contract size using ATR
Use this rule:
Contracts = (Account Risk Per Trade) ÷ (ATR-based stop cost)
If your risk per trade is $240, and your stop is $120 per contract, you can run:
2 contracts max.
Why ATR sizing works perfectly for 6A
6A trades with consistent rhythm across sessions, and ATR captures that. It keeps you from doing the dumb two mistakes:
- Putting your stop inside normal noise
- Oversizing during high-volatility cycles
This lines up with how institutional traders handle risk—volatility-adjusted sizing.
Where ATR fails
ATR is not perfect. It breaks down:
- During major news (FOMC, RBA, China GDP)
- During commodity shocks
- When volatility suddenly expands after a long quiet period
That’s why ATR should guide you—not control you.
Example ATR-based trade
Say 6A is in a clean uptrend. ATR is 0.0009. You want a 1× ATR stop. That’s 9 ticks = $90 risk per contract. If you’re risking $180 total, the correct size is two contracts. Simple. No overthinking.
Bottom line
ATR is the most reliable way to size 6A futures trades. It keeps your stops outside normal noise, keeps your contract size sane, and prevents stupid blowups during volatility spikes. Use ATR on every 6A trade—your account will thank you.