Always look at all 4 e-minis

Hi Everybody,

Yesterday was a great example of why I always suggest to look at all 4 of the US e-minis. As I suspected the trades were quiet yesterday (after a good few days), but there was a nice TS2 buy (that was “in line with” a blue STF) on the 3min Russell Index.

As you can see, this resulted in a nice +3R Profit (ignoring slippage and commission). But the point is that would have missed this nice trade if you only follow the ES of just one of the other e-minis. This is why I always suggest following all 4 of them.

We are going into a long holiday weekend here in the UK, so may I wish you all a good holiday and I will be back next Tuesday.

Thanks

Steve

YM as well

The 5min YM got in on the act as well, with a small Profit towards the end of the day. Making yesterday another good day overall

OK, we have had two very good days now, and I never like giving bad news, but after a period of good trades we should always keep in mind the “Cyclical Nature of Trading”. And just after a quiet period or some small loss we would expect some good trades to come though (which just have), likewise, after a period of good trades, we should be preparing for the hard part of the cycle to come round again............

This is just the Natural way markets unfold, but because so few vendors are Traders themselves, you well very rarely hear about this because most vendors simple do not know or understand how markets unfold in the Real World.

So we should, be thankful for the good Profits, but now is not the time to get complacent........

Thanks, Steve

Another good day

Hi Everybody,

Well, the Profits continue to come in, with a lovely +4.7R Profit (ignoring slippage and commission) on the 5min ES yesterday. Yes, this followed buy a -1R loss, but this loss was a lot smaller than the profit, and as you all should know by now, this is the key to long term trading success – keeping the losses small and Profits large.

That was not all, the YM came in on the act later in the day as well, next post

Thanks, Steve

What an Amazing Day !

Hi Everybody,

Well, I hope you all caught this one.................... As you can see, the 5min ES gave a TS1 sell, that not only nailed the high of the day for you, but also had you short as a sharp collapse unfolded. After the discussions on different signals yesterday, I have include the NinjaTrader 7 add-ons here to show how this TS1 sell was found using the RT add-ons.

The ES declined sharply, without exceeded the prior Bars high’s. As the decline continued, Standard Traders could have used the ATRStop for trade management. The result was a massive +6.9R Profit (ignoring slippage and commission).

What a brilliant trade !

Steve

STF Colour

Hi Everybody,

I do get asked sometimes about how to use the STF “colour”. Well, for the “Standard trader” we only consider trades that are “with” the STF colour, i.e. Blue (or Black) for a buy and red (or black) for a sell. It does not matter whether the STF is above or below the 0 line, we only use its colour.

The 3min YM yesterday was a good example................ Here the first two sell setups were not valid as they were “against” a blue STF. But the TS4 sell later in the day was when the STF was Black (neutral) so was OK to take.

The result was a nice +4.7R Profit (ignoring slippage and commission) as the YM continued its decline into the close.

Note: The trade management swapped to the ATRStop when the STF was strong (beyond its strength band) as the YM short reached its first Profit target....

Thanks, Steve

PS, this was found using the full MTPredictor v6.5, see the Advanced Blog for the RT add-ons.

Small losses and Big Profits

Hi Everybody,

The 3min YM on Friday was a perfect example of why I teach that it is so important to keep your losses small. Here we had two long trades (as the STF was blue), the first was a loss, the second was a Profit. But that is not the important thing. What is important is that the loss was kept small at just -1R, and the Profit was much larger than this at +2.9R )ignoring slippage and commission). So over all, you came out with +1.9R Profit (+2.9R less -1R).....

This is why it is so important that losses are kept small and Profits large, this is what makes you money over time.....

Thanks

Common Sense

Hi Everybody,

Here is a question I get asked a lot – what to do when a trade is in Profit but has not reached the first target ? This is a lot easier to answer “if” this trade has reached a natural support / resistance level, like the DP. But a good example is on the 3min NQ, where we can see that this TS1 short was sitting on +3.8R Profit (ignor9ing slippage and commission), but had not reached the first target...... So what should you do ?

Well, this is where common sense should come in. Firstly, once you are on such a good profit, your protective stop should already be at least at break-even..... The question now, is how far into Profit should you move it ?

This is judgment call based on experience and also based on what other markets are doing.... But common sense would suggest to lock in at least a small profit one you are on such a good profit initially....

Thanks, Steve

A good day yesterday.... Part 2

After a god start to the day on the 3min ES, the 3min NQ got in on the act with a YS3 buy later in the day, that made approx. +1.8R Profit (ignoring slippage and commission) on the close. Add this to the +2.8R Profit from the ES earlier, and you had a good day yesterday..............

Notice how the STF was blue all day, so sells were avoided....

This is why I keep on taking about the Cyclical Nature of Trading, and why it is so important to keep the losses small during the bad times, because the good days, with good profitable trades will come around again, and you must be ready to catch them.....

Thanks, Steve

A good day yesterday....

Hi Everybody,

Yesterday was a good day for the Standard Traders among you, which started with a nice S3 buy in the morning on the 3min ES.....

As you can see, the ES rallied nicely to reach the first projected profit target – that nailed the high of the day for you ! For a nice +2.8R Profit (ignoring slippage and commission).

Notice how this TS3 long did not get stopped out as the ES made a “double bottom” a few bars after the entry...........

Thanks, Steve

3min ES

Hi Everybody,

Yesterday was another perfect example of why I want you to all become “more advanced” traders and as such be able to “read” the charts, as you will see in the Advanced Blog, this would have given you another massive +9.9R Profit on the 3min NQ yesterday, making back to back +10R Profits over the last two days using Advanced Analysis............... This is the true power of MTPredictor and why, once you understand how to use it properly, you will see how it is one of the most powerful software programs around.....

But I do understands that many of you need to learn to walk before you can run, so let’s take a look at just the standard setups on the 3min ES yesterday, which was a hard day.

As you can see, there were two sells early in the day, the first was a -1R loss, but on the second, can you see how the STF turned red just after the long trade was entered, this was a sign to either get out or move stops closer.

Then we had a TS2 sell, that would have been a -1R loss or break-even depending on whether you used the 100% initial risk guideline. But it is the TS3 later on that interested me most. Mainly because it did reach the minor DP where a small profit was available, especially as other markets (as we will see on the Advanced Blog) were making brilliant buy setups.

So a tricky day, but then the Advanced Analysis kicked in with some perfect trades, please see the Advanced Blog.

Thanks, Steve

TS2 sell on 3min ES

Hi Everybody,

To celebrate that we have started the “Beta testing” of the new RT MTP add-ons for NinjaTrader 7, I will do today’s post using NinjaTrader 7.........

Friday was a good day with a TS2 sell unfolding on the 3min ES, that nailed the high of the day for you ! Using the standard trade management guidelines would have meant coming out for a +2.3R Profit (ignoring slippage and commission).

Some people will complain at that, but then they will have forgotten the +2R Profit from the YM the day before, and then compare this to just a small -1R loss on the 3min YM the day before.................. All these Profits were much larger than the losses, and that is what makes money overtime.... Big Profits and only small losses.

Thanks, Steve
PS, I know that you would all loved to have caught the whole decline, well pop over to the Advanced Blog to see how........

Beware the creeping DP

You will also notice on that 3min YM chart that we had two DP sells, neither of which worked out. BUT, notice how they are against a blue STF, so both should have been avoided.............

DP’s are brilliant for nailing the “end” of a trend, but because they are “trend termination” setups they should be used with caution, ............ Especially when they appear in a market that is “creeping” like the YM yesterday. On days like this, DP’s should be avoided......

DP’s are best used only by the more experienced trader and then only when they line up with the larger degree chart.

Thanks, Steve

YM yesterday

Hi Everybody,

The last two days have been a brilliant example of why it is so important to keep your losses small. On Tuesday the 3min YM made a -1R loss. But then yesterday we had a TS2 buy setup, that nailed the low of the day for you ! But the important point is that the profit from this was +2.1R (ignoring slippage and commission)..................... In other words wiping out the prior days loss and putting you back into Profit over all. Small losses and Big Profits, that is the key to successful trading.

I know that +2.1R is only small profit, but you have to remember that we are still in the quiet part of the trading cycle, so small profits and small control losses should be expected. It will not be long before we get back to some much bigger profits.

Thanks, Steve

The Dax saves the day with +9.7R trade...

Hi Everybody

Even when the US e-minis have been quiet over the last few days, the 3min DAX come up with this massive +9.7R Profit (ignoring slippage and commission) just this morning..................

A good one for the European Traders among you :)

Thanks, Steve

Loses can and do happen

Hi Everybody,

As I outlined yesterday, we are now in the quieter part of the cycle (Cyclical Nature of Trading), and as such we should expect some losses. Yes, despite what some software vendors and Gurus tell you, losses can and do happen, they are a very important part of a successful trading approach. Why are they so important ? Well it is important that they are kept small. And this is what MTPredictor does....

As you can see from the TS3 sell on the 3min YM yesterday, the loss here was kept small at just -1R, or one risk unit.

As we go through this quieter part of the cycle, we are safe in the knowledge that losses are being controlled, so we are ready to maximise our profits when we get back to the good and profitable part of the cycle, which is coming soon............ This is just the way market unfold in the “real world”.

Thanks, Steve

Quiet days

Hi Everybody,

Remember a few days ago I talked about the Cyclical Nature of Trading and how after a quiet period, we were due to come back to some god trades ? Well that unfolded as anticipated and we have now had a number of very good days with some good profitable trades................ But, after a period of good and profitable trades, we must expect the cycle to continue and us enter the quiet part....... This is what happened yesterday with a very quiet day on the US e-minis.

The 3min NQ yesterday was a good example, were we had two potential sell setups, but these were both “against” a blue STF so should have been avoided............

As you can see, a very quiet day. But this is OK, because now we all understand the Cyclical Nature of Trading, we know to anticipate quiet times, especially just after a run of very good and profitable trades....

Thanks, Steve

Don’t forget the 5min Charts

Hi Everybody,

I know I have mentioned it before, but it is important to not only follow all 4 of the US e-minis (ES, YM, NQ and TF) but also on the 5 as well as 3min Charts.

Friday was a perfect example, as the best trade came on the 5min Russell Index (TF). As you can see, early in the afternoon the 5min TF made a lovely ABC correction that setup an automatic TS3 buy setup. This nailed the low nicely and the Russell rallied into then close, where a nice +3.2R Profit was made (ignoring slippage and commission) ....

Yes there was a valid -1R loss earlier in the day, but the +3.2R Profit more than made up for this making money overall on the 5min TF. As usual, small loss and Big Profits is what successful trading is all about............

So the message here, is not to not only follow all 4 of the US e-minis (ES, YM, NQ and TF) but also on the 5 as well as 3min Charts.

Thanks, Steve

DP from the Wave B swing

Hi Everybody,

In today’s post I would like to remind you all of how the DP from the prior Wave B high or low can catch a minor high or low nicely. I assume you all have read the Trading Course Part 2, but if you have forgotten, then I suggest you re-read Part 2, because this is covered in there.......

A good example is on the 3min NQ yesterday, please see the chart, where we got a minor rally off the TS3 buy in the afternoon. But look where the rally stopped, right at this DP (from the minor Wave B high). So knowing in advance that this is an important zone will help you in your trading............

Thanks, Steve

PS, wouldn’t it be nice to have caught the rally off the lows ? Well, as you can see, we did get a DP buy there, so please turn to the Advanced Blog, to see how the more Advanced Traders among you could have caught this......

Tick levels

In the last example we had a nice +4R profit overall, but the first trade was stopped out by only 1 tick, and I know that a lot of you find this frustration............... So what we have done is added in the ability to adjust the “tick offset”.

As you can see, in the new Beta 186 (not released yet, but will be soon), you can adjust how many ticks the stop and entry are beyond the bar high and low. Here adjusting the stop to 2 or 3 ticks beyond the high, rather than just 1, kept you in the first short trade, so you would have had only one profitable trade.

The interesting part is because the initial risk is increased slightly, the profit on this one trade would have been +4R, which is the same as in the example below where we had a -1R loss then a +5R profit................ so in reality, this will not make much difference to the bottom line in $ terms. But it will help psychologically, if you feel that stops are getting clipped by 1 or 2 ticks, and you wish to avoid that. So this will help by reducing the number of losing trades you experience....

Thanks, Steve

Another good day..........

Hi Everybody,

Now do you all see why I go on about the Cyclical Nature of Trading so much – after a few hard days, we are now having a run of good and very profitable days ! This is how trading goes in the real world, the good times are followed by harder and quieter times, before the good times come round again........

Please remember to follow the 5min Charts as well as the 3min Charts, the 5min YM was a great example yesterday, where we had a -1R loss (which was only stopped out by 1 tick !) followed by a lovely TS4 sell that nailed the high of the day perfectly !

Using the Standard Trade Management guidelines would have swapped to the ATRStop as the STF was strong, for a nice +5R Profit (ignoring slippage and commission).............

So -1R and then +5R = +4R Profit overall – a good result !

Thanks, Steve

Yep, you guessed it, the Advanced Trader could have done a little better.....

Now a good day !

Hi Everybody.....

This is why I talk so much about the Cyclical Nature of Trading............ After a few hard days, we then got a good day with a nice Profit on the 3min YM yesterday............. Trading goes in cycles, and too many amateurs just give up after they have had a few hard day, when in reality, this is usually just before a great day, when good Profits can be made......

Here we had a -1R loss, then a nice +3.2R Profit (ignoring slippage and commission) before a small profit into the close........... But overall a good an profitable day on the 3min YM

Thanks, Steve

PS, Advanced traders could have done even better, please see the Advanced Thread.....

The Cyclical Nature of Trading

Hi Everybody,

Yesterday was a great example of how sometimes trading can be hard. As you can see on this 3min YM chart, the markets just moved sideways in a very narrow range yesterday, as such trading would have been hard. MTPredictor did well, with a -1R loss, which was follow by a small +1.2R Profit (ignoring slippage and commission) at the end of the day. But whichever way you look at it, yesterday was a hard day.

Most trading Gurus and software companies never tell you about days like this. This is because they are not professional traders so do not understand how market unfold in the “real-world”. There will be hard days, and quiet days as well as the good (profitable) days. This is just how markets unfold, they go in cycles, something I call “The Cyclical Nature of Trading”.

This is why expecting to make money every day is simply wrong, and if you hear of a system that promises to make X dollars a day, then you know that they have no practical experience in the real world.

This is why I always talk about the hard times as well as the good times, to make sure you are all prepared to tackle the markets how they “really” unfold....

Thanks, Steve

Why it is important to follow all 4 e-minis

Hi Everybody,

Yesterday was a brilliant example of why it is so important to follow all 4 of the US e-minis. I hear too many times that people are only interested inn the ES or YM. But just look at this brilliant TS4 buy on the 3min TF (Russell Index).

As you can see, after a -1r loss, then came a lovely +5.3R Profit (ignoring slippage and commission)............... A nice profit that you would have missed if you were only following the ES !
Lastly, I am asked a lot about DP’s. As they are “trend termination” setups, there are only to be used when they fall in line with the “larger degree trend” or larger degree support / resistance areas. As this takes a little more thought, they should be considered slightly more advanced, so should not be blindly taken by the newer traders among you

Thanks, Steve

PS, defiantly look at today’s Advanced Blog, as it shows a perfect +11R Profit !!