A quiet day yesterday

Yesterday (Tuesday) was a quiet day. This can happen after such a big “gap open” where the markets opened sharply lower, before drifting sideways for the rest of the day.

But quiet days are OK, and just part of the Cyclical Nature of Trading. We had a good day on Monday, so a quiet day yesterday was OK.

Thanks, Steve

A good day on Monday

As we can see from the chart. The TS4 sell on the NQ “was valid” as the STF at the sell was black.

This then caught the fall into the close for a nice +4.5R Profit (ignoring slippage and commission).

Adding this to the +2.4R from the ES earlier in the day and Monday was a good day overall

Thanks, Steve

A good day on Monday

Hi Everybody,

Sorry I am posting the charts and comments for Monday a day late, but it was such a good day, I felt that they should be up.

It was an interesting day on the 3min ES, with a valid DP buy coming in around lunch time. This worked out nicely as the ES rallied into the first profit target, where a +2.4R Profit was available (ignoring slippage and commission)

This was a standard setup as the STF was Black. But the TS4 sell later in the day was “against” a blue STF so had to be avoided. But this was not the case on the NQ, see next post.

Thanks, Steve

History Triangles

Hi Everybody,

Yesterday, on the 3min ES, there was a good example of how the “History Triangles” are not always -1R losses. If you look at the history triangle on the 13:09 bar you will see that the “next bar” (13:12) the high of the 13:09 bar was exceeded “BEFORE” the low, so the short trade was invalidated “before” it was filled.

So even though there is a History Triangle here, there was no trade, so no -1R loss.

The code is not that intelligent to be able to “look into” the bars to see which happens first – the stop trigger or the trade entry. So you do need to use some common sense and look at prior setups yourself to decide how the market unfolded.

Thanks, Steve

5min ES

OK, now lets move over to the 5min Chart. As the STF was red, we should have been looking for just sell setups, and we got three of these later in the day. The first of these was “at the same time” as the -1R loss on the 3min Chart, so should not be counted here, on the 5min Chart. We then had a valid -1R loss just before the TS4 sell nailed the high perfectly.

The ES then declined into the close, where a nice +4.1R Profit (ignoring slippage and commission) was available.

So -1R plus +4.1R makes a nice +3.1R Profit for the day. But as we have seen, this came from the 5min chart, when the 3min signals were flat

Thanks, Steve

PS, please take a look at the Advance Blog for why this last TS4 sell was a “high confidence” trade.

3min ES

Hi Everybody,

Yesterday was an interesting day, that started off with a -1R loss on the 3min ES just after the open. Then we had a nice TS2 sell, that made +2.1R Profit (ignoring slippage and commission). But then we had a TS3 sell later in the day that would have lost -1R.

So overall, the 3min ES was flat on the day........................

But, this is why I always say that you should also follow the 5min Charts, because, as we will see in the next post, that is where the money was made yesterday.

Thanks, Steve

The Holy Grail of Setups

Hi Everybody,

Today I would like to look at the Holy Grail of setups. This is a setup that I talk about in the Trading Course, and for those of you who have been following me for a while, will know that it is my favourite setup.

We got this setup on both the NQ and YM 3min Charts yesterday. As you can see, with +8.3R Profit (ignoring slippage and commission), this was a massive Profit to have yesterday.

I will take a more detailed look at the setup in the Advanced Blog, but I also suggest you take a look at this Forum Post: where I look at the setup in more detail as well

This setup was the reason I designed MTPredictor in the first place – to catch the end of Wave (2) to then be able to trade the whole of the Wave (3) swing, I think that this is the best trade there is !!

Thanks, Steve

Double Tops

Later in the day there was another example of a history triangle appearing when the market made a double top. This is exactly the same as the situation I covered in detail in yesterdays post.

The end result was a nice +2.8R Profit (ignoring slippage and commission) as the YM declined into the first target. Yes, it would have been nice to catch all yesterday fall, but +2.8R added to the +1.5R form earlier meant yesterday was a good profitable day, and that is what the Professional traders among you will be focusing on, not the “what ifs” ! Remember, we are here to make money, and that does not require us to catch every swing in the market. Amateur Traders seem to forget this sometimes.

Thanks, Steve

Trade management

Hi Everybody,

Today I would like to look at a question I get asked a lot, and that is how to manage a trade that has not hit the first target and is currently on a good Profit. Like the TS2 short on the 3min YM, that had a “open” Profit of +4R before starting to retrace.

My view is that when an open profit gets this big, it is always a good idea to look to “lock in” at least part of it. Here we can use the DP (form minor swing), or if that is not available, we can look at the “minor pattern” of the recent swing. If you look at the decline from the TS2 sell, you can see how it unfolded as a “minor” ABC pattern (as found by the Elliott Wave tool). So here you can use the high of the minor Wave b swing for the stop position. This then locked in a nice +1.5R Profit (ignoring slippage and commission).

Sometimes stop movement is easy and obvious, but sometimes it is a little more tricky, like here.

Thanks, Steve

A losing day – that could have been avoided

Hi Everybody,

Yesterday was a good example of a day that could have been very good, when viewed with an experienced and Advanced eye. On the surface, there were 4 -1R losses on the 3min YM. BUT, you should always be very wary of any day that has such a Big Gap Up on the open, usually these get closed. So this mean that a decline after the open as likely yesterday. So you should have been very cautious about any Buy set-ups.

This is where experience comes in, and experience is something that you will all gain over time of seeing and studying the market day after day.

Also, as we will see in the Advanced Blog, the 15min YM (on the 24hr chart) also gave us advanced warning of the decline to follow.

Thanks, Steve

History signals

Hi Everybody,

Today I would like to remind you all of the History triangles. In particular how we can get a history triangle and it does not necessarily mean a -1R loss. The 3min YM on Friday was a very good example of this.

Using MTP v6.5 we had two history triangle before a TS3 sell towards the end of the day. Please see the chart. BUT (and this is the important part), the “first” short trade ( at 14:30EST) was NOT stopped out. So this triangle, and indeed, the next one were NOT losses.

The reason this happens is that the market made a “triple top”. When we get equal highs or lows the code can put up a history triangle, even though the stop trigger was not hit. This is covered in the help video (http://www.mtpredictor.com/help/videos/65-history2/65-history2.html ) where I always say to place the analysis n any History signals and see how they would have worked out. Don’t just assume that each triangle is a -1R loss, because that is not how the code works

Thanks, Steve

+3.5R on the NQ.....

So far so good, even after the small -1R loss, you should have been +2R Profit on the ES. But as the low on the ES came in the 3min NQ gave TS1 buy (MTP v6.5) that nailed the low.

The NQ rallied into the first Profit target, where +3.5R Profit was available (ignoring slippage and commission).

Add this to the profits earlier on the ES and it was a good day yesterday................. And I have not even had time to mention the TS3 sell on Russell (TF) that came in later in the day that added further profits. Making yesterday a very good day indeed !

Thanks, Steve

A small loss later.

So far so good, you were up +3R, but then you had a -1R loss. But as usual this loss was small when compared to the prior +3R Profit. Then we had a TS2 sell that made a double top a few bars later (so was not stopped out). This short trade then started to decline nicely.

As you would have been on a small profits, you should have had your stop “at least” at break-even, making this a break-even trade.

But the day did not stop there, as the low on the ES was coming in, let’s take a look at the NQ in the next post.

Thanks, Steve

Yet another good day............

Hi Everybody,

Yesterday was yet another good day, that started with a lovely TS1 sell in the 3min ES. As you can see, the STF was Black, so this was OK to take. The ES then declined nicely to reach the first projected Profit target, where the STF was weak, so profits were taken at the WPT target. This is all text book stuff and all using the standard guidelines.

The result was a quick +3R Profit (ignoring slippage and commission). A nice start to the day !

Thanks, Steve

Another good day......

Hi Everybody,

The Cyclical Nature of Trading is an amazing thing. After a very hard day earlier in the week, where we had 3 loses back to back, a series ifo losses that would have got many amateur Traders stopping or doubting themselves. But juts look how MTPredictor has bounced back, with +2.5R Profit on Tuesday on the 3min ES and now another brilliant trade yesterday – a TS4 buy that nailed the very of the day for you – brilliant !!

This TS4 buy was a standard setups, where the STF was blue. Profits were taken at the first target as the STF was weak as the markets reached the zone. The result, a nice +3.6R Profit (ignoring slippage and commission.

As I say, add that to the +2.5R Profit from the day before, and the -0.6R Loss from one day earlier looks very small indeed. This is why it is so important to keep the losses small, as even after 3 losses (-3R loss) then next three trades made approx (+2.4R +2.5R +3.6R) +8.5R far far higher than the -3R loss. This is the true key to successful trading, keeping the losses small, then how MTPredictor will maximise your Profits....

The last few days have been an absolutely brilliant example of this and one I hope you all remember........

Steve

PS, it would have been nice to catch the DP sell, that nailed the high of the day, so please turn over to the Advanced Blog.

Cyclical Nature of Trading.

Hi Everybody,

The last few days have been a brilliant example of why it is so important to keep your losses small. Yesterday we saw how even after 3 loses in a row, the overall loss was only small, at juts -0.6R. Then look what happened yesterday, a nice +2.5R Profit (ignoring slippage and commission) on the 3min ES, which put you back into Profits overall.... Also remember that we had a couple of good days before that as well.

This is why it is so important to accept the losses but just keep them small. Because the Cyclical Nature of Trading means that it will not be long before the next profit comes along, and (this is the import part), with MTPredictor, that Profit will be larger in relation to the losses.....

So the last few days have been a very good lesson on this, that I hope has helped you all become better traders.

Thanks, Steve

Cyclical Nature of Trading (how to deal with losses)

Hi Everybody,

Yesterday was a good lesion in that losses can and do occur. Many Gurus will never mention losses, but they do not know how the markets unfold in “real life”. We all know that losses can and do unfold, so there is no point hiding them. But what we have to understands is that losses are important, mainly because it is how you handle losses that will make you a better trader. A good example is on the 3min YM, here you would have had 3 valid losing -1R trades in a row, so yes you would have been -3R down. But then the TS4 sell towards the end of the day made +2.4R Profit (ignoring slippage and commission)..... In other words making up most of the earlier losses for you.

So you should have ended the day down just -0.6R. Now compare -0.6R loss to the big Profits form the last few days, and do you see why losses should not be worried about or ignored, they should just be kept small. By keeping them small it means that you are back in the black with only 1 or 2 trades, even after 3 losses on the trot.

This is one of the hardest thing new and Amateurs traders struggle with. They find it hard to deal with losses. They want to just avoid them, then after 1 or 2 losses they stop trading and therefore miss the next big winner. Losses should not be vied as a “mistake” or anything “wrong”, but just as a “business expense” and part of the cost of trading. They will be easier to deal with then......

Thanks, Steve

+6R on the Russell

It was not so hard on the Russell Index, where there was no such problems, The TS4 buy was a perfect and straightforward “standard” setup, where the TS4 buy unfolded on a blue STF.

The Russell rallied nicely (with no opposing sells). As the STF was strong, the Standard Trader swapped to the ATRStop, which held the long into the close for a nice +6R Profit (ignoring slippage and commission).

Nice, easy and straightforward.....

Thanks, Steve

A tricky question.

Hi Everybody,

Every once in a while, along comes a tricky question on what to do when you are in a good and profitable trades and an “opposing” signal comes in. Normally, I look to the larger degree (15min) trend and then go with that. But ever so rarely we get a situation like we had on Friday, when the larger degree trend was not clear, and we were long off a TS4 buy setup at 14:27EST, but at 15:27EST along comes a sell setup. Now, this sell was “valid” as the STF was black, but the question is whether you want to “stop and reverse” a good strong opposing position ?

As I say, normally I would look to the 15min trend for the answer, but in a case like this when there is no clear “larger degree” trend, I would suggest sticking with your original; position, especially as you were in Profit ant is was going well.

The result was to hold this long into the close (as the STF was strong) for a nice +3.9R Profit.

But trading is like this, just sometimes we do get a situation, when the decision is no clear and we just have to d the best we can at the time.

Thanks, Steve

A good day on the standard setups, Part 2

OK, after a nice +2R Profit on the 3min EWS, it was nice to see a later TS3 buy on the 3min Russell Index. As you can see, this added another +2.7R Profit (ignoring slippage and commission), making yesterday a good day for the standard and automatic setups.

This is all part of the Natural Cyclical Nature of Trading, where the good times (Profits) are followed by harder times (losses) and quieter times, before the good times come round again. The last few days on the automatic setups has been a brilliant example of this. Too many Amateurs expect to just make profits all the time. The real world is not like that, there will be losses, the trick is keeping them small. Even with 4 losses (-4R total) on Wednesday, which is a hard day, +4.7R Profit yesterday form just two trades would more than have made up for that and put you back in Profit again............ This is what successful trading is all about, keeping the inevitable losses small so you are ready to make the most of the profitable trades..........

The Analysis is the easy but, the Psychology of dealing with how Profits and losses and then Profits again unfold in cycles in the real world is the hard part to learn to deal with and accept.

Thanks, Steve

A good day on the standard setups....

Hi Everybody,

Even after what I said yesterday on the standard setups, true to fashion, and in line with the Cyclical Nature of Trading, the standard and automatic setups had a good day yesterday.

As the STF was blue, Standard Traders should have been looking for buy (not sell) setups. And we got a lovely DP buy on the 3min ES that nailed the low of the day ! The ES rallied nicely to the first target where +2R Profit (ignoring slippage and commission) was available.

But this was not all, as we will see in the next post

Thanks, Steve

How to avoid losses

Hi Everybody,

Yesterday was a hard day for the Standard Traders among you as there were a number of losing (-1R) trades that unfolded in the afternoon, so the question I am asked all the time is whether there is a way to avoid these losses. As I know, we all don’t like losses.......

Well, yes, and this is what I teach day after day on the Advanced Blog, and it is to use the “larger degree trend” on the 15min Charts.

I know that the STF was still blue, so the standard guidelines said to buy, but what you all need to understand (and I go into detail on this in the Trading Course), is that every indicator in the world is “lagging”. In other words it will always be “behind” a tune. We only have the STF in the program as an easy way to help newer traders get to the basic level, before they make the transition to a more advanced trader. But for the more Advanced Trader, we have WPT’s and DP’s which are “leading” in other words ahead of the turns. But you need to “learn” how to use them....

So we DO have a brilliant way to help you “anticipate” the larger degree trend, and this is why I spend so much time on this education, in the hope that once you become comfortable with the Standard setups and guidelines, you all want to take the next step and become an Advanced Trader. When you make this step not only can you avoid otherwise losing trades like these, but also additional trade opportunities open up to you.

Please now take a look at the Advanced Blog to see how all these long traders were “against” a decline off a 15min DP resistance area, so should have been avoided.

Thanks, Steve

Trail or take

Hi Everybody,

Today I would like to look at a question I ask in the Trading Course, whether it is better to simply “take profits” at profit targets, or to start to “trail” (for example 1 tick beyond bar high or lows) once a target is reached.

Well, there is no set answer, you do whichever you feel most comfortable with. As long as you stick to the same method each time.

A good example is on the 3min Russell yesterday, please see the chart, where the long off the TS3 buy reached the first target, where a nice +3.2R Profit was available. But if you were using the “1 tick trail” method, this would have help the log into the high for +6R Profit (ignoring slippage and commission).

There is no right or wrong way, just stick to the same method and don’t “chop and change”

Thanks, Steve

PS please remember that today (Thursday June 10) is rollover day for the US e-minis.

Russell helps out.

This is a good example of why I say to follow all 4 e-minis, because they do unfold differently. So with -2R on the 3min ES, this +2.2R Profit (ignoring slippage and commission) on the 3min Russell was welcome.

As you can see, the TS1 sell was “in line” with a red STF so was a Standard setup. Even at the first target, this was a nice +2.2R Profit (ignoring slippage and commission). Yes, there was a -1R loss earlier, but that still makes +1.1R Profit on the day for the 3min Russell. +1.2R helps offset the -2R from the ES, making yesterday only a slightly down day.

Thanks, Steve

PS, But the Advanced Traders among you should have spotted another lovely trade on the ES. Please see the Advanced Blog.

Cyclical Nature of Trading....

Hi Everybody,

You are all very well aware with the Cyclical Nature of Trading by now, so a quiet day yesterday should have come as no surprise, especially after the brilliant trades over the last few days.................

A good example is the 3min ES, where we had two (-1R) losing trades. It is important to show losses, as it is important to understand that losses can and do happen when trading............ But (and this is the important part) the losses were kept small.

But, if you were following all the 4 e-minis, like we suggest, then the TF (Russell Index) would have help make some of these losses back, see next post.

Thanks, Steve

The difference between a Amateur and Professional Trader....

Hi Everybody,

Yesterday was a great example to show the different attitudes between an Amateur and a Professional Trader. If you look at the 3min NQ chart, we had 4 trades yesterday, 2 winners and two losers. The Amateur would complain that this was only a 50% hit rate and they wanted higher. They would also see that Profits were taken on the last DP sell early and then they would also complain that they missed the biggest move of the day. So basically, they would just moan and complain about everything..........

BUT, the Professional would just look at what is important – the money. They would look and say that they made +4.8R (+4.7 -1, -1 + 2.1) on the day. They would know that this followed on form a +9.9R Day the day before, so would be very happy that they had made +14.6R Profit over two days. At 2% per R, that was approx 29% return in just two days. As a Professional, they would know that was fantastic trading, and as such they would be very very happy....

So do you see the difference. The Amateur lives in “what if” and “what could be” land, whereas, the Professional lives in the “real world” and just looks at what is important, the money made over a period of time. That is what is important, not the number of profitable trades, or what the market did, but what the trader actually ended up making...............

This is where MTPredictor will help you, as it keeps the losses small, which allows your Profits to be larger, which should then give you the edge, over time, you need in your trading....

Thanks, Steve

Then another nice Profit from the YM

But Friday did not stop there, as you can see, we got a nice TS3 sell later in the day on the 3min YM that made approx. +3.9R Profit (ignoring slip[page and commission). Again, this was a completely standard trade as the TS3 sell as “in line” with a red STF,. And then profits were taken at the first target as the STF was weak....

Can you all see what a brilliant day Friday was here we had two trades for a massive +9.9R Profit (ignoring slippage and commission). This is brilliant trading and would more than have made up for small losses the day earlier...... This is why it is so important not to get emotionally involved with any losses. Don’t get angry or frustrated, as you will then just miss the good trades that will come round next.

This is one of the main difference between amateurs and Processional, Amateurs worry about losses and spend their lives trying to avoid them. This then get this into such a psychological mess that they then miss then next big profit or cut profits too early, as a result they never manage to make the most of the Big Profits when they come through. The last few days last week has been a brilliant example of this, where MTPredictor has done its job of keeping the losses small and then maximising the Profits, exactly what the Professional trader needs.

Thanks, Steve

3min ES gives +6R trade

OK, after a hard day on Thursday it was nice to see this lovely +6R Profit (ignoring slippage and commission) unfold early on Friday. As you can see, this was a standard and automatic setup where the TS3 sell in line with a red STF. Profits were taken at the first target, as the STF was “weak”.

But the point is that this Profit was +6R, it would have more than made up for all the losses on Thursday and put you back onto Profit overall. This is why we keep the losses small, at just -1R, because all it takes is just one big Profit, like this, to put you back into Profit.

This is the key to successful trading, and something that this and the last post should help you all understand.

Thanks, Steve

What it means to be a Professional Trader....

Hi Everybody,

Last week was an excellent example of what it means to be a “professional Trader”. Wednesday was good, with some good trades, then Thursday was hard with a number of losses, ands this is where most amateur traders get into trouble. After a few losses, Amateurs get lost, they worry, and start to second guess themselves. The trouble is that most amateurs trader spend all their lives trying to avoid losses, rather than just keeping them small. They get worried and even get mad at making a loss. These emotions are very destructive, because after Thursday, then are so angry at making a few losses, that they don’t take the trades on Friday.......................... And guess what, Fridays trades were brilliant. So the Amateur was so busy at being angry at making a few losses that they then miss out on the next big profits. This is usually a downward spiral that ends up in bankruptcy.........

The professional, on the other hand, does not mind losses. He knows that his (or her) job is to accept then but to keep them small. The Professional is then ready to take the next trades on Friday.

Even with -2R or -3R of losses on Thursday, as we will see, these are small to the BIG Profits on Friday where almost +10R was available to the Standard Trader. So this is the lesion for today, losses can and will happen, but it is not use getting angry, your Job (if you are to become a professional trader), is to accept then, but to just keep them small. Days like Friday will come along that will then clear all these small losses and put you back into Profit overall...

OK, let’s take a close look at Friday...........

Steve

Just in Time

Hi Everybody,

This is what I call perfect timing, notice how we got an automatic TS3 sell “just before” the DAX declined sharply. As such this was the perfect place to enter a short trade to take advantage as the Dax fell.

A very quick Profit or +6R )ignoring slippage and commission) was available as the Dax reached the Typical Wave 3 WPT target...........

Amazing, and I love it when the automatic setups give us such brilliant trades as this !

Thanks, Steve

Holiday

Hi Everybody,

Steve is away for a few days on a well earned holiday, so there will be no Blog posts for a few days.

Thanks

Steve

What a brilliant day !

Later in the day we had a automatic TS1 sell (on a red STF) that caught the last decline into the low of the day. This added another +3.8R Profit )ignoring slippage and commission).

What a brilliant day – with approx +10R Profit and all in just one day. This is why I keep talking about the Cyclical Nature of Trading, because it is days like this that will clear all those small -1R trades and put you back onto Profit. This is why it is so important keeping the losses small when they unfold. As Big Profitable days like this will then wipe out all these small losses and make money for you overall.

What a brilliant day ! Thanks, Steve

PS, but it did not stop there, see the Advanced Blog...........

What a brilliant day !

Hi Everybody,

As you all know, trading goes in cycles, this is what I call the Cyclical Nature of Trading. The Standard Traders among you have had a hard time recently, but that all changed on Friday, when we had some brilliant standard and automatic trades on the 3min YM.

Let’s start with the TS4 sell at 12:24EST. This nailed the high perfectly, just before the YM declined sharply. Even at the DP target there was approx +6.4R Profit (ignoring slippage and commission). What brilliant start to the day, but it did not stop there ! See the next post.

Thanks, Steve