A few small losses

Hi Everybody,

Well we are defiantly in the hard part of the cycle at the moment. As you all know, the markets go round between the good times (profitable trades) and quieter times when a few losses unfold. I call this the Cyclical Nature of Trading. As after a few very good days earlier in the week, we are now having a few losses come though. But (and this is the trick) these losses are kept small at just -1R. If you remember, earlier in the week we had a +10R day, so these losses are small when compared to the profits. This is just the natural way profits and losses unfold when trading....

But it was not all hard work yesterday, please take a look at the Advanced Blog, for a look at a lovely “Gap Opening” play on the ES that made a nice +6R Profit (ignoring slippage and commission).

Thanks, Steve

A quiet day

Hi Everybody,

It was a quiet day on the US e-minis yesterday, for example, there were no automatic trades on the 3min ES. But they we should all be familiar with the Cyclical Nature of Trading buy now, so quiet days are just a natural part of trading..........

But does this mean that nothing happened yesterday ? Well No, just take a look at the Advanced Blog for a lovely setup on the 3min YM. How the market unfold sometimes still amazes me – once you know what to look for !

Thanks, Steve

Tricky trade management

Hi Everybody,

After a couple of easier days, where we had some massive profits come in, it was no surprise that yesterday was a little trickier. This is just the natural Cyclical Nature of Trading at work...........

In particular, I would like to look at the TS4 long on the 3min YM. In past post I have suggested that when a trade reaches the DP from the prior wave b that stops should be raised to “at least” break-even. Well, that is what happened yesterday on the 3min YM.

After that, it was a frustrating wit until the close, as the markets just chopped sideways for the rest of the day. But the upside is that on the close there was a small +1.8R Profit (ignoring slippage and commission). So even though it was a hard and frustrating day, there was a profit at the end of it.....

The Russell Index was more interesting, so I will look at this in the Advanced Blog.

Thanks, Steve

Watch the STF colour

Hi Everybody,

Just a reminder that “Standard Traders” should only trade “in the direction of” the STF colour, so that is blue/black for a buy and red/black for a sell. Only “Advanced traders” should consider going against this, when they use the larger degree 15min charts. But to keep it simple for the newer traders among you please just trade with the STF colour. Once you become more experienced you can look to use the 15min charts and then you will be taking trades against the STF.

So this mean ignoring the two sells early in the day on the 3min NQ. But then taking the TS3 buy at 14:33, but this resulted in a -1R loss. Losses are OK, because straight after we got another TS3 buy, this one nailed the low.

The NQ then rallied nicely to reach the first projected profit target, where a profit of +3.7R (ignoring slippage and commission) was made. But do you see the important part here ? The Profit was much much larger than the loss. This is what makes money over time – big Profits and small losses. And that is what MTPredictor helps you achieve.

Thanks, Steve

What a brilliant day !

Hi Everybody,

After a very quiet day on Thursday, Friday came in with some brilliant trades, for example, let’s take a look at the 3min YM.

The day started with a TS3 sell, that would have been stopped out for break-even. But the trade that got my interest was the TS4 buy at 12:45EST. As you can see, that nailed the low just before a very strong rally. As the YM reached the first projected profit target, the STF was strong so standard traders would have swapped to the ATRStop. This held the long trade for a massive +8.5R Profit (ignoring slippage and commission ! What a brilliant trade !

Then we had another TS4 buy later in the day that would have made approx. +1.7R (ignoring slippage and commission) on the close. So Friday should have been a +10R day for the standard traders among you. So now are you starting to see how markets unfold in the real world, and why you should not get frustrated or bored during the quiet times, because massive days like this will be just round the corner !!

In MTPredictor you have the tools to keep the losses small during the quiet times, that keep you in the game so you are ready to make the most of massive trades like this.

Thanks, Steve

Protect open positions

Hi Everybody,

This is a question I get asked a lot, and it is “when do I move my initial stop to protect open profits”. With EOD trading we have the 100% initial risk level, but this is too close for normal day trading, so we only use the 100% guideline when the larger degree picture is uncertain. Otherwise we want to let the market have some more “wiggle room”. But the question is how much ?

Well, this depends on how the market is unfolding. A good example is on the TS3 long on the 3min ES yesterday. Here the market was making its second swing higher, so a “logical” place for the stop is now juts under the last pivot low.

At least this had your stop at a small profit, so if the market turned (which it did) you came out with a small profit (and not a loss)

But there are no hard and fast rules on this, it all depends on how the market is unfolding, so this is where common sense comes in.

Thanks, Steve

Small losses and Big Profits

OK, now if we look at the 3min NQ, you can see how there was a TS3 buy later in the day (the first one was against a red STF, but this second one was on a black STF so was OK). But the important point is the size of the profit at +3.7R (ignoring slippage and commission).

So even after 3 losses on the ES, this one profit put you back into Profit overall for the day. 1 profit and 3 losses is only a 25% hit rate, but you still made money. Most amateur traders never get to fully understand that you don’t need a high winning % to be a successful trader, controlling your losses is actually far more important. This is why 95% of amateur traders end up broke in this Industry because they never learn what is important and what they have to do to get it.

Thanks, Steve

PS, as I have already said, the 15min trend was UP so not only should you have avoided the losing sells but the Advanced Traders should have been looking to “run” their long trades further. So in reality, the Advanced Traders among you should have had a very good day yesterday.

Small losses and Big Profits

Hi Everybody,

Yesterday was a brilliant example of how the use of correct position sizing can help you when a number of losses come through. If you look at the 3min ES chart, you can see that there were 3 -1R losses. On the surface this does not look good.

BUT, as we will see in the next post, all it takes is one good trade to put you back into Profit. So in reality, you do now need to have lots of profitable trades to make money trading, you just need to control you losses. This is a point that most amateur traders never seem to get or fully understand.

Thanks, Steve

PS, also please look at the Advanced Blog where you will see that the Advanced Traders among you would have avoided these losing trades anyway as they were “against” the 15min chart.

Follow all 4 e-minis

Hi Everybody,

I know a lot of you only follow the ES or YM, but this is a good example of why you should follow all 4 of the US e-minis. As you can see the Russell Index (TF) gave a nice TS4 sell just after the open, which went onto reach the first projected profit target. At that point the STF was strong (beyond its strength band) so standard traders would have swapped to the ATRStop.

The result was a nice +3.7R Profit (ignoring slippage and commission).

This is why I suggest following all 4 e-minis because sometimes a trade will appear on one of them and not on the others, like this example on the TF.

Thanks, Steve

+10.9R Profit on the 3min YM !

The ES was not the only market yesterday that has brilliant trades, the YM also had a TS3 sell setup, please see the chart. Here the profit at the first target was a massive +10.9R (ignoring slippage and commission) !

What a brilliant day on Friday !!

Thanks, Steve

A brilliant day

Hi Everybody,

Well I did say that it would not be long before we had a few good days . This is just how the Cyclical Nature of Trading unfolds in the real world. And Friday was another good day. If we first look at the 3min ES, we can see how we got a TS3 sell in the morning. This nailed the high nicely, before the ES started to drift lower. This decline kept of going and going, until it reached the first projected profit target, where standard traders would have banked a very nice +6.4R Profit (ignoring slippage and commission).

This just goes to show how we should understand the Cyclical Nature of Trading. After a bad day on Wednesday it was all too easy to give up. But then you would have missed two brilliant days on Thursday and Friday where some big profits came through....

Thanks, Steve

Amazing ES short

Hi Everybody,

As I said yesterday, the markets go in cycles and after a few hard days we were getting ready for a good day, so when we got a TS3 sell to go short right off the open, I had high hopes. The ES did not disappoint, as the ES dropped straight into the Typical Wave 3 WPT. With +6.4R Profit (ignoring slippage and commission) available at that level, and some TS4 buys coming in on the 15min Charts (NQ), looking to bank such a good profit was a good idea........

No do you see why it is important to keep your losses small. Even with a bad day on Wednesday with three -1R losses, this one +6.4R Profit puts you back into profit in just one go ! That is the secret to successful trading, keeping the losses small and profits large.

Even with two more -1R losses later in the day, you were still up overall............. So all in all, a good day yesterday !

Thanks, Steve

Cyclical Nature of Trading.

Hi Everybody,

As I said a few days ago, after a very good week last week, where we had some huge profits, this week we have move into the harder part of the cycle. This is all the natural way markets unfold. I call it the “Cyclical Nature of Trading”, where the good times are followed by quieter times, where some small losses unfold, before the good (profitable) times come round again.

Well yesterday was a hard day on the 3min ES with three -1R losses. Yes this can and does happen sometimes when trading. Most vendors never tell you about losses because they are not real traders. But we believe in telling you how the markets unfold in the “real world” and yes there will be hard days like this. But, as I have said, this is OK as the losses are kept small, small in comparison to the big profits last week.

As we are in the hard part of the cycle now, it will not be long before the good (and profitable) part of the cycle come round again. But understanding how the markets unfold in the “real world” is vital if you are to become a professional trader, and learning to accept the harder times is just part of that.

But was it all hard work yesterday ? lets look at the Russell Index on the Advanced Blog.

Thanks, Steve

Break-even trade

If you all remember last week I talked about using the DP from the minor minor Wave 4 swings as an “initial target” off the end of a Wave 5 Swing. Well, the same applies from the end of a Wave C from the minor Wave B swing. As we can see on the 3mon NQ yesterday, this nailed the low before the NQ reversed. So how can this be used ?

In this example, as you were short from the prior TS3 sell, you could have used this DP to lower your protective stop to at least break-even once the DP level was reached. AS you can see, this helped avoid what would otherwise have been a losing trade.

Again, all these techniques are in the Trading Course for you to study in your own time.

Thanks, Steve

Another quiet day

Hi Everybody,

As I suggested in yesterdays post, yesterday was another quiet day, with few trades, this is just all part of the Natural Cyclical Nature of Trading. Having said that, there was a nice TS4 buy setup late in the day on the 3min ES. As you can see, this nailed the low, just before a nice rally into the close.

The result was a +2R Profit (ignoring slippage and commission).

So even though it was a quiet day, the 3min ES ended up with a nice profit.

Thanks, Steve

A quiet day

Hi Everybody,

Friday was a quiet day on the US e-minis. But this is OK as the earlier part of the week was so good, with some fantastic trades.

This is just the natural Cyclical Nature of Trading, where the good times are followed by quieter times and some small losses before the good time come round. So having a quiet time on Friday should have come as no surprise at all.

It will not be long before we get back into the good part of the cycle, but we still may have a few quiet days yet.

Thanks, Steve

A good day on the e-minis

OK, let’s also look at the 3min NQ...........

And here we can see that the STF was black at the time of the TS4 sell, so this could have been taken using the standard guidelines.

The NQ then declined nicely into the DP target, where a nice +3.9R Profit (ignoring slippage and commission) was banked. Add this to the +1.4R Profit form the ES and it was a good day on the e-minis yesterday..........

Thanks, Steve

A good day on the e-minis

Hi Everybody.....

Yesterday was a good example of why you all need to follow all 4 US e-minis, as we will see in the next post. But before we get there, let’s start with the 3min ES where we had a -1R loss. Yes this was only one -1R loss as the low was taken out after the first signal “before” it was filled so no trade. So only one -1R loss here.

Then we had a DP buy that nailed the low. The ES rallied nicely to reach the DP target where profit were taken (as the STF was weak) for a nice +2.4R Profit (ignoring slippage and commission).

It would have been nice to then “stop and reverse” to the TS4 sell, but the STF was blue. But, let’s look at the NQ in the next post.........

Thanks, Steve

PS, please also see the Advanced Blog, for an “experts” eye on the TS4 sell......

3min ES.

Hi Everybody,

It was a fairly quiet day on the 3min ES for the Standard Traders among you. As the STF was blue, you should have only been looking for buy setups (no sells), and we did get a nice TS4 buy later in the day.

As the STF was weak, profits were taken at the WPT target for a nice +2.1R Profit (ignoring slippage and commission).

Now, we all know that the market actually went much higher, so could you have caught that rally ? Let’s take a look in the Advanced Blog.

Thanks, Steve

Mind the Gap...........

Hi Everybody,

When markets make a BIG gap opening, like yesterday, it is always worth viewing this with caution. When this happens, the first think I do is check the “larger degree” DP’s on the 15min Chart. Here the normal “day session” charts did not give any good information, but the 24-hr chart did (please see the posts on the Advanced Blog).

As you will see, the ES not only made a big gap up yesterday, but ran into 15min DP resistance. When this happens then the “most likely” outcome is for the market to fall as the market attempts to “close” the gap. This is why all potential buy setups failed yesterday and the best trades were on the short side.

I know this is the Standard Blog, but I would like you all to see this “Advanced” short on the 3min ES to show what is possible, once you become more experienced. As you can see, mid morning we did have an abc correction, as found by the Elliott Wave module. The only reason this was not a automatic setup was because of the increased initial risk, but as we were anticipating a big decline, this could have been taken.

As you can see, this managed to capture most of the decline yesterday.

Please take a look at the Advanced Blog, to see now only how the “larger degree trend” was down, but also the 2min chart helped “give confidence” in this ABC manual trade.

Thanks, Steve

What an amazing day !!

But the good trades did not stop there, we got a nice TS2 sell a few bars later that caught the last fall into the low of the day. As the STF was weak, profits were taken at the WPT target. This nailed the low of the day ! for a nice 3.9R Profit (ignoring slippage and commission).

Add this to the +4.2R Profit from earlier and standard Traders should have had a great day with some very good profits !

But the day did not stop there, so please turn to the Advanced Blog, where we will see two more truly amazing trades for the more Advanced Traders among you.

I still cannot believe how well the markets move sometimes and how well MTP does in nailing the turns. Days like this are truly amazing !!

Thanks, Steve

What an amazing day !!

Hi Everybody,

Friday was an absolutely amazing day on the 3min YM, both for Standard and Advanced Traders..... But let’s start with the automatic DP sell just after the open. As the STF was black this was a standard sell setup. The 3min YM declined into the first profit target where the STF was strong, so we should have looked to “run” this short trade, rather than thinking of “stopping and reversing” as two potential buys came in.

The ATRStop held this short as the YM continued to decline for a very nice +4.2R Profit (ignoring slippage and commission).

A good start to the day, but this was only the start, you will be amazed how well MTPredictor does by the end of the day !

Thanks, Steve

What follows a quiet day ?

Hi Everybody,

Yesterday was a good example of how the markets move in cycles. After a narrow range and choppy sideways day on Tuesday, we should have been ready for a day that was likely to produce a big move. And that is just what we got yesterday with the markets collapsing in late trading........ So it was absolutely brilliant that we had a TS1 sell on the 3min ES at 14:54 EDT that had us short just before this sharp decline started !

The only question was whether there were any “other” indications that a continued decline was likely, and therefore to look to “run” this short trade further. Well, if you all take a look at Advanced Blog, you will see my analysis of the 15min Chart. As this set the “larger degree trend to down”, you could have “run” this TS1 short into the close for a massive +10.8R Profit (ignoring slippage and commission)

This is the power of MTPredictor, its ability to keep the losses small and under control, but its ability to help you run trades for huge profits like this.

Thanks, Steve