TS3 buy on the 3min NQ on Friday

Unlike most Gurus, I also talk about the harder trades as well as the loses. This is important so you all have a balanced view of how trading unfolds in the real world. This TS3 buy on the 3min NQ on Friday was a good example.

Although the long trade exceeded the 100% initial risk level, the larger degree trend (on the 15min Chart) did look to be up at the time. So you could very well have decided to leave the stop at the original position. As such this would have been a -1R loss. But (and this is the important point), the loss would have been small and controlled. A -1R loss when compared to even the +2.5R Profit on the ES is small. And just remember the Profits of +6R and +8R from mid last week. That is what successful trading is all about, keeping the inevitable loses small and under control.

Thanks

Steve

DP sell on the 3min ES on Friday

Hi Everybody............

Another quiet day on Friday with few signals. But as I said last week, this is just part of the Cyclical Nature of Trading, and comes on the back of some massive profits mid last week.

I did receive a question on the DP sell late in the day on Friday. Normally I say that DP’s should only be taken if they fall at larger degree support or resistance of if they are after 5 swings. But this was neither on the 3min Chart.

However, the Advanced Traders among you should have spotted that this was also on a high Volume (VSA) spike, as such it was a trade that the Advanced Traders among you could have taken.

Thanks

Steve

US E-minis yesterday

Hi Everybody,

As the 15min Chart moved strongly higher and there were no DP levels to provide resistance, the larger degree trend should have considered as still UP. So I would have been very cautious about the sells that appeared yesterday.

As I always say, better to trade “in the direction of” the larger degree trend, and the only group of traders that should consider “counter trend” trades are the more Advanced Traders among you. But, again as I have said before, caution should be used and stops moved closer quicker.

So it was a quiet day yesterday, but that does not matter as the prior two days were huge with some massive profits. Remember the Cyclical Nature of Trading, yes we do get quiet days as well :-)

Thanks, Steve

Cyclical Nature of Trading.....

The last few days have been yet another excellent example of the Cyclical Nature of Trading at work. After a few days at the end of last week when trading was tricky, we suddenly get two massive days in a row. This is why I keep saying how you must anticipate that you will have periods of small losses (but the aim is to keep these small) as well as quiet periods ( when you are uncertain of the larger degree picture), but as we have seen again and again and again and again, it is not long before the good trades come round again. This is just the natural way Profits and Loses unfold in the markets.....

Thanks, Steve

3 min ES – DP low

As we can see, right at the same time the 15min ES chart was at 15min DP support, the 3min gave us an automatic DP buy setup. This nailed the low of the day for us ! This is exactly the same as we had on the NQ the day before :-)

The ES then rallied strongly off the low. After a scary initial pullback (no 100% initial risk on this trade as the larger degree picture was clear), the ES did reach the first projected profit target, but as the STF Strength band was exceeded, we swap to the ATRStop, which held the long trade into the close for a nice +5.7R Profit (ignoring slippage and commission)

Thanks, Steve

15 min ES – DP low

For me, the larger degree trend became a little clearer when the 15min Charts put in a DP low early afternoon (this was also a TS3 buy on other minis), see chart to the right. This then gave a opportunity for long trades on the short-term 3min charts, as the 15min was now at support.

So let’s turn to the 3min ES to see what we find (next post)

Thanks, Steve

3min YM - Profits and Loses

Hi Everybody,

As the 15min trend was uncertain, in the early part of the day yesterday (more on this in the next post) you could have decided to take trades on both sides of the market. So I want to take a look at what would have happened on the 3min YM yesterday (this is only a sample of 1 day as there was a lot of trades on this chart yesterday, but may not be representative of everyday’s activity).

As you can see, we had a few trades, the first was a TS1 sell that made +4.7R Profit (ignoring slippage and commission). Note the small green triangles, these are failed trades. BUT not always filled, the first is a good example as this was invalidated (as the market went below the prior bars low “before” being filled), so the long trade was not entered. Then we had a -1R loss, then a nice +3.7R Profit, then a break-even TS3 sell later in the afternoon. So overall a possible +7R (+4.7 plus -1R Plus +3.7R Plus 0R) day yesterday.

Again, I have to stress that I do not suggest taking “all” the trades every day, but on a day when the larger degree trend is unsure and you use the 100% initial risk guideline, then Advanced Traders could consider it. But again, I stress that it is always best to trade “with” the larger degree trend and when in doubt, stay out.

Thanks, Steve