FOREX – GBPUSD 240min

Hi Everybody,

I would just like to remind all the FOREX traders among you not to forget the longer time frames. We suggest 60min, 240min and 480min for FOREX, as these longer time frames give smoother charts.

A great example is the recent TS3 buy on the GBPUSD on a 240min chart that caught the rally up into the 170 area....

A note for the Advanced Traders among you. When this trade reached the Maximum Wave 3 WPT (purple zone) “and” you were sitting on a +8R Profit what do you think would be the sensible course of action ? Exactly, tighten stops as this move was likely nearing an end. This is exactly what happed with the high unfolding right at the maximum Wave 3 WPT...

Thanks, Steve

Not all trades work out.....

Unlike most Gurus I do talk about the bad and hard trades. This is important so it gives you a balanced view of how trading unfolds in the real world, it is also important as there is so much B.S. (if I can say that :-) ) in this industry.......

So here is a TS3 sell on the 3min NQ that did not work out as anticipated. At worst it would have been a -1R loss (which is still smaller than the +2R Profit on the 3min YM), and at best a break-even trade. But the important point is that it did not work out as anticipated.

This is an important point, not all trades work out, loses can and do happen, your job as a trader is to keep the losses small at those times.

Thanks, Steve

The Cyclical Nature of Trading..... Again !

Hi Everybody,

We should all know about the Cyclical Nature of Trading by now, but it is always work reminding you all. Yesterday was a quiet day on the US e-minis with few trades. This is OK, because this comes on the back of some very good days recently. This is just because we have now entered the quiet period of the cycle. It will not be long before we get back to the profitable part. Again, this is just the natural way Profits and losses unfold in the markets

The YM did give us a small +2R Profit (ignoring slippage and commission) on the 3min Chart, but overall it was a quiet day yesterday.....

Thanks, Steve

Size matters.......

Hi Everybody

The 3min Dax this morning has just shown us a perfect example of why correct position sizing works and why it is so important to keep your losses small.

Here we had two losing DP sell’s as the DAX continued higher, but then on the 3rd sell the market collapsed. As you can see from the chart, this 3rd trade netted a massive profit of approx. +7R Profit (ignoring slippage and commission). Now compare that to the two losses earlier at only -1R each. So 3 trades, 2 losses and 1 profit but overall you ended up with a massive profit....

This is what amateur traders do not understand, they seem to only strive for a high % of winners, not understanding that you don’t have to win on all trades to make money overall. Here we had more losses than winners and still came out with a huge profit overall.

This is what separates the losing amateur with the successful professional, the understanding what is important in trading, and that is to keep losses small (not avoid them).

Steve

PS, this was taken using a Beta copy of the new MTPredictor v6.5 RT that has history trades shown by small triangles on the chart. Click here for a video on this new feature.

15min YM Wave C low

Here is the 15min YM chart. As you can see “at the time” of the 3min DP buy, the 15min chart was right at the minimum Wave C WPT support zone.

Thanks, Steve

3min YM DP buy

Hi Everybody,

Today I would like to remind you all to always keep an eye on the longer terms charts (15min for 3min entry). The DP buy on the 3min YM at 14:18 EST was a great example of this.

Normally we are cautious of DP’s because they can “creep”, but they are OK when they fall at “larger degree” support or resistance, so when this DP buy came up you should have had a quick look at the 15min chart. As you will see in the next post, the 15min “at the time” was right at the minimum Wave C WPT for a potential support, as such, the 3min DP was a good one to take....

As you can see, this nailed the very low of the day for you ! The YM then rallied nicely into the first projected profit target, but the STF was strong (exceeded the strength band) so it was time to swap to the ATRStop to look to run the trade. This held the long into the close for a very nice +6R Profit (ignoring slippage and commission).

So this is why I say to always keep and eye on the longer term charts for potential support / resistance zones.....

Thanks, Steve

Advanced Analysis....

Hi Everybody,

As the new MTPredictor V6.5 RT is getting closer to release I thought I would remind you all of how the Advanced Traders among you can use some of the more advanced tools and modules in the current V6.0 to help find additional trade setups. Here is a good example on the 5min YM, that nailed the high of the day for you on Friday.....

As you can see, the high unfolded at the minimum wave 5 WPT. But I also like how this was on a high volume (VSA) spike as well. This was a classic “blow off” top formation, where the move to new highs on very high volume failed and was just a “fake out” by the professional traders....

Please remember, that the Elliott module is an advanced technique. For Wave 5’s please see the Wave 5 help video at: http://www.mtpredictor.com/support/V6.php (bottom of the page).

The 5min YM then declined into the DP (from the prior Wave 4 low) perfectly for a nice +4.8R Profit (ignoring slippage and commission)

Thanks, Steve