My favourite setup

Hi Everybody,

You should all be with what I call “My favourite setup” as I out detailed it many many times before. It is when I look for the “first correction” off a “initial rally” off an “important low” to unfold as an abc pattern. Well that is exactly what we got on the 3min ES yesterday.

As you will see in the Advanced Blog, there was good initial support from the 15min Chart, so when this TS3 buy unfolded it was a good one to consider, even though the STF was red at the time. The target was the Typical Wave 3 WPT. As you can see, there was a massive +8.4R Profit (ignoring slippage and commission) available as the Typical Wave 3 WPT target was reached !

This is why I love this setup so much, as it carries such a high profit potential.

Thanks, Steve

100% initial risk guideline

Hi Everybody.

When you are unsure of the “larger degree” position, you can consider using the 100% initial risk guideline to help protect open profits. This us covered in the Trading Course, but basically means than once a open traded has exceeded the 100% initial risk level, you move your initial protective stop to break-even.

As you can see, this helped avoid an otherwise -1R loss on the 3min ES yesterday, making this a “break-even” trade.

So I hear you all ask – why dint we use this all the time ? Well, short-term charts often need more “wiggle room” than Daily charts. So when the “larger degree” position is clear I normally suggest not using this guideline. Only use it when you are unsure or against the larger degree trend.

Thanks, Steve

PS, if you want to see how well these markets unfold, then take a look at today’s Advanced Blog, where we see how the 3min NQ unfolded absolutely perfectly as defined by our more Advanced Tools. Being able to nail virtually every high and low throughout the day is amazing, and in MTPredictor you have the tools that can do just that !

A hard day for the Standard traders.

Hi Everybody,

It was a hard day for the standard traders among you yesterday. But as we all know, the markets unfold in cycles, where Profits and losses cycle round with the quieter time. I call this the cyclical nature of trading. It is just that the standard setups are in the hard part of the cycle at the moment. It will not be long before the good time (profits) come round again.

But this is why I encourage you all to follow the Advanced Blog and learn how to use some of the more Advanced tools that are in MTPredictor. As you can see from today’s post on the Advanced Blog, when you do, you will be able to take advantage of some great trades. This will more than make up when the standard setups are having a hard time.

MTPredictor can nail turns in the market brilliantly, you will see this on the 15min ES chart. The tools are there in the software, it is up to you whether you wish to take the time to learn how to use them. To help you, I post Advanced examples on the Blog everyday as well as go into more detail in the Trading Course.

Thanks, Steve

DP from Wave B low

Hi Everybody,

Yesterday was a tricky day, with the markets basically just chopping sideways all day. Days like this are always hard to trade. But we did get a TS3 sell on the 3min ES around lunch time. The ES then declined into the DP from the prior Wave b low. For those of you who read these Blogs regularly will know that this is a “minor” support level that can be used when markets are going nowhere (choppy).

As you can see, at this level there was a small, +1.8R Profit available (ignoring slippage and commission).

For those of you who are slightly more experienced, you will also see that there was a high volume (VSA) spike at this DP support level. This gave added weight that a low was in the process of unfolding, and as such profits should have been protected.

Thanks, Steve

Correct Position Sizing....

Hi Everybody,

Yesterday we had a brilliant example of why the use of correct Position Sizing is so vital to long term success. Using the Standard setups we had 4 trades on the 3min YM, 3 were loses and one 1 winner. On the surface this looks bad, UNTILL you look at the profits and losses when using correct Position Sizing. 3 -1R losses equals -3R down, BUT (and this is the important point), the one profit was +4.1R (ignoring slippage and commission). So this one profit wiped out the three (-1R) losses and put you into profit overall.

This is the main concept that most losing amateurs don’t seem to grasp, that you can have more losing trades than winners and still make money overall. Successful trading is about keeping your losses small and having big profits it is not simply about having a high % of winners. In the “real-world, having a high % of winners is actually very hard to do. Therefore it is far easier controlling your losses, as in this example. In fact if you read the Market Wizards Books, many of the world’s best traders only have about 40% winning trades. Most losing amateurs never seem to fully understand this point.

However, I understand that we all like to be “right”, so let’s take a look at the 15min trend on the Advanced Blog and see if these losses could have been avoided....

Thanks, Steve

A good day for the Standard Traders

Hi Everybody,

Isn’t the Cyclical Nature of Trading amazing ! After a few harder days for the Standard Traders among you, the 3min YM then gave us this lovely TS3 buy set-up. This was a completely standard setup, with the TS3 buy falling in line with a Blue STF. The YM then rallied to the first profit target, where a nice +5R Profit (ignoring slippage and commission) was banked as the STF was weak.

A perfect and completely standard setup and trade management..........

Thanks, Steve

15min trend

Hi Everybody,

For the Standard Traders among you, it was a hard day on the US indices. Yes hard days do happen, this is just part of the Natural Cyclical Nature of Trading. But, was there a way to avoid some of these losses ?

Yes, but it did mean using the 15min Charts for trend (rather than the STF), so this did require a slightly higher level of experience over and above the basic standard trade management guidelines. This is why I spend so much time on this Blog, trying to educate you all to become better traders, because I know that to get the most from trading takes experience and hard work. But (as we will see on the Advanced Blog), this hard work is defiantly worth it .....

Thanks, Steve