Beware the creeping DP

You will also notice on that 3min YM chart that we had two DP sells, neither of which worked out. BUT, notice how they are against a blue STF, so both should have been avoided.............

DP’s are brilliant for nailing the “end” of a trend, but because they are “trend termination” setups they should be used with caution, ............ Especially when they appear in a market that is “creeping” like the YM yesterday. On days like this, DP’s should be avoided......

DP’s are best used only by the more experienced trader and then only when they line up with the larger degree chart.

Thanks, Steve

YM yesterday

Hi Everybody,

The last two days have been a brilliant example of why it is so important to keep your losses small. On Tuesday the 3min YM made a -1R loss. But then yesterday we had a TS2 buy setup, that nailed the low of the day for you ! But the important point is that the profit from this was +2.1R (ignoring slippage and commission)..................... In other words wiping out the prior days loss and putting you back into Profit over all. Small losses and Big Profits, that is the key to successful trading.

I know that +2.1R is only small profit, but you have to remember that we are still in the quiet part of the trading cycle, so small profits and small control losses should be expected. It will not be long before we get back to some much bigger profits.

Thanks, Steve

The Dax saves the day with +9.7R trade...

Hi Everybody

Even when the US e-minis have been quiet over the last few days, the 3min DAX come up with this massive +9.7R Profit (ignoring slippage and commission) just this morning..................

A good one for the European Traders among you :)

Thanks, Steve

Loses can and do happen

Hi Everybody,

As I outlined yesterday, we are now in the quieter part of the cycle (Cyclical Nature of Trading), and as such we should expect some losses. Yes, despite what some software vendors and Gurus tell you, losses can and do happen, they are a very important part of a successful trading approach. Why are they so important ? Well it is important that they are kept small. And this is what MTPredictor does....

As you can see from the TS3 sell on the 3min YM yesterday, the loss here was kept small at just -1R, or one risk unit.

As we go through this quieter part of the cycle, we are safe in the knowledge that losses are being controlled, so we are ready to maximise our profits when we get back to the good and profitable part of the cycle, which is coming soon............ This is just the way market unfold in the “real world”.

Thanks, Steve

Quiet days

Hi Everybody,

Remember a few days ago I talked about the Cyclical Nature of Trading and how after a quiet period, we were due to come back to some god trades ? Well that unfolded as anticipated and we have now had a number of very good days with some good profitable trades................ But, after a period of good and profitable trades, we must expect the cycle to continue and us enter the quiet part....... This is what happened yesterday with a very quiet day on the US e-minis.

The 3min NQ yesterday was a good example, were we had two potential sell setups, but these were both “against” a blue STF so should have been avoided............

As you can see, a very quiet day. But this is OK, because now we all understand the Cyclical Nature of Trading, we know to anticipate quiet times, especially just after a run of very good and profitable trades....

Thanks, Steve

Don’t forget the 5min Charts

Hi Everybody,

I know I have mentioned it before, but it is important to not only follow all 4 of the US e-minis (ES, YM, NQ and TF) but also on the 5 as well as 3min Charts.

Friday was a perfect example, as the best trade came on the 5min Russell Index (TF). As you can see, early in the afternoon the 5min TF made a lovely ABC correction that setup an automatic TS3 buy setup. This nailed the low nicely and the Russell rallied into then close, where a nice +3.2R Profit was made (ignoring slippage and commission) ....

Yes there was a valid -1R loss earlier in the day, but the +3.2R Profit more than made up for this making money overall on the 5min TF. As usual, small loss and Big Profits is what successful trading is all about............

So the message here, is not to not only follow all 4 of the US e-minis (ES, YM, NQ and TF) but also on the 5 as well as 3min Charts.

Thanks, Steve

DP from the Wave B swing

Hi Everybody,

In today’s post I would like to remind you all of how the DP from the prior Wave B high or low can catch a minor high or low nicely. I assume you all have read the Trading Course Part 2, but if you have forgotten, then I suggest you re-read Part 2, because this is covered in there.......

A good example is on the 3min NQ yesterday, please see the chart, where we got a minor rally off the TS3 buy in the afternoon. But look where the rally stopped, right at this DP (from the minor Wave B high). So knowing in advance that this is an important zone will help you in your trading............

Thanks, Steve

PS, wouldn’t it be nice to have caught the rally off the lows ? Well, as you can see, we did get a DP buy there, so please turn to the Advanced Blog, to see how the more Advanced Traders among you could have caught this......