3min DAX

Hi Everybody

As we have seen many times before, just because the US e-minis are in a quiet part of the natural trading cycle, other markets are not. For example this beautiful TS3 buy on the 3min DAX this morning.............

+7R Profit (ignoring slippage and commission) using the ATRStop..........

Steve

Yes losses can unfold.

Hi Everybody.

First please re-read the post below, where I say “so what should we be starting to prepare for after a good (and very profitable) few days ? “ Exactly a few losses. As we all should know by now, this is just the natural Cyclical Nature of Trading and is how Profits and Losses unfold in the “Real World”. So don’t say that I did not warn you that a few losses were overdue .......

As you can see, the 3min ES had two losing trades, as shown by the history triangles in the new MTPredictor v6.5. BUT, and this is the important point, these losses were kept small at just -1R each, so -2R is a lot smaller than the +6R Profit that was possible on the ES the day before. And that is the key to successful trading, keeping the losses small (not avoiding them).

Again, unlike most Gurus and software vendors, we do show and talk about losses !

Thanks

Steve

3min VSA sell

This was an absolutely perfect example of the high volume (VSA) trade setup. Notice how the VSA bar was a break of a very obvious level (this is what I look for) and then how the DP nailed the high perfectly. And all of this on Stochastic divergence (not shown). As such this was a perfect and brilliant example of the VSA setup, and why it was such a good one to consider a “stop and reverse” from the 5min long trade.

The ES then declined nicely for a nice +3R Profit (ignoring slippage and commission)

Thanks

Steve

PS, after a slow start this was a good end to the week. Yet another perfect example of the Cyclical Nature of Trading, so what should we be starting to prepare for after a good (and very profitable) few days ?

5 and 3min together

This is for the more Advanced Traders among you.

What happens if you are in a 5min trade and you get a good looking opposing trade on the 3min ? For example the TS4 long on the 5min ES, when a lovely VSA sell appear on the 3min ?

Well, this is where you keep an eye on “correlated markets”. We have already seen that the 5min YM had already made its first target, and you were already sitting on +3R profit on the 5min ES long, so (and this is for the more Advanced Traders among you), yes (and only if the new setup is good enough) you can consider stopping and reversing.

Thanks

Steve

Don’t forget the 5min Charts

Hi Everybody,

I have said this before, but please don’t forget the 5min Charts, as there are some great setups on these, for example the lovely TS3 buy on the 5min YM on Friday (there was also a TS4 buy on the 5min ES at the same time).

As you can see, the YM then rallied off this low to reach the first projected profit target for a nice +3R Profit (ignoring slippage and commission). We used the WPT target as the STF was weak.

So the lesson here, is even if you mainly follow the 3min Charts, don’t forget the 5min ones as 5min chart very often give you some nice tradable setups :-)

Thanks

Steve

A great +6R Profit on the Russell

Hi Everybody,

Isn’t the Cyclical Nature of Trading amazing ! Here we are, after a few hard days, then we get a beautiful TS3 sell on the 3min Russell Index. The reason I liked this one over the YM was because the ABC pattern was a lot more symmetrical.

As you can see, the Russell declined sharply from the TS3 sell (which nailed the very bar of the high !) Once the STF strength band was exceeded we swap to the ATRStop, which held the short trade until it was stopped out for a very nice +6.3R Profit (ignoring slippage and commission).

This particular trade was why I designed MTPredictor in the first place, to look for the ABC correction “inside” a larger degree wave (2) (look at the 5min for this), off which a strong Wave (3) swing unfolds. This is the best trade in the book !!

Steve

Beware the creeping DP

But, and this is a good example, what of the two DP sells later in the day. Yes these turned out OK overall with a -1R loss followed by a +3.3R Profit (ignoring slippage and commission). However when DP’s are clearly “against” the larger degree trend they have a habit of “creeping”, in other words you can get multiple DP’s that fail. That is why the DP should only be used when you have confirmation of the larger degree trend particularly that you are at larger degree support or resistance. The reason for this is that the DP’s are “trend termination” setups and not “trend continuation” setups, so care is needed with them.

Steve