Perfect example of how to use the larger degree trend

Hi Everybody,

I keep going on about the larger degree trend, and in particular, why it is so important to only consider DP trades when they also fall at larger degree support or resistance. Well, yesterday was a perfect example on the Russell Index.

To show what I mean, lets first look at the 15min chart.

Can you all see how the high of the day fell at DP resistance ? Therefore, this was a good time to consider any shorter term (3min) DP short trades........... So let’s move to the 3min chart and see what we got :-)

Thanks

Steve

3min Russell

Some of the other e-minis did a little better than the ES, in particular the 3min Russell Index. Here the STF strength band was exceeded so the ATRStop was used, which ran the trade up for a nice +5.9R Profit (ignoring slippage and commission)

Thanks

Steve

Cyclical Nature of Trading

Hi Everybody,

A quiet day yesterday on the US e-minis, where the markets basically moving sideways. This happens and is all down to the Cyclical Nature of Trading. Something you should all know very well by now, where markets go though cycles of good (and profitable) times, which are followed by quieter times (where we are now) before the good times come back again. So having a quiet day is to be expected.

Nevertheless, the 3min ES did give us a couple of trades yesterday, a -1R loss, followed by a +2.6R Profit (ignoring slippage and commission).

Again you must not “except” to get big profits each and every day, the markets simple do not work like that. There will be big days, but equally well, there will also be quiet days as well. That is why we always look at trading over a longer period of time, like a whole month.

Thanks

Steve

Nails every high and low

This still amazes me when I see this happen again and again ................. If you look at the 5min NQ chart, you can see how every high and low yesterday was nailed by the corresponding WPT support or resistance zone.

This is amazing and shows how powerful the routines are in MTPredictor !

Steve

Advanced Traders

And lastly, for the more Advanced Traders among you...........

Not only was this automatic DP buy on the 5min NQ at larger degree 15min DP support, but it was also at the end of a very nice 5-wave decline.

Steve

Larger degree trend............

This is worth paying special attention to, because the DP should be viewed with caution, and as I have said before they should “only” be used when they fall at “larger degree” support or resistance. And I also like to see them at the end of a clear 5-wave sequence... Well, guess what ? Here we had both ?

I will start with the 15min (larger degree) chart. As you can see, the 5min DP buy also fell at 15min DP support, as such was a good setup to consider.

Again, this is when DP’s should be used, at other times they should be avoided.......

Steve

Don’t forget the 5min Charts

Hi Everybody,

I have said this a number of times before, but please do not forget the 5min charts. I know it is easy to get stuck on the 3min charts, but there are some brilliant (and clean) setups on the 5min charts as well. A perfect example was on the 5min NQ from yesterday............

As you can see, here we had a perfect (and text book) DP buy that nailed the low of the day for you ! If you also remember a few weeks ago I was talking about how to be careful of DP’s and that they should be used with caution ? Well, this was a perfect example of when they “should” be used. I.e. when they fall “in line” with the larger degree picture (which I will look at in the next post).

But for now, this resulted in a very nice +4.9R Profit (ignoring slippage and commission) as the NQ rallied off the low of the day to reach the first target. Notice how the STF was weak, so we use the target, rather than looking to run with the ATRStop.

Thanks