Now for the Advanced Stuff

OK, Did any of you notice how I labelled a “minor ABC” high just after the TS3 buy in the morning ? And do you remember how I said that we should be looking for sell setups, as the larger degree trend was down ? Well, this is where the Advanced Trader among you could have used this minor Wave C high for a new short trade.

The pattern can be seen slightly easier by dropping down to the 2min chart. I do not suggest doing this all the time, but only when you have a clear idea of the larger degree picture and you are happy working with Elliott Wave Patterns.

The result was a nice +4.8R Profit (ignoring slippage and commission) as the NQ mad a minor 5-waev decline into a high volume (VSA) spike. This actually nailed the low of the day for you !

As you can see, once you become more experienced, you will be able to uncover so many more potential trade setups

Thanks, Steve

3min NQ Chart

OK, now we have established that the 15min larger degree trend was down, we should be focusing on sell setups, so the TS3 buy that unfolded in the morning should have been avoided. The only sell that Standard Traders should have considered was the sell in the afternoon.

The NQ did decline slightly from this TS3 sell, but only in an ABC pattern. Locking in a small Profit of +1R (ignoring slippage and commission)at the Wave C low was about the best you could have done.

Not all days have big winners, we should all know that by now, this is because of the “Cyclical Nature of Trading”. I have written a lot on this before, where profits, quiet times and losses goes though cycles. We have had some great trades last week, so it is no surprise to find us in the quiet period of the cycle at the moment. This is just how markets unfold in the real-world....

Thanks

Steve

Larger degree trend first

Hi Everybody,

As usual, let’s start with the later degree trend by looking at the 15min NQ Chart.

As we can see, the 15min NQ found resistance at the DP (which nailed the high of the day) and a decline then followed. This set the trend to down.

Now let’s look at the shorter term 3 and 5min charts to see what setups there were

Thanks

Steve

Big Profits and small losses

Yesterday was a very good example of how it is possible to have a number of losses and still make money overall. Here we had 4 short trades, two of which were losses and 2 profits. BUT because the losses were kept small at just -1R each and the Profits were larger than these at +2.4R and +3.4R, money was made overall, +2.4 -1 -1 +3.4 = +3.8R Profit overall.....

This is such an important point and it still amazes me why so many amateur traders still cannot understand this, you do not need to have a high % of winning trades to make money. What is important is keeping the inevitable losses small and Profits large.

Yesterday on the NQ was a perfect example of this, 2 losses and 2 profits and still you came out with a good profit at the end of the day.

Thanks, Steve

TS3 sell on the 3min NQ

TS3 sell on the 3min NQ

Later in the day we did have two -1R losing trades. As always, we do not hide the losses, and that is important, loses can and do happen, and as such all traders much know how to deal with them.....

But they we got a nice TS3 sell that nailed a high before a decline into the WPT target for a nice +3.4R Profit (ignoring slippage and commission).

A good end to what was a very choppy and narrow range day :)

Thanks, Steve

TS3 sell on the 3min NQ

The day started well with a TS3 sell. Notice how this was not stopped out, so even though it appears as a “history triangle” it was a valid short trade. This is why I always suggest you “analyze” the history triangles to see how they would have unfolded....

The result was a nice +2.4R Profit (ignoring slippage and commission).

But why did we not use the ATRStop here I hear you ask ? Well, as outlined in the Trading Course, the “day after” a big move, we anticipate a sideways and choppy day, so best to look to bank profits earlier using the WPT targets.

Thanks, Steve

NQ – 15min trend

As always we look at the 15min Charts for our “larger degree” Trend, and when we looked at the 15min NQ we can see that it hit the Typical Wave 3 WPT, This signalled that the prior rally was over and that a decline should follow. As such, this set the trend to down for the “shorter term” 3 and 5min Charts.

So now let’s take a look at the 3min NQ Chart

Lastly, notice how we are now on the March 2010 (H0) contract.....

Thanks, Steve