As usual – larger degree trend first

Hi Everybody,

The trend on the 15min YM on Friday was Still down, with no visible DP or WPT support at all. As such, we should have been focusing on sells on Friday and ignoring Buy setups.

OK, with that in mind, lets now move down to the 3min Chart

Thanks, Steve

DP buy on the 3min Chart

Now we have confidence in the 15min DP support we can consider the 3min DP long trade.

Yes, it was a hard and boring trade, but the NQ did reach the first DP profit target. Using standard trade management guidelines, meant taking profits there as the STF was weak. This added another +2.2R Profit (ignoring slippage and commission) to what was already a brilliant and very profitable day on the NQ.....

Thanks, Steve

Back to the 15min Chart

OK, so what of the 3min DP buy that we saw at the end of the last post. Well, this is where we go back to the 15min Chart and check the “larger degree” position.

When we do that, we can see that the 15min NQ is now at DP support, so this not only the logical place to start to banks profits on the prior DPO short trade, but also look to reverse to a new long trade....

Thanks, Steve

Isolation approach to Elliott Wave Part 2

OK, on the 3min Chart, we got a lovely 3min DP sell setup. As we have seen, we were already anticipating a decline on the 15min Chart, so this was a good 3min sell to consider.

Now comes the important part................. The markets actually declined a lot faster and sharper than a 15min Wave (4) correction would expect............... Sop in “traditional Elliott Wave terms”, the pattern had gone wrong.............. BUT (and this is the really important part). Do we care ? Well, no, because we have a short trade that is now running further and as such making more money than anticipated......

This is so important, and why the Isolation approach to Elliott Wave actually works far better in the “real world” because Elliott Wave patterns fails so many time, BUT when they are obvious, they do give brilliant “trade entries”. And this is the important difference, in that we use the pattern for the trade entry only and then manage accordingly, and do not worry about any “forecasts” !

The result, a lovely +6.8R Profit (ignoring slippage and commission) as a DP comes in

Thanks, Steve

Isolation approach to Elliott Wave

Hi Everybody,

Yesterday was a perfect example of why I invented my unique “isolation approach” to Elliott wave analysis, where we use Elliott Wave patterns “just” for the trade entry and then “do not” try and “forecast” where the market will go next. This is the biggest mistake an traders can do, and is actually not necessary for trading profits, as we will see in this example

Here the 15min NQ was at a Wave (3) high, so normally Elliott wave analysis would expect a Wave (4) type decline. But the point is that a decline was anticipated, so we could look for sells on the 3min Charts.....

OK, onto the 3min Chart , Steve

5min TS1 long on the NQ

OK, now we have a clear 15min DP support and as such the 15min trend had turned up, we start to look for Buys.

And then we got this TS1 long on the 5min NQ chart. Why was this so good ? Well for those of you who have studied the Trading Course, you will know that a TS1 is off the Wave (2) correction, so “ideally” we look to play into the Wave (3) WPT. AND, the TS1 “ideally” comes as the first setup in the new trend direction just after a major turn. Well, that was exactly the picture here, so everything was fitting together very nicely indeed.

The long trade did do as anticipated and did reach the Typical Wave 3 WPT just before the close. For the standard traders among you the STF was strong at the first target as well. But because we were playing for the Typical Wave (3) WPT this was the perfect place to look to bank +7.3R Profit (ignoring slippage and commission)

Brilliant, a perfect example of how much easier trading can be “if” you wait and “only” trade when the picture is clear.....

Thanks, Steve

PS: The only slight question mark was as the TS3 sell came in. But this is when I suggest looking at other “correlated” markets. In particular, the 15min trend on the ES, YM and TF were all strongly up at this stage, so combining this with a strong STF on the 5min NQ and holding and looking to run the currnet TS1 long into the anticipated Typical Wave 3 WPT was best.

Only trade when you have a clear Pattern

Hi Everybody

Yesterday was a perfect example of how easier trading can be, when you wait for a “clear and obvious” setup. Many amateur traders fall down because they want to trade every day, in other words, they tray and “force” trades when the picture is unclear. This leads to confusion and losses. I have always said that it is much better having the patience and discipline to wait and then only trade the “clearest and most obvious” setups. And yesterday was a brilliant example of this

First the 15min trend was nice and clear on this 15min Chart because we had just started to rally off 15minm DP support. Therefore the trend was not clearly up.

So the old phase “when in doubt stay out” is very good advice, and a lesson most amateur traders could learn from. Trade less and only trade when the picture is clear, that is what professional traders do...

Thanks, Steve