Measured moves

Hi Everybody,

I get a lot of questions from people asking why we can place an ABC count on what is obviously an “impulsive swing” in MTPredictor. Usually we are looking for the ABC pattern to be part of a “correction”, please see this help video:
http://www.mtpredictor.com/help/videos/WaveC-Criteria/WaveC-Criteria.html

But, for the Advanced users among you, the Typical Wave C WPT can be used as a “measured move” as it contains the 1:1 ratio. Very often we get an “impulsive swing” that stops at the 1:1 ratio, or at the Typical Wave C WPT.

Yesterday charts of the 15min YM was a great example of this, as you can see, this nailed the high of the day.

But, as experienced is required to know when to apply this, I only suggest that the more Advanced Users among you consider this.

Thanks, Steve

Cyclical Nature of Trading...........

Later in the day yesterday the picture because a lot less clear as the 3min charts became choppy as they reached 15min resistance levels. This can and does happen. Too many amateur traders “assume” that everything is picture perfect each and every day. Real life trading is simply not like that. I describe it as driving in Fog. Sometimes the fog is dense and you can’t see, but sometimes it is clear and you can see well. Trading is the same, sometimes the pattern is clear and at other times it is not..... This is why “assuming” that you are going to make “x dollars” each and every day is wrong, because some days it will be easy and you have good profits, but then some days you will have losses, and other days will be hard with no trading...

This is the Cyclical Nature of Trading....

Something that all professional traders come to learn and understand. Once you do, then you can trade “in tune” with how the markets really unfold. Please read this PDF:
http://www.mtpredictor.com/support/documents/How%20Profits%20and%20loses%20unfold%20in%20the%20real%20world.pdf

Then you will have a better “expectation” of how Profits and Losses unfold in the real word

Thanks, Steve

Nice TSA3 buy on the 3min Chart

Early in the day we got a good looking TS3 buy on the 3min NQ.... As this was in the direction of the larger degree (15min) up trend, this was a good trade to consider.

As the STF strength band was strong as the first WPT target was reached, standard traders would have swapped to the ATRStop. The result was a nice +2.9R Profit (ignoring slippage and commission).

So far so good. But this is when the nice clear patterns then ran out, and the day got a lot harder as the pattern became less clear later in the day.

Steve

The day started well

Hi Everybody,

The day started well yesterday, with a clear up trend, this can be clearly seen on the 15min NQ where the market was rallying from DP to DP. So early in the day yesterday the larger degree trend was up....

A word of note on using the longer (15 and 60min) charts over the “Roll over period”. When we chart across the Roll Over the longer charts can get distorted because of the price difference between the last and current contract month. This can skew your 15min charts a bit. This is just something to be aware of....

OK, onto the 3min NQ Chart now

Steve

Advanced Analysis – the true Holy Grail

OK, I hope you have all been paying attention to my “Advanced Analysis” posts recently, because there was yet another perfect example of my favourite trade that I call the Holy Grail of trades.................. Where we use the tools in MTPredictor to nail the very end of the Wave (2) correction, to then be able to trade the Wave (3) swing.............

As we all know, Wave (3) in Elliott Wave terms is the strongest and longest swing so carries the highest profit potential. Therefore, this is the best possible trade you can have as it carries the largest profit potential for the smallest initial risk....

If you look at the chart, we already knew that the larger degree trend was up, so when the 3min YM made a 5 wave rally (Wave 1), we knew to look for a abc correction (Wave 2). As you can see, the tools in MTPredictor nailed these swings for us. The target was the Typical Wave 3 WPT. This was duly reached later in the day for a brilliant +7.8R Profit (ignoring slippage and commission)......................

Amazing..... and all nailed by the tools in MTPredictor !

Thanks, Steve

Larger degree tend on the 15min Chart

Here is the 15min ES chart, which as you can see made an automatic TS4 buy setup at the low of the day. This set the trend to UP for the rest of the day................ Therefore, as we have already seen, the two sells on the 3min YM charts were “against” this 15min up trend, so should have been avoided......

This was a good example and I hope has helped you all to see how to use the larger degree trend to filter your actual setups on the shorter term chart..

This applies equally well to 240 and 480min charts when trading on 60min Forex, to weekly charts when trading on Daily Stocks. It is the same principle and us using the 15min charts for trades on the 3 and 5min charts, as we do regularly here on this Blog.

Thanks, Steve

How to avoid losing trades..

Hi Everybody,

Here is a chart of the 3min YM from yesterday. As you can see there were two losing sells as the YM rallied. Yes there were only two sells as there was a double top with the second history triangle and the TS4 label so there was only one trade there. So the question arises – was there a way to avoid these losing trades ?

As always, the answer is in the larger degree trend, which we will see was UP in the next post.

So this was a good example of how using the “larger degree trend” helped avid what otherwise would have been two -1R losses.

Thanks, Steve