STF Colour

Hi Everybody,

I do get asked sometimes about how to use the STF “colour”. Well, for the “Standard trader” we only consider trades that are “with” the STF colour, i.e. Blue (or Black) for a buy and red (or black) for a sell. It does not matter whether the STF is above or below the 0 line, we only use its colour.

The 3min YM yesterday was a good example................ Here the first two sell setups were not valid as they were “against” a blue STF. But the TS4 sell later in the day was when the STF was Black (neutral) so was OK to take.

The result was a nice +4.7R Profit (ignoring slippage and commission) as the YM continued its decline into the close.

Note: The trade management swapped to the ATRStop when the STF was strong (beyond its strength band) as the YM short reached its first Profit target....

Thanks, Steve

PS, this was found using the full MTPredictor v6.5, see the Advanced Blog for the RT add-ons.

Small losses and Big Profits

Hi Everybody,

The 3min YM on Friday was a perfect example of why I teach that it is so important to keep your losses small. Here we had two long trades (as the STF was blue), the first was a loss, the second was a Profit. But that is not the important thing. What is important is that the loss was kept small at just -1R, and the Profit was much larger than this at +2.9R )ignoring slippage and commission). So over all, you came out with +1.9R Profit (+2.9R less -1R).....

This is why it is so important that losses are kept small and Profits large, this is what makes you money over time.....

Thanks

Common Sense

Hi Everybody,

Here is a question I get asked a lot – what to do when a trade is in Profit but has not reached the first target ? This is a lot easier to answer “if” this trade has reached a natural support / resistance level, like the DP. But a good example is on the 3min NQ, where we can see that this TS1 short was sitting on +3.8R Profit (ignor9ing slippage and commission), but had not reached the first target...... So what should you do ?

Well, this is where common sense should come in. Firstly, once you are on such a good profit, your protective stop should already be at least at break-even..... The question now, is how far into Profit should you move it ?

This is judgment call based on experience and also based on what other markets are doing.... But common sense would suggest to lock in at least a small profit one you are on such a good profit initially....

Thanks, Steve

A good day yesterday.... Part 2

After a god start to the day on the 3min ES, the 3min NQ got in on the act with a YS3 buy later in the day, that made approx. +1.8R Profit (ignoring slippage and commission) on the close. Add this to the +2.8R Profit from the ES earlier, and you had a good day yesterday..............

Notice how the STF was blue all day, so sells were avoided....

This is why I keep on taking about the Cyclical Nature of Trading, and why it is so important to keep the losses small during the bad times, because the good days, with good profitable trades will come around again, and you must be ready to catch them.....

Thanks, Steve

A good day yesterday....

Hi Everybody,

Yesterday was a good day for the Standard Traders among you, which started with a nice S3 buy in the morning on the 3min ES.....

As you can see, the ES rallied nicely to reach the first projected profit target – that nailed the high of the day for you ! For a nice +2.8R Profit (ignoring slippage and commission).

Notice how this TS3 long did not get stopped out as the ES made a “double bottom” a few bars after the entry...........

Thanks, Steve

3min ES

Hi Everybody,

Yesterday was another perfect example of why I want you to all become “more advanced” traders and as such be able to “read” the charts, as you will see in the Advanced Blog, this would have given you another massive +9.9R Profit on the 3min NQ yesterday, making back to back +10R Profits over the last two days using Advanced Analysis............... This is the true power of MTPredictor and why, once you understand how to use it properly, you will see how it is one of the most powerful software programs around.....

But I do understands that many of you need to learn to walk before you can run, so let’s take a look at just the standard setups on the 3min ES yesterday, which was a hard day.

As you can see, there were two sells early in the day, the first was a -1R loss, but on the second, can you see how the STF turned red just after the long trade was entered, this was a sign to either get out or move stops closer.

Then we had a TS2 sell, that would have been a -1R loss or break-even depending on whether you used the 100% initial risk guideline. But it is the TS3 later on that interested me most. Mainly because it did reach the minor DP where a small profit was available, especially as other markets (as we will see on the Advanced Blog) were making brilliant buy setups.

So a tricky day, but then the Advanced Analysis kicked in with some perfect trades, please see the Advanced Blog.

Thanks, Steve

TS2 sell on 3min ES

Hi Everybody,

To celebrate that we have started the “Beta testing” of the new RT MTP add-ons for NinjaTrader 7, I will do today’s post using NinjaTrader 7.........

Friday was a good day with a TS2 sell unfolding on the 3min ES, that nailed the high of the day for you ! Using the standard trade management guidelines would have meant coming out for a +2.3R Profit (ignoring slippage and commission).

Some people will complain at that, but then they will have forgotten the +2R Profit from the YM the day before, and then compare this to just a small -1R loss on the 3min YM the day before.................. All these Profits were much larger than the losses, and that is what makes money overtime.... Big Profits and only small losses.

Thanks, Steve
PS, I know that you would all loved to have caught the whole decline, well pop over to the Advanced Blog to see how........