A good day on Monday

Hi Everybody,

Sorry I am posting the charts and comments for Monday a day late, but it was such a good day, I felt that they should be up.

It was an interesting day on the 3min ES, with a valid DP buy coming in around lunch time. This worked out nicely as the ES rallied into the first profit target, where a +2.4R Profit was available (ignoring slippage and commission)

This was a standard setup as the STF was Black. But the TS4 sell later in the day was “against” a blue STF so had to be avoided. But this was not the case on the NQ, see next post.

Thanks, Steve

History Triangles

Hi Everybody,

Yesterday, on the 3min ES, there was a good example of how the “History Triangles” are not always -1R losses. If you look at the history triangle on the 13:09 bar you will see that the “next bar” (13:12) the high of the 13:09 bar was exceeded “BEFORE” the low, so the short trade was invalidated “before” it was filled.

So even though there is a History Triangle here, there was no trade, so no -1R loss.

The code is not that intelligent to be able to “look into” the bars to see which happens first – the stop trigger or the trade entry. So you do need to use some common sense and look at prior setups yourself to decide how the market unfolded.

Thanks, Steve

5min ES

OK, now lets move over to the 5min Chart. As the STF was red, we should have been looking for just sell setups, and we got three of these later in the day. The first of these was “at the same time” as the -1R loss on the 3min Chart, so should not be counted here, on the 5min Chart. We then had a valid -1R loss just before the TS4 sell nailed the high perfectly.

The ES then declined into the close, where a nice +4.1R Profit (ignoring slippage and commission) was available.

So -1R plus +4.1R makes a nice +3.1R Profit for the day. But as we have seen, this came from the 5min chart, when the 3min signals were flat

Thanks, Steve

PS, please take a look at the Advance Blog for why this last TS4 sell was a “high confidence” trade.

3min ES

Hi Everybody,

Yesterday was an interesting day, that started off with a -1R loss on the 3min ES just after the open. Then we had a nice TS2 sell, that made +2.1R Profit (ignoring slippage and commission). But then we had a TS3 sell later in the day that would have lost -1R.

So overall, the 3min ES was flat on the day........................

But, this is why I always say that you should also follow the 5min Charts, because, as we will see in the next post, that is where the money was made yesterday.

Thanks, Steve

The Holy Grail of Setups

Hi Everybody,

Today I would like to look at the Holy Grail of setups. This is a setup that I talk about in the Trading Course, and for those of you who have been following me for a while, will know that it is my favourite setup.

We got this setup on both the NQ and YM 3min Charts yesterday. As you can see, with +8.3R Profit (ignoring slippage and commission), this was a massive Profit to have yesterday.

I will take a more detailed look at the setup in the Advanced Blog, but I also suggest you take a look at this Forum Post: where I look at the setup in more detail as well

This setup was the reason I designed MTPredictor in the first place – to catch the end of Wave (2) to then be able to trade the whole of the Wave (3) swing, I think that this is the best trade there is !!

Thanks, Steve

Double Tops

Later in the day there was another example of a history triangle appearing when the market made a double top. This is exactly the same as the situation I covered in detail in yesterdays post.

The end result was a nice +2.8R Profit (ignoring slippage and commission) as the YM declined into the first target. Yes, it would have been nice to catch all yesterday fall, but +2.8R added to the +1.5R form earlier meant yesterday was a good profitable day, and that is what the Professional traders among you will be focusing on, not the “what ifs” ! Remember, we are here to make money, and that does not require us to catch every swing in the market. Amateur Traders seem to forget this sometimes.

Thanks, Steve

Trade management

Hi Everybody,

Today I would like to look at a question I get asked a lot, and that is how to manage a trade that has not hit the first target and is currently on a good Profit. Like the TS2 short on the 3min YM, that had a “open” Profit of +4R before starting to retrace.

My view is that when an open profit gets this big, it is always a good idea to look to “lock in” at least part of it. Here we can use the DP (form minor swing), or if that is not available, we can look at the “minor pattern” of the recent swing. If you look at the decline from the TS2 sell, you can see how it unfolded as a “minor” ABC pattern (as found by the Elliott Wave tool). So here you can use the high of the minor Wave b swing for the stop position. This then locked in a nice +1.5R Profit (ignoring slippage and commission).

Sometimes stop movement is easy and obvious, but sometimes it is a little more tricky, like here.

Thanks, Steve