Cyclical Nature of Trading.....

The last few days have been yet another excellent example of the Cyclical Nature of Trading at work. After a few days at the end of last week when trading was tricky, we suddenly get two massive days in a row. This is why I keep saying how you must anticipate that you will have periods of small losses (but the aim is to keep these small) as well as quiet periods ( when you are uncertain of the larger degree picture), but as we have seen again and again and again and again, it is not long before the good trades come round again. This is just the natural way Profits and Loses unfold in the markets.....

Thanks, Steve

3 min ES – DP low

As we can see, right at the same time the 15min ES chart was at 15min DP support, the 3min gave us an automatic DP buy setup. This nailed the low of the day for us ! This is exactly the same as we had on the NQ the day before :-)

The ES then rallied strongly off the low. After a scary initial pullback (no 100% initial risk on this trade as the larger degree picture was clear), the ES did reach the first projected profit target, but as the STF Strength band was exceeded, we swap to the ATRStop, which held the long trade into the close for a nice +5.7R Profit (ignoring slippage and commission)

Thanks, Steve

15 min ES – DP low

For me, the larger degree trend became a little clearer when the 15min Charts put in a DP low early afternoon (this was also a TS3 buy on other minis), see chart to the right. This then gave a opportunity for long trades on the short-term 3min charts, as the 15min was now at support.

So let’s turn to the 3min ES to see what we find (next post)

Thanks, Steve

3min YM - Profits and Loses

Hi Everybody,

As the 15min trend was uncertain, in the early part of the day yesterday (more on this in the next post) you could have decided to take trades on both sides of the market. So I want to take a look at what would have happened on the 3min YM yesterday (this is only a sample of 1 day as there was a lot of trades on this chart yesterday, but may not be representative of everyday’s activity).

As you can see, we had a few trades, the first was a TS1 sell that made +4.7R Profit (ignoring slippage and commission). Note the small green triangles, these are failed trades. BUT not always filled, the first is a good example as this was invalidated (as the market went below the prior bars low “before” being filled), so the long trade was not entered. Then we had a -1R loss, then a nice +3.7R Profit, then a break-even TS3 sell later in the afternoon. So overall a possible +7R (+4.7 plus -1R Plus +3.7R Plus 0R) day yesterday.

Again, I have to stress that I do not suggest taking “all” the trades every day, but on a day when the larger degree trend is unsure and you use the 100% initial risk guideline, then Advanced Traders could consider it. But again, I stress that it is always best to trade “with” the larger degree trend and when in doubt, stay out.

Thanks, Steve

Now for the Advanced Traders...

OK, we have already see that the NQ was moving up into the “opposing” DP level, so what do you think would have been the sensible thing to do when you reached the 15min DP resistance zone AND you were at the maximum Wave 3 WPT on the 3min Chart AND that bar came on a high volume VSA spike AND you were sitting on a massive +10R Profit ?

Exactly, tighten stops................ This enabled you to come out at the high of the day ! Long from the low of the day to bank profits at the high of the day for +10R Profit (ignoring slippage and commission), not bad :-) , and all it took was a little advanced knowledge and experience. All of the tools that you need are in MTPredictor, you just need to take the time and make the effort to learn how to use them.

Thanks, Steve

Larger degree trend on the 15min NQ

OK, here is the 15min NQ chart, as you can see the 3min DP Buy was right at the “larger degree” 15min DP support zone. As such giving the 3min DP added weight.

The 15min NQ then rallied nicely to the “opposing” DP.

Things do not fall all into place this well all the time, but when they do, it is worth maximising your profits on the trades you have. Which brings me nicely onto whether the Advanced Traders among you could have squeezed any more profit out of that 3min long trade. Let’s see in the next post.....

Thanks, Steve

+8R Profit on the 3min NQ

But for me the “trade of the day” was the DP buy on the 3min NQ, as this nailed the very low of the day for you !!

As you can see from the chart, standard trade management guidelines swapped to the ATRStop once the STF strength band was exceeded. The result as a massive +8R Profit (ignoring slippage and commission).

OK, I know what you all asking, why take DP’s as they are more of an advanced technique. Well, the exceptions are when they fall in line with “larger degree” support or resistance (on the 15min chart) or they are et the end of 5 swings. Well guess what ? This 3min DP was bang at 15min DP support as we will see in the next post, so was a real beautiful trade....

But the main point here is how after a few hard days along comes some massive profits, so you have to be in the right frame of mind to take full advantage of these. Too many amateurs have a few loses and then give up, so they are never there to make these big profits.....

Thanks, Steve