The Cyclical Nature of Trading

Hi Everybody,

Yesterday was a great example of how sometimes trading can be hard. As you can see on this 3min YM chart, the markets just moved sideways in a very narrow range yesterday, as such trading would have been hard. MTPredictor did well, with a -1R loss, which was follow by a small +1.2R Profit (ignoring slippage and commission) at the end of the day. But whichever way you look at it, yesterday was a hard day.

Most trading Gurus and software companies never tell you about days like this. This is because they are not professional traders so do not understand how market unfold in the “real-world”. There will be hard days, and quiet days as well as the good (profitable) days. This is just how markets unfold, they go in cycles, something I call “The Cyclical Nature of Trading”.

This is why expecting to make money every day is simply wrong, and if you hear of a system that promises to make X dollars a day, then you know that they have no practical experience in the real world.

This is why I always talk about the hard times as well as the good times, to make sure you are all prepared to tackle the markets how they “really” unfold....

Thanks, Steve

Why it is important to follow all 4 e-minis

Hi Everybody,

Yesterday was a brilliant example of why it is so important to follow all 4 of the US e-minis. I hear too many times that people are only interested inn the ES or YM. But just look at this brilliant TS4 buy on the 3min TF (Russell Index).

As you can see, after a -1r loss, then came a lovely +5.3R Profit (ignoring slippage and commission)............... A nice profit that you would have missed if you were only following the ES !
Lastly, I am asked a lot about DP’s. As they are “trend termination” setups, there are only to be used when they fall in line with the “larger degree trend” or larger degree support / resistance areas. As this takes a little more thought, they should be considered slightly more advanced, so should not be blindly taken by the newer traders among you

Thanks, Steve

PS, defiantly look at today’s Advanced Blog, as it shows a perfect +11R Profit !!

History Signals Part 2

OK, now we have applied the Analysis, we can see that indeed this was a valid TS3 buy, and as such gave us a nice profitable +3.3R trade (ignoring slippage and commission).

So what is happening ? Well, if you use the Chart Replay mode, you can see that the pivots changed as the market unfolded around that time, this is why the abc pattern changed. But by placing the history triangle on the chart and allowing the analysis to be applied, we can analysis see what the situation would have been “at the time”

So the result was a nice +3.3R Profit as the TS3 buy nailed the low and then the NQ rallied nicely

Thanks, Steve

PS, I do suggest you take a look at the Advanced Blog, as MTP continues to do some amazing stuff with the more advance tools !

History Signals

Hi Everybody,

Yesterday we had a great example on the 3min NQ, of why we always need to check and then apply the analysis on the history signal (small triangles on the chart), as they are not always -1R losses

As you can see from the chart, the history triangle at 13:45EST looks to have nailed the low perfectly and as such looks to have been a good trade............

So let’s apply the analysis, in the next post and see....

Thanks, Steve

Yes losses can happen

Hi Everybody,

Yesterday was a frustrating day with a few losses on the automatic signals alone.... The 3min Russell is a good example, where we had two -1R losses early in the day. These were partly made up by a small +0.8R profit in the last few minutes of trading.... But overall, it was a hard day....

And yes, hard days and losses do unfold. This is part of trading. Any Guru or software company who tells you that losses do not happen, then they have either never traded themselves or they are lying !

This is all part of the natural Cyclical Nature of Trading, that I talk about a lot...... and is how markets (and trading) unfolds in the “real world”.

Having said that, Advanced Traders could have done better, please see the Advanced Blog

Thanks, Steve

Opposite signals

Hi Everybody,

This is question I get a lot – what do I do when in a trade and I get a signal in the “opposite” direction. The 3min Russell (TF) Index on Friday was a good example of this. As you can see, we had a good looking TS3 sell, and you would have been short, but then a TS2 buy appeared at 11:00EST. So what do you do ?

Well, I always see that you try and stick with the original trade unless there is a very good reason to change. I.e. you are trying to stay with the strongest trade based on the larger degree trend.... Sometimes this is easier than at other times. For example here, the trend was nicely down, and the TS2 (although on a black STF) was not a “obvious” ABC correction so was not a “good enough” reason to sway from the current TS3 short trade.

BTW, “if you had have “stopped and reversed”, the TS1 sell later would have got you back short again, so in this example it would not have made much difference.

Thanks, Steve

A Quiet day

Hi Everybody,

Yesterday was a quiet day on the automatic setups, please see the 3min ES chart. As you can see there were no automatic setups yesterday.

But, yesterday was a perfect example of why I encourage you all to learn some more “advanced” techniques and setups, because if you had then you would have had some brilliant trades yesterday.....

From an Advanced eye, the 3min ES unfolded absolutely perfectly yesterday !!

Please see the Advanced Blog........

Thanks, Steve