DP from the Wave B swing

Hi Everybody,

In today’s post I would like to remind you all of how the DP from the prior Wave B high or low can catch a minor high or low nicely. I assume you all have read the Trading Course Part 2, but if you have forgotten, then I suggest you re-read Part 2, because this is covered in there.......

A good example is on the 3min NQ yesterday, please see the chart, where we got a minor rally off the TS3 buy in the afternoon. But look where the rally stopped, right at this DP (from the minor Wave B high). So knowing in advance that this is an important zone will help you in your trading............

Thanks, Steve

PS, wouldn’t it be nice to have caught the rally off the lows ? Well, as you can see, we did get a DP buy there, so please turn to the Advanced Blog, to see how the more Advanced Traders among you could have caught this......

Tick levels

In the last example we had a nice +4R profit overall, but the first trade was stopped out by only 1 tick, and I know that a lot of you find this frustration............... So what we have done is added in the ability to adjust the “tick offset”.

As you can see, in the new Beta 186 (not released yet, but will be soon), you can adjust how many ticks the stop and entry are beyond the bar high and low. Here adjusting the stop to 2 or 3 ticks beyond the high, rather than just 1, kept you in the first short trade, so you would have had only one profitable trade.

The interesting part is because the initial risk is increased slightly, the profit on this one trade would have been +4R, which is the same as in the example below where we had a -1R loss then a +5R profit................ so in reality, this will not make much difference to the bottom line in $ terms. But it will help psychologically, if you feel that stops are getting clipped by 1 or 2 ticks, and you wish to avoid that. So this will help by reducing the number of losing trades you experience....

Thanks, Steve

Another good day..........

Hi Everybody,

Now do you all see why I go on about the Cyclical Nature of Trading so much – after a few hard days, we are now having a run of good and very profitable days ! This is how trading goes in the real world, the good times are followed by harder and quieter times, before the good times come round again........

Please remember to follow the 5min Charts as well as the 3min Charts, the 5min YM was a great example yesterday, where we had a -1R loss (which was only stopped out by 1 tick !) followed by a lovely TS4 sell that nailed the high of the day perfectly !

Using the Standard Trade Management guidelines would have swapped to the ATRStop as the STF was strong, for a nice +5R Profit (ignoring slippage and commission).............

So -1R and then +5R = +4R Profit overall – a good result !

Thanks, Steve

Yep, you guessed it, the Advanced Trader could have done a little better.....

Now a good day !

Hi Everybody.....

This is why I talk so much about the Cyclical Nature of Trading............ After a few hard days, we then got a good day with a nice Profit on the 3min YM yesterday............. Trading goes in cycles, and too many amateurs just give up after they have had a few hard day, when in reality, this is usually just before a great day, when good Profits can be made......

Here we had a -1R loss, then a nice +3.2R Profit (ignoring slippage and commission) before a small profit into the close........... But overall a good an profitable day on the 3min YM

Thanks, Steve

PS, Advanced traders could have done even better, please see the Advanced Thread.....

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 !