History signals

Hi Everybody,

Today I would like to remind you all of the History triangles. In particular how we can get a history triangle and it does not necessarily mean a -1R loss. The 3min YM on Friday was a very good example of this.

Using MTP v6.5 we had two history triangle before a TS3 sell towards the end of the day. Please see the chart. BUT (and this is the important part), the “first” short trade ( at 14:30EST) was NOT stopped out. So this triangle, and indeed, the next one were NOT losses.

The reason this happens is that the market made a “triple top”. When we get equal highs or lows the code can put up a history triangle, even though the stop trigger was not hit. This is covered in the help video (http://www.mtpredictor.com/help/videos/65-history2/65-history2.html ) where I always say to place the analysis n any History signals and see how they would have worked out. Don’t just assume that each triangle is a -1R loss, because that is not how the code works

Thanks, Steve

+3.5R on the NQ.....

So far so good, even after the small -1R loss, you should have been +2R Profit on the ES. But as the low on the ES came in the 3min NQ gave TS1 buy (MTP v6.5) that nailed the low.

The NQ rallied into the first Profit target, where +3.5R Profit was available (ignoring slippage and commission).

Add this to the profits earlier on the ES and it was a good day yesterday................. And I have not even had time to mention the TS3 sell on Russell (TF) that came in later in the day that added further profits. Making yesterday a very good day indeed !

Thanks, Steve

A small loss later.

So far so good, you were up +3R, but then you had a -1R loss. But as usual this loss was small when compared to the prior +3R Profit. Then we had a TS2 sell that made a double top a few bars later (so was not stopped out). This short trade then started to decline nicely.

As you would have been on a small profits, you should have had your stop “at least” at break-even, making this a break-even trade.

But the day did not stop there, as the low on the ES was coming in, let’s take a look at the NQ in the next post.

Thanks, Steve

Yet another good day............

Hi Everybody,

Yesterday was yet another good day, that started with a lovely TS1 sell in the 3min ES. As you can see, the STF was Black, so this was OK to take. The ES then declined nicely to reach the first projected Profit target, where the STF was weak, so profits were taken at the WPT target. This is all text book stuff and all using the standard guidelines.

The result was a quick +3R Profit (ignoring slippage and commission). A nice start to the day !

Thanks, Steve

Another good day......

Hi Everybody,

The Cyclical Nature of Trading is an amazing thing. After a very hard day earlier in the week, where we had 3 loses back to back, a series ifo losses that would have got many amateur Traders stopping or doubting themselves. But juts look how MTPredictor has bounced back, with +2.5R Profit on Tuesday on the 3min ES and now another brilliant trade yesterday – a TS4 buy that nailed the very of the day for you – brilliant !!

This TS4 buy was a standard setups, where the STF was blue. Profits were taken at the first target as the STF was weak as the markets reached the zone. The result, a nice +3.6R Profit (ignoring slippage and commission.

As I say, add that to the +2.5R Profit from the day before, and the -0.6R Loss from one day earlier looks very small indeed. This is why it is so important to keep the losses small, as even after 3 losses (-3R loss) then next three trades made approx (+2.4R +2.5R +3.6R) +8.5R far far higher than the -3R loss. This is the true key to successful trading, keeping the losses small, then how MTPredictor will maximise your Profits....

The last few days have been an absolutely brilliant example of this and one I hope you all remember........

Steve

PS, it would have been nice to catch the DP sell, that nailed the high of the day, so please turn over to the Advanced Blog.

Cyclical Nature of Trading.

Hi Everybody,

The last few days have been a brilliant example of why it is so important to keep your losses small. Yesterday we saw how even after 3 loses in a row, the overall loss was only small, at juts -0.6R. Then look what happened yesterday, a nice +2.5R Profit (ignoring slippage and commission) on the 3min ES, which put you back into Profits overall.... Also remember that we had a couple of good days before that as well.

This is why it is so important to accept the losses but just keep them small. Because the Cyclical Nature of Trading means that it will not be long before the next profit comes along, and (this is the import part), with MTPredictor, that Profit will be larger in relation to the losses.....

So the last few days have been a very good lesson on this, that I hope has helped you all become better traders.

Thanks, Steve

Cyclical Nature of Trading (how to deal with losses)

Hi Everybody,

Yesterday was a good lesion in that losses can and do occur. Many Gurus will never mention losses, but they do not know how the markets unfold in “real life”. We all know that losses can and do unfold, so there is no point hiding them. But what we have to understands is that losses are important, mainly because it is how you handle losses that will make you a better trader. A good example is on the 3min YM, here you would have had 3 valid losing -1R trades in a row, so yes you would have been -3R down. But then the TS4 sell towards the end of the day made +2.4R Profit (ignoring slippage and commission)..... In other words making up most of the earlier losses for you.

So you should have ended the day down just -0.6R. Now compare -0.6R loss to the big Profits form the last few days, and do you see why losses should not be worried about or ignored, they should just be kept small. By keeping them small it means that you are back in the black with only 1 or 2 trades, even after 3 losses on the trot.

This is one of the hardest thing new and Amateurs traders struggle with. They find it hard to deal with losses. They want to just avoid them, then after 1 or 2 losses they stop trading and therefore miss the next big winner. Losses should not be vied as a “mistake” or anything “wrong”, but just as a “business expense” and part of the cost of trading. They will be easier to deal with then......

Thanks, Steve