Part 1 – How to Trade December Price Patterns

Here’s the first part of the webinar from Dec. 6, 2016. Toward the end of the year, the market starts to rally. John Paul believes the end of 2016 is likely to trend this way (bullishly). At about 2:40 in, market open is discusses with an emphasis on candlestick interpretation (candles vs. wicks and what they mean). Traditionally, market open is difficult to trade because of the increased volatility. Often, there’s a push higher or lower. Moving averages or other common indicators see these big moves and can give bad advice. The move can quickly be over, followed by chop that makes taking profit tricky. The ATO (At the Open) software simplifies finding breakouts by producing entry signals on the chart. You’re taught the exact rules for entry, profit target, and stop loss.

You can use NinjaTrader’s Fibonacci Retracement tool to measure the midpoint between two candles. This is useful when finding entries during common bullish December price action. Configure the tool to only draw the 0%, 50%, and 100% values. We’ve covered this in recent videos. The tool is use unconventionally to find areas where the market has tested highs and lows. The ATR (Average True Range) is used here to determine the profit target and stop loss. When price surpasses the 50% level on the way back up, it’s time to consider placing a trade. The idea is to follow the momentum back up. Of course, the market can do whatever it wants at any time, so trade carefully. It can begin chopping right after passing the 50% level, so it’s best to get in and out quickly to limit risk. Towards the end of the video, you can take a look at the Atlas Line and how it provides additional confirming for long moves.

Atlas Line E-mini S&P Trade – Too Fast?


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Here’s a sped up look at the first Atlas Line trade that occurred yesterday, Dec. 6, 2016 on the E-mini S&P. The Atlas Line produces a long signal at about 9:55 a.m. EST when price was at 2203.25. This signal appeared because there were two closing bars above the purple Atlas Line. The signal appeared on the close of the second candle. If the candles closed below, this would have been a short signal.

John Paul used 11 contracts, but it’s best to use a smaller amount if you’re new to trading. The order was filled at 2202.5. The profit target was set at 2204 and the stop loss at 2199.5. To make the entry visible on the chart, the TextAndMarker setting was applied within NinjaTrader’s Data Series window. The goal is to make profit as quickly as possible. The longer you stay in a trade, the greater the exposure to risk. It’s also important to know exactly what profit target and stop loss you’re going to use ahead of time. When using preconfigured values (via ATM Strategies), quickly changing the profit and stop to appropriate values may decrease risk or prevent an early stop out. Within about 10 minutes, the profit target was hit (+1.5 points). To compute the profit or loss of a trade, multiply the profit or loss value (e.g. 1.5) by the price per tick of the instrument (E-mini is $12.50/tick), then multiply that by the amount of contracts used. Keep in mind, this does not factor in broker fees or any extra values. Check with your broker to learn about any extra fees.

The Atlas Line is included with the Mentorship Program, along with all of our other courses and software. The next Mentorship class begins Dec. 15, 2016. Eight weeks of live training will show you how to use all of our strategies together and turn them into one trading plan. Click here to find out more.

E-mini S&P Roll Date Approaches – How to Roll Over

December 8, 2016 is the official rollover date for E-mini futures. On that date, you can switch to the ES 03-17 (March 2017) contract. As of this moment, most traders are still trading the December contract, which currently has about 15x the volume of the 03-17 contract period. Of course, the volume will eventually transfer to the 03-17 contract. Some traders prefer to trade the contract with the greatest volume. Others prefer to switch on the exact roll date, no matter what. Click here for the CME page that shows the volume. On the roll date, expect a significant amount of volume to transfer over. After December 8, the next roll date is March 9, 2017.

As a reminder, here’s how to roll over your contracts with NinjaTrader 7. If you use NinjaTrader 8, click here. In NinjaTrader 7, begin by going to Tools > Instrument Manager

1. In the name box, type in the name of the instrument you wish to roll over (e.g. ES)

2. Click Search

3. A row should appear for the instrument you searched for. Click on the row so it becomes highlighted. If you’re doing this on or after Dec. 8, notice how NinjaTrader automatically knows the new contract to use. If you are rolling over early, you may need to select 03-16 from the Expiry list.

4. Click the button that has a black arrow that points to the left. Doing so will add the new contract period to the list of selectable instruments. If desired, you can select old contracts from the left list and then click the right black arrow button to remove them.

5. Once satisfied, click OK at the bottom.

Now, go to an existing chart or open a new chart. You should be able to select the new contract period.

This picture shows the steps from above:

E-mini Contract Rollover

Price Action Trading – How to Use Trailing Stops

Every trader should know when and how to using a trailing stop. It’s one of those fundamental trading techniques. Essentially, it’s a way to “lock in profit” when trading two or more contracts. When price meets a specific condition, you close out one of the contracts that has reached profit territory. This video is designed to answer common questions: what types of trades are compatible with trailing stops? What values should the trailing stop use? How do I go about placing these stops in my trading platform?

Some strategies work better with trailing stops than others. For example, the Roadmap strategy (taught in Mentorship) works great because it happens before the move or right in the beginning of the move. In comparison, the ATO and Blueprint strategies are less compatible because the move usually has already begun. The Atlas Line and X-5 work well, however, providing you catch the trade early. For trailing stops, you need to be using a method that finds trades very early or before they happen.

Trending conditions are great for trailing stops because of the consistent direction. When the market’s ATR (using a period value of four) is around one point, the market probably isn’t going to trend, so be careful with any trailing stops. Normal levels of volatility, when the ATR between two and three points, increase the chance of trending conditions. Normal to higher than normal volatility periods are ideal for trailing stops.

When using trailing stops, John Paul likes to use a minimum of two contracts or multiples of two. When you first start out, even if you can afford it, avoid trading many contracts because it increases the risk. Work your way up responsibly. When the market starts to move, half of the position is removed of the trade.

The best way to learn all of the strategies that work the best with trailing stops is to take part in the next Mentorship Program. Click here for details. Considering all that you get, it’s a great deal and an excellent way to learn from John Paul directly during eight weeks of live, all-inclusive coaching.

Live Webinar – Atlas Line Real-time Trade & Jan. Effect


See the real-time Atlas Line trade at about 21:00 in this live webinar.
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Here’s the webinar from yesterday, Nov. 28. John Paul starts off by saying he expects volatility to come back to normal levels and leads into the January Effect. In short, the January Effect is a strategy used by traders to predict, with some historical accuracy, whether the rest of the new year is expected to trend higher or lower. If on January 31, 2017 price closes higher than it opened on January 2, 2017, the market is expected to trend up during the year. Of course, there will be points when price drops heavily and consistently. The Effect simply says to expect price to be up by December 2017. You can see why this isn’t a buy and hold strategy. For small-time traders, holding a position for a hundred points is not possible, and if it was, would be incredibly risky. In the video, John Paul explains how regular, retail traders can work with it.

As usual, an ATR with a setting of 4 helps determine volatile conditions. Yes, the ATR can be used with a daily chart (useful for the January Effect). Look at how the green ATR spikes match the significant movements in price. To justify an entry based on the Jan. Effect, John Paul wants to see a minimum of 4+ days to retrace. Markets like to go where they’ve previously been. It’s good to find opportunities where the market is retracing to a high that’s previously been reached. The Fibonacci Tool (F8 in NinjaTrader 7), is handy for finding entries. It’s not used in the traditional Fibonacci sense. Instead, you can configure it to draw a horizontal line halfway (at 50%). This 50% level is what John Paul uses for the entry point in the retracement. Once the 50% midpoint is passed, the goal is to be in the trade long until the new highs are tested. You’re not going for the full 40+ points on the trade. Instead, 1x the ATR value is more reasonable.

January Effect for 2017 – What Can We Expect?

January 2017 is almost here, so that means it’s time to review the January Effect to see what it can tell us about future market conditions. While there’s no way to truly know what will happen, John Paul has been using the January Effect to improve his trading for a long time. You can go back in history to review our previous videos and see what happened with this strategy. In this video, a couple of recent years are reviewed to show you exactly what to do to find trading opportunities.

The main rule to the January Effect is if January closes higher than the price at which it opened, the market is expected to have an up year. Let’s say January 2017 does in fact close higher than the price at which it opened. We can now follow the rules of the strategy, which say for every four or more days of pulling back (not making new highs), look for a retracement opportunity. John Paul uses NinjaTrader’s Fibonacci Retracements tool to draw a 0%, 50%, and 100% line in one shot. If you need help configuring this tool to only show the three percentages, click here for instructions. This represents the recent high and low as well as the value (50%) price needs to surpass to trigger the rule for a long entry. When price retraces through the 50%, it’s time to place a long trade to capture the bullish movement. Keep in mind, these moves often extend over multiple days. Holding a position that long requires a good amount of account funding, however, you can still take advantage of intraday movement.

If you want to hit the ground running in 2017 with a full bag of trading strategies, the best way to learn everything John Paul has to share with you is to take part in the upcoming Nov. 28 Group Mentorship class. Click here to enroll. By submitting the deposit, your seat will be saved and you’ll get the first week’s course to use ahead of time.

7 Trading Tips for the Holiday Season

2016 Trading HolidaysTrading during this time of year can be particularly challenging. Markets can range from being too slow to extremely volatile. Keep the following tips in mind when looking for opportunities on your favorite futures, commodities, stocks, and currencies:

1. Big traders and those running trading firms may be taking vacations. The traders who remain can cause unusual market movement. In addition, businesses are publishing annual and quarterly reports, expectations for the new year, and are looking to increase holiday sales. All of this activity can add to instability.

2. On and around holidays, markets will close early or will shut down entirely. On partial trading days and those surrounding holidays, markets tend to move slower than normal. Don’t be surprised by an early closure after you’ve been filled! Look out for these dates and times (in EST/UTC-5) as they apply to the CME (Chicago Mercantile Exchange) and the E-mini:

Wed., Nov. 23, 2016, day before Thanksgiving: Normal market hours
Thu., Nov. 24, 2016, Thanksgiving Day: Early close at 1:00 p.m. and reopens at 6:00 p.m.
Fri., Nov. 25, 2016, day after Thanksgiving / Black Friday: Early close at 1:15 p.m.
Mon., Dec. 26, 2016, Christmas Day Observed: Closed and reopens at 6:00 p.m.
Mon., Jan. 2, 2017, New Year’s Day Observed: Closed and reopens at 6:00 p.m.

Note that Christmas Day and New Year’s Day both fall on a Sunday, therefore the observation date is Monday.

3. On days when the FOMC (Federal Open Market Committee) meets, volatility lessens and price has a tendency to chop. The next dates are Dec. 13 and Dec. 14. The next meetings will occur in late January, 2017.

4. John Paul likes to use the ATR (Average True Range) to determine the profit target and stop loss for each trade. The ATR provides a measure of volatility, telling you how much the market could possibly move. It does not provide an indicator of direction, just potential. He uses the ATR with a period value of four. This means the last four bars are used in the calculation to gauge expectations. Stay out of the market when the ATR is below one point or above five points.

5. Big traders have holiday expenses just like everyone else. Trading firms need to meet annual goals. Everyone is thinking about spending and taxes. When large positions are taken and exited, this can create ripples and vacuums in the market. Be careful!

6. On average, market prices tend to increase towards the end of the year. If you’re shorting the market in a long-term position, be cautious. The Super Year pattern (look for an upcoming video) may change your expectations of long-term market direction for the coming year. Your intraday trading may be slower than normal, so account for this in your monthly performance analysis.

7. ‘Tis the season to enjoy the company of family. Take a break, refresh, and think about your trading goals for 2017. What will you do differently?

We wish you a happy Thanksgiving and holiday season!

Thanksgiving E-mini/CME, NYSE, and Nasdaq Trading Hours

Thanksgiving E-mini TradingIf you trade the E-mini S&P and similar CME markets, here is what you can expect for the U.S. Thanksgiving holiday this week:

Wed., Nov. 23
Markets close at the regular time

Thu., Nov. 24 (Thanksgiving Day)
Markets open at the regular time
Markets CLOSE EARLY at 1:00 p.m. EST (UTC-5, New York Time)
Markets RESUME trading at 6:00 p.m. EST (UTC-5, New York Time)

Fri., Nov. 25
Markets CLOSE EARLY at 1:15 p.m. EST (UTC-5, New York Time)

See the official CME Globex Trading Schedule for Thanksgiving.

The NYSE also closes early at 1:00 p.m. EST (UTC-5, New York Time) on Nov. 24 and Nov. 25. The Nasdaq is closed Nov. 24 and closes early at 1:00 p.m. (UTC-5, New York Time) on Nov. 25.

Why the early close on Friday, the day after Thanksgiving? Stock trading is usually at half the volume. Also, since 1992, the exchanges have closed early on Black Friday. Black Friday is considered the big kickoff to the holiday shopping season.

We hope you and your family have a happy and safe Thanksgiving!

Simple Trade Scalper Short Price Action Trade


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Thanks to everyone for attending the recent live webinars and presentations! We like all the feedback from new traders and those who have been using our systems for a while. Here is a video of a Trade Scalper trade taken today. The Trade Scalper software is the Short and Dbl Wick Short signals with the corresponding arrows. In the retail version of this indicator, there are a few other lines drawn that help you know when a trade is about to happen. John Paul does not talk about the Dbl Wick signals often, but they refer to two consecutive wicks. The Dbl Wick here at 2181.75 is an exact entry price you want to be filled at. It’s important to use a profit target and stop loss relevant to current market conditions. With scalping, your goal is to be in and out in a short amount of time with low risk, but a higher percentage of accuracy. Staying away from the market open and news events is one way to do that. The ATR here is at about three ticks. He is using a three tick target and a six tick stop. If your target is touched, it’s time to get out of the trade. There were a number of signals provided today. He covered most during the live training class for the Trade Scalper. From 11:00 a.m. to 2:05 p.m. EST today, there were about 10 trades.

The upcoming Mentorship class that begins Nov. 28 includes the Trade Scalper and all the other courses and software. Click here for more information.

8 Points, 3 Atlas Line Trades: Today’s Price Action Reviewed


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Here is a recap of today’s Atlas Line signals, including the profit targets and stop losses. John Paul has configured the line to look a little different than what you’ve seen in other videos. The goal of the strategy is to enter short or long when the signals appear. It’s more of a price action trading tool that will tell you when and how to enter if price behaves a certain way. The profits and stops are based on the ATR (Average True Range), a trading tool built into most platforms. By loading up an E-mini S&P chart and setting it to 5-min, your candles should look similar.

The first Atlas Line trade today was a Short at 2164.25. The profit target was 2.5 points (10 ticks). The 2.5 points was exceeded (the market traveled 4 points), so this was a good trade. The second trade occurred about 40 min. later when price hit 2162.50. This was a larger move – a 3.5 point target (14 ticks). Price far exceeded the target, so that was another good trade. In the afternoon, a Long signal appeared when price reached 2158.75. The target was 2 points (8 ticks).

The Strength and Pullback signals (the small S and P letters on the chart) provided additional opportunities. John Paul teaches how to use the S and P trades in the included live training.