NinjaTrader sponsored John Paul’s price action webinar yesterday. John Paul begins the hour-long webinar by talking about one of our old courses, the ATO (At the Open). Now only available in the Mentorship Program, the ATO teaches you how to trade the opening move in the E-mini S&P. This exact price pattern occurs on a regular basis. By applying objective rules, you can learn to take advantage of this pattern every day.
Next, John Paul says why he doesn’t like to use traditional indicators – fibs, moving averages, MACDs, etc. These indicators usually require optimization because the market is always evolving. If you don’t optimize, you are stuck with old settings for a market that no longer behaves the way the indicator anticipates. The Atlas Line is indeed software for NinjaTrader, TradeStation and eSignal. Unlike other indicators, the Atlas Line only needs to be configured for the user’s local time zone. No ongoing updates are provided, nor does the user experience lag associated with traditional indicators.
At about 8:00, John Paul gives us an update on the January Effect on how it has played out so far. The January Effect says 2013 is expected to close higher (in December, 2013) than the price the price it closed at in the end of January, 2013. Since an overall trend is determined, John Paul is able to recognize a breakout strategy you can use for holding positions longer than a day or two. We get many questions from traders who hold positions overnight or swing trade – this is what you’re looking for. The strategy is described starting at about 10:00.
At 23:00, you can get an understanding of what the ATR (Average True Range) is. Even with long term positions, traders can use it to determine profit targets and stop losses.
At 37:00, John Paul transitions into the Atlas Line, explaining its trades and the Strength and Pullback signals.
At 43:00, John Paul explains the difference between the two scalping methods offered – The Trade Scalper and Price Action Scalping. Price Action Scalping is only offered in the Mentorship Program (begins May 1, 2013). He also covers chart setup with the NinjaTrader Dynamic SuperDOM. Remember that he can’t describe the full method it its entirety – just the basics are mentioned.
At 55:00, John Paul explains the market news page. We’ve posted about it before. Use the calendar to see upcoming financial news for the week. The closest news event is highlighted. On the top of the page, real-time market news is shown. Just refresh the page every week.
Najam from New Jersey was a struggling trader who traded on and off for about a year. During his struggle, he was following moving averages, cycles, momentum, etc. He was not sure when to enter the trade and when to exit. He then found Day Trade to Win and signed up for the eight-week Mentorship Program. By learning the many price action methods John Paul teaches, Najam has all the answers he needs. Najam’s favorite trading methods he learned is the Roadmap, Atlas Line and X-5 trade.
“John Paul is an amazing teacher. You can ask him any question and he will explain it over and over until you get it. His method of trading is price action.”
He recommends this course to anyone who wants to improve their trading results. He commends John Paul and the Day Trade to Win staff for reliable help and service.
Included with the eight week Mentorship Program:
• Eight weeks in duration taught live by John Paul.
• Focuses on the E-mini and other popular futures and currencies
• Includes all software and courses (Atlas Line, ATO, Roadmap Trade, Blueprint Trade (Power Price Action method), X-5 Trade, Price Action Scalping, the Trade Scalper, Filtering Trades, Trading the News and much more).
• All classes are recorded and any class after the eight weeks is free. You can play back your videos at any time in the future and watch the lessons.
• Via email, John is also able to answer your trading questions about the Mentorship methods whenever you have them
• We also offer remote assistance to completely set you up with everything that you need.
• Our methods are based on experience and knowledge used by floor traders. Our focus is consistent profitability using only price action.
Last week, John Paul took a look at the E-mini S&P and the Atlas Line. He scrolled through four days of history, showing the many signals produced by the software. You can see more recent trades here. The idea of the Atlas Line is to provide you an exact entry and an overall direction of whether you should be long or short. When price is above the plotted Atlas Line line, go long. When below, go short. It’s a simple way of thinking.
You might be wondering how the Long and Short signals are produced. There needs to be two closing candles above the Atlas Line for a long signal. Similarly, two closing candles below the plotted line will produce a Short signal.
Sometimes, it can be a bit tricky to decide when / where the entry is. The Atlas Line has a BarsBack parameter that lets you specify how far back the order signal plots. If you zoom in on your chart and take the BarsBack into account, you’ll know exactly what candle the entry corresponds to. Alternatively, just look for the two closing candles above or below.
For your stop losses, there are a few different strategies. We take whatever comes first. (In case you’re new to trading – you are hoping your profit target is hit. The stop loss is what’s hit when price does not go in your favor -it’s a safety net.) The prove-it stop occurs when price closes on the opposite side of the line. The time-based stop occurs when 20 minutes have passed (four bars on a five minute chart). No need to hold the trade longer than that – get out at the current price. And the catastrophic stop is the big safety net – in case the market unexpectedly and sharply rises or falls in a short time frame. All of the stops are covered in detail during the hour-or-so long live training that’s included with purchase.
Watch this video to learn a great forecasting technique. It will help you determine whether the day will be trending (heading in one direction for the most part) or whipsaw (full of choppy, difficult to trade, back and forth activity).
The E-mini S&P 500 (ES) experienced a trending day on February 27, 2013. At 1:17 in the video, you can see how price slowly climbed throughout the day. If you can know in advance whether the day will trend or not, your trading can greatly improve. The technique in this video works for many market opens, but the 9:30 a.m. US/Eastern market open is used. John Paul demonstrates how to split the trading day into three separate sections (A, B and C) at distinct times. Each section has its own characteristics as discussed at 3:40. The method – what to do with the A, B and C sections, is explained at around 5:20. In short, section A can tell you with reasonable certainty whether or not the day will trend. Using the ATR, you can position your profit target and stop loss. You will need to wait for price to prove where it wants to go – either two consecutive closes above or below the previous range. At 9:28 in the video, see what the Atlas Line produced for orders. Visit our videos page to see more videos or the Atlas Line page to see software that works for trading trends.
On January 23, 2013 trading the E-mini S&P 500, the Atlas Line produced a successful Long trade at 1488. This first trade was good for one point according to the market’s ATR (Average True Range). Profit targets are always based on the ATR. This type of dynamic stop reduces risk and makes your profit target match was the market is expected to be able to produce. John Paul has his “BarsBack” Atlas Line parameter set quite high, so you see the entry signals a few bars to the left of the entry candle / signal. You can see how this setting applies with the Short trade at 1486.50. This video shows the trade occurring live, with a profit target of 1.25 points. The best time to trade the Atlas Line is the morning (US/Eastern), but you can trade it on nearly and market that trades 24 hours a day with reasonable volatility. Trading is simple and objective when you have your profit targets and stops known in advance.
1. Have an entry and exit plan Knowing when to get in, when to get out, and what to do if the trade fails is extremely important. In other words, have an entry strategy, profit target and stop loss.
2. Avoid the first 15 minutes when a market opens This period of time is usually highly volatile – automated systems, premarket trades and unfounded trades produce choppy price action. You are better off waiting until it levels out and using the ATO (At the Open) Strategy taught in the Mentorship Program.
3. Understand market orders vs. limit orders Market orders tell your broker to buy or sell at the best available price. Limit orders let you control the maximum and minimum prices at which you will buy and sell. Limit orders are better because you have more control and can be used more easily with strategies.
4. Avoid margin risk The whole point of trading using a margin is to increase the amount of potential returns on each trade. Leveraging more money puts you at risk so keep your margins in check. Trade with a 4:1 intraday margin, if possible.
5. Don’t guess or follow instincts Always have a strategy. You need to know objectively what conditions will trigger your entry. And these conditions have to be consistently successful.
6. Keep a log of your trading activity Your trading software can keep track of your profit and loss performance. You should keep track of your personal development as a trader – improve upon your mistakes. The paper remembers better than the mind.
7. Paper / sim trade first Practice makes perfect. Paper trading with a live data feed will simulate the experience of live trading as closely as possible without spending real money. Paper trade for as long as you need to before going live.
8. Be wary of where your trading advice comes from The markets are inherently unpredictable for the most part. In the business of trading, there are many who are a little too confident. Do your research before putting anyone’s advice to the test.
9. Control your losses When trading with real funds, only trade with money you can afford to lose. If trading ever gets you into financial trouble, take a break and refine your strategy by paper trading with live data.
10. Allow yourself enough time to learn A baby needs to crawl before being able to walk. Don’t panic at the first hint of loss and throw your strategies out the window. Trading is emotional. Know that you will have losing trades. Being consistent requires discipline with the right, objective trading methods. See our courses to find out more.
Significant news this week regarding for traders of the E-Mini S&P 500 (ES), YM (Mini-sized Dow), NQ (E-Mini NASDAQ-100) and EMD (E-Mini S&P MidCap 400) – as of Sunday, November 18, 2012 the close of the CME Globex for electronically traded equity index futures contracts will change from 4:15 p.m. US/Eastern to 5:15 p.m. US/Eastern. Your broker will most likely cancel any orders you have that are not filled by 5:15 p.m. US/Eastern. This time change will affect your day trading starting Monday, November 19.
• There will be a 15-minute halt in electronic trading from 4:15 p.m. to 4:30 p.m. US/Eastern
• Trading for equity index contracts listed on CME Globex will resume at 4:30 p.m. US/Eastern for the same trade date for 45 minutes, closing at 5:15 p.m. US/Eastern. This includes Fridays, meaning that the end of the trading week on CME Globex also will be changed to 5:15 p.m. US/Eastern
• CME Globex trades that take place during the 4:30 p.m. – 5:15 p.m. US/Eastern time frame will be subject to the daily settlement prices calculated at 4:15 p.m. US/Eastern (i.e., settlement times will not change).
• Trading of equity index contracts on CME Globex will be closed from 5:15 p.m. – 6:00 p.m. US/Eastern.
• Trading re-opens at 6:00 p.m. US/Eastern on CME Globex (Sundays-Thursdays) for the new trade date.
These changes to CME Globex hours coincide with the implementation of daily price limits on equity index contracts (switching from quarterly price limits, pending regulatory review). Daily price limits will be applied each day starting at 6:00 p.m. US/Eastern. The changes are designed to harmonize CME products with the underlying markets at U.S. stock exchanges, which will adopt daily price limits on February 4, 2013, in accordance with updated market-wide circuit breaker rules.
• Trading re-opens at 6:00 p.m. US/Eastern on CME Globex (Sundays-Thursdays) for the new trade date.
• The Reference price for daily price limits for the next trade date will be calculated based on the 4:00 p.m. US/Eastern futures prices.
• The width of the equity index futures price limit band will be based on the underlying cash equity index.
• The daily limits will be published on the CME Group website prior to the CME Globex open at 6:00 p.m. US/Eastern.
• CME Globex trading hour changes are effective for both U.S. and international equity index futures and options.
When reading the announcement from the CME website, note that the time zone in use is Central Time (CT). This is an hour behind us here in Florida (Eastern Time / ET).
What does this all mean for you?We do not foresee an impact to any of our Day Trade to Win strategies or methods. John Paul indicates that he is unsure if there will be significantly tradeable volatility during the extending electronic trading hour. You may want to stay away from trading during this time at first. Going forward, it will be interesting to see how an expansion in trading time impacts the markets.
I look forward to summer every year. June, July and August bring sun, fun, bikinis, and oh, that’s right – let’s not forget slow moving markets! Every year, the same thing occurs. From January through May, the markets move normally as expected. The following three months of summer bring the slow inactivity every trader complains about. This uneventful market action is to be expected. This lack of movement is indicative of a method that I use on a daily basis – the ABC Pattern. If you haven’t yet watched the video on how to trade the ABC Pattern, now is a good time: Learn the ABC Pattern.
Nearly every trading day, the market starts off normal, slows down, and then speeds up towards the close. This same behavior applies to the trading year. The three parts of the year are historically predictable. With that said, now is the time to rev up your trading engines and prepare yourself for the action that will close out the year!
Starting in September, the trading volume is expected to pick up as the 4th quarter earnings come into play. This year is especially important because of the November presidential election. This coupled with the January Effect (my bullish prediction for 2012) will make the upcoming months worthy of watching.
Let’s look at the specifics…
Election year – markets usually rally.
January Effect – markets expected to close higher for the year
End of the year quarterly reports and holidays – markets again expected to rally
These three conditions point to the market moving higher, but timing is everything. Wait for the pullback. This is key, and just after making new highs in the past week, expect a little retracement. Be ready to buy the equities when they move back up to break the current highs. September could very well be a down month, and that is a good thing because when the buying does resume, the entries will be that much sweeter.
I always have expectations. Pay attention to the ATR (Average True Range). In any time frame and any market, this will be the leading indicator to guide your profits, stops and epxectations. Watch for the “Yo-Yo Bars” on both the log and short sides for hints that the market is having a difficult time following through. These are some key basics I teach my Mentorship students as well as students of the Power Price Action DVD Course.
The chart below shows the price action of the weekly candles yo-yoing just prior to the drop. The term “Yo-Yo Bars” is one I’ve used for years to describe the repeated attempts and failures of a price bar to fully form on its way towards a goal. When multiple instances of this action occur, play close attention. The chart below depicts this exact scenario playing out. Now that the market is at new highs, or at least testing the current highs, a good sign to watch for would be these Yo-Yo Bars once again proving that price is trying and failing to move higher. Whether or not this will happen again I cannot say. However, once three, four or five candles begin to demonstrate the Yo-Yo Effect, you can expect a pullback to occur. These are visiual signs that I like to use as proof to show me where price may be headed. Regardless of the type of chart used (one minute, weekly, etc.), this action works the same way. If the pullback occurs (let’s wait for it to happen), the buying opportunity will present itself to close out the year. Stay tuned!
Before we take these courses off the shelf, take advantage of this limited time offer…
At the Open (ATO)
• Spot high probability E-Mini S&P entry and exit points
• Includes a live training session
• One to two trades per day – BE DONE BY NOON
• Take advantage of momentum within seconds
• Includes course PDF and automated software
• Includes lifetime software upgrades and email support
• Countertrend scalping for E-Mini S&P traders
• Includes a live training session
• Learn how to capture up to 4 or more trades daily
• Quickly identify setups using 250 tick charts
• Includes course PDF and Scalp Level software
• Includes lifetime email support
• Includes The Trade Scalper and Price Action Scalping
• Includes bonus Floor Trader Secrets Manual Course
• Includes 2 live training sessions
• Combine trend and countertrend scalping methods
• Identify and take advantage of scalp setups quickly
• Includes course PDFs and scalping software
• Includes lifetime email support
Within the last week, you may have noticed a new look throughout the website. After a couple months of planning and design, the new Day Trade to Win website is much improved. With a focus on content and the success of our students / clients, we’ve revamped nearly every page.
A few pointers for navigating the new site:
• Learn 3 exact trading methods by visiting the Videos page. You’ll be asked to provide your email address after a few minutes to continue watching. Don’t worry – this goes away immediately and you can watch all the videos you want.
• The FAQ page is now a great educational resource. This frequently updated page acts as a trading glossary (Day Trading 101 – The Basics) and an instructional source (Day Trading 102 – How-To Guides). For example, you can learn basic trading terminology John Paul uses in his videos and how to perform essential trading tasks like contract rollover, using Market Replay, etc. Remember to click the See More buttons for easier navigation.
• The Recent Trades (results) page is now a bit more consolidated. With most of the changes on the back end, John Paul just needs a spare moment every week to update the trades.
• We’ll get to updating the Power Price Action trades soon, along with new videos for each of our products and redesign of this blog. These types of updates are very time consuming, so please bear with us.
• You can now sign up to attend a Private Mentorship lesson right on the Private Mentorship page. John Paul will teach you one exact trading method from the Private Mentorship Program. It’s entirely separate from any other method you’ve seen from us.
• Keep checking back as we’re always adding new content – especially videos.
As always, if you have any comments / recommendations for the site, we’d love to hear them – leave a comment below.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
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