Soon after the short trade John Paul recorded earlier in the day, the Atlas Line produced a Long trade as seen in the video above. John Paul caught the price action right before it caused the Atlas Line to generate the Long signal. You can see how John Paul knew a Long trade was likely to occur – a second bar was about to close above the Atlas Line. Remember, two consecutive closing bars either above or below the plotted Atlas Line will generated a Long or Short signal. Seen here, a long signal was generated at 1926.25. If you take a look at the green ATR value on the bottom of the chart, you can see the current ATR value at 2.3. This indicates the profit target should be rounded to 2, or 1928.25. What happens if the trade goes against you? This is why we have specific stop losses in mind. A catastrophic stop is the largest of the stops John Paul uses. In most cases, if the profit target is not hit, the time-based or prove-it stop will be hit first. You can learn about all of these stops, profit targets, and signals by purchasing the Atlas Line and attending the included live training session with John Paul. Click the blue link above to find out more.
Click here to find out more about the courses mentioned in the presentation.
John Paul conducted a presentation for NinjaTrader, in which he covered his price action approach to the markets, what to expect in 2014, and how to improve your results.
Some of the topics discussed:
• Best time of the day to trade – why the first 2.5 hours are usually the best
• Why manipulation occurs – handling overbought or oversold markets and “testing” previous prices
• Why your trading methods should work with trending and non-trending days
• Why you should be using the ATR and what it can tell you about the market
• Where you should go to find about news events that can impact the markets
• How to plan for trending or whipsaw days on the E-mini S&P 500
• A peak at the Trade Scalper software for NinjaTrader (you fully learn this method in the Trade Scalper course, so the software is not required)
• Where John Paul expects the market to reach later this year
Using 10 contracts, John Paul traded with a result of over $2,000. This was accomplished using the Atlas Line software and the Trade Scalper strategy. These methods can be purchased separately or can be acquired through enrollment in the Mentorship Program.
For the E-mini S&P, the Atlas Line provides an entry signal around 10 a.m. US/Eastern. However, March 11, 2014 was an exception. Price danced around the Atlas Line around this time without having two consecutive closing signals above or below (which would normally generate an entry). The entry signal fired off at the close of the 10:15 a.m. candle, suggesting a Long entry of 1875. This means John Paul needed to buy the market at that price. He entered with a limit order which told the market he wanted to get in at the specified price. Price rose upwards for a while and then dropped again, tagging the entry price and filling the order. Now that he was in a trade, it was a matter of waiting and managing the the trade. You might notice NinjaTrader’s Chart Trader was not turned on right away, but you can see the profit target indicated by the green bar in the DOM window.
The second trade, over an hour later in the day, told John Paul to go short at 1874.50. Three ticks was the profit target. Although he could have gone for six ticks, he already made some profit for the day and decided on a more conservative approach. This one was filled much more quickly.
Stay tuned for the upcoming Trade Scalper videos were you can see the remaining two trades!
Today, the Atlas Line produced a Long signal at 1857.75 as seen on the chart. The doorbell sound was heard, as the Atlas Line can be configured to play sound file for the main Long and Short signals. John Paul’s Limit order was filled at the desired price. His catastrophic stop was at 1853.75, four points below the entry. In most cases, the catastrophic stop is not hit; it’s just there as a safety net. From this point, John Paul manages the trade by tightening the profit target slightly to 1859.50 (1.75 points of profit, if hit). Right away, price approached his profit target. Price danced around, retracing values it reached previously. As he says, markets love to retreat back to tested waters regularly. Within 10 minutes, price broke through the profit target, earning the 1.75 points (or $87.50 profit with one contract, $1050 with 12 contracts as seen here). Remember, the ES is worth $12.50 per tick and there are four ticks per point. 1.75 / .25 = 7 ticks x $12.5 = $87.5 (1 contract) or x 12 = $1050 (12 contracts).
Remember, you can get these same exact Long and Short entries on your charts everyday. Click the link above to find out more about the Atlas Line.
Click the image for a larger chart
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Today’s E-mini at 9:30 a.m. EST was priced at 1811.75. It ended the day at 1780.25. It was a big down day. This opportunity allows us to show you multiple Strength and Pullback Trades when price is severely trending. The Atlas Line was correct in deciding the market would be going short, as it advised sticking to the short side. You can see our recent trades on this page that show the Atlas Line strategy in action from 9:30 a.m. to noon, EST.
After purchase, we email you the Atlas Line software and instructions. We also provide you with a training video ahead of time to teach you how to use the Atlas Line. We also invite you to the next live training session, where John Paul shows you and a handful of other new Atlas Line users how to use the software. We also provide you with a recording of the live training session. Free support is provided for the duration of your license. Click here to go to the Atlas Line purchase page.
In case you weren’t able to make it to the webinar earlier today, here is the recording. Consecutive days, multiple markets, live audience – it’s all here! Check out the performance on the YM, ES, 6E, and ZB. In case you don’t yet know, the Atlas Line is software that plugs into your trading platform (either NinjaTrader, TradeStation, or eSignal). It then plots a line at a specific time and angle every day. Depending on how price moves in relation to the line, order signals are generated. The order signals tell you when and how to enter the market (either Long or Short). It’s quite simple to use and it comes with live training.
Reminder – Monday, January 13, a new session of Group Mentorship starts. Click here to read everything about Mentorship. Yes, the Atlas Line is included with Mentorship, as are all of our other courses and software.
The first part of this live webinar recording explains how to use the Atlas Line to evaluate whether a trade is still viable after big market spikes. By checking if the current plotting Atlas Line position is more than double the ATR, a trader can determine if the market is “exhausted” and not worth trading. If the value is less, the trade is still viable. The Atlas Line’s entry, profit target and stop loss can then be placed according to the rules. At around 7:00 in, John Paul explains what the ATR is and how to configure it. At about 13:00 in, John Paul discusses trade management from the last few days. Again, the profit and stop loss values are taught to you in the live training. However, John Paul goes over them briefly in this video at the 15:00 mark. Fast forward to the 28:00 mark to see a review of this year’s January Effect trading opportunities. The January Effect is sort of a retracement breakout strategy, where there’s an expectation for the market to rise overall for 2013. Each time a previous high value is reached via retracement using a Daily chart, there seems to be consistency with price then rising. According to John Paul, this makes for many good Long (bullish) entries.
John Paul shows how the short entry signal is displayed for the Atlas Line. In this case, we are waiting for two closing candles below the dashed pink line (Atlas Line). When the second candle closes, red text appears indicating to the trader that it’s time to sell the market (a short trade). You can see how we’re waiting for price to trigger our entry. This is essential what price action trading is all about. Using a price action strategy, you can determine when to enter, and what your profit target and stop loss should be. The entry, profit target, and stop loss are the three primary positions you have to consider for each trade. As with any trading method, price action does have losing trades. The long trade earlier on June 17, 2013 resulted in a small loss or break-even trade. It’s important to consider broker fees and periods of time greater than 30 days when gauging the success of a trading system.
The trade in this video occurred in the afternoon. Typically, John Paul only trades the US/Eastern morning period, from 9:30 a.m. to noon. The Atlas Line can provide evening trades as well for the Globex market. For trading futures currencies like the 6E (Euro FX), you can set the Atlas Line to work with the 3:00 a.m. US/eastern equivalent of the European market open.
After you enter a trade, you are waiting until your profit target or stop loss gets hit. If the profit target is not hit, you have to get out at either a smaller profit, break even, or loss. At 2:56 in the video, John Paul explains a few of the stop strategies. He advises taking whatever stop loss comes first. The profit targets are based on the Average True Range (ATR) with a value of four. By rounding the current ATR value down, you can determine what the profit target should be. This allows you to keep your profit expectations a reasonable distance from the entry.
At about 5:30 into the video, you can see John Paul enter a live trade in front of the attendees. The Atlas Line said to go long at 10:00 a.m. Using his live account, he bought the market at 1630.50. The ATR was at 3.48, so John Paul’s profit target was three points (by rounding down). His stop loss was five points (also based on real-time market conditions). You can see how he drags the profit target and stop loss around on the NinjaTrader DOM window. You can also do this on the chart using the Chart Trader feature. The green profit target and stop loss lines get automatically placed on the chart because of the ATM Strategy John Paul has in place. The ATM strategy did not fit the real-time market conditions, so he had to re-position them. By 11:00 into the video, the trade is over with John Paul making 3 points of profit. Even if you were trading one contract, that’s a profit of $150 without broker fees. John Paul was trading 10 contracts, so the trade was worth $1500.
Here are some of the answered questions and statements asked by attendees:
Mike: Would you have a short sitting below that price for a break out to take you in the market?
TA: are your decisions only n 5 min charts?
Mike: Your profit target is the previous highs. Would you adjust the targets or leave them no matter what?
Frank: can you please explain the entry process?
Mike: If there was news at 10:00 would you wait until after the news?
Tom: are your posted results taken from the room?
tony: new to this ..so what is your profit so far
Dean: Do you recommend starting out on the 5 minute chart?
Will: you get another Atlas line today, or will you use this one all day?
NJ: How far away from ATR would you enter as your prove-it-stop may be too big?
Dean: How does the Atlas line handle ranging markets?
Dean: Very stringent rules based trading. I like. Instills discipline win or lose.
Some of the attendees were John Paul’s Mentorship students. Here’s what they had to say:
Najam: i took the trae 4 contracts
Guess: i took it with 5 contracts
Chris 2: Been using your ATO successfully for last 2+ years. Thanks
Chris 2:You are one of the MOST Honest Trading Instructors I’ve encountered and it works!!!
dick: To all who are contemplating signing up for J Pauls mentorship I would encourage you to enroll. I’m 75 yrs young and this is the best systems I had experienced.
On June 3, 2013, the Atlas Line produced a Short signal around 11:00 a.m. Note that the actual text for the Atlas Line always plots a few bars back from the actual entry. So the price and time for the entry is really 1626 because you enter when there are two candles closing above or below the Atlas Line. John Paul draws an arrow showing the point of entry at about 28 seconds into the video. See the Long signal at 1632 as a comparison. Yes, the Atlas Line gives you exact entries so you know when to “buy the market.” This portion of calculating the entries is automated. You have to manually position the profit target and stop loss according to the rules John Paul teaches you during the client-only training.
While buying the market at the entry price (aka placing the order), you’ll notice the ATR (Average True Range) value can be rounded to 3.25. This 3.25 is our profit target – 3.25 points – the amount we’re hoping to profit from on this trade. We know exactly how much to go for based on what the current market conditions can produce. We use an ATR with a period value of four for this calculation. The E-mini has been more volatile as of late, allowing for bigger moves. It’s a nice change considering the relatively slow conditions of previous months.
If you do the math, 1 tick on the ES is worth $12.50 USD. Four points are in a tick. On the ES, a profit of 3.25 points is $162.50 while trading one contract. If you trade two contracts, that’s $325.00 on this one trade, excluding the broker round-turn fee, which would probably be around $9.00 for two contracts. Not bad! And according to John Paul, the previous trade in the video would have also been a winner.