John Paul shares two E-mini S&P charts – on the left, the Atlas Line is being used with a 5-min chart. On the right, the Trade Scalper uses a 1-min chart. By seeing these two charts traded in real-time, you can get a sense of how both can really improve your trading.
In this instance, the Atlas Line provides the signal first at 1957.5. He has enough time to increase the order quantity before placing the short trade. Often times, John Paul will increase the number of contracts he trades under slower conditions to make up for a smaller profit target. A few different stop loss strategies are used – if the market turns around and goes against the trade, a prove-it stop will cancel out the trade. Likewise, the catastrophic stop will put an end to a much larger move. As always, the profit target is determined by the ATR. All of the profit target and stop loss strategies are covered in the included live training. For this Atlas Line trade, volatility is high and right at the edge where any higher, you should probably stay out. The doorbell sound is the Trade Scalper shooting off signals. It’s important to avoid trading at the same time in the same account with both the Atlas Line and Trade Scalper – do one or the other, or combine the methods where the Atlas Line can tell you the direction for the scalp trades. The profit target is around four points – don’t go beyond the ATR.
John Paul configures his 1-min Trade Scalper chart so you can get a better idea of how the Atlas Line can be used to obtain a price direction. A short scalping trade at a loss would not put John Paul in the negative for the day because of the previous Atlas Line win. No more than six ticks will be risked. Again, you have to adapt to real-time conditions when it comes to the market. Scalping is based on looking for fast and small market movements. If the Atlas Line says to look for short trades by producing a short signal, you can look for short Trade Scalper trades, either using the Trade Scalper signals or by your full understanding of the method. During the live training, John Paul explains the Trade Scalper method completely as well as how to use the included indicator software for NinjaTrader. Like the Atlas Line, You can use the Trade Scalper with many different markets. John Paul wins three ticks of profit with scalping in just a couple of minutes.
At the end of the video, he shows his total profit for both of the trades. He also reviews previous Trade Scalper trades earlier in the morning.
As a reminder, the next eight week Group Mentorship Program begins Jan. 11 2015. An Atlas Line lifetime license is included as well as the Trade Scalper. Classes are twice a week: Mondays and Wednesdays from 3 p.m. to 4 p.m. EST (New York Time). You will be coached live by John Paul on all of our trading action trading methods (about 10 total). All courses and software are included with lifetime licenses. Space is limited, so register early and get the first week’s ATO course and software ahead of time. Click here for information.
We often get asked for the official E-mini S&P 500 (ES) trading hours. The CME Group website has all the hours listed for the various E-mini markets as well as other equities, energies, commodities, and interest rate markets. Click here for the full table or click the image below to see the full list.
Highlighted is the regular E-mini S&P 500 market that we trade. Note the time shown are US/Central (currently UTC-5), so that is why 8:30 a.m. open outcry is listed instead of the US/Eastern (UTC-4) equivalent of 9:30 a.m. Therefore, if you want U.S. East Coast time, add an hour to all times shown.
Click the image to see the CME’s full list of trading hours
We find it best to trade during hours of consistent volatility. This means we start looking for trades at the open outcry time (market open), even though the market is open nearly 24 hours. On weekdays, the E-mini S&P 500 is available from 6:00 p.m. EDT the previous day until 5:15 p.m. EDT the current day with a trading halt from 4:15 p.m. to 4:30 p.m. EDT. Click here for contract specifics.
The E-mini S&P 500 (ES) trades on the CME Group’s Globex exchange. CME Globex is the electronic market that trades nearly 24/7. At one point in time, open outcry floor trading, where the traders yell orders on behalf of clients in the “pit”, was the dominant form of trading. Now, anyone with a computer, the proper software, and a funded account can engage the markets. Traditional open outcry hours of trading still align with market volatility. Many of our trading methods focus on capitalizing on this volatility that occurs during open outcry hours. This is why having an understanding of pit trading is important.
Why do people still want to trade in the pit? Because of better liquidity compared to electronic trading. Executing a combination of trades and spread strategies is easier in an open outcry environment. For example, a broker can easily buy 25k in options in one day at the same price. If this was accomplished on a screen, you would likely end up moving the market as you buy.
In the CME pit, there are usually up to 200 present on a given day. While it may seem hectic, checks and balances, etiquette and rules are practiced. In some ways, the rules of pit trading are more restrictive than electronic trading.
There are two types of people in the pit: brokers and “locals” (also called market makers). Brokers represent customers who want to place trades. Locals try to make a small percentage of profit or “edge” off of each trade as frequently as possible.
Here’s an example of how the order process works:
1. A broker gets a call from a customer to get a quote.
2. The broker yells and uses a hand signal asking for the quote.
3. The locals yell back and mention two prices: what they are willing to pay for the quoted item (bid) and what they are willing to sell the item for (their offer).
4. The broker tells his customer on the phone what the locals are offering.
5. The customer decides what to buy or sell and tells the broker.
6. The broker yells out the customer’s order to the crowd and uses a hand signal.
7. Depending on order acceptance, the locals will either hold their bid, offer a different bid, or a local will yell “sold”.
8. The broker will confirm the order with the locals after handing out or dividing up the contracts. Once confirmed, he will tell the customer the details of the order.
9. Once all orders are confirmed, the orders are written down and handed to the broker’s clerk. The broker quotes the trade to the market reporters who release the information to the world. The trade is displayed on the board, allowing for additional confirmation. The clerk then confirms with other clerks the details of the trade.
10. The broker waits for his phone to ring again with another order.
Depending on the broker, customers can allow the broker to execute the order at the broker’s discretion (best price or “feel” of the market). In other cases, the customer has an exact price in mind. As a broker, the objective is to be as fair as possible to your customer, the other brokers, and the locals. A positive reputation is extremely valuable in the pit, as this helps in getting your orders recognized.
If you trade the E-mini S&P 500 Futures, remember that you will need to roll over to the next contract period (December, 2013) by September 20, 2013. On September 20, 2013, the current contract period expires. Note that it is possible to switch over earlier – you can visit the CME’s website and compare the volumes of the two contract periods (Sep 2013 and Dec 2013). When Dec 2013 volume is greater than the Sep 2013 volume, you can switch. At the moment this is written, the December volume is only 11% of the September volume, so it is much too early. You can always find the contract expiration date for any future by visiting the CME Group website, searching for the future, and clicking on the Product Calendar for the selected future (also called a product, market, or instrument). For example, the December 2013 contract will expire on Dec. 20, 2013.
How to Trade the New Contract Period in NinjaTrader
1. Go to NinjaTrader’s Control Center > File > New Chart
2. In the Data Series window that appears, type in the instrument symbol and the desired contract month, ex. “ES 12-13”
3. Click the New button below, configure your chart settings as desired in the right panel, and then click OK
4. The chart with the new contract period is now displayed. To keep the new chart persistent through NinjaTrader restarts, save your workspace via NinjaTrader’s Control Panel or opt to save your workspace when you close NinjaTrader.
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!
Here’s a live trading video on the ES (E-Mini) for May 21, 2012. John Paul enters the market long at 1310.75 according to the Atlas Line software’s advice – a Strength signal. His profit target is 1 point (4 ticks), as determined by the ATR (Average True Range). In the included live training, you are taught how to manually calculate the Strength and Pullback trades. The automatic signals in this new Atlas Line version make identification even easier. Training also covers software configuration, working out stop losses, and everything else you can think of.
John Paul’s demanding teaching schedule prevented him for taking all of the excellent Atlas Line trades. The original Dbl Bar Long signal at 1299 was good for three points. Six other Strength and Pullback opportunities occurred, resulting in a profitable day for Atlas Line users.
Ever miss a trade due to contemplation or a busy schedule? John was conducting a webinar at Tradersworld and missed a Short opportunity on the ES as indicated by the Atlas Line software. While he waits for another trade to set up, he reviews ES activity for the two prior days. Again, many excellent setups were identified, as the Atlas Line is used by traders the world over for confirming entries on a daily basis. At about 4:30 into the video, John enters a live Pullback trade going Short with a profit target of 1.25 points. Profit is reached. The video concludes with a live Strength trade earning another point of profit. Again, if you had taken the original Short when advised and the additional Strength and Pullbacks, you would have had a nice profit. The automated Atlas Line software is entirely based on price action. Being a consistent day trader is easy when using reliable tools.
Today, the U.S. House of Representatives passed a bill, the STOCK (Stop Trading on Congressional Knowledge) Act, to curb Congressional insider trading. Vote results indicate 417 Congress members in favor of the bill and two in opposition. This House version differs from that of the Senate, which includes provisions for financial data collectors to disclose their activities like lobbyists. Regarding the differences between both bills, critics claim the House version has “caved in to investment firms” with its exclusion of said provisions.
A political intelligence industry exists to monitor and sell data based on the financial activity of government officials. House Representatives have expressed concern that this “watered-down” version of the bill does not regulate the communication or financial exchanges between these industry members and government officials. Wall Street lobbyists have been accused of leading the “watering.” Nevertheless, both House Democrats and Republicans overwhelmingly support the bill, including the President’s stated endorsement.
The creation of the STOCK Act may have been the result of the CBS “60 Minutes” investigation that implicated that lawmakers enriched themselves based on information obtained through their official duties. Even without the bill being passed, members of Congress are by no means above the law when it comes to insider trading. Members of Congress face the same penalties as regular investors who attempt insider trading. For the last seven years, there have been no recent insider trading charges brought to Congressional delegates.
What do you think?
• Are you in favor of the legislation banning insider trading?
• If so, what should the penalty be for insider trading?
• If not, do you think government officials’ investments should be kept entirely private?
• If the investments of Congress members become free public information, how can an industry that sells this data exist? Does this imply a relationship of “shadiness” between these data miners and government officials?
John Paul once again proves that successful day trading can be easy. The video starts with showing you how to take advantage of the large bullish news event candle at around 8:30 a.m. US/Eastern. A common mistake is made when trying to interpret the news as either positive or negative, then entering based on your judgement. John shows a specific technique where the market can be used to provide direction AFTER the big move, when price movement becomes easier to predict. To keep track of news events, visit the Bloomberg Economic Calendar and note the red star announcements.
Another technique John discuss is the Yo-Yo effect. Based on buyer / seller exchange principles, this effect occurs when price bounces back and forth in a choppy succession. If you’re looking to enter a trade, this forecasting method will help you avoid problematic conditions. Start watching from around the 26 minute mark if you’re interested.
The final topic John touches on is market predictions for 2012. By the end of the year, John expects indices to climb to levels higher than those reached in January 2012. The pattern used for this prediction can be back-tested many years with a high degree of accuracy, as it’s used by professional market analysts.
As a trader, you are faced with choices every day. Each choice affects your bottom line. Be sure &ndash absolutely sure you know the ‘why’ and ‘when’ before entering each trade. If you are not trading objectively using price action, then you are missing the clear picture.
Attend this informative webinar to see how using price action can provide answers:
• What instruments offer the best bang for the buck?
• What times of the day are best to trade and why?
• Trade management / stop strategies / profit targets
• Configuring your charts (time frames, ticks, data, etc.)
• Day trading methods you can use to maximize profits
• Trading the E-Mini (ES), Euro Currency (6E) and your picks
At Day Trade to Win, we let price tell us how it wants to be traded. We don’t use indicators or outdated information. We trade based on price in real-time. Watch how we trade price action by attending this free webinar. Make 2012 the year you changed your trading for the better!
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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