I (John Paul) may not have a crystal ball, but I have a prediction of where 2012 will end up. How can I be so sure? Although you may follow my real-tme price action methods of day trading, know that historical analysis has played a major role in my trading career. Most traders are unaware of one strategy in particular that relates to the month of January. Going back in history, you can verify that the first month of the year is an accurate predictor of how the year will end (up or down) in the E-Mini and related indices. As an example, the last day of trading in January 2012 closed higher as compared to the opening price on January 3, 2012. This gives us a strong indication that 2012 will end higher (in December) as a bullish year because of January’s activity.
How can you take advantage of this? You can buy the December contract right now. You can buy options far into the future. You can even buy the cash market and sit on it. Analysts use this method every year as part of their strategies.
Another forecasting method that most traders are unaware of is that every year ending in a 5 is a bullish year for financials. You can verify this by going back in history to the early 1900s. Without fail, a bullish year occurs when the last digit ends in with a 5. Without requiring advanced mathematics, the next year this is expected to occur is 2015.
Conclusion – the year 2012 is expected to end bullish as compared to its opening price in indices. The year 2015 is expected to be bullish.
Trading index futures, such as the E-Mini S&P 500 (ES), offers more bang for the buck as compared to trading stocks. Traders who can successfully make two to four ES points consistently can eventually increase the amount of traded contracts. In addition, futures commission charges are generally much lower than stocks, with current round-turn costs averaging just above $4.00 plus exchange fees. Perhaps the most significant difference between stocks and futures is accessibility. Day trading stocks requires a $25,000 account minimum. E-mini trading accounts can be established for as little as $2,000. However, $5,000 is the industry standard. Also, the leverage ratio in futures allows for quicker profits. Waiting for a stock to move one dollar compared to a few ticks in futures will likely take longer. The leverage structure of futures contracts, compared to stock shares, allows traders to quickly exploit price fluctuations.
Additionally, traders who live outside the U.S. or Europe may have limited access to stock indices as compared to index futures. For example futures equivalents exist for indices like the Dow Jones, FTSE futures and large S&P. Another factor facing international traders is time – stock trading is limited to just 7.5 hours a day in the U.S. compared to futures, which is almost 24 hours a day.
Stock trading can be more stressful than futures trading. Waking up early to keep track of multiple charts, screens, news events, alerts and related indices can be time consuming and tedious. Who wants to spent hours performing research and technical analysis to find the best performing stocks? Everyone has a differing opinion and research can lead to multiple conclusions. Successful futures trading, using only one clean chart, can lead to the same income in much less time without the extensive research. Also, traders can count on the liquidity of the E-Mini being more consistent than a stock, which may have a strong, sudden movement due to a press release (company released report) followed by long periods of stagnation. Many E-Mini traders will simply keep an eye out for scheduled news events and stay out until the spike in activity has subsided. Also, when a news event comes out, the E-Mini’s price moves much less compared to a stock equivalent.
As a way to avoid sudden and substantial loss, futures trading implements stop loss orders. These orders serve as safety nets when markets turn around unexpectedly, contrary to the desired direction. Some stock brokers allow stop losses, however, the implementation may rely on human involvement instead of mechanical placement. Market orders for electronic futures traders are regarded as seemingly instantaneous. Futures exchanges guarantee the execution of each trade. The same cannot be said for trading stocks.
When trading futures, there is just as much potential to benefit from bearish price movement. Futures trading allows traders to buy or sell (bear or bull market), whereas trading shares is subject to the up-tick rule (a stock has to move up one tick before it can be shorted). Short positions are always available to futures traders.
You may have noticed some new pages, products and minor tweaks here and there while navigating Day Trade To Win:
Results Page – see how well the Atlas Line and Power Price Action method have been been performing on the E-Mini, Euro and other markets. We will update this page every couple of days, so be sure to check back. All of the trades are real and verifiable. The Atlas Line page has some Power Price Action Trades, but it should be accurate in containing only Atlas Line trades for the month of April, anyway.
Courses Page – entirely revamped, you can now see all of our products on one clean page. Click the boxes at the top and you’ll be brought to the course. All of the product details are listed. If you need help in deciding, you can always contact us by phone or email.
Private Mentorship Page – streamlined and restructured. Be sure to check out our new video testimonials and what’s included in the eight weeks of live training.
New Power Price Action DVD Course
This has probably been keeping us busy the most – a complete 4 DVD package with eight weeks of live training and a color training workbook that shows you a highly profitable setup that’s compatible with Futures, Forex and Currencies. It’s called Power Price Action and it’s suitable for traders of all levels. Very few traders know about this setup. There are a bunch of other highly profitable techniques taught in the course as well.
Use this coupon code to purchase the Power Price Action course at 10% off: 10OFFDTTW
Buy here: www.powerpriceaction.com
Need your Atlas Line, ATO or scalping software
updated for NinjaTrader 7?
Send an e-mail to [email protected] that includes your customer ID and we’ll send you a compatible update. Try to send the e-mail from the same e-mail used to purchase the product.
For those who missed last night’s Power Price Action webinar, here is the video recording:
In this hour-long presentation, John Paul discusses the following:
- Indicators vs. Price Action – what is better?
- Recent market activity / erratic behavior
- Trading high volatility and low volatility markets
- Typical trading behavior – where most traders go wrong
- Trading high volatility and low volatility markets
- Front running trades
- Trading the news
…plus yesterday’s list of topics and much more…
And if you watch the video long enough, you may just come across a 10% off coupon code for the Power Price Action course.
With all of the recent Atlas Line posts, we’ve neglected to show you how well the ATO (At The Open Method) as been performing. Even though the ATO and Atlas Line combo sale was over on Sunday, special arrangements can be made by contacting [email protected] Those of you who purchased the ATO along with the Atlas Line are seeing a perfect example today of how the two price action methods can confirm one another. We encourage traders who use the ATO to use a secondary confirmation tool like the Atlas Line.
These recent NinjaTrader charts show how just the ATO and Atlas Line can be used to grab a couple of points before noon.
E-Mini S&P – ATO – March 7, 2011
E-Mini S&P – ATO – March 8, 2011
Crude Oil – Atlas Line – March 8, 2011
The Atlas Line continues to identify trade setups for big market moves and scalping opportunities in advance, unlike common day trading indicators. Look at the charts below to see the differences in Atlas Line trading between the E-Mini S&P, Crude Oil and Euro markets.
Crude Oil – February 22, 2011
Euro – February 22, 2011
E-Mini S&P – February 22, 2011
Periodically, I like to help customers with things that are outside the price action methods I teach. This week I’d like to discuss commissions and execution. Even though we can’t control market direction or volatility, there are certain aspects of trading we can control.
The first of these is commission. In today’s environment, we consumers have the luxury to be more selective in whom we choose to do business with (brokers). The next variable is the choice of trading platform; and considering today’s technological advances, there is an ever-increasing amount of choices. The next variable is cost. Keep in mind that most expensive or cheapest option is not necessarily the best. Consider your individual needs – are you a day-trader, swing trader, do you need charts or just data? Determine what’s best for you, and by all means, don’t be cheap. The long-term costs of “inexpensive” brokers, trading software, etc. is usually much more expensive in the long-run, beyond the hidden costs.
Firstly, you have to be wary of guys advertising .49 cents or .99 cents per execution. Obviously, they’re forgetting to mention the additional cost of clearing and execution fees. The last (but by no means least) variable to consider is execution. Here we have two factors to consider
In terms of execution, the perfect trading software does not exist. Glitches do occur. Some platforms are more stable than others. Data feeds are equally as important. Besides the trading platform itself, we need an accurate and stable data feed: one that does not “go down”, is FAST and without delay. Believe it or not, there are some data feeds that are delayed and that is why at times traders experience high slippage on their trades. We as traders can’t afford instability and delayed data because this will “eat” into our profits.
I recently switched completely to the Rithmic Data Feed, for use with NinjaTrader. I’ve found that Rithmic is an institutional type data feed with VERY low latency. It exactly mirrors the market, quotes exactly and delivers bids/offers/trades in milliseconds. Rithmic has its own data center where they host their equipment right on the server on their exchange. They use high-end equipment to ensure stability. My connection rarely goes down and the data feed is superior to anything that I have ever used in the past.
My recommend brokerage firm is Optimus Futures (http://www.optimusfutures.com). Optimus recommended that I switch feeds and go with Rithmic; a suggestion I can’t thank them enough for making. Matthew, my boker, gives me $4.00RT / all fees included and does not impose any quota minimums when it comes to trading. I highly suggest using his services. When it comes to brokers, I try to stay as objective as possible. However, I’ve found the combination of Rithmic’s low-latency service combined with Matt’s excellent services to be the best broker / feed combination.
As an experienced trader, I’ve been around enough to know the difference a fast data feed and a professional broker can make.
Here is Matt’s contact information:
Optimus Phone #, toll-free: 800-771-6748
Optimus Phone #, (local – Boca Raton, FL, USA): 561-367-8686
Matt can also be reached directly at [email protected] if you have any questions.
Below, find 50 minutes of helpful price action trading advice from John Paul as presented in a new NinjaTrader webinar. The Atlas Line™ is an innovate technique for scalping, day trading and trend following using an algebraic trend line approach. Using the Atlas Line™ short and long entry signals, traders know when and how to take trades in advance.
Download the full video here: [smartcounter:3]
A couple of points regarding price action trading:
- Everything you ever need is being played out as you see it on the chart.
- Have a blueprint / strategic plan to execute the trades is essential. Don’t trade without having one.
- Trading price action is how professional traders do it. Nothing else matters.
Quit picking the tops and bottoms of price and let the Atlas Line™ tell you what they really are!
Find out more.
On June 26, 2010, John Paul will be teaching his exclusive trading methods and strategies in a workshop for day traders of all experience levels. You can register for the educational day trading seminar that will be held on Fort Lauderdale, Florida.