On March 18, 2013 the market gapped down overnight due to news in the country of Cypress. Take a look at the E-mini S&P at around midnight, US/Eastern and you’ll see the gap. The news was that the Cypress government is assuming control of its citizens’ financial assets. As one might expect, this created a large, downward move. The bias created was to sell the market. Even though your bias may be to sell the market, it’s still important to take a look at what the price action is saying to us. From midnight onward, price instead made a steady climb to around 1539 at 9:30 a.m. US/Eastern in the E-mini S&P.
The Dbl Bar Long signal was generated at the close of the red candle (1542.75) at 9:55 a.m. US/Eastern. The rest of the day until around 2:30 p.m. This goes to show you that listening to news to get a direction is not always a good strategy. When price intersected the Atlas Line and had two closes below it, a Dbl Bar Short signal was generated at 1545.5. The ATR allowed for a profit of 1.5 to 1.75 with this second trade. At about four minutes into the video, John Paul shows the Euro which had a very strong rally right after the Atlas Line’s long signal. Price action is best tool for helping you decide where the market is headed; especially in conjunction with the Atlas Line.
Babak took part in our Mentorship Program in August, 2012. Before he was an income trader, Babak was a teacher and network engineer for over 20 years. An unsteady career led him to create his own business as a professional trader. As a professional trader, he first began buying and selling stocks. For three years, he day traded stocks but found the results to be inconsistent; nothing he could count on as an income. Through research, he realized trading futures was more cost effective than trading stocks. On other day trading websites, he participated in classes and seminars that focused on watching indicators and broad market conditions as a gauging factor on his trades. However, these strategies did not provide him with enough confidence. He found his timing to enter and exit to be way off due to following lagging indicators.
By finding Day Trade to Win’s price action methods, Babak became successful. He was able to pinpoint entry and exit strategies and stay on the “green side” for a change. He realized indicators are always lagging to interpret the current condition of the market.
“The funny thing is John’s method is so simple to follow. Having live webinar sessions recorded make it so easy to go back and reinforce the lessons. I can still access the recorded sessions that I attended and review them as many times as I need. They’re still there. After eight weeks of Mentorship Training and practicing with paper money, I became consistent with the number of my winning trades as opposed to the losing trades. I know every morning how to set up my charts, what to look for, and most importantly, how to keep emotion out of every trade I make. To me, that is a blessing and the empowerment I got from John Paul and Day Trade to Win.”
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.
We asked one of our students, Craig F., if we could interview him about his experiences before and after the Group Mentorship Program in which he participated. Enjoy!
It’s been a while since you were last in the room. How has your trading been?
Looking back on the last few months since the program, I’ve been at an 82% accuracy rate. This is the number of profitable trades versus the number of losing trades on an average monthly basis over four months. I am trading more consistently than I ever have before. This figure covers my time learning to use the methods on real markets, so it’s possible that it may go up as I iron things out. Yeah, taking part in your program was the best decision I’ve made in terms of trading. I’ve added a couple contracts too.
Was the Mentorship Program what you expected?
The video recordings you provided of each training session were immensely helpful for reviewing later. No one else does this. I liked that we looked at the day’s charts each time. Having the written version of the courses was also very helpful. After the program, I went back a few times to review the videos and written courses. But yes, the live format of the room and your instruction was great.
What originally held you back from joining the Mentorship Program?
One of the reasons why I postponed the move from automated systems to your coaching program was because of the idea of having to change software. I had seen that most of your videos used NinjaTrader. Even though I now use Ninja exclusively, my prior trading philosophy had centered around execution speed. I heard that NinjaTrader, at the minimum, had 100ms of delay built into its charts. Since I used automated systems on platforms where speed was never above 40ms, doubling the latency (I felt) was a surefire way to be left behind. Also, I didn’t want to learn new software if I didn’t really have to.
What do you think about execution speed now?
It’s still important, but you teach a way to read the candles and predict where price is headed. Since I am trading manually now, and with better success I might add, a few milliseconds in difference doesn’t really matter. The added ability to change broker accounts, clearly see price plot and other reasons more than make up for the difference.
Can you provide an example of how a typical trade works for you now?
Sure. I use about five of the methods taught in Mentorship on any given day. I always have an eye on the charts looking for one of these setups to occur. My favorite is the Roadmap Trade. Since this setup requires a good amount of candles to prove the pattern exists (and price is ready to go where we expect), I am very comfortable with it. My brain is on autopilot looking at these charts now. Yes, in any case, once I see the pattern, I know where to place my profit and stops for the Roadmap. The same is true for the other methods.
What would you like to say to other traders who are on the fence deciding whether to participate in Mentorship?
Do it. Now is a great time to start and you’ll thank yourself later. Automated systems have that curb appeal, but realistically, you have to have multiple strategies in mind to take action at any given moment. That’s what you teach and it isn’t exactly “turnkey” as another trader pointed out. With that said, with a bit of patience and practice, it’s possible to make a living day trading. I know because I’m doing it. It’s rewarding and fun to see price line up in your patterns time and time again and know exactly what to do.
Thanks for taking the time, Craig. Don’t hesitate to contact me if you have any questions about anything you learned!
Yes, will do. Thanks and take care!
A new session of Group Mentorship begins August 15, 2012. All courses and software are included and taught during the eight weeks of live training. Reserve your seat today!
Remember to watch in HD (720p) by clicking play then selecting 720p from the Gear Icon on the bottom. Watch fullscreen by clicking the button on the far right button on the bottom. Check out our other methods
John Paul hosted a presentation at DTI (Diversified Training Institute) / TradingPub. There were over 140 people in attendance. John went over the differences between trading based on indicators vs. trading based on an understanding of price. More importantly, he taught everyone the ABC Pattern. This exact method splits the day session into three segments. By recognizing the behavior and start times for each segment, you can identify when breakouts occur. Specific profit strategies are also mentioned. E-Mini charts dating back several months were used to demonstrate the consistency of the method. The half-hour presentation concluded with John showing the ABC on a live Euro (6E) chart. Remember, you can use the ABC method with any trading platform since it’s easy to calculate manually.
Tradersworld and NinjaTrader teamed up to provide a week full of educational webinars, from May 14 to 18. Over 45 of the best presenters in the industry were invited to speak. Topics ranged from trading tools, software, strategies and market direction as a whole.
Today, John Paul gave his presentation showing the strength of price action trading. Demonstrated using charts within the last few days, don’t miss the techniques! Learn the ABC Pattern, Trading the News method and how to tackle markets on a daily basis from a price action perspective. We always enjoy showing traders the difference between trading based on what you see in real-time vs. blindly following a laggy indicator system.
How many profit opportunities did you see today? The Atlas Line® tells you exactly how and when to enter by plotting either a Long or Short entry signal at the moment you should enter. You will know exactly when to buy or sell the market. Additional profit-taking setups are identified using the Strength and Pullback Trades, appearing after the initial Long or Short signal. These signals are very accurate and can be used as a standalone trading system or with your own strategies.
Yesterday, John took part in an educational webinar event hosted by DTI. The video above shows John’s presentation, where he covered the benefits of price action trading. He also discussed how most traders think, front running trades, essential tools and chart configurations, stop and entry placement, problems with using indicators, exact trading setups, and how to differ your trading style from the herd.
Two of the trading systems discussed in the video are the Atlas Line and Power Price Action. The Atlas Line is trading software that will tell you to enter long or short at a specific price (a very accurate signal). Power Price Action is a 4 DVD Course that teaches a handful of valuable trading methods, the crown jewel of these is the Blueprint Trade. Live training is included with purchase of both products (although Power Price Action includes 8 weeks of training).
What type of trader are you? I was asked this question recently and the first answer that came to mind was “I’m a setup trader.” Now this phrase may be confusing, but it really explains how I look at trading the markets. I teach traders how to identify specific setups in order to validate trades. If the setup validates, then we enter the market. Price has to prove itself in an exact pattern before we consider taking an exact trade with exact rules. How we proceed to manage the trade is equally important. At any given moment, I’m watching price as it plots to see if the pattern matches the rules of the Roadmap Trade, Blueprint Trade, Atlas Line, or any other of my price action trading methods. By having a how, when and why behind each trade, we’re much better off.
Those of you joining me for the next eight week Private Mentorship Program starting on March 22, 2012 will learn 11 unique methods of trading price action. By looking at my live charts during each training session, spotting these setups will become second nature. The first week of training discusses the ATO (At the Open), and like all other courses offered on Day Trade to Win, is included and taught in full detail. Another method learned in later weeks is the Roadmap Trade (available only in Private Mentorship). The Roadmap shows exactly where market manipulation occurs and therefore provides a filtering strategy that works with all other methods in the Mentorship Program.
New video testimonial – Tony is a Private Mentorship student who attributes his success to the methods taught during his eight weeks of training with us. By using eight of the 11 of the unique price action methods taught in the coaching program, Tony has a chronological plan to deal with any situation price presents. Tony can handle price when it’s trending, ranging and whipsawing while being able to determine a market’s tradability and the best approach to take at the current moment. Tony says, “I know exactly what I am looking for as a price target. I know when to stay out of market – when it’s too wide and too thin. What he (John Paul) does teach, you can go through and start taking ticks out of the market instead of giving them back.”
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