Missed today’s live webinar? Watch the recording above to see what happened. Right away, you can see our Trade Scalper running on two markets in one chart: the ES (E-mini S&P 500) and CL (Crude Oil). Everyone who attended saw the trading signals plot in real-time.
At about 1:50, John Paul explains the importance of having common sense stop loss values. Too high and the risk exposure is too great. Too low and regular price fluctuations will exit a position prematurely. Because the Trade Scalper is a scalping method, the danger is choppy and/or rapid market conditions considering smaller profit target (3 to 4 ticks) and stop loss values are used. As an option, consider using a trailing stop. Learn how to use trailing stops beginning at 4:30.
Other topics covered: • 14:30: Cyclic daily price activity • 19:30: MIT (market if touched) orders vs. limit orders • 25:30: Using our Atlas Line software as a predictive tool (Long signal) • 30:00: More Trade Scalper signals with potential wins/losses/expectations discussed • 32:30: Knowing your profit limits and the dangers of overtrading; profit and loss management, psychology
Do you know that we have a new Group Mentorship class that begins Feb. 27, 2020? Class times are Tue. and Thu. from 12 p.m. to 1 p.m. EST (UTC-5). Click here to find out more.
Check out our new trading news events calendar page. It shows scheduled financial news events for the week. How is it useful? You can stay informed and know when to stay out of the markets or place trades based on news events. Why would you want to stay out of the markets around news events? Because of increased volatility. When financial reports are publicly announced, price can suddenly take off in the opposite direction and hit your stop loss. By the way, we teach a free news trading method that pairs nicely with the calendar. Watch that trading video, “Trading the News,” on the top of the videos page.
Quick tips on how to use the updated news page:
• The current day (column) is gray in color.
• Events marked with a pink/red circle signify potential high-impact.
• Events marked with a green circle signify potential medium-impact.
• Click the small Consensus or Report buttons for event details.
• Use the calendar navigation area on top to look at future or past dates.
• Click the Event Definitions button to learn the different event types and their classification.
• Prefer a different time zone? Click the Change Time Zone button to select a new time zone.
• The calendar works well on mobile devices; so check from your phone while you use your main computer for trading.
As always, if you prefer to see news events on your NinjaTrader chart, visit our Free Downloads page and download our Free News Indicator.
Here’s what it’s like to see a Trade Scalper signal and then trade it. It’s really the same process you would undertake if you had the Trade Scalper software running on your chart. As usual, we’re using the NinjaTrader platform. If you need help getting NinjaTrader on your Windows computer, send us an email at email@example.com.
Moving forward, this is a Short trade. The order is placed using the Dynamic SuperDOM (off-screen). We have Chart Trader enabled with an ATM Strategy, so you can see the profit target (green) and stop loss (red) lines and values. Look at how fast the profit target was hit. Don’t delay when scalping. Preconfigure ATM Strategies based on frequently used profit target and stop loss combinations.
Since we’re trading the E-mini S&P here, 1 tick = $12.50. Therefore, 4 ticks (aka 1 point) = $50. If we’re trading 6 contracts and made 1 point of profit (excluding broker fees, etc.), that’s $300 in profit. Of course, you’ll need to have enough funds to trade multiple contracts. Regardless of the amount of money you have, we recommend taking it slow and devoting significant time to practice via paper trading. Then when you’re ready, start off with just one contract to get a feel for how things move with “real money” trading.
Later in the video, there’s another short signal. Watch what happens!
Here’s a review of today’s Atlas Line and Trade Scalper signals. First, we look at the Trade Scalper on a 2-Range E-mini S&P 500 (ES) chart.
Unfamiliar with a “2-Range” chart? It’s simply a different way of looking at price activity on a chart where each candle represents two (2) ticks, or .5 points. For example, you can see that all of the candle (aka bar) heights are the same (two ticks long). A 2-Range chart lets us see price patterns differently and this is helpful with the Trade Scalper strategy.
The text that you see, Long and Short, are the Trade Scalper signals. The first two signals are Long. Both would have been successful, according to John Paul. You can also see an example of a losing trade.
At 1:00 in, take a look at the Atlas Line performance on the Micro E-mini Futures (MES) market. More Long trades here. Many traders like to use the Atlas Line and the Trade Scalper together to find more opportunities and filter out potential losing trades. We like to think that when both methods say, “Go Long” or “Go Short,” we stand a better chance at winning. The small S and P (not related to the S&P of E-mini S&P) represent Strength and Pullback trades. These are additional Long or Short signals. They’re color-coded, so the anticipated market direction (up or down) is indicated.
Keep watching the video to see performance reviews for prior days.
We’ve posted about the predictive/forecast method called the January Effect for a number of years. Now that we’re at the end of January 2020, we can soon look to use this long-term, historical method to predict if price will ascend to new heights by the end of 2020. This information is useful for futures, options, currency, and stock traders.
To summarize how the January Effect works, we look at the E-mini S&P 500 price value at the start of the 2020 (January 2, 2020). We compare the value with price on the last day of trading for the month, January 31, 2020. If the later price is higher, we say the January Effect has predicted that 2020 will be an “up year.” By “up year,” we mean that in December 2020, the E-mini (and other important market derivatives/measures) will close higher for the year than the closing price in January 2020. To put it simply, if January was an up month, we expect 2020 to be an up year overall. That said, there are no guarantees the January Effect will be correct. However, we have found it useful for identifying long-term breakout buy/long opportunities as we have chronicled in past videos.
As discussed in this video, price is currently near levels in early January. There are a few days left in the month. Watch how price performs on January 31, 2020 to see if 2020 is considered an up year. If price closes lower, we will say that there is no January Effect in play for 2020. Yes, the year may actually end up higher, we just don’t have the historical benefit/indication of the January Effect.
Based on the Jan. Effect, when should one buy? We wait for price to break previous highs. This may include swing trading. We also wait for a four-day retracement. Please watch the video to get a better sense of how this free trading method works. The explanation of placing trades related to the January Effect begins around 4:00 in the video. To better understand how this all works, use 2019 as an example, as John Paul did. Also, you can configure NinjaTrader’s Fibonacci tool to show horizontal lines for 0%, 50%, and 100% of a drawn distance, which is a good visual aid to identify areas to place trades.
At the start of the video, take a look at the two nice Trade Scalper signals using a 2-Range chart with NinjaTrader. On a 2-Range chart, each bar (aka candle) represents 2 ticks of ranging price activity over time (however long it takes to plot each bar based on volatility). At around 2:42, the later trade results in a four tick (1 point) win.
When scalping, timing is important, but always have a profit target and stop in mind. We use NinjaTrader’s ATM Strategy feature to predefine these values. This way, when we place an order on the DOM, we have a premade ATM Strategy selected so we don’t have to fiddle with values when fast entry is important. For this Trade Scalper method, we’ll tell you what values to use for ATM Strategies, etc.
Once you’re in a trade, try to refrain from moving your profit target and stop loss values. Doing so will put you “at the back of the line,” essentially. Orders are to be processed first-come, first-served. Also, avoid using stops > 2x your profit target. It’s probably too much risk and a sudden unfavorable move can greatly impact your trading account. Too small of a stop loss is also a problem because “normal” market movement can stop you out prematurely.
Scalping is a great way to minimize your time in a position. Trading always involves risk, so the less time you spend with an open trade, the less risk. We often recommend our Trade Scalper method for this reason. The strategy is “in and out” whenever price action says, “there’s a trade here.”
Let’s put two charts side-by-side: the Atlas Line on the left and the Trade Scalper on the right. As you can see, the Trade Scalper chart on the right already has a signal (in purple). No signals appear yet for the Atlas Line. The reason why we’re showing both systems is that many traders prefer combining these methods. The Atlas Line is good for signals and providing an overall direction of expected price activity. Using that information, you can confirm (i.e. get a second opinion for) Trade Scalper trades.
At about 2:00 in, you’ll hear a doorbell sound that corresponds with an Atlas Line Long signal. The buy (long) signal occurs when price is at 3305.25. The idea is to quickly place a trade according to the signal. John Paul believes the anticipated upward price climb (based on the Atlas Line signal) also matches up with a retracement, whereby price climbs back up to test prior highs.
Remember the market has a different attitude or behavior depending on volatility. Over time, you may notice a certain personality emerge during slow activity and also when fast. We adjust our profit target and stop-loss values based on current market conditions. This means we want to trade based on realistic values that we believe the market can “afford” to give us.
Jump to 5:25 and you’ll see a Trade Scalper signal. We have the indicator also set up to use the doorbell sound. The Trade Scalper goes for more trades but of lesser value (three to four ticks on average) as compared to the Atlas Line. The Atlas Line, in comparison, may produce a couple of primary Dbl Bar Long or Short signals per day on average.
Could you afford your lifestyle by trading two to three times a day only? Or is it better to take a dozen trades just because your trading system says so What time of day is best or how can we filter losing trades for better results?
These are questions you probably asked yourself if you’ve been day trading or practicing for some time. Firstly, avoid closing time or the afternoon where the market can behave more erratically than normal or become too slow. Note that the chart time in the video is US/Eastern (EST). Also, consider incorporating a time-based stop. No matter what, if a certain amount of time has passed, be ready to get yourself out of the trade. Hanging in a trade for too long out of desperation or misplaced confidence can be an expensive play. Take advantage of NinjaTrader’s ATM STrategy feature so your predefined stop loss and profit target value(s) are automatically used. And no, you should not take every trade that your system/indicator produces. Typically, trading systems will continue to produce signals in less than optimal conditions. This is where your training comes in, or at least if you’re one of our clients.
Jump to 58 seconds into the video to see four consecutive winning Trade Scalper signals. And then around 2:00, see the fifth Trade Scalper trade of the day for demonstration purposes. Keep in mind, you may not want to trade five times per day. If you have success and made a decent profit with the first couple of trades, it may be better to minimize risk and walk away with your wins. At 3:17, you’ll see the sixth trade of the day. Yes, there was still time to trade (slow afternoon conditions had not yet occurred). Again, you may not want to take that many trades.
In day trading, other than the pursuit of making money, the one thing that confounds traders the most is order placement. Placing orders is a requirement for day trading. A person places a buy or sell order with the hopes of making money. Sounds easy, right? Well, there are different types of orders and each one behaves differently. You should know what’s available to you. For example, some order types may work best for some situations and not others. In this video, we’ll teach you about the differences and use.
What are the different order types? Discussed in the video, you have market orders, limit orders, MIT orders, stop orders, and stop limit (also called stop with limit) orders. Depending on your trading platform, you may have all or some of those order types available to use with buying or selling.
Sometimes, you may want to get into a position (aka get into a trade) at a given moment. A market order will do this. It’s probably the easiest to understand. Essentially, you get into a trade wherever the price is soon (almost instantly) after clicking the Market button in either the Buy or Sell column of the NinjaTrader SuperDOM (pictured in the video on the right side of the screen).
In other cases, you may want to get into a trade when price reaches a certain value or one more favorable. This can be accomplished with a limit or MIT order as explained at 3:40 in the video. Please take a moment to watch the full 15 minutes, as it could save you time and potentially money (in case you could be using more appropriate order types for your style of trading).
Here’s a trade from this morning, Monday, December 16, 2019. We’re using a 2 Range chart to look at the E-mini S&P 500 (ES) in the NinjaTrader 8 trading platform. The Trade Scalper is an indicator that we sell. It’s applied to the chart. The indicator provides trading signals; mainly long (buy) or short (sell). As a trader, you would be waiting for a signal to occur just like John Paul is in the video.
At about 40 seconds, you’ll hear a doorbell sound that accompanies the long (buy) signal. When a long signal occurs, we can place a trade and hope price increases (moves up). We teach you specific rules on how to place trades, including how to manage risk. Mainly, this is accomplished through the use of a profit target and stop loss. A profit target is what your goal is for profit. Ahead of time, you should know what your profit target is by looking at current market conditions. We feel it’s better to see what the market “can do” at a given time rather than use a huge profit target when the market is slow (which would be very risky). We think our approach in using the ATR (Average True Range) to get a sense of volatility is a more realistic approach.
Back to the chart, once the order is filled (trade is placed), you can see the profit target as a green line. The stop loss is the red line. At about 3:37 in the video, you can see the trade worked out well. The profit target was “hit.” This would have been a profitable trade.
All trades should be considered hypothetical. No guarantees or claims of performance are offered. Past performance is not indicative of future results. Day trading is risky and may cause substantial financial loss. Individual performance may vary, as trading subjects your finances to new, unexpected market conditions. You are responsible for executing trades. Before trading, consult with a licensed broker and a financial expert see if day trading is suitable for you.
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.
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones' financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described herein. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. For example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.
Trade Results Disclosure: All trades presented are NOT TRADED IN A LIVE ACCOUNT and should be considered hypothetical.
Trade/Training Room Disclosure: Presentations are for educational purposes only and the opinions expressed are those of the presenter only. All trades presented should be considered hypothetical and should not be expected to be replicated in a live trading account.
Testimonial Disclosure: Testimonials appearing on this website may not be representative of other clients or customers and is not a guarantee of future performance or success.