Here’s part two of the most recent webinar. Miss the first webinar? First, we start off with a review of the Super Year. We already had a good trade with a retracement from the previous 50% level for about 22 points around March 16. If price breaks the most recent highs, John Paul expects for another good long trade. Don’t expect the market to go straight up! That’s why we use a large stop. The market rarely goes in one direction consistently. Therefore, your stop loss has to be large enough to allow for regular price movement. What about a time-based stop? Watch the video to find out.
You’ll also see the first Atlas Line signal of the day plotted live. It’s configured to play a doorbell sound when a Dbl Bar Long or Dbl Bar Short trade appears. The profit target for the first Atlas Line Dbl Bar Long is 2.25 points (rounded down from 2.4) or 2097.75. The first stop in place would be the catastrophic stop (4.5 points – 2x the ATR). If the profit target or catastrophic stop is not hit, then we’ll manage the trade by getting out at four candles (20 min.) on a 5-min chart. In 20 min. time, that could be a small profit, break-even, or loss. A prove-it stop is another type of stop whereby a closing candle on the opposite site is the point at which you close your position. You’ll have to watch the video to see if this trade works.
One of the things John Paul teaches in Power Price Action and Mentorship is trend identification. A trend on a 5-min chart looks different from trends on an hourly, daily, or weekly chart. For 5-min charts and the E-mini S&P, John Paul uses the 6/6 rule to identify trends. Six candles plus six points occurring is a trend. This is explained further in the video.
Near the end of the video, you’ll see how to calculate the ATR value on the 6E and how the Atlas Line performed.
Click here to find out more about our next Group Mentorship session that begins April 22, 2015. All courses and software are included.