steve46

This might help some folks to understand the significance of discipline My system requires that the operator follow some basic rules At the start of class I indicate to students that the most important thing they can learn from me, is risk management.....because these are smart folks, all of whom have a history of previous success in business, they actually listen....BUT they still need to see what I am talking about....and this last Friday we had what professional educators call a "teachable moment"..... After an early selloff, price hovered around my lower "Pivot" (the dark blue bar just below price in the attached chart). The first "test" of that dark blue pivot occurred at 8:45 am PST, however price did not "take out" (close below) the pivot....instead it bounced....and on a close above the pivot, traders were free to take a long IF they wanted to.... Later in the session at 10:18am PST, price came back down to test and close below that blue pivot...and shorty after 10:30am PST I entered short position getting filled at 2674.75 with a 2 point stoploss... For the next 18 minutes I watched as students (some of whom had also elected to take a short) fidgeted, and one by one took themselves out of the trade.......NOT ONE of them was able to stay in the trade EVEN THOUGH PRICE NEVER TOUCHED THE 2 POINT STOP.. Twenty-one (21) minutes later price moved lower, and did not retest that entry point....favorable excursion down to our target area at 2650 where we exited the trade. At the close of session, I asked each person to write (in their journal) their reason(s) for exiting the position early.....every one of them said the same thing....they thought the trade was going to be a loser RIGHT AT THE BEGINNING and they wanted to save a few bucks by closing it out before the two (2) point stop was hit......:doh: My comment was as follows....IF you follow the system rules....the SYSTEM will take care of you.....yes you will take losses.....and at some point you surely will have runs of consecutive wins AND losses....that is the nature of a system based on a mathematical (statistical) edge....however if you CHANGE the system by inserting your emotional response....you are randomizing the result...and negating your edge....and it is likely that your final result will be due to random chance....and one last thing.....no matter what system you trade...if you have an edge.....and you have tested all the components (including the size of the stoploss) as we have......don't change anything during the trading day.....the only time you can make changes is at the end of specific time periods when you are evaluating your results.... In terms of everyday trading, if you really want to do this and make money you have to have the understanding of what a successful system is....and you have to be willing to put that understanding on the line by committing to disciplined execution of the system rules....practically speaking, when you enter a trade, you have to be willing to take a loss....a full...complete stop out and then simply go on to the next trade.....you can't decide well I THINK this one going to be a loser and I'll save myself a few ticks by getting out right here.... This is one example of the critical role that discipline plays in trading success. Good luck folks

This is one edge I don't mind sharing (to a point).....there's an old saying among my generation of participants.."its time AND price"......knowing the signficance of time is one way of keeping yourself out of the periodic chop that occurs regularly in contemporary index markets... Also there is significant edge to be had, if you learn how to trade economic reports, earnings reports ("Apple earnings" trade on Page 48, post 378 of my thread), bond auctions, and more recently Euro news of all kinds...for a period of years, I made a nice living just trading the time period PRIOR to and AFTER these events....there are folks who specialize only in event trades where the trader has to learn how to act based on the combination of time & price.... Finally, about half my income derives from time based trading prior to the open of both the Globex Markets (Asia & Europe) and RTH (US markets)....the opportunities are there if you take the time to learn them...this is in part what I teach folks to do...professionals call these trades "layups" because they tend to be consistent producers year after year.... Okay then thats my good deed for the day, week, month AND year.... Good luck Steve

A visual example might help The attached chart shows a couple of concepts that work for me...with benefit of research I know how to identify areas where previously participants have come in to move markets...I believe I know why they decide to act at these prices....and at these times....so I use that information to make visual, the areas on my chart where I believe they may want to act today to move price up or down...The large blue colored is my workspace from several days ago....within that space I have what I call an "inset" or darker blue area where I think participants are likely to act today (at specific times)....my rules are simple....price tests and closes above and on the retest I take it long....price tests and closes below and on the retest of that price I enter a short position....whatever direction you enter, the stoploss is a close no the other side of the dark blue bar...(about 2 NQ points)....my profit targets extend on the short side to about 30 NQ points... Not going to get into all the details but the system shows me that price is probably going to move south....I am willing to take longs but I won't spend a lot of money trying to make it work...since I know (from experience) that the system is probably right... I guess the point is....(and it is my only my opinion) you will never be able quantify a system so that you don't have to take responsibility for making a decision....its just not possible...no matter how many questions you ask folks, no one here is going to provide the information necessary for you to cobble together a system that allows you to trade without having to use your own judgement. I have spent a lot of time doing the research and the result is that I have an edge that works every day...yet I still have to make a decision as to where and how many times, to put money at risk....for me, it is time AND price so it is a easier to do, but I still have losing days...eventually what skilled folks learn is that once you have a basic concept that works, the amount of profit you make is directly related to how well you manage and limit losses...

What most often missing from discussions like this is a common context That, it seems to me is why one person can suggest a strategy that they say works, when others say no....that won't work... I trade both sides of the street....reversion to mean and breakout....depending on what the market gives me...the method is simple...taken from what I know to be a common frame of reference used by many of my colleagues....a simple daily chart with a restricted date range (attached) and a 130 min chart displaying a distribution (also attached) I look for tests of the extremes on each.....and then act according to what the information shows me....in this case we see a range bound market at the top of a longer term dist...(the daily chart).....and the 130 shows me that price is at or near an area of previous demand (shown by a blue rectangle)....on tests of the lower boundary I am going to get long and if the market shows me that particpants are interested in marking it up...I am "going with" that move...knowing the odds favor continuation....if not, I am looking at how price acts on shorter time frames....and the reversal pattern is very easy to recognize...(because volume comes in to confirm it)... The third chart show a behavior that is becoming quite common and that is, a trend move that starts during the overnight market.....allowing knowledgable participants to get on board early (I call it pre-positioning). When you're right it really pays you well... by the way, for me 10 year data histories mean nothing...my world is 100-400 data points at a time maximum...I know that many of my peers are doing the same...so as long as it works (as long as it gets me on the same page as they are) I am going to use that approach....

Sleep deprived and heading off to bed as usual The Globex session went about as expected....people need time to "get" the concept... The overriding idea that a new trader has to learn is to find a "big picture" or framework that provides a consistent, reliable way to anticipate sizable moves and get positioned... To do this you have to see it traded in front of you....I think that is the problem for folks looking for education and mentorship....there aren't many folks willing (and able) to do it....because we already make money (so why bother)....right....in other words there has to be another reason.... So here is the chart for today (last night & today).....as can be seen we focus on the opportunity provided by the distribution....once we see price moving along the lower part of the blue rectangle (displaying support or demand at that price level)....we look to get on because THAT is the level where we see the best odds (historically) for a significant move up. We can't know that it will happen, but what we can know from our data acquisition is that when it DOES, it happens from this starting point.....so we position ourselves here and try to hold on (within reason)....tonight it worked out....the first (left most) green arrow is our initial or pre-market entry...that one was good for 2 and then 5 NQ points. The next two green arrows show secondary entries as price retraced to that lower distribution boundary once again....as mentioned many times before...we take this retest because in our experience the second test is often where the significant moves start...and that is what happened tonight (into this morning) as price really took off....now of course we all have to sleep sometime, so the question is how long do you hold this position....for me...I know what the system can do...so the baseline trade is 2 and 5 = 7 NQ points....and then I am looking for 10 and 20....on a minimum 4 contracts.....and if you have sufficient capital....you hold one contract in order to capture the outlier trades where it runs (as it does this morning).... and the right most arrow shows the entry a trader would have had, if he/she were simply trading the US open at 6:30am PST....again the entry rules are simple...you wait for price to test and close above or below the dist line....on the next open OR the next test of that line you enter...(yes there is some discretion involved)....this opportunity occcured at 6am so it is a pre-position entry....notice that it moves nicely away from that point giving the trader breathing room until the open at 6:30....the retrace is minimal...and if the trader has basic common sense, and is monitoring the broader market, he/she should be able to see the potential for a continuation move....you hold, you scale out, and you try to stay in long enough to see as much of that move as you can..... Good night and good morning....

Tonight is the first of my Globex (overnight market) classes... In this class I show folks how to trade the overnight market....how to orient to the news, to pending reports, and to find the best entries (which happen to occur at specific times during the session)..... Finally I demonstrate how to organize so that you can trade the overnight market, and still have a life.... At the beginning of the process we focus on the London Open at Midnight (local time) I list the preferred times for pre-positioning, and show students how to organize themselves so that they can focus at the critical times, thus avoiding the fatigue and boredom that is usually associated with trading... This will be a brief class...about two (2) months duration in which time I expect that students will learn how to make enough so that they can see the potential of trading as a fulltime job..for those who acquire the skills and the discipline to do this properly, it means a chance to move themselves a step closer to a different kind of life..... Good luck folks

Interesting...this is very basic math For my system I keep records of each type of entry as a separate entity.....i.e. all entries based on a test of the previous high, the previous open, the previous low....each category has its own data set.... I know for each category, and for each time period (yearly, quarterly, monthly, weekly), how many of these entries were winners, and how many were losers.... I view each type of entry as a profit center....doing it this way I can tell whether a specific type of entry is "likely" to be a winner or loser based not only on historical data, but on specific time periods...again for example....entries based on tests of the previous open may not be performing well over the last 60 days....knowing that I might want to trade that opportunity using a smaller size position..conversely if a specific type of opportunity is performing very well, it may be wise enter a bigger size position... In some instances the benefit of this type of data management becomes evident right away...for example I recently implemented what I believe to be, an improved method of preparing for the open by identifying long & short targets (pivots actually) just prior to the open. I started to do this two (2) months ago....already I can see the improvement in my data...so now all I have to do is to confirm that this initial result is NOT due to chance (this takes about 400 data points to confirm)....requires patience and discipline but it really pays off if you take the time to do it... The math is as Blue Horseshoe suggests... Good luck

The blue rectangles are placed during the previous evening... The arrows (next to the horizontal bars) show targets that we place on the chart between 5am and the Open. To determine directional bias, we simply look at price action prior to the open...today is was clearly down....inside the Blue Rectangle we mark the open with a vertical line...when the market opens we show folks how to evaluate price action so that they can find high probability entries good for at least 5 NQ points... Our risk/reward management is as follows 1. Our stoploss is 2 points 2. Our initial profit target is 2 points 3. Our second profit target is 5 points 4. Our third profit target is 10 points 5. For accounts of sufficient size and skill, we hold at least one contract to 20 NQ points The system can be traded by accounts using as few as 2 contracts. For small accounts, a winning trade = $140 less commission....a losing trade = approximately $80 plus commission Suggest automating the scale out process to insure that once an order is filled the stop loss (and the profit target(s) are honored... I like it

Here is the follow up to the previous chart....quite gratifying to see this one looking like it might reach 20 NQ points...

Followup comment to the previous post At this point, shortly after the London Open, we can see why there was buying near the close yesterday...people were indeed pre-positioning, if only to get setup for this open.... Earnings were known to be leaning toward the positive side, no significantly negative news on the Euro front...and relief that in the US, the damage from Hurricane "Sandy" although major is now for the most part over and recovery can begin...the natural tendency is to see a positive boost (I think)...from here...we'll see tomorrow..when RTH opens Most importantly, during our time based checklist (we manage our time prior to the London open, by monitoring various elements of the market at..... A.) 2300 hours B.) 2330 hours and c.) 2345 hours....at each "checkpoint" prior to the open, we look for valid signals to enter PRIOR to the open....If we see a legitimate signal we enter the trade....we call this strategy.. "pre-positioning" This evening's entry is shown on the chart....the result.....another (almost) 10 NQ points and all that was required was about 45 min of prep and 30 minutes managing the position... Rob, I think this relates to the question you brought up a couple of posts ago....

Suby, the only reason I can post at all, is because my former employer asked me not to post on this subject and I agreed.....sometimes I forget...but for bonds and currencies...thats what agreed to... So as I said before, "continue as you were"..

Were you to ask a professional how "easy" it is to push the market, he/she might have a different perspective...it requires significant capital...even when the attendance is down... I think what you are seeing are European and Asian participants looking to preposition prior to the RTH open on Wednesday...that should become apparent this evening when London opens... Good luck to everyone

Just one man's opinion of course, but it seems someone is taking advantage of the abreviated session to make some extra money...It can't happen without the DAX market leading the way....

Always choose the higher vol (round up)

and I think I will post this and then call it quits for the evening As you can see, if you had the education, and the discipline to position yourself, and just hold while price moved....you really made a nice profit...all because you recognized the opportunity presented when a market gets oversold... What else can I say....these charts are posted for the few folks out there who really understand the potential this system provides...top to bottom this was a 20 pt (NQ) move. Good night folks

and a follow up to the previous chart showing how that entry (in whatever market you chose) would have worked out had you simply held the position until the London Open...A process that we call "pre-positioning".... For some, waiting until the formal open of any market is your choice....so be it....I've used this method for years...and while it isn't foolproof it does have its obvious advantages...when you are right, you really make a few dollars and it is relatively low stress trading...

Another very nice setup and its trader's choice....you get to use the ES chart to provide the primary signal (green arrow) or you can simply trade the NQ chart and this time you have two (2) signals....the primary as price tests 2626.25 and then as it comes up through the Blue Rectangle, it closes inside and then you have my classic setup as it retests the lower boundary....pretty... HEY GOB this one is right up your alley...take a look at the NQ chart...notice how price moves down to test a distribution line, then takes off to the north...tests the next higher distribution line, closes above it, then retests...do the odds favor price going higher.....uhhhhhhh yeah...

With "Sandy" continuing to cause damage to the East Coast, markets will be closed tomorrow The Globex however is open this afternoon and as chance would have it, we saw several nice entry opportunities....I am posting this because it is an excellent example of how to use a correlated market to signal trades in the NQ Futures....in this case I am referring to the ES and as you can see it provides a nice clear signal to get long 12 minutes after the Globex market opened.... The long taken off that signal didn't quite provide the 5 NQ points we want to see, however we get a second signal (and a third in case students missed that one) all marked by green up arrows. As mentioned in my previous post, I like to take "retest" signals even though they may be uncomfortable for traders to act on....in my experience those retests often provide significant profit opportunities (as this chart shows)....

I'll take a day or two off....catch up on my sleep....the opportunity doesn't come along often... The attached chart shows the Globex trades last night.....Three trades all profitable and I attribute that to the discipline enforced by the system....I took the first test, banked some money and then stayed with the rules as price continued to retest the distribution line... As mentioned in previous posts, in my experience that second retest often results in a significant move.....this time it didn't and that telegraphs a message...it tells me that the market might roll over (and it did) moving down to 2635...nice successful evening..too bad it had to happen on a night where they decide not to continue trading.....oh well thats life... As usual the distribution works well IF you follow the guidelines...but it doesn't trade itself... Hope everyone enjoys a bit of holiday...and for my friends on the east coast...stay inside and stay safe... Edit By the way, there was one more trade at the end of the evening....I wasn't going to take it however because I was unsure when the session would end....didn't want to get stuck holding a position overnight (or for several nights if they extend the closure)....that last trade was worth another $140 bucks per contract.

Hard to keep focused tonight because of the news about Hurricane "Sandy" approaching the Eastern Seaboard....What we understand as of this point in time, is that the exchanges have decided to close tomorrow.... As far as the Globex, we saw our initial trade go positive then reverse turning into a probe to find sellers....We've seen this several times previously so on retest of our original entry we closed the trade and waited....as price retested we took another long (#2 on our chart) and we are monitoring this one.....in our experience if a probe to find sellers is unsuccessful the reversal is often a significant move...lets hope so...so far we have a small profit (we call it "buying a stop").

So with regard to trading less....for me the concept is valid....now how you implement it is really where the rubber meets the road... For me, it is a relatively easy to work it out....I know in advance where entries are likely to occur, also I keep good records and finally I know what my system is likely to produce per each time period....that is due primarily to the fact that I have done my homework, in contrast to the majority of folks who seek out chat rooms, advisories, and other resources where the primary service is to tell them when to buy and when to sell....YOU SEE? So there are a couple of things to say about this thread...first as with most of the things Pristine reprentatives post, the basic premise is valid....the real question is can they provide some practical alternative, and will there be enough demand from the populace... Frankly I doubt it....and I think the folks at pristine know that....they are here for other reasons. As I've said before they ask good questions....and suggest valid concepts but never provide much substance after that......in other words its a promotional article....nothing wrong with that. There's a simple way to trade less (and more efficiently)....but you have to be willing to do the work....I'll be showing students how to do this after I show them how to identify high probability entries...first things first.

Sorry I should have posted this one earlier....we trade from a screen that displays three (3) markets....DAX, NQ and ES.... As can be seen in the attached chart....the DAX isn't open when the Globex opens on Sunday afternoon...so we monitor the NQ and the ES....and you can see the value of having both screens open....as both entries take place at the same time (providing nice confirmation)...

and here is the follow up to that Globex trade....as can be seen this one looks like it has a chance to reach 10 NQ points.....students would be advised (I can't TELL anyone what to do) that this is a good place to consider taking profits....) Students would be "advised" are as follows...stoploss of 2 points.....first profit target at 2, second profit target at 5 points, third target (for those trading 3 contracts) at 10 points.... For traders with experience and accounts suitable to accept and manage further risk, I would suggest (again I cannot "TELL" anyone what to do)....that they hold aside one (1) contract in case price runs to the next distribution boundary (this target located at approximately 2665). I hope this helps folks looking at this system... Best of luck

Yes hard to imagine anyone being so naive as to pay for instruction that doesn't permit the student to watch trades being executed.....also difficult to imagine any student being so naive as to think they can learn without having the teacher watch them execute entries and exits.....I can't imagine anyone being that ignorant, but since you bring it up...there it is... As for finding "free" resources on the Internet....most of the content I read on the Internet (including here on this site) consist of half truths peppered with urban myth....generally the content is of very poor quality, and if used as the basis for education, the trader can expect to end up bewildered and broke... What works is what can be shown to work, and demonstrated...here is one example....prior to beginning a class I ask students to go through an exercise as follows. I ask them to take a coin (a quarter is preferred) and a pad of paper and spend about an hour flipping that coin and writing down the results.....Every 10 flips they are to make note of the results....in theory coin flips should result in an approximately 50/50 split between heads and tails....in practice, as a coin is flipped there will be runs of heads and runs of tails...if the students will simply take this time to do the exercise, what they learn is valuable because it demonstrates some very important truths about trading (and statistics)....from this exercise alone I can ussually tell if a student is "going to make it" in this business. I certainly apologize if I have offended anyone...

Nice to hear of your success GOB...16 pts is pretty damn good....for anyone...keep up the good work... For those interested here is my first Globex entry tonight....just below the midpoint of my distribution (filled at 2648)....initial scale out at 2, next scale out at 5....looking for a test of 2665 (top of the blue rectangle) next...