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GCB

John Carter's Setups: Legit or Lame?

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I wouldn't be trading index futures if I hadn't read John Carter's Mastering the Trade. It's one of the best books written about the fundamentals of day trading futures, trader psychology and developing a thorough and professional trading plan. Carter is a very successful and seasoned trader and he knows his stuff.

 

Every trader wonders if there is a better method or technique to trading out there than he or she is using, and Carter does provide several trading "setups" (as he calls them) to consider and study. After studying these setups and writing or obtaining the indicators necessary to apply them (Carter oddly doesn't provide the code for the indicators) it seems that these setups are not that reliable. In fact, none of them seem any more reliable than, say, a basic moving average crossover system. I reproduced the three-bar-reversal indicator for tick bar range trading and it was amazing how many three-bar signals appeared when the run was ending, not beginning. The squeeze indicator produces so many false signals it was laughable.

 

Now this realization can either be disconcerting or encouraging. If Carter can become successful using lame setups like these, then perhaps setups in general are less important than we might think. Or perhaps Carter is using more filtering for these signals than he let's on. Either way, he doesn't tell us.

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I think it's difficult to teach someone all you learned and know. He may have simplified it into indicators as a start. I tested the Squeeze myself and not that great. Virtually all his indicators are in the TS forum (if they make them, TS has 'em, it's why I consider TS one of the best platforms around, not the company itself but the user group is very strong). If it were a winner, everyone in TS forum would rich by now (we're talking in thousands here). It's how I started with my mentor, using simple indicator while explaining to me the price action. It's like a baby-walking toy to aid walking upright. Little by little, I moved away from indicator and see the value in price itself. It might what he's doing to simplify market structure. I don't negate he's a great trader, just passing the torch is much more difficult in this game than any other (2 yrs with my mentor and I'm still learning). So a weekend or week with might not be sufficient.

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First let me begin by saying I am a fan of Carter's and Hubert's work. They have done alot to educate the trading community. I have also read Carter's book which I found very useful. I have not purchased any of their indicators or participated in their trading room.

 

BUT... I wouldn't go out to say Carter's or Hubert's methodology or setups is lame. The indicators they use such as the TTM Trend, Bricks, Squeeze have all been replicated by the Tradestation community and can be downloaded for free. They are also available in our indicator forum.

 

I have tested them in my trading and found them of no help. The squeeze sends out too many false signals and the bricks is something that does not fit my style of trading. Now, the TTM Trend is a indicator I use but I do not follow their directions for it. I use it in my own distinct way.

 

Although I prefer not to use their indicators, this does not mean their setups do not work. I have heard Carter and Hubert mention previously that what they want traders to do is to find/steal elements of their trading that will fit a traders style. In other words... find the good parts and apply it to your own. Carter and Hubert teach alot on market internals which in my opinion is the best part of their program.

 

In the end, I think it will hurt a trader to completely duplicate another traders methodology. It is similar to buying/selling a stock on a tip. When the trader finds new inisight to his methodology, when do you get to know about this? Perhaps they have applied new rules to using their tools or maybe they see new things that the markets are telling them. This will change the way they use their setups. I have only taken what I found useful to my trading from John Carter and Hubert and applied it to my mine. For example, the TTM Trend is a tool I use for visual purposes. I combine this with Volume Delta to mark turning points by gauging supply vs demand. Basically, find whatever fits your trading style. Carter may have his own entry/exit rules for pivot plays... while I have my own criteria for entries and exits on pivots.

 

Regards,

 

Soultrader

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The fact that these indicators Carter recommends give such random results leads me to believe that he has a filtering method he doesn't quite explain. I don't think he's consciously withholding information, it's just something that is hard to explain to others.

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First off, let me have my say, they both clearly say, especially Hubert that their indicators are useless if you don't understand market internals.

 

Which is very true.

 

Their "squeeze" indicator is a simplified way or a mechanical way to give a trader the heads up that prices may explode in one direction or the other. For the new trader with the untrained eye, that is great, but once you recognize when markets are in a "quiet" period and due for an explosive move, you really dont need the squeeze. It's just a way/method of keeping your trading consistant because using your judgement may be eratic at times and provide inconsistant results to analyize what is wrong.

 

Understand price action and market internals is more important than any indicator or system out there. Hubert even says using a chart and indicators are like crutches. The dude can trade, he's a tape reader, I've seen him do it first hand and you don't even realize he's trading because its so fast, but he is still human and mistakes are bound to happen. If anyone trader says they don't make mistakes, like Hubert says "run the other way" and get far away as possible from that trader, he's full of crap.

 

Ever wonder how Jesse Livermore or Humphrey Neill trade back in the days with no computers or technology that we all have today? They understood price action and the psychology behind what was occuring and about to occur.

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I find it deeply ironic that Carter berates the use of indicators early in the book because of their inherent time lag and then later on touts his own TTMSqueeze indicator. Additional favorites like Stochastics, MACD, and RSI make appearances in Ch. 18 as well. If you closely examine the charts in Ch. 18 you will also see a surprising number of losing ttmsqueeze signals present. So what are we to conclude?

I spoke with Hubert Senters and found his candor refreshing. He told me his TTMSqueeze, Bricks, etc. had a 50-50 win/loss percentage which is coin toss country. However, he implied that everything is filtered by market internals. Senters also truthfully said that they are no holy grail and that you must completely master market internals first before seeing any kind of success with any strategy.

This book has plenty of valuable information that you can cherry pick but I recommend caution in using most of his setups. Both Carter and Senters are very honest and straightforward which is a rarity in this business. They have alot to teach us.

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Minetoo, I agree with your perspective. In 'Mastering the Trade', pages 141-142, John is discussing the merits of trading off pivot levels versus following indicators. Traders that follow indicators "are getting in and out of their positions far too late." "By the way, all market indicators are the wrong indicators, because they are all lagging. Price action is pure."

I did enjoy the book very much, especially the early discussions about market internals, and the late discussions about the importance of having a trader's business plan. I recently took the two week trial, in which Hubert did most of the instruction as John was travelling. Hubert is the more active day trader, while John tends to focus on swing trading. Hubert was refreshingly honest in many of his comments. Among some of the more memorable: He said he didn't care exactly how John was identifying his setups and trading, and he was sure John felt the same. Though they do have a business together and share ideas, they each have their own style of trading. He also got on to people for "quoting the book (MTT) like it was the Bible." He emphasized screen time and becoming familiar with price action and market internals. As far as TTM idicators, he only uses three: TTM Trend, TTM Squeeze and Bricks. Even at that, I rarely saw/heard him reference them, except in hindsight to show how they might have been useful as a heads up. He focuses on tape reading coupled with pit noise and TICK readings. He also glances at other market internals for confirmation, including TRIN, Put/Call and Premium. Hubert seems very capable and consistent with his method of trading. He is interesting to follow, and his Kentucky accent and 'down home' manner are both enjoyable and entertaining. He doesn't mince words, and will speak his mind, so come with your thick skin and remove any rose-tinted glasses at the door.

GCB - Why don't you swing by and give John a shout out? :) Your home city is a favored spot of mine. I'm a Longhorn and my son's name is Austin, if that lends any insight. Good trading to you both, minetoo and GCB.

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GCB - Why don't you swing by and give John a shout out? :) Your home city is a favored spot of mine. I'm a Longhorn and my son's name is Austin, if that lends any insight. Good trading to you both, minetoo and GCB.

 

Neal,

 

Thanks. I actually took the 2-week trial at TTM. But Carter was never there, at least not for long. I actually did send him a message. I have thought about doing the mentoring program with him since we live in the same city, but I have a mentor now who is very good and reasonably priced.

 

(Another thing Carter doesn't tell us is how he decides which signals to take. Although he is very rigid in his rules, he doesn't give us his rules for why he might, say, favor pivot plays over squeeze plays. But I'm sure that's just discretion on his part. But he doesn't tell us how he decides.)

 

Basically, this thread has verified what I figured: that the indicators are just ways of getting signals that you can get in other ways. The real meat of trading is being able to read the market pulse and go with it, and be able to jump back in after being stopped out, even in the opposite direction.

 

Good trading to you, too!

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I did a trial membership in their trading room, and found much what everybody else has - candor, robust methodology and an emphasis on market internals.

 

you can't backtest the squeeze without taking into account internals. I've found that the 5 minute squeeze is a very profitable play IF you filter market internals and support resistance into your trade decision. It also keeps me out of bad trades, like fading a tick extreme and going short right after a long squeeze has fired.

 

They admit they didn't invent the squeeze. It's a familiar indicator for many.

 

I programmed my own version in quotetracker using paintbars, and find it useful

 

I trade differently than john or hubert, but i learned a lot from their free videos and the trial membership.

 

john also inspired me to start my own mentorship business, so I have him to thank for a successful and enjoyable business.

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Guest cooter

They didn't invent the squeeze indicator, but merely purloined it from the TS Forum. This is why many traders look twice at their operations and see it for what it really, a money-making operation to provide capital for their own trading account.

 

Nothing wrong with that, except that they didn't give credit where credit was due (does eKam and the rest of the folks on the TS forum get a royalty check from TTM?) and pass it off as if it was their own development, when they merely refined it, and copy-protected their version.

 

Aside from that, their site is full of tips and insights that you'll be able to glean, as even the free newsletter has videos that do have some worthwhile info for the average and newbie trader. Seasoned traders probably wouldn't care for TTM, but as Barnum and Bailey said, there's a sucker born every minute!

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Dalby,

 

I note with interest that you have programmed the TTM squeeze. I have spent more time looking for the code than it would have taken to learn TS and translate it into QT. In addition, most of the stuff I have found is laughably short of what the TTM squeeze shows. Anyway, are you willing to share the code ?

 

I know I put that bluntly but I don't believe in flannel !

 

Regards,

Eric

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Dalby,

 

I note with interest that you have programmed the TTM squeeze. I have spent more time looking for the code than it would have taken to learn TS and translate it into QT. In addition, most of the stuff I have found is laughably short of what the TTM squeeze shows. Anyway, are you willing to share the code ?

 

I know I put that bluntly but I don't believe in flannel !

 

Regards,

Eric

 

Since you've found this site, try looking around, and you might just find it when searching....

 

Otherwise, if you are a TS user, try their support forum as well.

 

If you haven't found the ORIGINAL by then, you've probably been looking too hard, and in the wrong places!

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Cooter,

 

I'm a QuoteTracker user. I've found all sorts of rubbish in all sorts of places. Maybe it's a wood and tree type of thing but I haven't found anything that looks like the TTM squeeze.

 

Thanks,

Eric

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QT has Keltner Channel and Bollinger Bands. Just use those instead for the squeeze. 20 SMA for both. 1.5 ATR for Keltner, 2.0 for Bollinger are the preferred settings, I believe.

 

As for the momentum settings, try the momentum indicator, set to 12 or 14. However, the actual "momentum" histogram in the TTM indicator is not momentum or ROC at all, but actually the LSMA of the difference between Price and the mid-line of a Donchian channel.

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Hi, sorry if I am overstepping my bounds here, but in the TS forum I believe this TTM squeeze you are looking for is called "nickmnextmove" - something like that.

This is all free stuff, if you know what you're looking for, who wants to spend an hour going through 72 page long forums to find it! Better to be watching the market and waiting patiently, attentively. Coding can be so distracting, and tempting!

PS does anyone actively apply this to market internals or the tick? That would probably be a decent application. I've watched it on stocks, futures and you better have a bunch of filters and know exactly what you are looking for otherwise it is clutter.. IMO

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Yep, but he's NOT a TS user, is he?

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After doing this for a couple of years, I realize this type of question is almost not worth talking about. And believe me, I used to ask the same questions!!!

 

Trading is about you, not the holy grail play that no one else knows about...

 

If your beliefs about the market are different that the creator of a play you will lose money with their plays. If you subscribe to a service you end up taking the plays you think are good not every play. So in effect you are actually trading your own system!!! Ability to handle drawdowns and bad trades in a row also affect each individual trader and system performance.

 

I have been in Carters room and I think they do a good job of teaching and giving a realistic view of trading. They have one of the best systems regarding market internals. The free market videos they do are excellent.

 

 

It is almost impossible to backtest most of the plays in the room, because most are discrectionary and to be taken in conjuction with market internals at the time.

 

So with pivot plays for instance they become reference points to daytrade off of and some people in the room are fading it and other people are waiting for it to consolidate and buying a breakout pullback type of thing.

 

Money mgmt for the trades always leave the last 1/3 or quarter discretionary and that portion of the trade is paramount to whether you make money or not at the end of the week. So this is another factor that makes it impossible to backtest and figure out whether the average person is are going to make money with the system..

 

Overall if you are looking to learn to daytrade or swingtrade futures I believe TTM it is worth checking out.

 

 

 

Just my two cents!!!

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Guys,

 

Thanks for the suggestions. I subscribe to the TTM trading room and have been there from the start of May. They have just had a new couple of additions. One of the guys who's been trading with them for quite a while, plus Carolyn Boroden.

 

Either she knows what she's talking about or she's been damn lucky !

 

Anyway, I thought I'd see if I could get the squeeze to work in QT.

 

By the way, it's been said earlier, but John and Hubert make no secret of the fact that they didn't invent the indicator.

 

Regards,

Eric

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Guys,

 

Thanks for the suggestions. I subscribe to the TTM trading room and have been there from the start of May. They have just had a new couple of additions. One of the guys who's been trading with them for quite a while, plus Carolyn Boroden.

 

Either she knows what she's talking about or she's been damn lucky !

 

Anyway, I thought I'd see if I could get the squeeze to work in QT.

 

By the way, it's been said earlier, but John and Hubert make no secret of the fact that they didn't invent the indicator.

 

Regards,

Eric

 

Yeah, if you check around you'll find that CB is well respected in the world of fibonacci analysis of time-price series. In other words, she's damn good with fibs!

 

Hopefully, they'll add more of CBs stuff to the newsletters, since they (JC and Hubert) travel a lot lately, and haven't been as diligent updating it as they should.

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i programmed the TTM squeeze for quotertracker. if you spend 5 minutes learning paintbars in QT, it's very easy

 

all the ttm squeeze is is when the bollinger bands (20,2) go inside the keltner (20,1.5) - that's IN THE SQUEEZE

 

and then the squeeze fires when it goes outside

 

that condition is exceptionally easy to test for and write a paintbar for

 

the other paintbar is merely the 12 period momentum

 

i find the 5 minute squeeze EXTREMELY successful but i filter it (iow, i don't take every one that fires - only those that meet certain criteria).

 

i also will not do a fade play short when a long squeeze is setting up, etc.

 

helps keep me out of unsuccessful trades.

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Carter legit. Setups Lame.

 

Well lameish - some of the underlying principles are sound (e.g. BO after volume and volatility dry up). More valuable to just see a 'squeeze' and understand whats going on behind it.

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Guest cooter

He makes more $$$ from his trading room and seminars than from his actual trading, IMHO.

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That is NOT correct. And I can prove it. (But even if he did - so what?)

 

Send me an email and I will show you why this statement is so stupid and based on what ... jealousy?

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What is not correct?

 

That his seminars and trading room are immensely profitable? So what? More power to him and Hubert. They deserve it.

 

No need to prove a thing, unless you work with him.

 

Otherwise, PM me yourself if you feel an innate need to defend his honour, or some thing.

 

LOL.

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