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Divergence Day Trading Method; Day Trading Euro with Dollar Index Futures
– The divergence method
o Watch the video, and follow along with the notes that are posted in the adv course
o When does the trade signal become invalid?
– Using the dollar to trade the Euro
o Buying pullbacks and selling retracements
o How many bars in a pullback?
Never know how many bars in the pullback
You will know what a GOOD pullback vs/ a BAD pullback
You will know the reversal before it takes your money from you.
• Watch the video in the advanced course
• Ask questions in the trade room when you see pullbacks you need help confirming
– Inside days vs Outside days
o Inside = we are trading inside the range from yesterday (above the lows and below the highs)
o Outside = we trade above / below the range from yesterday
o Why does price move?
People react on their opinions, biases, their emotions of fear and greed
o Why would price be moving?
Because traders see more/less value at that current price level
If price is rising into the highs of day, then we assume people see price as TOO CHEAP
So why would price move nowhere?
• Traders don’t KNOW if the price is too cheap or too expensive
– Profit targets and trade management
o Section 11, managing the trade
o Scalpers will use the same standardized trade management
6-8 tick stop
5/10/Runner
4/8/Runner
Never touch our first 2 targets unless 3 strike rule
– Sharing volume during contract rollover
o How do you know when the markets roll over?
Your broker will usually email you
Go to the exchange website
Use our blog and look for the contract specifications
– Contract Rollover today on the e-mini, currencies, bonds
– Why range charts?
o ALL the pattern look the same b/c all the candlesticks have the same range inside them
o Compare that to a minute chart and the range charts look nice and clean
o I make money when the market has trading range
Do I make money when the market uses a lot of TIME? No.
Do I make money when the market uses a lot of TICK? No.
Do I make money when the market uses a lot of VOLUME? No.
Do I make money when the market uses a lot of RANGE? YES
o Easy to predict the risk on the trade
Assuming you enter a trade at the highs of the bar, and your stop is placed at the lows of the bar
We always know the amount of risk
– Auto Trader, fully-automated trading system
o 20 tick stop
o 75 tick target
o Very low RRR
o Very low drawdowns
o Takes on avg 1.5 trades per day