13 Ticks Today; Manage Losses correctly…with WINNERS!

Great weekend for watching the Olympics on TV, and was hard getting up early for Monday morning trading….and I think the rest of the market really did the same thing!

It was expected to be a slow Monday morning b/c:

• All Monday Mornings are relatively slow

• No major news events today

• Ben Bernanke spoke @ 11:00am EST

Basically, a Monday with zero news and Ben Bernanke speaking makes for a slow and sluggish beginning to the week, and that EXACTLY what we got!

We began the day looking at the market…

• Red Pace of Tape (all 4 markets < 100)

• Flat Trigger Lines

• Not many BIG MONEY traders in the market

So we knew that patience was going to be the key to our success today, and even though we knew we had to wait, it certainly doesn’t make it any EASIER to hold off on trading on a Monday morning.

Sitting on hands is easier said than done, right?

We took 6 total trades today, and the first 3 trades (before 10:30am EST) we didn’t get very much to work with, and our results showed.

We took scratch trades, losses, and a small winner up to 10:30am EST, and then we finally got some movement in the markets, which allowed us to make some profits!

Stay patient…wait for your perfect pattern, and don’t be afraid to lose money. This is what we have to be focused on as a trader in today’s challenging environment.

6 trades, 2 losses, 3 winners, and a scratch trade!

+13ticks ($140)

See you tomorrow @ 745am EST for the live trade room session!

Review Our Trades From Yesterday!

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TODAY’S TRADE ROOM QUESTIONS:

JJ@SchoolOfTrade.com

Where can I find today’s news?

http://schooloftrade.com/news

Which brokers do we use?

Sales@SchoolOfTrade.com / 800.381.2084

List of brokers, computer requirements, etc+

What do the Auto-Levels (red lines) represent?

– The most important support/resistance levels

– Swing highs/lows

– Weekly, monthly, quarterly

– Weighted for recency

– Not Fibs, Not Pivots, they are unique

What am I watching to tell me how this day is going to be?

– Today’s news events; anything coming up today?

o Bernanke speaks, so things may be slower

– Speed of Tape; how FAST is the market moving

o Pace of tape indicator moving SLOWLY

o Rule of thumb: 200+ POT for trades

– Trending vs. Sideways Markets

o Trigger Lines tell the story

 Flat trigger line = flat market

 Steep Slope Trigger Line = strong trend

o We see flat trigger lines

Big MONEY in the market:

– Big buyers/sellers

– Filtered Time & Sales window

o Filtered for 10 contracts

o Another time & sales w/out filter

Candlestick patterns, what are their worth?

– Candlestick patterns won’t get you INTO or OUT-OF a trade….they won’t give you buy/sell signals

– They WILL tell you what the market is thinking, and then we use that info to make educated decisions

o Market Sentiment (what the majority of the traders are ‘thinking’/’doing

Size & Speed of the Tape:

– Time & Sales Window

o Green = buyers

o Red = Sellers

 Filtered Time & Sales window to locate the BiG buyers/sellers

 Un-filtered time & sales window to see SPEED of the orders

 Pace of Tape Indicator to measure the SPEED of the time & sales window

• RED = slow speed

• Green = Fast speed

 Pace of Tape, 200 is a good minimum to wait for as a new trader

• 200 (RED) but it will be decent speed

Brokers:

– List of our preferred brokers: Sales@SchoolOfTrade.com

o Low margins $500 for most, $1,000 crude oil

o Open two accounts is OK

o Place 2 orders at once

 OCO (one cancels the other)

o Using your DOM or Chart Trader

 Set-up 2 ATM strategies

 Execute one ATM strategies with long order

 Execute the other ATM strategy with the short order

• Help you enter 2 orders on your DOM/Chart

o Support@NinjaTrader.com and ask them how to do it, or watch the video we do later today.

Dollar Index Correlation:

– DX (Dollar) rises, others fall

– Watch for sideways market on the DX to avoid trading on the Crude and Gold

– Wait for a strong trend on the DX to trade the Gold & Crude Oil

– Learned that correlations aren’t trading opportunities, they are market sentiment/filters

– Example: Dollar is FLAT (stay away)

o Dollar is rising = breaker short, 2-step short

o Dollar is falling = breaker long, 2-step long

What do we look for when the market transitions from FLAT/SIDEWAYS to TRENDING?

– Flat trigger lines (sideways) begin to develop a steep slope

– DX goes from Flat to trending as well, we will see the market begin to move up/down against it

Wave Indicator Trading

– Crude Oil = 1 / 13 / 21 range charts

o Fewer trades, stronger signals

When do we know lunch is here?

– There’s no bell that rings, no alarm for lunch

– Watch the market to tell us:

o Slower Price Action

 Pace of Tape Indicator = RED

o Sideways/Flat Market

 Trigger Lines = FLAT (sideways)

o Fewer Large Traders in the market

 Filtered Time & Sales Window

• Fewer big buyers/sellers

• Tell us they have left for lunch!

Dead Zone = 10:30 – 11:30

10:30 = after the news

11:30 = Euro traders close for the day (EST)

Tend to see a spike in volume @ 11:30am EST, be careful, if the volume doesn’t come, we can’t trade it!

What did we learn today?

– Read the news ahead of schedule to identify days with few news releases

– Identify days where we have major speaking events

– Watch for RED POT at the open

– Watch for Sideways markets (flat trigger lines)

– Watch the filtered time & sales window to know when to get in

o Speed is most important!!! Fast orders, and a LOT of them!

– Most important thing about taking a loss

o Reacting to it the correct way

o Learning from your mistake, and not repeating that mistake

Review Our Trades From Yesterday!

See All Of Our Previous Trades

Save on Cost of Membership by answering these Trading Quizzes!