159 Ticks Live! Trade Management Strategies

820am EST

– Dollar index futures are trading sideways, after they dropped the past 24 hours

o We notice that we only have 1 double-top, and we have 4 double-bottoms on our slower chart

o Tells me we have very little resistance, and lots of support

o Negative correlation with the dollar and everything else we trade

o Dollar support = resistance on everything else

o Higher % trades today may be the short side

 Fast chart confirms sideways market today

 Speed of the tape is very slow < 100

 Average true range has been dropping, and its at the lowest point of the week.

– Euro Futures are trading slowly above the very important number of 2000

o Fast chart shows price trading at its open, so we aren’t too excited about the current location, we need to wait for the market to start to move.

o Average true range is very low, the lowest all week

– Gold Futures are very concerning this morning

o Very slow speed of the tape < 50 today

o We are trading in the middle on BOTH the slow and fast timeframe charts

 We want to avoid trading in the MIDDLE of the chart b/c we call this the ‘zero-line’

930am EST

– Dollar index futures trading through their lows, making new lows and continuing down

o We need the lows to hold if we want to take the DX-Pattern

o If we see those lows broken, we can then look for other markets to be getting more volatile

o The dollar is the perfect hedge against a slow day

 If the dollar is moving, everything else moves so we have lots of trades to take

 If the dollar isn’t moving, we look for the DX-pattern, which is VERY high %

Make sure you use the correct trade management for the chart you’re trading:

– Scalpers will use the same trade management every single time they execute

o 4/8/Runner

– Day Traders / Position Trader

o Use the market’s support and resistance to plan our trade management

o Most common ways to place your stops and targets:

 Swing-High/Low

 Trigger Line (thin yellow)

Cheat Sheet (entry/exit rules)

– Breaker

o Be more than 5 ticks away from the big round number (75.00, 1.2000, 56.000)

o Must see a breakout first, above/below the RED LINE

o Swing Low for short trade, swing high for a long trade

o 6-ticks from the swing-high/low to the next level of support/resistance

 Uses your trade management as a guide

 Scalper = 4/8/Runner

• 6 ticks = 4 + 2 slippage = 6ticks

 Day Trader (13-range)

• 8/16

• 10-tick rule (8 +2)

o Steep slope to the trigger line

 Avoid trading a breaker pattern when we see a flat trigger line

 You don’t need to worry about the slope on a 2-step pattern

• b/c it’s a trend reversal

• use the trigger line as support/resistance for a 2-step

o Momentum must be pointed down for a short, or up for a long

 Be careful around overbought, or oversold momentum

o Size of the orders (larger the better)

o Speed of the orders coming into the market

 Pace of tape indicator

 Faster the better to confirm your entry.

Exit Rules:

– Green or Yellow POT = use my mechanical trade management

o Pink line on Trade Man Chart

– RED Pot I use a discretionary

o Red POT = slow speed

o MACD against my position

 Long = macd below the zero line

 Short = macd above the zero

o Momentum curls against my trade

5 trades today, 5 Winners

+159ticks, $1,590 usd

Only 4 contracts needed to achieve this today!

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