Before we wrap up the 3 Steps to our Trading Success, Lets recall for a moment, our first 2 steps…
Step #1 was to use our AUTO-LEVELS Indicator to locate the very best levels to use, and then look for simple price patterns such as the Wave, 2-Step, and Breaker to enter the trade.
Step #2 we use our ENTRY RULES to identify these patterns as either HIGH or LOW probability in order to make sure we are taking only the very best trading opportunities.
Step #3 is to look for CONFIRMATION OF THE MOVE to give us confidence to enter this trade!
Step #1 was to use our AUTO-LEVELS Indicator to locate the very best levels to use, and then look for simple price patterns such as the Wave, 2-Step, and Breaker to enter the trade.
Step #2 we use our ENTRY RULES to identify these patterns as either HIGH or LOW probability in order to make sure we are taking only the very best trading opportunities.
Step #3 is to look for CONFIRMATION OF THE MOVE to give us confidence to enter this trade!
What’s next?
Keep an eye out next week for another video series, which will cover Trade Management!
Now that you know HOW to TAKE the trade…now you need to know what to do when you are IN THE TRADE!
Our trade management strategies are PROVEN & Time-Tested to be easy to use in the heat of the moment in the markets, and we have both Mechanical and discretionary components to ensure you are able to manage trades in ANY MARKET CONDITION.
You don’t want to miss our next videos series, it will complete this process of learning to day trade the futures markets with a process as simple as 1…2…3!
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
October 28, 2009
Secrets For Success
Blog Image:
Use These Entry Rules To Qualify Trades…
Step #2: Entry Rules Identify the Highest-Percentage Patterns
Lets recall for a moment, our first step…
Step #1 was to use our AUTO-LEVELS Indicator to locate the very best levels to use, and then look for simple price patterns such as the Wave, 2-Step, and Breaker to enter the trade.
Once we see those important patterns show up around those important price levels, we have to look at Step #2...
Now we much use our ENTRY RULES to identify these patterns as either HIGH or LOW probability in order to make sure we are taking only the very best trading opportunities.
Before we can do that, we must be aware of what those rules are!
Our Advanced Members receive a full, detailed copy of our entry rules, but for live trading, we use a shorter version, which we call the ‘CHEAT SHEET’, and there is a copy of these rules posted on our blog for your reference.
Let’s go over these rules 1 by 1 for each pattern set-up so you can get familiar with them…
Its important that you are aware…these rules are listed in order of importance, so the first on the list is checked first, and the last is checked….last
This entry pattern looks to capitalize on a moving market, look for Swing-Highs & Swing-Lows as well as a steep slope to our Trigger Line for entry. Beware taking Wave Set-Ups in low volume, or sideways markets, as it has a tendency to reverse direction.
Breaker Set-Up:
Breakout Above/Below
Swing High/Low
Perfect Pattern
6-8 Ticks
Medium & Slow
Trigger Slope
Momentum (check this last)
Speed of Tape (POT) (check this last)
D/Q: Time/Price/POT
The Breaker Set-up is a trend-continuation pattern that works best on Sideways & Trending Conditions.
This entry pattern looks to capitalize on a moving market, look for Swing-Highs & Swing-Lows around the major levels of support and resistance which are market for you automatically using our AUTO-LEVELS INDICATOR.
Beware taking Breaker Set-Ups in the CHOP ZONE & around low volume times in the market.
2-Step Set-Up:
Short-Term Trend
@ Extremes
6-8 Ticks
Medium & Slow
Momentum(check this last)
Speed of Tape (POT) (check this last)
D/Q: Time/Price/POT
The 2-Step Set-up is a counter-trend pattern that works best on sideways markets.
This entry pattern looks to capitalize on a choppy market, look for Swing-Highs & Swing-Lows marked with our SWING INDICATOR to identify your entry.
Don’t forget!! You need to see follow-thru to confirm your entry.
Beware taking 2-Step Set-Ups without identifying the Short term Trend, because this pattern should be taken against the trend, looking for a reversal in price action.
Let’s Recap…
Step #1 is to let our AUTO-LEVELS indicator find the most important levels of support/resistance.
Once we find those important levels, we then wait for simple patterns to develop around those levels, such as the Wave, Breaker, and 2-Step as we’ve discussed in earlier videos in this series.
With those patterns now developing, we check our detailed and specific entry rules (Step #2) to identify the pattern as either being HIGH or LOW probability.
If the trade does NOT meet our entry rules criteria, we will avoid the trade, and potentially look for that trade in the opposite direction using our 2-Step Counter-trend reversal entry pattern.
If the trade DOES meet our entry rules criteria, I will then move to Step #3….Look for Confirmation so we can enter the trade with confidence.
In our next video we will discuss Step #3, which is the final part of this process, which is to look for the confirmation of the move, and enter the trade.
Keep an eye out for video #3 of this series later this week!
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
October 27, 2009
Secrets For Success
Blog Image:
Must Identify Price Patterns First…
The markets can be VERY chaotic for a new trader, and there’s no wonder why…
Many different markets to trade
E-Mini: ES, YM, TF, NQ
Currencies: Euro, Pound, Yen
Commodities: Gold, Crude Oil, Corn, Wheat
Fixed Income: Bonds & Notes
Different timeframes to trade
Scalper on a fast timeframe
Day Trader on a medium timeframe
Position trader on a slower timeframe
Different levels of support & resistance
HOD/LOD
OPEN/CLOSE
Moving Averages
Pivots
Fibonacci
The list goes on…
Different Times to trade:
Breakouts
Failed breakouts
Buy Pullbacks
Sell Retracements
At the Open (or) At the Close
During News events (or) after news events
US Session, Euro Session, Asian Session…which is best?
With all of this to learn…how does the SchoolOfTrade.com make this learning process so simple?
Its as easy as 1…2…3
Step #1: Identify the Patterns Set-Ups at IMPORTANT PRICE LEVELS
Finding the Price Levels:
Price levels are located for us automatically using our proprietary indicators, such as the AUTO-LEVELS Indicator, which makes these levels VERY easy to locate.
Assuming we have our levels properly identified with our indicator, we then watch for these simple patterns AROUND these levels.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
October 22, 2009
Secrets For Success
Blog Image:
2 Step Set-Up
First, It’s important that we break these into 2 main categories:
Trend-Continuation
Perfect for trending markets, high volume, price making higher-highs & lower-lows
Wave Set-Up
Breaker Set-Up
Counter-Trend
Perfect for choppy, sideways markets with low volume, double-tops & double-bottoms
2-Step Set-up
Let’s get to know the 2 Step shall we? Scroll down to review the Breaker and Wave Set-Ups.
The 2-Step Set-up is a counter-trend pattern that works best on Sideways markets. This entry pattern looks to capitalize on a choppy market, look for Swing-Highs & Swing-Lows marked with our SWING INDICATOR to identify your entry.
Don’t forget!! You need to see FOLLOW-THRU to confirm your entry.
Beware taking 2-Step Set-Ups without identifying the Short term Trend, because this pattern should be taken against the trend, looking for a reversal in price action.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
October 21, 2009
Secrets For Success
Blog Image:
The Wave Set-Up
The Wave Set-up is a trend-continuation pattern that works best on trending markets.
This entry pattern looks to capitalize on a moving market, look for Swing-Highs & Swing-Lows as well as a steep slope to our Trigger Line for entry.
Beware taking Wave Set-Ups in low volume, or sideways markets, as it has a tendency to reverse direction.
Trend-Continuation Pattern
Watch for the Trigger-Line to make new Highs/Lows to take trade
80% Winning Ratio
Remember, we teach over 10 different set-ups in our Advanced Materials, but these are the 3 highest-probability and consistent patterns we see every day in the markets we trade.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
October 20, 2009
Secrets For Success
The Breaker Set-Up
The Breaker Set-up is a trend-continuation pattern that works best on Sideways & Trending Conditions.
This entry pattern looks to capitalize on a moving market, look for Swing-Highs & Swing-Lows around the major levels of Support & Resistance which are market for you automatically using our AUTO-LEVELS INDICATOR.
Beware taking Breaker Set-Ups in the CHOP ZONE & around low volume times in the market.
Trend-Continuation Pattern
Watch for the Swing Indicator to mark our Swing-High/Low levels for entry
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
October 16, 2009
SchoolOfTrade's Secret For Success
Blog Image:
Learn How WE Read The Tape
“Market participants leave their footprints…telling us where they’ve been, and giving us clues as to the direction they’re headed in the future”
What is it?
Tape Reading is the study of raw price action as it comes across your time & sales window, and is considered by most to be the ‘purest form of the market.’
The term tape comes from ticker tape; print out by the ticker tape machines available since 1870s which reports the latest trade/bid/ask update information.
How it’s used:
Predict short term price changes by examining price and volume information as it comes across the ticker tape.
Most effectively used at potential turning points in the market to gauge overall market sentiment and help determine the future direction of price.
Traders use this to see confirmation of a potential trade set-up, or a heads-up that a set-up should be avoided.
Also used as an indicator of when momentum has dried up, signaling a trader to take profits or to limit his/her risk on a position.
Benefit to the trader:
Filter out the highest percentage set-ups
Confidence in your entries
Know when to exit a trade
Maximize profits on each trade
Limit the risk on each trade
What to watch:
Speed of the orders
Size of the orders
Order Condition
Learning to read the tape is a vital part to becoming a successful trader in the long term, and understanding how to learn this skill can be difficult if you don’t know what to look for.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
A pivot point is nothing more than a specific price level for the market you are trading, and we will use this price point as a reference.
The most common pivot points for this would be the open, high or low of day, and previous close levels. We use these specific levels in the market to watch how price action reacts in and around these areas.
If we see that price action shows bullish patterns around the high of day, that will tell us we should expect to see the market try to rally through the highs of the day. In other words, this tells us the overall market sentiment at these levels.
Reaction to Price Moves
Successful traders always trade the reaction, rather than the move, and reading the tape allows them to really tune-into what really drives these moves.
For example, if price is trading in a specific sideways trading range and then breaks out of this to the up-side, the experienced trader knows to stay away from getting involved on the initial move up, but rather pays close attention to how the tape reacts to this move.
Using simple price patterns at these extremes, the trader can get a better feel for the sentiment in the market, and make educated trading decisions based on this reaction to the increase in price.
Conviction in the market
Are buyers met with equal amount of sellers?
Are the sellers having a hard time keeping up with the buy orders?
Is price forcefully moving through levels of support or resistance?
Is price flirting with support and resistance levels, only to be swatted back and forth like a paper napkin?
Price patterns on the tape solidify conviction in the market and give the trader more confidence getting involved with the current short-term trend.
On the opposite side, conviction on the tape can also give the trader an indication that the current move has ended, and they need to be prepared to see a potential reversal
Second, use simple patterns to identify these opportunities
As traders we use predictable and dependable patterns on the tape to make educated trading decisions. These patterns are easy to see on your time & sales window if you know what to look for.
Characterized by a breakout of range-bound price action, this move up is quick, and on increasing volume, followed by a small pullback down, only to be taken up again by increased momentum on the buy-side.
In this example, you could use this pattern as confirmation for a LONG entry in the market, or as an indication that you should be covering a short position.
Characterized by a sharp move out of its trading range, usually on low volume by small retail traders in the market, and is met with great resistance from larger-sized traders who quickly take advantage of this opportunity to get into the market at a great price, and the retail traders pay the premium on it.
In this example, this pattern shows little confirmation, which is an easy give-away for traders to stay away from the up-side b/c the buyers didn’t bring enough conviction to the market and the sellers are ready to make them pay.
Don’t get fooled into a long position on this, wait for the conviction to show you where to go, and in this example, you would want to short this jump up in price once you see the sellers take control.
The most common pattern we see, this pattern shows no concrete direction, no conviction, and no volume in any given direction. Traders who can see this pattern know to wait for more conviction in the price action as to where the market is headed.
In this example, the experienced trader waits patiently to see a pattern develop, knowing that this lack of conviction in the market increases the risk on a potential trade exponentially.
“If you can’t see a pattern on the tape it’s most likely the confusion pattern, and in any case, you need to avoid it…”
Be on the lookout for my next news post, where we will use this knowledge to make educated trading decisions
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
October 16, 2009
SchoolOfTrade's Secret For Success
Blog Image:
Use This Knowledge To Make Educated Trading Decisions…
Professional traders use the tape to better-understand the overall sentiment in the market participants, and we use that knowledge to make educated trading decisions in our trading.
Execute with Confidence:
Reading the tape increases your confidence to pull the trigger on your trades by giving you the ability to know what the other traders are thinking.
Wish you had the ability to speak with the other traders in the pit? You do when you read the tape!
Know when to hold ‘em, and when to fold’em:
Know when to exit your position, or when to let it run using the information you gather from reading the tape.
Using specific ‘pivot points’ as a reference, you will better understand what other traders are thinking as price moves in your direction, and you can use this information to know whether you need to exit your position or stick around for the ride!
Understand your stops and targets:
Ever wonder why you got stopped out of a trade?
Ever wonder why you get some targets filled and some do not?
The answer lies in the tape, and your ability to read and understand it.
Using the tape, you’ll know more about why a trade didn’t work out, or why you barely missed a profit target, or even when to move that target closer to price to ensure you get filled.
Remember, the markets are anything but random, and price always moves with purpose, it’s your job to interpret the tape to understand why.
Please read our disclaimer:
Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. The videos are neither a solicitation nor an offer to Buy/Sell futures or options. The past performance of any trading system or methodology is not necessarily indicative of future results.
Rule 4.41 - Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown. Learn to trade futures forex stocks.
