We got exactly what we expected out of the market today.
We opened our charts at 745am EST and we saw….
- Gold @ OPEN (flat market)
- Very tight trading ranges on Gold
- Crude Oil, all trigger lines are the same (flat market)
- Red Pace of Tape, RED = SLOW price action
- Dollar = Red Pace of Tape, Flat Overall Trend, Slight uptrend on the fast timeframe
Things looked and felt very slow at the open, and no matter the REASON is for this, we knew we had to remain patient and wait for the best patterns to show up.
We also made note of the slower timeframe levels on the Dollar Index Futures Chart.
We spotted a double-bottom on Dollar around 80.500 and we knew that if the Dollar Index tried to break out below that level we would see things get pretty choppy, and they did!
After 10:30am est. today the Dollar attempted to break below these 2-bottoms and we also saw the reaction on crude oil and gold futures immediately.
Once the Dollar began to attempt this breakout, we had to wait patiently to see what the reaction would be, and I’m glad we did.
The next 45 mins of the market, into lunch, was VERY difficult to trade…all pointing back to the Dollar Index level it was having difficulty breaking.
So, once again, knowing what to look for, we knew to stay away towards the end of the morning on Friday, and that ended up being the best decision we made all day b/c it KEPT the money in our pockets instead of giving it back to the markets!
4 trades today, 2 winners, 2 losses
Our trade management style is the reason we are profitable!
+22 ticks, $210usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
We got exactly what we expected out of the market today.
We opened our charts at 745am EST and we saw….
- Gold @ OPEN (flat market)
- Very tight trading ranges on Gold
- Crude Oil, all trigger lines are the same (flat market)
- Red Pace of Tape, RED = SLOW price action
- Dollar = Red Pace of Tape, Flat Overall Trend, Slight uptrend on the fast timeframe
Things looked and felt very slow at the open, and no matter the REASON is for this, we knew we had to remain patient and wait for the best patterns to show up.
We also made note of the slower timeframe levels on the Dollar Index Futures Chart.
We spotted a double-bottom on Dollar around 80.500 and we knew that if the Dollar Index tried to break out below that level we would see things get pretty choppy, and they did!
After 10:30am est. today the Dollar attempted to break below these 2-bottoms and we also saw the reaction on crude oil and gold futures immediately.
Once the Dollar began to attempt this breakout, we had to wait patiently to see what the reaction would be, and I’m glad we did.
The next 45 mins of the market, into lunch, was VERY difficult to trade…all pointing back to the Dollar Index level it was having difficulty breaking.
So, once again, knowing what to look for, we knew to stay away towards the end of the morning on Friday, and that ended up being the best decision we made all day b/c it KEPT the money in our pockets instead of giving it back to the markets!
4 trades today, 2 winners, 2 losses
Our trade management style is the reason we are profitable!
+22 ticks, $210usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
Discipline Cycle 2 of 5 Day Trading E-Mini Futures
Blog Image:
In this 2nd video of this 5-video series, we talk about the 2nd Phase of the Discipline Cycle, which is Consistency.
Let’s first recall where we left off on our Last Video:
• We Listened to My (JJ’s) story of HOW and WHY he created the Discipline Cycle
• We Learn what the Discipline Cycle is and how it works
• We learned the first phase of this cycle; Discipline, which is also the LAST phase of the cycle as well.
Now that we’ve found discipline in our trading, we begin to see some consistency in our trading. If you follow your mechanical rules with discipline, things will begin to take form…
Remember, this may not be profitable consistency yet, but this consistency will give you the SAME patterns, the SAME entries, and the SAME feedback from the market each trade you take, which will produce valuable Consistency in your trading, which will enable you to continue to grow with this ‘cycle’
In this 2nd Phase of the Discipline Cycle we lay the foundation for Consistency in your trading, so make sure you watch this video, and stay tuned for the rest of this 5-video series, which will teach us more about the EVOLUTION of a Trader through the Discipline Cycle!
Keep an eye out for the 3rd Video of this series…your Profit & Loss Statement will THANK YOU!
Stick to those Rules!
See you in the Live Trade Room tomorrow @ 745am EST
Ready To begin Your Trading Career As A James Wave Trader?
66 Ticks Sideways Ranges on Crude Oil & Gold We know what to LOOK for!
Blog Image:
What a great day in the markets today! I think we may be learning here!
We waited patiently for the time in the day when the price was moving quickly, and not sitting there slowly.
We knew to pay close attention to the DOLLAR INDEX FUTURES Fast & Slow timeframes.
We knew to stay AWAY from the extremes on the sideways ranges in crude oil and gold futures.
And we knew to follow those rules when we tried to enter a trade.
The result? NO STRESS! Easy trading and no pressure to MAKE UP TRADES!
We traded everything from the British pound, to Gold and Crude Oil futures today.
The day started pretty well, taking 3 winning trades before 930am EST is always a major plus, and then we can stay focused on the best potential entries the rest of the day.
We took a small loss at 1030am EST, but finished up the day with our largest trade of the day on Gold, on a 2-step short, counter trend off the High of Day!
It was another great day…see you in the live trade room tomorrow!
6 trades today, 5 winners
+66 ticks, $600usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
TODAY’S TRADE ROOM QUESTIONS:
WEBINAR: Trading the News:
- Every new trader attempts this
o I spent more than 1 full year trying to study and dissect how to trade the news
Here were my results:
- Charts tend to Jam on you
o When the news is released, charts tend to lock up, makes it hard to execute!
- Market lose liquidity
o People are desperately trying to get filled
o Lots of slippage
o The choppy price action around the news = more slippage as well
- No way of telling what the REACTION will be to the news release?
o Jobless Claims RISE (less jobs, more un-employment)
Crude Oil = rise?
• Cost of goods drop
• Inflation should drop
• Commodity prices should DROP
• Crude oil should….fall?
• What was the previous report?
• Are there any continuing claims?
• What was the expectation?
How do trade the news?
- Avoid the market 5-mins / 5-mins
- Avoid that illiquid, unpredictable in the reaction to the news event
- Pick a news event that happens WEEKLY
- Study the previous releases
- Study the reaction to the market
- Study the OTHER news releases that could correlate to it
- Once you have your news event identified, and you do your homework….
- What is your entry rule?
- What is your exit rule?
o Jobless Claims
Entry = exceed the expected news number by 10%, and the correlated news is XYX
Exit = reaction to the news, profit targets, and where is your stop?
• Where do you take profit?
• Where do you get out for loss?
o S/R levels, major levels, most important
• Profit targets
o 8 / 23 / 50
In conclusion:
- Had days made $3000
- Had MORE days losing $3000
- Trading the news is NOT consistent
- That’s why I don’t trade it today
February 24, 2010
34 Ticks Today Look for the CONFIRMATION to Pull the Trigger
Blog Image:
Another day filled with learning and profits in our live trade room for members and guests!
Today was a challenge, but we knew what to expect!
We identified the day ahead of time today as being a potentially VERY SLOW day because of…
• Fed’s Ben Bernanke in front of Congress
• Sec. Tim Geithner in front of the Budget Committee
• Toyota hearing on Capital Hill
With these speaking events today, we expected to see more people sitting on the sidelines than any other day this week.
We were correct, and we saw this in the markets when we opened our charts:
• Red Pace of Tape Indicator
• Flat Trigger Lines
• All Trigger Lines were the SAME price level
• Lack of BIG MONEY in the market
The lack of BIG MONEY was the most obvious.
We had dozens of potential trades today, however, we cannot change our rules, we need to see BIG MONEY in the market as a confirmation to take our entry on the trade.
The patterns kept lining up, we qualified each one correctly, and we WAITED for the BIG MONEY to give us the confirmation trigger…..and….NOTHING.
Lots of little traders on the time & sales window, nothing from the BIG MONEY, and we assume it was b/c of the events scheduled for today.
So how did we trade this market today?
Very patiently, and we emphasized being aggressive with our defense! Lock in profits early, and move onto the next high percentage pattern.
One of the most important things to remember on days like today is that making money is a great result, but keeping money from yesturday’s $800 day is the most important.
Often times the market will give you a challenging day, and the easiest way to trade it is to use patience to wait for the obvious patterns, look for the best volume, and lock in those profits b/c the market gets very choppy quite often when volume slows down.
We stuck to our rules today, and we made money!
6 trades today, 3 winners
+34 ticks, $365usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session.
Ready To begin Your Trading Career As A James Wave Trader?
Your Emotions can be an asset or a liability to your trading; I think we all agree on that.
Out of ALL the things we worry about in the trade room each day, the most important is within ourselves! Our emotions a deadly to our trading if we can’t keep them under control.
Created in 2003, the Discipline Cycle is the by-product of Joseph James’ attempts to find an easy way to change the emotional impact on his trading.
Every trader goes through an evolution of learning and growing as a trader, and this Discipline Cycle defines that EVOLUTIONARY PROCESS that all traders must go through to achieve long term and consistent success as a day trader.
In this first video of this 5-part series you will…
• Listen Joseph’s story of HOW and WHY he created the Discipline Cycle
• Learn what the Discipline Cycle is and how it works
• Be introduced to the first phase of this cycle; Discipline, which is also the LAST phase of the cycle as well.
Oh….wait!!!!!!
If you’re thinking to yourself right now….why do I need Discipline?
YOU are the trader this video series is designed for!
Watch this series…your PnL statement will THANK YOU!
Ready To begin Your Trading Career As A James Wave Trader?
74 Ticks Today, Dollar Index Trading Webinar on Thursday
Blog Image:
SchoolofTrade.com Daily Commentary 02-23-10
We had another GREAT day in our live trade room!
We knew this week would be challenging with a LOT going on…
• Bernanke speaks off and on all week
• Toyota hearings in Congress today/tomorrow
• Alan Greenspan making comments about TARP
The lists went on and on about how many things were going to be happening this week, and ALL of these threatened to steal that always-important VOLUME and SPEED from our markets.
Today was a great example of a SLOW market, but with lots of patterns, so we had plenty of patterns to look for, but only a few of them qualified.
We took trades on Gold, Crude Oil & Euro Futures today, all were winners.
Keep an eye out for our DOLLAR INDEX Trading Webinar this Thursday!
Make sure you are on our newsletter for more info on this new event coming this week!
5 trades today, 5 winners
+74 ticks, $793usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
Ready To begin Your Trading Career As A James Wave Trader?
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!
106 Ticks HUGE Day in the Live Trade Room! Don’t miss Monday!
Blog Image:
Today reminded us of why our trading methods are so successful!
We battled tough markets all week this week, and at times, it seemed that there was no light at the end of the tunnel….not so fast!
Tuesday, Wednesday & Thursday and the choppy markets that they delivered were quickly forgotten today when we saw plenty of price movement, lots of good volume, and the perfect patterns that set up over and over again.
Some days it feels like you can’t lose…and today was one of those days!
We took 9 trades today, mostly on Crude Oil Futures, and we did a great job at executing according to our simple trading rules.
From trend-continuation to counter-trend, we took long and short according to our Breaker and 2-Step Patterns.
Tiger Woods got up and spoke around 1030am EST and the market began to slow down, but not before we had already grabbed over 100 ticks out of the market.
After we saw the market begin to take off for an early lunch, we took an hour to answer questions, and we finished up the week with a special webinar on the ‘Discipline Cycle’
Overall, a great way to end a great week in the live trade room!
We took 9 trades today
7 Winners / 2 Losses
TOTAL = +106 ticks / $1,060usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
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+
How do we define the BRACKETS?
- Starts w/ Auto-Levels Indicator
o Draws all the RED LINES (important) automatically
o Projects those lines on my FAST timeframe so I can use them to take trades
- Bracket = RED Line High, & RED LINE Low
Contract Rollover:
- Crude Oil: Monthly; trade the month with the MOST volume
- Gold: every-other-month: trade the month with the MOST
- Currencies: quarterly
- E-Mini: quarterly
- More info: on the exchange websites
NYMEX Gold Crude Oil
CME Group E-mini Currencies
o Google: ‘contract rollover Crude Oil NYMEX’
Dollar Index = DX (don’t trade it, use its correlation)
DAX Futures (Eurex) = FDAX (www.Eurexchange.com)
- Rollover is also quarterly on the DAX, FESX, CAC, FTSE
When does lunch begin?
- Remember….ends early on Friday
- No lunch bell, so we wait for the market to tell us
o Slower Price Action (speed)
Pace of Tape Indicator
o Sideways Markets
Flat Trigger Lines
o Fewer BIG Money traders
Filtered Time & Sales Window
• Filtered for 10+ contracts, shows the big trades only, easier to see.
Does the SIMULATOR give you LIFE-LIKE results?
- Fills? Exits? Targets?
o YES! If you use it correctly
TUTORIAL: Setting up your Workspace
• Control Center: change the settings on your simulator
o TradeStation SIM = very basic, no reality behind it
o NT SIm is the Best (also like the Market Replay Recorder)
DAX: Volume is too low right now
- Ever since end of 2008 the DAX lost all speculative volume (FESX and ES)
- Rule = 100,000 contracts before 8am EST
o If less, stay away, not enough volume
DAX = very whippy
25 euro / point
• 12.50eur / tick
• Avg trading range = 130 points
o ES Avg = 13points
What if I lose control over my charts & im in a trade?
- Go get a change of pants!
- Be prepared:
o Back-up internet connection
o Back up battery-power
o Know the phone # (two) for your broker’s trade desk
o Your stops and targets will remain in the market until your broker removes them for you.
o If there’s no power…how do you CALL?
Cell phone, something that can be used without power in your house
Advanced Membership:
- Lifetime access
- Open-code indicators
- No monthly fees
- All future up-dates ( to include automation)
- Free Charts ($150) ($3600 each year you save!!)
- Free Market Data ($150)
- Chart Templates
- 24/7 tech support
- Video chapters, easy to learn this way!
- Ninja Charts have a license fee of $995 for lifetime, we show you how to AVOID that fee (easy)
What are the skills we use as traders?
- Same as other occupations?
o Doctor? Engineer?
o Different: combination of discipline/focus, avoid fear-based decisions, keep our cool, and we need to be risk-takers
Be careful about those BIG BROKERS
- IB good example
- Filtered Tick Data! Pace of Tape Indicator and RANGE charts are going to be DIFFERENT with IB
o Too expensive
Margins too high ($1,000 on Crude Oil)($500)
Commissions too high
All the bells and whistles are not needed for a day trader
o Sales@Schooloftrade.com 800.381.2084
What account size is ideal?
- 1 contract traders = $750 ($500 min)
o Crude Oil =$1,000usd / contract ($1500usd)
- 3 Contract Trader = $2500usd +
o Crude Oil = $3,000 ($3750)
- 6 tick stops, these are tight stops, we can get away with small account
14Ticks Today: In a hole? Stop Digging & Follow THESE rules!
Blog Image:
Today was a day made for building character, one of those days you heard about when traders tell stories about the struggles we all go through as traders.
• We had chart issues at the open, so we had to deal with re-loading charts
• The Market was VERY slow today almost all morning
• First trade was a FULL STOP LOSS, so we dug ourselves a big hole
• We didn’t know if we would have any opportunities to dig our way out!
To say that today was challenging would be an under-statement!
We began with a VERY slow day in the markets, which makes it difficult to be confident in our entries b/c low volume typically brings inconsistent S/R levels.
On top of that, we continue to see the result of the snow storms we saw in the US the past 2 weeks with our data servers CLEARLY having a hard time with pushing our charts.
After re-loading charts twice, we were exhausted from trying to mess with charts, that we were happy to be back in the markets when they finally got working again around 10:30am EST.
To make matters worse…after we loaded our charts @ 1030am and started trading after the delay we took a FULL STOP! Ouch!
It has been 3+ weeks since we took a FULL stop. We take pride in our abilities to take SMALL losses and LARGE winners, but this was a FULL stop loss, so it hurt!
To make matters worse, the REASON for the loss…completely a mental mistake. Our second trade of the day did NOT have 6 ticks of room to let the trade run, and we missed that, took the trade, and of course, our RULES would have kept us OUT….but we were IN…and we had to make up for that mistake somehow!
So how do you dig yourself out of such a big hole?
Lets recall…the market is VERY slow today…we only took 2 trades…1 scratch…1 big loss…so we had to focus on our plan and wait patiently for the best patterns to take.
We can’t risk another loss, so we had to be patient.
The best way to dig out after a loss is to take a quick break, re-focus, and then prepare yourself for waiting for the next high percentage and PERFECT pattern to take the trade.
It doesn’t do us any good to take high risk trades when we find ourselves in a hole, its too risky to lose MORE money!
So we did just that….we waited…and sure enough (as always) more patterns showed up, and we took the best patterns with confidence!
Our 3rd trade made half the loss back
Our 4th trade of the day, just before we finished for lunch, made us 24 ticks and got us back in the green for another day well traded!
The key today: If you find yourself in a hole…stop digging. Focus on Rules.
2 Losses / 2 winners
TOTAL = +14ticks / $140usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
TODAY’S TRADE ROOM QUESTIONS:
What are the settings on the time & sales window?
- ADV/Download Section: Time & Sales Window Properties (copy that)
And the 5th & Final Video of this Series on Trade Management is….
Trade Management for Different Traders
Every trader is different…
Scalpers, Intra-Day Traders, Swing & Position Traders
Those different types of traders have different goals for their trading and they have different account sizes as well.
You cannot expect consistently positive results if you apply the WRONG style to the WRONG trader.
The easiest way to identify the trade management style that is right for YOU and you’re trading goals and resources, you need to identify WHO you are and the resources you have available.
In today’s video we discuss the importance of a ‘CUSTOM TRADE PLAN’ that will take everything into consideration such as who you are as a trader, the type of trading you do, and the resources you have available.
Watch this video to learn the different trade management styles for different traders
If you missed the first four (4) videos in this series on trade management, here they are…
Trade Management Videos: TM Video 1, TM Video 2, TM Video3, TM Video 4
20 Ticks Today How to get back in your Trading Routine
Blog Image:
After missing last Friday & this Tuesday for the long weekend, we had the distinct challenge of getting back in the ‘rhythm’ of the markets in order to profit this week from our trading.
We always have trouble getting back into the swing of things when we go away from the markets for a few days, so here is what we focus on:
• Embrace your daily routine: our minds and bodies love routine, it makes us confident and comfortable with our actions. The sooner we get back into our routine the better
• Focus on the rules and the best patterns, rather than your Profit & Loss Statement: its easy to get emotionally-charged when you go back into the markets b/c your mind tells you “we need to make up for lost profits”, however, we need to avoid allowing those emotions to play into this by following our rules
• Don’t try to do too much: it’s more important to wait patiently for the very best opportunities to get into a trade then to FORCE the trade b/c you feel like you have missed previous opportunities b/c you were aware from the markets.
Again, the most important aspect of getting back into the rhythm of the markets is to get back to where you left off. Focus on your routine and get confident again in what you are doing.
It won’t take long, but it takes the correct approach.
We had a challenging day today b/c we had 2:00pm EST FOMC Meeting Minutes, which meant we KNEW that price would be a little slow today.
As always, we follow our routine, we plan our trades and we trade our plan!
3 trades today, 2 winners (its all about managing losses!)
TOTAL = 20 ticks or $200usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
Review Our Trades From Yesterday!
See All Of Our Previous Trades
Click Here To See How We Set-Up Our Workspace
TODAY’S TRADE ROOM QUESTIONS:
Time & Sales Window:
- Yes, the larger orders are split up into smaller batches
o Filtered Time & Sales shows those small batches
- We watch the Filtered Time & Sales Window to identify when those ‘smaller’ batches hit the market
- Wait for large buyers (long) or large sellers (short)
- If we don’t see anything, we wait for the next pattern
How do we manage the News?
- Wait 5 mins before, 5-mins after
- Exception: US Market OPEN 15-minutes before, 5-mins after
If your levels don’t match JJ’s
- Re-load historical data
- My DocumentsNinjaTrader 6.5templates
o Delete the line file for the specific market in question
Dynamic Indicator:
- Trigger Lines: always changing with price changes
Static Indicator:
- Prev High of Day: Does not change with current price
Delay in Webinar:
- No wireless connections
- Sometimes its better to use a separate computer than your trading computer (bogged down)
- As a member, you have your own charts, market data, indicators, 100% trained on how to use them.
Trade Confirmation comes in 3 different forms:
- Positive: we see buyers to get long
- Negative: we buyers, and avoid a short
- No-Confirmation: we don’t see anything at all, so we wait
- Don’t forget the rest of the rules! Momentum, 6-ticks, slope trigger line, etc
11:00am EST Look for Lunch:
- Price action will slow down
o Slow Pace of Tape (RED < 100)
- Sideways Markets
o Flat Trigger Lines
o All of them were the SAME price level (big concern)
- Big Money Leaves the Market
o Fewer large orders on FILTERED T& S
o Large orders are our confirmation! So we need them!
11:30am EST always brings more volume, so we wait for it
10:30-11:30am EST = sometimes gets VERY slow (dead zone)
www.SpeedTest.net and test your download speed, that will have an impact on how fast you can download the charts, data, and the movement in price
Medium Timeframes = additional layers of risk
- Show more aggressive traders what risky trades look like
- Clearly define a LOW RISK trade to a new trader
Always make sure you CPU clock is set to EST, so your charts will follow that clock
Time & Sales Window Flickers:
- Video Card trying to keep up with the new information, new price data
In a slow day like today, what is our profit goals?
With a better understanding of HOW the market moves, our second video discussed the emotional response to our trading, which allowed us to turn our emotions into an ASSET, rather than a liability.
We defined our goals for our trade management as…
• Hit more profit targets b/c that builds confidence and contributes to move winning decisions
• Hit less stops b/c this steals that confidence away from you
• Never let a winner trade turn into a losing trade
• Be in a position to capitalize on the BIG moves of the day!
With this new knowledge, our 3rd video in this 5-part series covers our method trade management from development to execution.
Watch this video on our Trade Management Method
Don’t miss our next video in this 5-part series, we will go into more detail on the different ways to manage a trade; Mechanically & Discretionary
Sometimes the market doesn’t do what we want it to…and for those times we must know what to do if something goes wrong…so don’t miss the NEXT VIDEO coming next week!
Today was one of those days that reminded us why we love being traders.
Monday, Tuesday Wednesday this week were very challenging, and we were frustrated by the lack of movement and the inconsistency in the price action as the market digested some very important information from Congress & the Fed this week.
Today, however, was a different story, and days like today remind us why we patiently trade through days like we saw earlier this week, but we KNOW that days like today will soon return.
Today was marked by frequent patterns, and our rules lined up very frequently.
We took 6 trades today on Euro, Crude Oil & Gold Futures
With the exception of the Gold trade @ 911am EST, we didn’t see much more than a little bit of movement against us today, so the day was pretty easy.
One thing we spoke about today in the room was that having TIGHT stops allow us to make it through the hard times so we can be in a positive MENTAL position to trade again when the market gets better for us.
Today was a good example of how keeping the tough times to a minimum and maximizing the good times is the secret to longevity in this industry.
We had another challenging day in the markets today!
Once again…we knew today was going to be a tough day, here’s why…
• Not much news today
• Ben Bernanke testimony @ 10:00am est
• BIG Snow Storm on the East Coast, fewer people in the markets
This was a good start, but we saw even MORE information from the markets when we opened our charts..
• Red Pace of Tape Indicators across the board
• Flat Trigger Lines
• All timeframes were flat: Slow, Medium & Fast
• Lack of BIG MONEY in the market (filtered time & sales window)
So the end results…
We knew ahead of time that today might be very slow, but when we opened our charts, we quickly saw more feedback from the markets which solidified our concerns.
Only 4 trades today, very difficult market environment b/c we had lots of patterns, but our rules never really lined up 100%, so we fell short of entry on most of them…watching the market move without the
BIG MONEY, which we need to justify our entries.
4 trades today, 1 loss, 2 scratches, 1 winner
TODAY’S TOTAL = 17 ticks or $170usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
In our 2nd video of this 5-part series we address the Emotions that affect our trade management.
The emotional response to your trading does MORE than just make you happy or angry; it changes your perception of the market, and makes it easier, or more difficult to take the trades that are coming in the future.
In this 2nd video we take a look at the EMOTIONAL RESPONSE to your trading, and how it affects our overall trade management structure.
• More profit targets means you will be more likely to keep winning…
• Hitting stops means you are less likely to keep winning…
Watch this video on Emotional Response to your trading to find out WHY this happen!
Once we know how & why our minds react to the different results we get as traders….
Keep an eye out for the NEXT video….Our Trade Management Method itself, and how it will take different forms for different times in the markets we trade.
Today was a great example of how sometimes we need to take our money and get out of the market before we give it all back!
We started today with a breaker/2-step combination that made us 21 ticks on the breaker and 14 ticks on the 2-step reversal, so we were off to a great start!
We then padded the account with winners on Gold, Crude Oil and Euro Futures.
Then the market started to fall apart…
10:30 am est came, Obama took the stage, Budget meetings started in Washington, and all of a sudden we started losing water from all directions!
• Flat trigger lines
• Slow Price action, red pace of tape
• VERY slow follow-through on moves in the market
We saw this begin to happen, and we knew that we may see our morning come to a close VERY soon, but we were still open to taking trades…that didn’t last too much longer.
With a bunch of WINNERS in our pocket, we were confident in our entries, and then we saw 2 of the last 3 trades we took came out as losses, and we knew we had to do something to avoid giving more money back to the market.
Remember, the EASIEST way to avoid loss is to STOP TRADING, and we did exactly that @ 11am est when we took our 2nd loss for the morning.
So we saw some losses, and that was what it took to get us sitting on hands, and headed for our 1130am est FREE webinar in the live trade room!
10 total trades today, most of the winners were BEFORE 10:30am EST…look out for that tomorrow so you don’t give back that money like we did today!
TODAY’S TOTAL = 63 TICKS (WAS 87 TICKS) $630USD
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
2 Losses, 2 Winners & Charts Crashed! Just another MONDAY!
Once in a while we have a tough day in the markets we trade, and today was the the worse case scenario.
We started off with a VERY slow and choppy market today.
Crude Oil had all the same trigger lines across all timeframes, so we knew it was going to be slow until they separated a little.
We also noticed everything had fewer large buyers/sellers and RED Pace of Tape Indicator, so we also knew that the market was seeing VERY slow price action to start the week.
Could it be Monday?
Could it be the Super Bowl?
What could the issue be that is holding up the price action? We didn’t know exactly, but we don’t NEED to know WHY, just need to know HOW to trade it.
So we had to use patience to wait for the market to give us something to work with.
To make matters worse, JJ’s charts froze @ 935am EST just moments before we got started in the US
Session, and that’s when we knew it..
“Its MONDAY….AHHH!”
So on top of a very slow and choppy market we had charts jam and freeze on us, which added another obstacle to overcome…patience to get them working again.
Just like any other professional, we traders need to be aware of HOW and WHEN to use our tools properly.
Just like a General Contractor needs to know how to use his/her tools correctly, so does a trader, and today’s trade room was a great example of that.
Its hard enough to trade in today’s choppy market, but with a technology issue as well, it really tests our control over our emotions.
We learned a valuable lesson today when our charts froze:
1.Know your limitations. Is your computer going to crash if you push the limits?
2.Back-up your info. Save your workspace and any other materials on a SEPARATE folder outside of NT to make 200% certain that it cant be corrupted or ‘lost’ if NT crashes or corrupts.
3.Know your Broker’s direct phone number for the trade desk. Who would you call if you were in a trade?
4.Close out NT and re-open your charts, slowly, without making the issue worse
5.When you re-load, repair your database first
6.Load charts and BEFORE you begin trading, go through your ROUTINE
7.DON’T SKIP YOUR ROUTINE, you need to get back into the ‘rhythm’ of the market that you lost when your charts crashed.
So, we opened the day with slow choppy markets, so we waited…and then charts locked up and closed on us, so we had to re-load them, get back into our routine, and then keep our emotions from getting the best of us while we worked at getting some profits out of the markets today.
All in all, it was a great learning experience today!
We took 4 trades: 2 winners, 2 losses, and we ended up in the GREEN!
TOTALS = +8 TICKS, $80USD
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
Ready To begin Your Trading Career As A James Wave Trader?
• Identify Important S/R Levels & Look for Patterns
• Use our Entry Rules to Identify the patterns with the highest probability of success
• Look for our technical indicators to Confirm the move and give us confidence to enter the trade
In the next video series we’re going to show how to manage this trade to maximize your profits and minimize your risk, as well as many other important aspects of trade management that you may not be aware of.
Trade Management is one of the most under-valued aspects of your trading, it deals with more than simply stops and targets, and we use very simple & proven techniques to manage not only our trades, but our emotions as well.
In this video series you will learn:
• The 3 main phases of the ‘move’ in the market, and how understanding these will show immediate benefit to the trader’s Profit & Loss Statement.
• The Emotions behind Trade Management & how to Conquer Fear & Greed
• The simple & effective method we use to manage our trades across different markets such as Commodities, E-Mini’s and Currencies
• 2 Different Types of Management: Discretionary & Mechanical
• Adjusting Trade Management for Different Types of Traders, Timeframes, and objectives
Let’s get started with our first topic….
3 Main Phases of the ‘Move’
Before you learn how to manage the trade, you need to know how and why the markets are ‘moving’ in the first place, as well as the different phases each move goes through as it develops.
Each market has its own unique personality, but within that personality are the basic ‘building blocks’ of each move, which are…
With the knowledge of these ‘3 Phases of the Move’ you can now begin to plan your trade management to capitalize on these phases with the proper placement of stops & profit targets.
Keep an eye out for the next video in this series…
…The Emotions behind Trade Management & how to Conquer Fear & Greed
See you tomorrow @ 745am EST for the live trade room session!
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!
What does confirmation look like?
• Increasing Speed of Tape, Pace of Tape Indicator
• Large Buyers/Sellers on the Time & Sales Window
• Bullish/Bearish Price Patterns on Fast Timeframe
• Follow-Thru above the Swing-High, or Below the Swing-Low
• Momentum Curls in your direction
• Medium/Slow Timeframes; 6 ticks
• Slope of the Trigger Line
• Does not take more than 5 minutes to trigger
What does NO Confirmation look like?
• Decreasing Pace of Tape
• Small orders on the tape
• Flat Price action, indecision on the charts
• Momentum curls against you
• Medium/Slow timeframes re-calculate; 6ticks
• Trigger Line flattens, nobody has control
• Doesn’t move, stalls, takes; 5mins
Let’s wrap it all together…
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!
February 03, 2010
59 Ticks Today! Read the Future by Identifying the Market Correctly
Blog Image:
SchoolofTrade.com Daily Commentary 02-03-10
One of the easiest ways to improve your trading is to understand HOW to IDENTIFY the market each day BEFORE you begin trading.
The process of IDENTIFYING the important aspects of the market each day begins with looking and listening to what the market is trying to tell us!
We open our charts, and before we begin calling trades, we have to prepare…
• What does the market look like today?
o Trending vs. Sideways?
o High vs. Low Volume?
o Big vs. Small Money
• What type of Events do we have today?
o News events today
o Political Speakers today
o Big Events today
• What do we have the rest of the week?
o Important event tonight?
o Important event tomorrow?
o The rest of the week?
o Holiday this week?
As you can see, there is a LOT to look at in order to feel confident that we know where everything is.
Once you review these possible variables in the market, we can then ADJUST to what we SEE ahead of us.
If we have low volume…we know what to do.
No trend…we know what to do
Lots of news events…we know what to do
No Big Money yet? We know what to do!
If getting off on the right foot each day has been a problem, and it usually is for new traders ( take me
for example) this is something we work on EVERY DAY in our live trade room!
Come join us tomorrow and learn how to properly identify the day ahead. Know WHO, WHAT, WHERE, WHEN, and WHY for all the markets we trade.
Being prepared for the day is like having a good breakfast. If you miss it, you will regret it very soon!
We took 5 trades today, had to stay patient to make sure we had everything line up for us, but @ 11am est price action gave us what we needed!
4 trades, 4 winners, and another great day in the live trade room!
TODAY’S TOTAL = 59 TICKS, $590USD
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
We had a lot to be concerned with when we open the live trade room @ 745am EST..
• Non-Farm Payrolls this Friday…BIG news event coming this week
• Secretary Geitner Speaking today & tomorrow
• Beginning of the month, possible indecision in the market
As expected, these outside influences made the market very slow, sluggish, and indecisive. Having a hard time deciding where it wanted to go, we had to wait for it all to line up.
So what did we see?
• 90% of our rules line up…but not 100%
• No follow-through, the trades we took didn’t go very far
• Early end to the morning, price action didn’t move very much for very long
So we knew what to expect, and it certainly happened as expected.
On days like today, the key is patience.
We have to wait for the best trading opportunities. On days like today its more important than ever b/c if we break our rules and trade against them, we may not have a chance to make many trades today, so recovering from a potential LOSS is going to be harder b/c the volume on days like today makes it hard to see a lot of opportunities.
Patience is key…but what are we looking for?
High-Percentage patterns according to our rules, and nothing else.
Its easy on days like today to get anxious to trade, an ‘itchy trigger finger’ but we need to remember that what makes us successful on HIGH volume days, is the SAME strategy we need to execute on LOW volume days.
We can change the way we trade as the market changes. Stay focused on the long run, and follow those rules.
Our rules are used to identify a market that is in a positive earning position. Without the rules, we would be left trading with emotion, and we ALL know how that story ends…with the trader BROKE and penniless!
Follow those rules, we provide them to all of our members!
We took 5 trades today. 2 of them were scratch trades, and today’s total was
TOTAL TODAY: 26 ticks, $270usd
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
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 bottom is checked last…
Wave Set-Up:
• Breakout Above/Below
• Trigger Line HH/LL
• Perfect Pattern
• 6-8 Ticks
• Medium & Slow
• Trigger Slope
• Momentum (check this last)
• Speed of Tape (POT) (check this last)
o D/Q: Time/Price/POT
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.
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)
o 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 & 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)
o 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!
We opened the live trade room today and had a few concerns on our mind..
• We ended January with a HUGE profit, so we didn’t want to trade too aggressively
• This was the first day of the month
• This is a Monday
• We had Treasury Secretary Geithner speaking @ 1030am EST
• We had President Obama speaking at 11am EST
Knowing all of this, we had to be in the right MINDSET to be able to..
• Not get emotionally-charged when we started
• Wait for the best patterns
• Wait for the market to have enough VOLUME
• Wait for the BIG MONEY to enter the market after being on break for the weekend
Like most Monday’s, people are slow to get into their trading desk. There hasn’t been much overnight trading besides the Asian & European open, so there isn’t much feedback to read from the market yet.
One of the most important aspects of day trading is confidence, and this is the confidence to WAIT this morning for exactly what we KNOW we want to see.
• Volume
• Green Pace of Tape
• Higher-Highs, Lower-Lows
• Bug Buyers/Sellers
These aspects showed up just before 1100am est, and b/c we had the confidence in our patience to wait for the best patterns, we were in a great POSITIVE MINDSET to conquer the market in any form today.
We still didn’t see very good price action, but our patience was able to allow us to wait for the times in the market that presented the most potential for profits.
4 trades today, Crude Oil & Gold Futures
TOTAL TODAY = 45 TICKS, $450USD
Only 4 contracts needed to achieve this today!
See you tomorrow @ 745am EST for the live trade room session!
