steve46

Just finished posting about the necessity for good trade selection (meaning you follow your system rules)...... For our system the rules have not been fully explained...simply put we have two rule sets....one for beginners, and one for those with more experience... The beginners rules set is simple...you only take trades when price tests the extremes of each day's distribution...as can be seen in the attached chart, prior to the open, we produce two sets (two long and two short) "targets"...these stay in effect all day long. As price moves through the day, the trader is free to "take" entries on tests of those horizontal bars, and/or the previous day's open, high and low... As students prove "to themselves" that they have the discipline to follow the rules, and make money....they earn the right to trade additonal entries including 1) Pre-market "globex" entries 2) Continuation (or scale-in entries) and 3) Tests of longer time frame targets... The business is based on making a profit.....if a trader proves that he/she can make money, then the bar goes a bit higher...can they make money consistently...and finally can they scale up to bigger size and still manage risk skillfully....as has been said before, we simply suggest how the game can be played......but in the end each person defines their own success.

As regards "following rules" it depends....if you have a set of rules that are tested and proven, it would be foolish not to follow them to the letter.....the problem is A.) Most folks don't have a proven set of rules B.) Unable to muster the discipline to follow the rules As an example....I am in process of walk forward testing of my rule set...need 400 data points in order to make a determination....during the few weeks that I have been testing I have had several observers watch me trade, and each (and every one) has at some point suggested trades outside the rules....even though its been explained to them (rules are simply to wait for a specific small group of extreme levels to be tested) So what I've done is to track those "suggestions" and produce a record of those results vs. what my rule set has done to date......and the record is very revealing... My system rules have produced a net profit 81% of days since I began....."Observers" suggestions have produced net losses EVERY day since we began the process.....EVERY SINGLE FREAKIN DAY..... and for those interested, my analysis of these "suggestions" shows that most amateurs would be tempted to trade inside areas that produce congestions or range bound price action...further these traders (all of them having some experience) tend to want to keep on doing the same damn thing (entering trades in areas of congestion) even though it continued to produce losses....

You know as I was writing this I had a change of heart....by all means keep on with what you are all doing....

My Globex traders class will start next week, and at that time I will probably have little or no time to post...I am still in the process of collecting data to confirm that my method of generating a distribution is statistically valid (this is the "walk forward" part of the process). While that is happening...I will post this "quick & dirty" substitute that can be used by folks with basic math skills to approximate the distribution that I am using (multiplication & division is all that is required)... Understand that this is an exercise only...this method will NOT produce the same distribution that I am curently using to trade....but it will come close... In order to calculate the distribution on a daily basis, you will need to obtain volatility data relating to ATM ("at the money") put & call options...I obtain this by going to Ivolatility.com Currenty you do NOT need to register....all you need to do is scan the top of the home page and type in SPX....we will be using volatility from the S&P cash index to generate our approximation..the attachment provides the necessary detail... We also need a starting point, and for us that will be the previous session "settlement" as determined by the CME exchange....traders can obtain that data by going to the exchange or simply typing "ES settlement" on a search page (like Google for instance) and then scaning the result for the CME settlement page. Follow the directions on the attachment and you will be able to calculate an approximate distribution for each day. Be advised that currently I am using an advanced (different) method, however I would have no problem trading from the approximated distribution generated by this method... I have made this as simple as possible...and will try to answer questions BEFORE I have to commence class...after that you are on your own.. Calculating volatility bands.docx

Thanks for the chart Rob....looks better on yours than it did on mine...what I meant to convey was that sometimes these entries are "uncomfortable" at the beginning.... Nice job & good luck the rest of the day

Hello Rob, always nice to hear from you...and brave of you to take that entry... I'd like you to see the new Globex screen that I am preparing for my students.... as you can see it has a very minimalist look...only what we need to make a good decison three (3) charts...on the far left the DAX..15 min candles...the horizontal blue bars are my pre-market targets....I will "prefer" to enter on tests of those boundaries...(as long as the entry aligns with the right time)... In the middle, the NQ futures...also 15 min candles and I put my dist lines in place just before 10pm PST.... On the right, the ES (for now) ...also with 15 min candles Prior to the open (DAX/London) I check my economic calendar for pending news and report releases....I also check out the news (particularly Bloomberg) to make sure I have a complete picture of what has happened in Asia, and what is happening on the continent.... Because I have just a little bit of experience I know to expect a specific kind of price action....Generally I look for a pre-market opportunity just before the DAX opens...if I am lucky I have a profitable position prior to London's bell.... At the London open I watch the initial move and try to confirm direction....then I look to enter on the "counter" move at or near 12:15am PST.....today it was picture perfect...12:15 on the button.. Looking at my middle chart you can see the trades numbered....the pre-market open was number 1....then the DAX opened and helped me out a bit....London opened and I entered short at 12:15....and finally as price descended to retest the dist line I got a nice bounce back up...number 3.....

Very nice short entry today...at 12:15am (shortly after midnight PST)....which is one of our "preferred" entry times... In this case what motivates our entry was data from Bloomberg as a gentleman from Fitch (one of the primary rating agencies) came on to confirm changes in Spain's credit rating and to suggest that Spain was already in proces of coming into compliance with the broad elements of the ESM and other bailout fund resources...I watched part of the interview and as he began to speak about the timing, I decided to get on board, after all it is "time & price" and we saw all three markets (ES, NQ and DAX) start to show signs of rolling over.. The extent of the move was a bit of a surprise, however we have come to expect that the NQ will move a bit more briskly than the ES (which we would normally be trading)....7+ points and we are still holding a small piece in reserve in case the position continues to run south.. In the next few days, what we have decided to do is to provide training (as mentioned previously) however it will be for the overnight (what we call the "Globex") market....that class will meet shortly before 10pm PST time, trading until just after 3am (a total of 5 hours). What we have found over the course of the last 6 months or so, is that the character of the markets has changed significantly.....we now see Europe as the major driver for trading opportunity (not the ES)....and in our opinion, the NQ futures provide a easier way to capitalize on those opportunities...of necessity we will probaby have to stop trading the RTH session however our P&L should improve, with risk at about the same levels.... Anyway back to work Good luck folks

Like many professionals I learned Auction Market Theory and MP early on....later I discovered that the originators of the concept (MP) had made changes to the system.... I decided to make "my own" changes to the MP that I learned....and ended up with a system that uses "time based pivots" and a relatively simple distribution..(authored a couple of threads on the subject in the Emini Forum). Basically I have gone from using MP to a hybrid system based on the alignment of time & price Knowing what I know now....I wouldn't use MP....because in my opinion markets have evolved to such an extent that those principles no longer provide an accurate description of how markets act... Good luck

Here is a nice example of a pre-position opening trade that occurred prior to the DAX open The NQ (the market I am currently trading) is the chart in the middle of the screen...as can be seen we watch price test our distribution line signaling long entry and from there its a matter of watching periodically, managing risk and holding long enough to obtain a decent (about 10 NQ points so far) profit... On the far left you can see the DAX open and move up strongly "taking out" the distribution line....

Recently I waded through several paragraphs of verbage about "how to know where the reversals are"...the thread was about "catching a falling knife".......LOLOLOLOLOLOLOLOL So I get about three quarters of the way through this multi-chapter novel when I realize that the poor schlub thinks that this is what he has to do to locate reversals.....Uhhhhhhhhh no.... There is an easy way to eyeball reversals on any time frame...I'm not going to put on the seminar...but in order for me to tell YOU folks (readers of this thread) that I was getting off the bus at 2840 I had to be able to figure it out quickly and accurately and its not rocket science You need two charts...and thats it...no arrows no calculations, no magic incantations...no ritual sacrifice....(well maybe a couple of virgins if you can find them).... Lets see if anyone can figure it out...

and here is the final screen shot for today....as my exit target is hit (notice the reversal candles as price hits 2640) My final comment is as follows....I remember one recent thread where folks complain (as they often do here) about the lack of "quality education"...(it was one of the Pristine "promotional threads"....lol)....and Negotiator comes to post suggesting that the problem is that it is hard to recognize what a good educational program looks like.... I think there are two issues...one is the lack of good quality education for traders, but then I have to say it.....even when an opportunity to get quality education exists.....I don't think people are able to recognize it......and even then they don't take action...in the end people make their world what it is...... Oh well, I am done

and here is another nice opportunity....this is called a clean-up trade...and it takes advantage of the fact that folks who are late to the party, look at this and say, "well Apple is sure to rebound from this very slight miss in revenues...this is an opportunity to buy it"....and they do The mechanism is simple, on the report Apple stops trading...when it re-opens people are moving aggresively to get back into it (talking about folks with the experience and intel to see the opportunity here)...as they transact, the spillover affects the index as well (people transact here as well)...and up we go.... In total this opportunity was worth about $1000/contract if you were prepared....still in this one looking for 2640 exit Bye...

One very interesting benefit of trading the NQ is that you get a shot at the after hours earnings plays that periodically occur. Today was Apple and the surprise miss on bottom line revenues, which caused a spike down to 2626....that spike down just happened to test one of our distribution lines If you were there waiting for the opportunity, what you did was point & click....although this chart does not show that initial move and reversal....the test of 2626 caused automated programs to buy. The reversal was all the way back to the origin at 2651....a nice windfall of $500 per contract... I think its fascinating that with all the problems folk have making money in this game that no one (and I mean no one) has figured this out (the upside benefits of trading NQ).... Similar opportunities with Facebook earnings by the way...but hey don't let me interrupt your normal schedules..... Seeya

Hello Rob, nice to hear from you This evening's chart shows the London Open (Europe Open actually)...and the entry is really easy to see this time.... I am really enjoying trading this.....as long as you are disciplined enough to wait for the tests of the distribution lines, you really have an easy go of it....As can be seen the planets lined up very nicely at the open, so you just take the trade and hold on....I didn't even scale on this one, I just held it until I saw a test of the previous high... You know the real issue for amateurs and experienced players alike is to obtain some kind of reliable point of reference when you trade...once you have a way of doing that, whether it be my distribution lines, or some other method...the real game switches over to managing risk and by that I mean making sure you absolutely never get let a losing trade run...If you can do that consistently and stay in the trade long enough for your edge to kick in, you are golden, and frankly this is the test for my students....this is what I "suggest" each person evaluate when trying to establish long term goals....can you do these things, if "yes"....well go live your life...if "no"....what is holding you back....and how can you get from here to there....? As it turns out, a lot of this is psychological rather than technical....so really what we are often talking about is resolving issues around lifestyle choices, and fear of loss....once you go through those doors the rest is actually pretty much like going to any job on a daily basis, except that now, you make a hell of a lot more money, in a much shorter time.... Time to get some sleep...(I hope) Best of luck to everyone Steve

My first (and last) Mental Health Professional I had just gotten my first institutional job....I had an excellent record managing a private fund, years before I had graduated a top tier school with an excellent record. Clearly I am a "type A" personality...driven, detail oriented and (when not winning)...a short tempered SOB....when winning I was a walk in the park....patient and helpful to one and all... At the beginning of my second year, everyone in the office attended a seminar by Dr. Ari Kiev....afterward I discovered that it was "mandatory" that we all become his "clients" for a minimum of 3 months....at our own expense....lol. I grumbled, and threatened to leave....I was told that "the choice was mine"....translation... "don't let the door hit your ass on the way out".... The experience was an eye opener to be sure....I saw the good Doctor every other day for 1 hour....he watched me trade every day for 15 minutes and he had access to my trading records as needed....after the first month my P&L turned down as I encountered some problems with my trade selection process...with his help that was corrected in about a week...We had one more conversation, the content of which I am not willing to share in detail, but suffice to say it was NOT about trading but about life in general and the importance of time (the limitations we all face, our mortality, our families, etc)....the short version, of this story is that from that point forward, whenever I have felt that I was "losing ground" I simply remember some of the comments that kind gentleman offered me about the importance of living life and being aware of the only really precious commodity we have...our time on this earth... Since that time I have worked with a handful of folks (about 8 in total) and I have tried to offer the same kind of counsel to each....some have found it useful, some not so much....realistically thats how life is, some win, some lose, and in the end it is not which side of the equation you encounter but how you choose to handle it.... Best of luck to all.

Those of us who actually trade for a living (some of us anyway), got short in the area of 1460 around the 18th Oct....my distribution shows the resistance there and the market starts the process of rolling over....this is a seasonal move that we expect to happen at some point in October....with a potential low of 1360 Your very late to the party having missed little more than half the move...but then that is exactly how retail traders act...isn't it....you come in late, you get on board and then taking a beating as the market starts to correct back forth in a range.... While I am not trying to be critical...I do have to call it as I see it....the COT is valuable in hindsight...but the report comes public way to late to be actionable in most markets.... The first attached chart provides all the heads up you need if you know how to interpret price action....it "tells you" (if you speak "price action", study a bit of history and add a dash of common sense)....that the odds indicate the S&P market is headed south... The second chart is the daily chart from which my basic approach originates....as can be seen we have been in a months long up trend, then we went sideways as seasonal forces prepared us for the current "correction" back towards 1360...and in the next month or so we should revert back to a holiday "up" trend....into the new year.... Do we need COT for that...I don't think so...

Well I was going to ignore this, but I have to say something I thinks it wonderful to assist folks asking for help...good job... Now to put things in perspective...while its POTENTIALLY profitable to place a number of positions in related financial instruments...when you do this, you incur risks....and unfortunately those risks are "non-linear" (especially if are talking about options) Once again not interested in putting on a seminar...but the short version is as follows If you learn enough to know that you can profit handsomely by placing a series of related positions....then you are a danger to yourself....what you need to know IN ADDITION is how to characterize the risk (all the risks that you are exposed to) and "what to do" in case things go south.....are we clear....? (probably not).... OK so let me make it "crystal" clear....when you put on a series of correlated investments that include options, (especially if you sell options) you have put yourself in a position whereby you can lose not only your entire position, but much more than that.....are we clear now....? No personal criticism intended Dude....one hears the same recommendation all the time from others....and why not...risk is how we make money....for the orignal poster, just be clear on what your risks really are, and learn how to manage them first....otherwise at some point you will find out what the word "surprise" really means.....

So this is interesting....and I when I say "interesting"....its because this is one of the very very "old" school strategies that NAZ traders used to employ....and it worked pretty well by the way... For me the question is how would that strategy work in today's market (and by that I mean trading the ES, the NQ or even the Russell for example). And to make it more interesting. I KNOW that a variation of that strategy works very well, based on my "preferred times"...now will anyone actually do the homework...I doubt it... Seeya

Okay so first questions from Robster Yes, I often pre-position, sometimes I do that during the Asian session, more often I wait for London at midnight local time....because that market offers more profitable entries. I try to get sleep however years of working the overnight markets have taken a bit of a toll Finally, apparently I should not have mentioned that I am nearing the end of my posts here....now I am receiving pms and emails from folk asking for help, and information about my distribution process....so ONCE MORE for the record....I am working on a method that allows me to approximate the very time consuming process of creating distibutions...I need to obtain a minimum of 400 data points to properly evaluate this "approximation"...I am doing that one day at a time....because thats what it takes....now, I am not surprised that folks do not understand that you need to verify these things...this in my opinion is one reason why retail traders lose their accounts...because they throw money at indicators, systems, vendors, and chat room/signal services INSTEAD of doing their own research (correctly)..... And for those of you involved with Forex...PLEASE don't ask me to provide training....I don't want to be involved in that market...OK? If some of you decide to go to exchange traded currency markets, THEN you might think about approaching me but not FOREX sorry.....the two markets I am going to trade are the S&P futures and the NAZ futures....because they provide the best returns (in my opinion), AND because this system has proven itself (to me) for both markets.. I will answer questions periodically and I am going to start a SMALL class that I expect will last from 3-6 months max...then I am done, because as I have mentioned several times, I don't seem to be able to focus like I should, when I am trying to monitor and respond to student's questions... Good luck

LOL so Tams you have it correct....in the end it comes to selling a subscription to a room By the way I have a system that is "tick accurate" as well....my system also "re-calibrates" every day.....the difference is that I don't really like you folks that much....and for me at least, the economics of selling a product or service to the public simply don't work...I make more $ just trading on my own.....so I am not interested in new "friends"...clearly I have a lot to learn about marketing.... Edit Lets see, make new friends or watch NYGiants/WashRedskins game.....ahhhhh....I'll watch the game... Seeya

I'm not particularly impressed with the article... For the original poster...in my experience, it is often the case that a person encountering difficulties trading cannot identify the "high value action" that they should take to obtain a better result... There is a two step process that can help...first you backtrack from the most recent "negative result" through the series of actions that caused it....within this process you are attempting to find the pivotal element that preceed that negative result...often it is a process of gathering data, processing it, then coming to a decsion....somewhere within that chain of events, a problem exists....usually that pivotal element consists of unconcious or sub-concious decision that the trader makes just prior to trading.... Secondly you look closely at this chain of events and try to identify a "stopping point"...usually some part of the process just prior to where you make a decision one way or another....THAT point is where you want to intervene with another, more productive strategy. The crucial questions are as follows 1. Can you accurately identify the internal sequence of events that causes the problem 2. Can you find the place within that sequence where you can intervene with a superior strategy and 3. Can you create a superior strategy to substitute within that sequence to transform it from unproductive to your desired result... This is logical and it works....alternatively you may want to try the advice I read in one of DB's threads, where a person reveals that a behavior he is engaged in is causing him difficulty trading, and DB suggests that he "just stop doing that"....... Either way, best of luck to you

Direction based on the longer term distribution, and on the historical record for the DOW or the S&P Market (or any market a person might be interested in) is relatively easy to anticipate. As WBtrader commented, longer time frame context is where a skilled person starts the process....then simply reviewing how the market has acted in the "context" of previous similar circumstances...the human beings who move these markets are creatures of habit, and so one can count on them to repeat what has been done before... For our own pre-market prep, we identify both long & shorts, however we do that as a matter of professional discipline....for the S&P Futures market, the historical record shows a tendency for reversal whenever price tests a distribution extreme. This can be confirmed when you bring analysis of volume to bear....simply, on the test or retest of any high, do we see increasing volume coming into the market on the buy side..if not, we wait for the price to stage a reversal pattern and AT THAT TIME, WE LOOK FOR PRICE TO CONFIRM THE MOVE WITH INCREASING VOLUME...This exercise is called "reading volume" and it is one small element of what I was taught to do. It never fails to identify a move... Finally I have to say, that I am growing a bit short of patience with the so-called vendors (actually they act more like use car salesmen) who regularly show up here claiming to have something to offer traders, and yet we seldom see them offer comments of this nature....one assumes that they either don't have the knowledge (or the skills to) do it correctly themselves... Good luck

Actually Jacob was a Jew...but hey the part about being a "mean" was pretty accurate...(Book of Genesis for those interested)...

One of the very important issues, especially for new and/or struggling traders is "what to do if you miss an entry"? And the answer is that you need a reliable consistent set of rules that produces what we call "continuation entries".... Our system provides a unique method for trading the open...simply put we are able to accurately identify both long & short entries off the opening bell....(marked by horizontal blue bars)....we realize however that often traders will find these early entries psychologically challenging, and they fail to act, missing that opportunity.... Continuation entries depend on accurate characterization of market behavior...and what we have seen is that for the ES and NQ markets, it is possible to locate additonal entries fairly close our primary long and short opportunities.. For today's market we show both the primary and continuation entries marked by red arrows "At the Bell" Primary entries are generated by tests of the horizontal blue bars...they are also "time constrained"...that means that we prefer to take our entries at specific times...for our system these "specific times" are 6:30 to 6:36.....6:39.....6:45.....and 6:57 to 7:02am PST.... We'll talk about "continuation entries" during our next post... Best Regards Steve

Attached chart shows my "opening targets" as horizontal blue bars.....arrows show the entries The logic is as follows; Two potential long & two potential short entries....and two choices as to how to make use of them 1. If you thought "long" was going to be the winner, today you would have watched as price tested the first short target right at the open...that initial move down would have been missed.....and you would have been left waiting, however if you had common sense to see the error of your ways, there were multiple chances to change your mind and get short 2. If you thought the short side was going to prevail, that same target was hit right off the open......psychologically this type of entry is difficult for newbies, so most folks would be apprehensive and miss this one...fortunately (as you can see) there were several valid short entries available as price continued south. As mentioned before, the real contest is within each of us...can we organize the data in such a way as to be quickly and accurately interpreted.....then can we manage our emotions so that we can act on what we see....finally can we muster the courage to hold on long enough for our edge to kick in....I have said these things many times over the past 6 or so years that I have been here, but they continue to apply.... By the way...the big winners were the folks who got short last night during the Globex market and held....but then that is nothing new..... Okay. so its just a few minutes after 8am PST and I am sleep deprived, and hungry, so I am going to get something to eat and get some sleep.... Once again I am done for the day Good luck everyone... Edit I had a nice week and however I am a bit burnt out from it....so I am going to take Monday off you all have a nice weekend...see you Tues (or Wed...who knows).