Edition 759 - January 11, 2019
SCROLL DOWN TO READ ABOUT MARCO MAYER'S AMBUSH SIGNALS!
Ambush Traders close the year with a crazy $7,100 trade in the E-Mini S&P 500
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by Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed
Chart Scan with Commentary: Tick Charts Again
This week I had a request to show something that traders in Brazil could use. I chose a stock that is traded in both the U.S. and in Brazil, and possibly at many other exchanges. What I am showing is that you can use a tick (equitick on some software) chart rather than a time chart for trading in any market. Tick charts remove the element of time from the price action. What we are interested in here is trading volume, not share volume. We want to create a chart that shows "X" number of trades made per price bar. Creating this kind of chart enables us to a certain extent to customize the chart so that it fits the way we like to trade.
However, I submit this chart with the following cautions:
The flaw in using tick charts is time coupled with charting inaccuracies. The time aspect is that the Law of Charts formations that one sees on those charts are fantastic, but they are very difficult to manage in live trading. The challenge is that the beautiful formations that you see on a historical chart can take 30 minutes or 30 seconds to form. Therefore, you either fall asleep before the formation completes itself or you don’t have time to get the order placed. In addition, the tick bars can change shape completely when your trading software corrects or recalculates the data. It doesn’t happen often, but enough to cause a problem: a formation would look one way during live trading and then after the nightly update, it would look similar, but different enough to change how you would have traded it.
Tick charts seem like they might be useful to see inside a reversal bar, but not on their own.
When trading tick charts, you must be “on” 100% of the time that you are trading, because you never know how long it will be before a tradeable formation happens. With time charts, you know that you have a few minutes while the bar completes, so you can unplug from time to time.
The chart below is a 700 tick chart of "RIO." As you can see, much of the time it would have been fairly easy to trade. There are times when prices are moving sideways on a time chart, but experimenting with various numbers of ticks per price bar you can create a chart that is trending. Tick charts may be just the right kind of chart to use for non-trending markets, or to peek inside of reversal bars. Note also that the Law of Charts works just as well on a tick chart as it does on a time chart.
© by Joe Ross. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
by Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed
Trading Article: Simulated Trading
Why does simulated trading work so well, but when you do the same thing in the live market everything falls apart?
Has this happened to you? Simulated trading, to a large extent, has replaced what was once called "paper trading." Simulated trading is much closer to the real thing, but still some of the best methods and systems fail in real trading. What are the factors that make the difference between the two?
There are many factors, some emotional, and they can be difficult to figure out without doing a lot of research into the reasons why. In this trading article I am going to show you only one factor. But that "one" may be the greatest method and system killer there is.
Many methods and systems are set up to use limit orders. If prices hit your limit price, the computer running the simulation assumes you are filled. But the truth is that unless you are a very large trader, you will be filled on a limit order at your limit price 10% or less of the time if all prices do is touch the limit and do not trade through the limit. Why does that happen?
It is because of the way the exchanges handle the order queue. The queue is filled first-in, first-out, BUT your place in the queue is also affected by size. The exchange gives priority to the largest orders.
When you trade on a simulated basis, the ordering of the queue is not taken into consideration. So you happily trade the simulation of your method or system and dream dreams of wealth and fame. But when you put your money on the line in real trading, the dream bubble bursts and you are faced with the reality of the way the exchange handles the queue.
Below are two graphs. The first graph is of a method that in simulated trading using limit orders for both entry and exit wins 80% of the time. For every one dollar lost it earns $2.56. The net profit for the method is $16,625 trading a 1-lot.
Following is the graph of the same method traded the same way over the same period of time. The only stipulation is that outcomes are counted only if prices trade through the limit price. Changing that one requirement yields the following: The method wins only 42% of the time. For every one dollar lost it earns only .49. The method produces a net loss of $13,500 trading a 1-lot.
© by Joe Ross. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
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by Philippe Guartier: Administration and
New Developments of Instant Income Guaranteed
Trading Idea: Instant Income Guaranteed
CSCO Trade
On 30th December 2018 we gave our Instant Income Guaranteed subscribers the following trade on Cisco Systems Inc. (CSCO). Price insurance could be sold as follows:
- On 3rd January 2019, on a GTC order, we sold to open CSCO Feb 08 2019 36P @ 0.34, with 35 days until expiration and our short strike about 16% below price action, making the trade very safe for a blue chip.
- On 7th January 2019, we bought to close CSCO Feb 08 2019 36P @ 0.15, after only 4 days in the trade.
Profit: 19$ per option
Margin: 720$
Return on Margin annualized: 248.80%
Philippe
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© by Joe Ross and Philippe Gautier. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
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© by Joe Ross and Philippe Gautier. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
LAST DAY!
ANDY JORDAN HAS A SPECIAL
TRADERS NOTEBOOK
OFFER JUST FOR YOU!
35% OFF
1-YR & 6-MO SUBSCRIPTIONS
Use coupon code during checkout: tn35
Valid through January 11th!
by Professional Trader Andy Jordan
Educator for Spreads, Options, Swing, Day Trading, and
Editor of Traders Notebook Complete
Trading Idea
This week, we're looking at short HGK19 – HGN19: short May 2019 and long July 2019 Copper (COMEX at Globex).
Today we consider a Copper calendar spread: short May 2019 and long July 2019 Copper (COMEX at Globex). The spread has been trading in a range between 0.50 and -0.90 for almost two months. Will the spread drop below the December low and will it follow its seasonal path to the down-side?
Andy Jordan is the editor for Traders Notebook which shows you Futures Trading Strategies in Spreads, Options, and Swing Trades. Learn step-by-step how to trade successfully.
© by Andy Jordan. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
LAST DAY!
ANDY JORDAN HAS A SPECIAL
TRADERS NOTEBOOK
OFFER JUST FOR YOU!
35% OFF
1-YR & 6-MO SUBSCRIPTIONS
Use coupon code during checkout: tn35
Valid through January 11th!
by Professional Trader Marco Mayer
Educator for Forex, Futures and Systematic Trader
Creator of Ambush Trading Method, Ambush Signals, and Head of AlgoStrats.com
Ambush Traders close the year with a crazy $7,100 trade in the E-Mini S&P 500
Days before the end of 2018, on December 26th, all the stock indices rallied like crazy posting new record single-day gains. This includes the E-Mini S&P 500 which rallied 119.5 points from open to close. What a crazy day. Now stock traders surely celebrated due to this but guess what trading method did even better and got long very close to the low of the day?
Right, the Ambush System - because that's exactly its job. Thanks to the entry close at the day's low Ambush ended the day with a profit of 142 points, that's $7,100 trading just one contract!
And with that, Ambush Traders happily close the year and look forward to a great start in 2018!
Happy Trading!
Marco
LEARN ABOUT AMBUSH TRADING METHOD!
With Ambush Signals you can easily follow Ambush, a system specialized in
catching intraday market tops and bottoms in the Futures markets
Learn all you need to know about our new Ambush Signals service during this presentation by Marco Mayer. What is the Ambush System, what's the idea behind it and how does Ambush Signals make trading Ambush so much easier!
Join us and become an Ambush Trader!
The most popular and easiest way to follow Ambush is Ambush Signals. It does all the work for you, allows you to customise what markets you want to see and has a position sizing tool implemented to automatically adjust the positions to your risk preferences.
Each day around 6:30 pm NY Time the Signals are available for you on the Dashboard. You can then place your orders and literally walk away until the next market close! To find out more about the details of Ambush and how Ambush Signals works, have a look at the Ambush Signals Website.
Let’s be realistic. Following any System can be tough, especially in the beginning. It simply needs time to build the confidence needed to make it through inevitable drawdowns. So what if you are unlucky and don’t catch a good start right away?
I want you to succeed trading Ambush Signals, so here’s something for you that will strongly increase your odds of success and allow you to easily gain the confidence you’ll need to become a long-term profitable Ambush trader.
Find out more about Ambush and Ambush Signals!
Did you come up with questions? Don't be shy, email Marco Mayer, he wants to hear from you! This email address is being protected from spambots. You need JavaScript enabled to view it.
© by Marco Mayer. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.
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