Webinars are one of the best ways to get a feel for how well a person’s day trading strategies work in live conditions. Occasionally, DayTradeToWin holds live webinars to provide just that, as well as educate attendees on a variety of topics. Just recently, John Paul conducted a live webinar and showed his ATO 2, Trade Scalper, and Atlas Line trades to a room full of traders.
For gauging a market’s tradability, knowledge of the ATR (Average True Range) is essential. Set your trading platform’s ATR setting to 4. When the ATR is between two and four points on the chart, trading conditions are ideal. However, an ATR above 5 points or below 1 point means the market is too fast or too slow, respectively. Slow conditions are also apparent when many dojis or short candlesticks appear on minute-based charts. Keep in mind, the ATR is always looking back at the last 4 bars (using our recommended setting), so it is not an indication of future levels. Once you place a trade, you can continue to monitor the ATR and adapt your profit target and stop loss based on your ATR-based strategy.
Ever look at NinjaTrader’s SuperDOM and wonder what all those buying and selling numbers mean? In the webinar video, you can gain an understanding of this so-called Level II price data. For a historical interpretation, check out NinjaTrader’s Times & Sales window. Note that with most DayTradeToWin strategies, we avoid interpretation of buying and selling numbers. In the old days of trading, these numbers were more useful. High-frequency trading and other changes have made our price action approach different.
One of the great new features of NinjaTrader 8 is the ability to place MIT (Market If Touched) orders. Consider the literal interpretation of “Market If Touched.” One could say that if your order is touched by the current, fluctuating market price, then you enter the trade at market value. MIT orders are useful in preventing slippage, which is when a tick or more of potential profit is lost due to unfortunate market conditions. The webinar video also explains limit orders, stop orders, and other helpful order tips.
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John Paul also touches on the topic of front-running. If you Google that term, you’ll probably come up with an explanation of dirty tactic employed by unscrupulous brokers. That is not what John Paul refers to. Instead, his meaning refers to getting filled a tick ahead of the desired price. It’s a tick less of profit, but it can be the difference between having your stop loss hit. You probably would not want to front-run scalping trades, because you’re only going for a couple of ticks. It’s probably better to front-run in trades when you’re going for a point or more of profit.
Aside from the other day trading strategies, it’s also important that you stick around for the part where he discusses closing out trades. Of course, not every profit target will get hit. You should know how to manually close out a trade in order to reduce excessive loss. The DOM has two buttons designed for that purpose. Be sure to watch John Paul’s specific approach based on years of looking at the markets.