Forget Traditional Indicators: Price Action is Key

First, take a look at the Atlas Line price action indicator for the NinjaTrader 8 trading platform. The line itself is pink. In this case, it’s used on a 1-minute chart. On this particular day, the E-mini’s price action caused the Atlas Line to give two main signals: a Long and a Short. John Paul draws a box around the short signal. The indicator can be used as a long-term directional tool. Notice how price stayed below the line for the remainder of the day. In such cases, taking short trades is advised. Additional trades are provided as Strength (S) and Pullback (P) signals.

At 1:53, another price action indicator is shown: the Trade Scalper for NinjaTrader 8. This price action scalping indicator plots Long and Short signals based on price patterns. You won’t have to worry about identifying the price patterns yourself – the indicator does this automatically. Your job is to place the trades using the SuperDOM or Chart Trader. We recommend that you preconfigure multiple ATM Strategies so you can use the best one quickly when you’re ready to place a trade.

At the time, the ATR (Average True Range) indicator was indicating that we could go for 3.5 points of profit. Yes, we let the market dictate our risk. This is partially due to the idea that the stop loss must be large enough to absorb inevitable fluctuations. Traders who use stops that are too tight may be stopped out prematurely and such things may be costly if repeated. According to John Paul, the scalping trades shown were worth about two points of profit each.

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