Here’s a question that may confuse you at first: what do you not know that you do not know about trading? The unknown may be your biggest downfall. In this two-part video series, John Paul from DayTradeToWin.com endeavors to clarify common trading misconceptions. The general approach is price action. This means letting a chart’s price movement tell you when and how to trade.
By using the ATR (Average True Range) as an indicator for volatility, profit target, and stop loss, you can mitigate some risk. How? The ATR with a period setting of four gives you a picture of the average price variation for the last 20 minutes when a five-minute chart is in use. If you use this value to determine each trade’s win and loss settings (profit target and stop loss), you can mitigate some risk compared to those traders who use large, fixed values. We prefer an adaptable approach because price is always shifting. Tune in to the first video at 5:50 for an explanation in conjunction with the Trade Scalper. If the ATR is above five points, that’s considered too fast. If below one point, that’s considered too slow. There are exceptions and ways to trade really volatile conditions. Those approaches have been shared in recent videos.
Do you know how to quickly measure the points and ticks between two points on the chart? NinjaTrader 8’s ruler tool is useful. Select it from the drawing drop-down (click the pencil at the top of the chart). Next, you’ll need to click three points on the chart. The first is the start point. The next is the end point. The last is the point at which you want the measurement to display. Practice by measuring the distance between candles. You can quickly determine price ranges this way.
DayTradeToWin offers a free trading news indicator. News events can take a trader by surprising and plunge them into big loss territory in a jiffy. Wouldn’t it be better to know when a planned news event is going to happen so you can stay out of the market? The news indicator plots upcoming, scheduled news events directly on the chart. You can customize the number of displayed events. You may want to change it to five or so as the default value can take up much vertical space with overlap.
John Paul expects the E-mini S&P 500 to go up overall during the remainder of 2020. He explains how to find long (buy) opportunities once price exceeds a specific 50% level. He explains later how this long bias can be used intraday in combination with other signals, such as those from the Atlas Line and Trade Scalper. Use a daily chart to see recent highs and lows. You can configure the Fibonacci tool to draw three horizontal lines. The middle line is the 50% line. Look for retracements above the 50% mark to previous highs. Watch for situations where the market may stagnate or pause for one or more months on approach to higher levels. The specific midpoint value is defined as 2,782.