How to Use Price Action to Identify E-mini Trends

One of the biggest ways to “win” in day trading markets is to correctly capitalize on trending days. If you are lucky and confident, you can place a trade before the trend takes off, then ride the trend up or down and get out at a big profit. For this, you have to:

  • Enter early at the right time
  • Be correct regarding the direction (i.e. up or down, long or short, buy or sell)
  • Have a stop loss large enough so that regular price fluctuations won’t hit it and cause a premature exit (and loss)
  • Have a profit target large enough for the trend to eventually hit that and cause significant profit
  • Get out at the right time

Of course, there is much that can go wrong. For instance, you can buy instead of sell, anticipating the market to turn around yet you keep getting deeper into loss territory to a point where you wondered why you had a trading account to begin with. Hopefully, that never happens to you and you always trade with money set aside for high risk trading.

There are some trading systems out there that are meant to be traded only on trending days. But it is easy to think a day is trending if the market opens and goes up consistently for 20 consecutive minutes. Does that mean it will continue to do so into the early afternoon? There’s no guarantee. Is the move over? Could be. There’s no guarantee. The market can reverse at any moment. This is a reality of trading and something you have to be comfortable with. As a trader, you have to understand that responsibly and reasonably dealing with loss is a part of the “job.”

This is why hedge funds and big organizations use trading algorithms. Sure, there is win potential associated with execution speed, but some of these algorithms undoubtedly incorporate some sort of predictive qualities. Yes, companies that have millions of dollars are trying to predict the market just like you. It is true that some outright manipulate it, but that’s another discussion altogether.

So, if these companies have invested big bucks in predicting the market, who can say that individual traders cannot have any success with predicting the markets? This is why you see so many trading systems that exist. Yes, some will be more successful than others. Some will do better on trending days than others. Some will easily get “confused” in choppy conditions.

Hopefully, the video above has helped you understand how DayTradeToWin approaches trending markets, especially the E-mini S&P. The Atlas Line, ATO 2 and Trade Scalper can be used as predictive tools (though there is no guarantee they will be correct).

Pro Trader Predicts Big Sell-Off in January 2021

Within the last month, a couple of predictions have emerged regarding how they market will be in early 2021. John Paul, founder of DayTradeToWin.com has said that he expects a big sell-off to occur in early January 2021. Below, you will find two more videos mentioning this prediction.

What is a sell-off? It’s a sustained period of bearish activity. In other words, a “great fall” in the markets. It’s not exactly a crash. A crash implies less control (i.e. a disastrous free-fall), whereas a sell-off is more of a series of thoughtful actions or consequences via controlled market mechanisms, trading, or business strategy.

John Paul says it is possible for regular “intraday” traders to capitalize on the anticipated sell-off, providing they have the right signals and trading systems. He points to the DayTradeToWin Atlas Line and Trade Scalper software specifically for finding short (sell) trades during a sell-off. Recognizing a sell-off can add an additional level of confirmation. And as a trader, are you not always looking for an extra indicator of confidence?

In the December 31, 2020 trading video above, you can see how the Atlas Line helps confirm anticipated price direction and can lead to profitable trades. Though there is inherent risk in trading and hypothetical performance is not indicative of future results, you can get a sense of how the signals appear to inform traders of a potential favorable condition in the near future. For instance, in the thumbnail image, you can see how there is an Atlas Line Long (buy) signal. Price continue moving up afterward. This should have led to a reasonable profit target being hit, thus a profit.

Normally, trading New Year’s Eve and Christmas Eve is best avoided. These are times to spend with family and friends. And if you must trade, because the big players tend to be away, there may be unusually slow periods. When these slow periods occur, the market can suddenly chop back and forth without any clear direction. This makes it extra difficult to trade. Fortunately, trading systems such as the Atlas Line and Trade Scalper can add “clarity.”

If we go further back in time, we see another video where John Paul predicts a January 2021 sell-off. What is your opinion? Do you think it will occur? There may be many headlines as we switch from one U.S. president who has been quite controversial to another, who also is involved in some controversy. We’re living at an unusual time where the world is trying to mitigate a contagion. This has set up a number of complexities at a time when the greatest number of people on earth exist, where all sorts of organizations, companies, and governments want to prosper, which can be disadvantageous to various populations, some of which do not have the means to grasp any portion of the picture. Also, there is the mindset of going into a new year and expecting change. Maybe that will happen. So when it comes to the markets, we have so much reason to expect some turbulence.

Is It Possible to Have a Career as a Day Trader?

There are so many day trading systems out there claiming to be the best. If you do a bit of research, you may see some of these organizations making big claims or promises have only been around for a short period of time – nowhere near the 10+ years DayTradeToWin.com has. If you take a look at all the new trading videos on YouTube, you’ve probably seen many rags to riches stories. Is it really that simple? Be careful to not subscribe to a personality; the methods have to work. Period. Do these other people have videos going back 10 years demonstrating consistency? Very few, if any do, with the exception of DaytradeToWin.

…Here’s yet another demonstration of success. Keep in mind, trading should only be done with designated risk capital; not one’s rent money, grocery money, child support money, etc. If you’re in that desperate of a situation, we sincerely wish you the best with a more conventional form of employment or other means of fortune/sustenance.

Even if you have stacks of cash serving as improvised furniture because you don’t trust the banks and physically want to see your money every day (a ridiculous and hopefully humorous picture that hopefully drives home the point), you should still practice first. NinjaTrader and other platforms have really honed in on creating a practice environment that replicates the trading experience closely. In fact, simulated trades in Ninja sometimes aren’t filled – just like the real thing!

If you were to purchase the Trade Scalper and Atlas Line, the configuration of each is relatively straightforward. You’ll have signals just like those in the video above: short, long, etc. It’s up to you to place the trade. The systems don’t go as far as trading for you. Why’s that? Because it’s better if you’re in charge rather then entrusting some code to not sabotage your trading account. If you look hard enough, you can probably find some horror stories of traders who had too many orders placed otherwise subjected themselves to too much risk because of a robot’s algorithm. DayTradeToWin.com has always preferred to put that power in your hands, the human trader, who may have some discretion though the methods/rules are objective.

Best Trading Conditions: $100+ Per Trade Possible?

Market conditions don’t always allow for $100+ per trade. The 2020 Election and whatever else impacts the markets has increased the volatility. Does that mean you should abandon rationality to make some big money? Of course not. In fact, we’ve been saying for a while now that it’s best to use a 1-Minute chart instead of a 5-Minute chart as well as continue use of the ATR (Average True Range) to determine tradeability.

The recent January Effect video shows there are many great long trades. But what about those inevitable intraday price drops? What do you do with those? As seen in this video, the Atlas Line and Trade Scalper day trading signal systems have been effective in finding winning opportunities…

The real-time trade was worth +2.25 points. That’s nine ticks at $12.50 each, thus $112.50 with one contract. That may not seem like much, but if you have multiple winning moves per day and can afford to trade multiple contracts, there may be enough profit for you with commission covered. Let that be no indication of guaranteed performance. We have to state everything is hypothetical to comply with regulations.

NinjaTrader was designed with the intention of replicating conditions as closely as possible to live trading. In fact, when sim trading, you won’t be filled every time – just like in live trading. When practicing, you may want to limit the simulator account to less than the original amount of $100,000. Maybe drop that to something more reasonable like $5,000. This way, you can use the Trade Performance tool to get a sense of how it goes with the Sim101 account over a period of time. If that works for you consistently enough, consider trading with a live account and start off slow and carefully.

Beginner Day Trading Methods: How to Place Orders

Are you 100% sure that you’re using the best types of orders for your style of day trading? For example, if you’re scalping for a few ticks, you’ll want to use an order type that has decreased slippage because every tick is important. Slippage, extra risk, timing, etc. are all factors one must consider when using a specific order type. Many day trading platforms offer multiple order types, such as stop-limit, market, and MIT. Each order type has pros and cons.

This video is a detailed 45-minute presentation. You’ll see descriptions along with examples in the SuperDOM. Yes, you can use Chart Trader for order placements, but we prefer the more robust and professional tool for the job. However, a clear distinction must be made: Chart Trader also consists of the red profit target and green stop loss lines that appear on the chart. Therefore, Chart Trader must be enabled to see these lines, although the panel for order placement is not necessary. This setting, “Chart Trader (Hidden)”, is preferred. By the way, the Dynamic SuperDOM is preferred because the Static SuperDOM involves extra costs added due to its use and patent/licensing agreements with a third-party.

Throughout, you’ll see Short and Long signals from the Trade Scalper and Atlas Line. These are price action trading methods described in more detail at DayTradeToWin.com.

One common mistake when using a SuperDOM is not selecting the Instrument (aka market) or a mismatch between the selected instrument in the SuperDOM vs. the chart. Make sure they are one and the same. The SuperDOM’s display of the instrument’s real-time price (in yellow) should match the real-time price of the chart. Yes, if you want to observe and trade multple markets, have multiple charts with DOMs for the respective markets.

Signals for Futures Traders: Price Action E-mini on NinjaTrader

Two important lessons we see traders miss time and time again:

  1. Stick to the rules you’re taught. If you’ve found a way to improve, by all means, do that, but try not to lose the foundational aspect of what’s been tried and true for years.
  2. Avoid a fixed approach to profit targets and stops. If you have “big money” in mind and only trade this way, you will expect too much when the market is too slow. Rather, it’s better to adapt based on what the market can reasonably provide at a given moment. For this, we use the ATR (Average True Range) with a Period value of 4 (last four bars).

Regarding #1 above, this video clearly demonstrates why one should avoid fear and remember training. If you closed the trade too early, that would have been a good-sized loss. If you waited and respected the rules, you would have seen success, as John Paul did here.

We should add a third main lesson, which is this:

3. If possible, use one or more trading methods to confirm the direction or types of trades you’re taking. Here, the Atlas Line shows price is below the line, so stick with short trades. When the Trade Scalper provides short signals beneath the Atlas Line (dashed line), we have confirmation that selling the market is better. The Atlas Line’s short Strength and Pullback trades, also short while under the line, were good to take as well.

To learn more about day trading and price action techniques, visit the DayTradeToWin.com website. There is a new Mentorship class that begins Nov. 2. Enroll early to download and install signal software like what you see above.

Price Action Indicator Signals Demonstrated Live

When comparing trading systems, it’s easy to get mixed up and not know which one is best. Should you scalp and go for more trades with smaller profit targets? Or should you go for fewer but larger trades? Well, the DayTradeToWin.com Trade Scalper and Atlas Line day trading methods reflect both concepts. They can be used independently from one another or they can be used together to get the best of both worlds.

In the beginning of the video, you’ll see many Atlas Line Long signals. Price drops big right after the first Short trading signal. That looks to be a big winning trade, had you taken it. Hang on to your hat as the two next signals, both Long (buy), look to be winners as well. A short (sell) signal follows; another winner.

Now, every day won’t be like this. It’s about looking at the big picture. Day trading as a source of income is possible, but the market is not like a typical boss. Normally, when you get paid from a traditional job, the next day, your boss doesn’t reach his hand in your pocket and says, “You owe me 1/8 of what I paid you.” This is why with trading, we must look at time frames such as 30+ and 90+ days to gauge success. Of course, it is crucially important to start with practice trading (sim account) regardless of your level of wealth. NinjaTrader has this ability to generate a report indicating win rate, loss rate, and other factors that will help you gauge your performance. That’s covered in a different video.

Later in this video around 3:30, we see the other trading system in use, the Trade Scalper. A signal and trade are demonstrated in real-time. This is much like how one would experience trading for oneself, having the proper software and configuration established. This is no problem, though, because I hear the DayTradeToWin crew gladly help set up clients with the proper config to get the most out of the markets.

Price Action Day Trading Systems for Review

Let’s look at two day trading systems and see how they compare. The NinjaTrader platform is in use. The chart type is a 1-Minute E-mini S&P 500 (ES in NinjaTrader). Both techniques use price action. Price action means trading based on how price moves across the chart; e.g. various patterns, levels, etc. are recognized and reached, thus causing the next set of decisions to be made by the trading software and/or day trader.

First, we look at the Atlas Line. In the beginning of the video, the Atlas Line is represented by the blue dashed line and Atlas Short signal. The short signal appeared because the Atlas Line recognized two candles closed below its dashed line. It notifies you this occurred via the short signal text. Likewise, if we had two candles close above, a long signal would appear. See, you’re getting the hang of it already!

At the 52 second mark, we see an explanation of the Trade Scalper signal. Why is the full method not explained? Because it’s a valuable trading method. You have to purchase it from the DayTradeToWin.com website. Rest assured, when you’re using the indicator, you’ll see the same signals as everyone else with the same basic chart configuration. The included live training video, live training, etc. help ensure a complete understanding.

With scalping more than the other methods, it’s important that you place an order (trade) soon after the signal appears. If you wait around too long, price can easily move beyond where your profit target would have been and you probably don’t want to chase a missed opportunity. Instead, it’s recommended that you pre-configure profit targets and stop losses via NinjaTrader’s ATM Strategy feature. After configuring the most common values, you will be able to quickly select the best profit target and stop loss for current market conditions.

Flip-flop or Trend? This Price Action Indicator Helps

In this video, the Atlas Line gives two winning signals. The first signal is a Short winner. The second is a Long winner. The market is the E-mini S&P 500. The Atlas Line is installed as an indicator into the NinjaTrader 8 platform. Once applied to the chart, it will automatically provide signals based on how price moves around and through the plotted line (dashed pink line in the video). When two candles close above, that causes a Long signal. When two candles close below, that causes a Short signal. Since you know the basis of the signals, you can prepare yourself for placing a trade ahead of time. This is made easier with a 5-Minute chart, as the market moves slow enough for most people to prepare a trade.

Do you focus on previous highs and lows or guess when trends start and stop? That’s a mistake. As demonstrated, if you thought the market was going to continue down, you could have been stopped out by the reversal. This is where the Atlas Line is useful: the line itself maintains its direction all day. In effect, you can gauge the overall “bias” of the market: whether you should be prioritizing long (buy) or short (sell) trades. The automated signals are icing on the cake.

Whether you purchase the 6-Month or Lifetime Atlas Line, the signals will be the same. Remember that your 6-Month won’t count towards your Lifetime, so keep in mind that purchase a Lifetime license may be a better value unless you decide to roll into the eight-week Mentorship Program. In that case, your purchase may count towards Mentorship.

We should mention the Atlas Line can be used across many market types: the YM, CL, NQ, etc. The requirement is that the market needs to trade overnight and be reasonably volatile. Therefore, stocks won’t work. However, you can trade currencies (aka forex) just fine. NinjaTrader is free to use with futures and forex data available. You only have to purchase or lease the platform when you’re ready to trade with real money. Click here so we can help you get set up with NinjaTrader.

2 Videos: Multiple Days of Price Action Trading Reviewed

When evaluating any day trading system, it’s important to look at multi-day performance. How did the system perform over multiple days? What about consecutive days? How big were the wins, if any? How big were the losses, if any? What’s the recommended trading account size? What markets can be traded? What is the underlying mechanism – price action?

DayTradeToWin.com’s Trade Scalper and Atlas Line price action day trading systems are seen in many day trading videos. We can see signals that promise to be the same as what a regular trader would see via their personal computer. Long and Short signals are equivalent to Buy and Sell, in trading vernacular. When a signal appears, the trader is supposed to follow the rules and place a trade. If the market is too volatile or too slow, it may be best to wait until conditions return to normal. This is one example of many. Fortunately, the rules for those two price action trading systems appear to be relatively straightforward.

Both allow customization of the signal text including color and size. This is especially useful if you’re older and prefer not to squint. The NinjaTrader platform allows dark and light charts. Some traders are colorblind, so offering the ability to change colors to contrast with background is very important and overlooked in indicator development.

On the bottom of the charts, you will see a gold-colored line. That’s the ATR (Average True Range) and included with many trading platforms, such as thinkorswim and Trading View. It should be configurable, allowing you to specify the time frame or period value for the primary “averaging” calculation. Four bars is recommended, as greater values consider longer periods of time. This depends on the type of chart in use, of course!