Back in early February, we posted about how the January Effect forecast predicted the E-mini would close at a higher price in December than the price at the end of January. The January Effect is used to predict overall market direction for the year. The strategy can be used for swing trading.

By switching to a daily chart, you can get a better idea of annual price activity. Since April 2018, we have seen price rise to higher levels. In fact, the four arrows show positive monthly price action. This may be an indication the January Effect is correct. We’ll need to see how the rest of the year pans out. However, if you are confident in the forecast, you can find long opportunities for swing trading.

Swing Trading Using Fibonacci

The swing trading strategy uses a simple Fibonacci tool. Many platforms have them. In NinjaTrader, the tool can be configured to show three levels: 0%, 50%, and 100%. When configured this way, you can easily find the halfway point between two price values. By identifying the recent highs and lows and the halfway point, we can look for long opportunities that match the anticipate long direction predicted by the January Effect. Jump to 3:28 in the video for an example. When price surpasses the 50% point during a retracement to the recent high, that is the entry. The idea is to ride price up and hopefully get out with a profit.

Keep in mind that this type of trading requires you to hold a position over many days. Not all brokers and accounts are equipped. The longer you’re in a position, the more risk you’re subjected to.

Will price continue to stay above the 50% level established earlier in the year? Only time will tell. Will the 2018 January Effect maintain its historical accuracy record? We’ll have to see!

Sign up for the next Mentorship class to gain more insight. We have a new class that begins on August 14, 2018.

Purchase the ATO 2 by clicking here

Purchase the Atlas Line by clicking here

Want both? Join Mentorship or ask about a special combination offer by emailing [email protected]

When multiple day trading strategies confirm a long trade, we take that as a good sign. In this trading video, the ATO 2 and Atlas Line agreed that going long was correct. They were correct – the trade resulted in a two-point winner in just a few minutes. Trading one contract, this trade was worth $100. Two contracts = $200 of profit. You get the idea. Remember that these figures do not consider brokerage commissions or other costs. Generally, futures commissions are around $4.00 per contract, per trade (round-turn cost).

For background, this trade was taken on the E-mini S&P 500 market (ES in NinjaTrader). At 10:20 a.m. EDT, the Atlas Line produced a long signal. At the time, price was at 2822.75. A market buy order was placed soon after the signal appeared. With the Atlas Line and ATO 2, the signals appear once a bar closes. The rules for these strategies are fully taught in the included live training and online training video(s).

We understand that some traders prefer to work on other things during the day. With these two trading systems, you can set up a sound file to play when a trade occurs. This allows you to go back to the platform, place, and monitor the trade.

Day Trading Strategy Profit Targets & Stop Losses

Did you notice how the stop loss and profit target were automatically placed? That’s because an ATM Strategy was used. In NinjaTrader, ATM Strategies let you predefine a profit target and stop loss value. By selecting an ATM Strategy in the DOM prior to a trade, the specific predefined profit target and stop loss will apply once a trade is placed. The 2 point profit target and 4 point stop ATM Strategy is commonly used by DayTradeToWin.com because it’s a good average of risk vs. reward in terms of how the E-mini generally behaves. An effective day trading strategy should involve adaptive values.

By the way, NinjaTrader is free for practice trading. DayTradeToWin.com’s real-time practice data (simulator) page helps with this. Assistance can also be provided for MetaTrader, though at the moment, the ATO 2 is the only indicator available by DayTradeToWin.com for MetaTrader.

Changing a profit target or stop loss while in a position is best avoided. Doing so will put you behind other traders because orders are processed in the order received. When a trade goes against you, closing a position (via the DOM) is always an option.

Having stops that are too small may cause an early exit to an otherwise profitable trade. Stops that are too large expose you to greater risk. Similarly, profit targets that are too small may unnecessarily limit the amount of profit you can make on a trade. Profit targets that are too large may increase risk because they’ll never get hit or keep you in the market for longer than necessary. For these reasons, we approach trading dynamically. We prefer to use a tool called the ATR to determine what are profit target and stop loss should be based on real-time conditions. The full rules for this approach are explained in the included training for our strategies.

Improve Your Day Trading Strategy

In NinjaTrader, there are two ways to monitor profit and loss while in a position. If you have Chart Trader enabled, look for red or green chart text showing a profit or loss value. You can also check the bottom of the DOM.

We’ve said it before, but we truly do follow price action. We let price dictate our risk and our goal. We want to be in and out as quickly as possible with the largest bang for our buck. A simple and realistic day trading strategy is the way to go.

If you want to learn everything we have to offer during a comprehensive eight-week coaching program, Mentorship is for you. This live training occurs twice a week online. The webinar format allows you to see live charts, ask questions, and learn from an experienced trader. All of our courses and software are included with live training. We record every class for later playback. Need help installing or configuring NinjaTrader? No problem – our support people can help via remote assistance. Have trading questions outside of class? No problem – email them in and we’ll respond as soon as possible.

Wow, we’re more than halfway through 2018! That means it’s summertime and we need to stay aware of the unexpected market activity. At least we can plan around Independence Day, which is July 4, 2018. This U.S. federal holiday is the anniversary of U.S. independence from Great Britain. Back on July 4, 1776, the colonies produced the Declaration of Independence, so the holiday celebrates the birth of the country, essentially. Who thought you’d learn about history from a trading blog?

Because July 4 is a federal holiday, expect market hours to be different. For your reading pleasure, we’ve consolidated the important changes from the CME. You’re encouraged to still look at the official CME page and the Excel files explaining the differences. The consolidated versions are the easiest to read, though the format can still be a bit difficult to read. If you trade commodities like grains, dairy, etc. read the CME’s spreadsheets. We don’t cover that here because most of our traders are interested in futures (like the E-mini S&P).

Here are the hours:

• Tuesday, July 3, 2018: Equity and Bitcoin markets close early at 1:15 p.m. EDT (UTC-4). Forex, interest rate, energy, metal, and DME markets will be open normal hours.
• Wednesday, July 4, 2018: Equity, forex, bitcoin, interest rate, energy, metals, and DME markets halt at 1:00 p.m. EDT (UTC-4) and reopen at 6:00 p.m. EDT (UTC-4).

Beyond Independence Day

Market hours should be normal the rest of the week. The next trading holiday is Labor Day in early September.

Speaking of Independence Day, do you want to become an independent trader? We often hear that people are subscribed to trading rooms and fear that when they shut down, they won’t be able to find trades themselves. We teach people just like you how to do it yourself. The best way to learn is our eight-week Mentorship Program. Get all the details here and sign up for the upcoming July 2, 2018 class. We teach and include everything with lifetime licenses – it’s a good deal!

In my 20 or so years of trading, one of the most common questions I receive is, “How can I trade successfully?” There are many products and services out there. Trading can be confusing as it is. Fortunately, I had the opportunity to trade at a well-respected U.S. firm where I learned from the best and was in a position to be at the forefront of developing techniques I still use to this day. Keep reading and I’ll let you in on some advice. Here’s an early hint: finding a day trading coach is the best way.

In reality, there are about two main ways to become a trader.

One method is to do everything yourself. Spend countless hours, days, weeks, and even years trying to figure out what the market is doing and how you can consistently find winning trades. This is a long, expensive road. Do you have the free time to dedicate to learning properly? What about the “10,000 hour rule” for becoming an expert? Do you have endless supplies of cash for trial and error in live markets? Even if you stick to simulated trading entirely, you will need to put yourself into simulated positions on an almost daily basis in order to learn all the ways the market can move (and how you can best counter that movement). There are a ton of books and learning resources out there. Do those strategies still work? Were they tested? Are today’s markets different?

The day trading coachj way is better. Consider a capable mentor who has already put in the time and money, and has refined his approach based on trading his and other peoples’ money, plus the added benefit of feedback from his students. Decades of trading wisdom is priceless. Also, a good teacher knows how to break down information into understandable portions. Sometimes, trading instruction can be way too technical. A slow, steady, cumulative approach tends to work best.

Ready for a Day Trading Coach?

For over a decade, DayTradeToWin has lessened the learning curve and cost associated with becoming a trader. We have designed a number of products for this purpose. In fact, we offer an eight-week Mentorship Program specifically designed from turning both inexperienced and experienced traders into capable market strategists who can tackle the highs and lows every day. All training is conducted live by a day trading coach in a webinar format. No filler content is added – it’s all based on tried and true methods.

To learn more, visit the official Mentorship page. Group Mentorship classes begin about every month. The one-on-one program can almost begin at any time.

A new Group Mentorship class is set to begin January 3, 2019. What is Mentorship? It’s an eight-week trading school where you can learn about 10 different ways to trade popular markets, including futures markets like the E-mini S&P. John Paul, the founder of DayTradeToWin.com personally teaches each of the classes. The live training sessions are conducted in an online webinar room. In the room, you can see John Paul’s trading charts as he teaches each of the strategies. By the end of the eight weeks, the goal is to have a complete understanding of all the strategies and how they work together to form one complete trading plan.

Mentorship takes a different approach compared to other online trading schools. For starters, it’s an all-inclusive program. There are no hidden charges. Typically, you pay for the course via three payments and that provides access to all of the training and downloads. If you want to use the NinjaTrader platform and trade with real money, you will need to have to buy a license from NinjaTrader and fund an account with a broker that is compatible with NinjaTrader. DayTradeToWin.com can assist in providing a complete practice environment in which you can simulate the live trading experience.

Although the course downloads are provided for NinjaTrader only, many of the methods will work with other platforms. For most strategies, the rules are fully explained. You learn how to find the trades according to price patterns, what profit target and stop loss values to use, and how to manage trades. By using an understanding of price action, you can manually trade on other platforms without the aid of signal software.

This Trading School Offers:

• ATO 2 course and software
• Price Action Scalping course and software
• Trade Scalper course and software
• Atlas Line software
• Roadmap software
• Blueprint method
• ABC software
• Trading the news method and news event software
• X-5 method
• Yo-Yo method, Stair Step Method, Trailing Stops, Filtering Trades, and much more
• All classes are recorded and posted online in your private account for future playback
• Email support
• Optional remote support for installation and configuration of course materials

The testimonials page has dozens of written statements from traders who have used DayTradeToWin.com products over the years. DayTradeToWin.com has stood the test of time as a reliable trading school / online educator. If you have already purchased the Atlas Line, Trade Scalper, ATO 2 or another product, you are entitled to a discount for your prior purchases.

On Monday, May 28 (Memorial Day), expect the E-mini S&P and other CME products to halt early at 1 p.m. ET and reopen at 6 p.m. ET. This five-hour closure is detailed on CME’s page here. Expect an early trading halt for the CME’s equity, interest rate, FX, NYMEX & COMEX products. Note that the CME often uses CT (Central Time), so keep this in mind when thinking about your time zone.

Beyond Memorial Day

What’s the next trading holiday? July 4, 2018 (Independence Day). We will post more about this holiday soon. Beyond that, we have Thanksgiving and Christmas.

Friday, May 25 may be a slow trading day, as can happen the Friday before a three-day weekend. With the market moving fast lately, maybe this will be a nice break.

Every three months, futures traders need to perform a contract rollover. CME futures trading is structured in such a way that contracts expire on a quarterly cycle. In the months of March, June, September, and December, you will need to perform roll over steps to ensure that you’re trading an up to date contract. If not, your chart’s price activity will be inaccurate (among other problems).

Some trading platforms automatically roll over your contracts. Others specific a “continuous contract” where you simply don’t need to worry about doing anything – the contract is just always up to date. With NinjaTrader 8, the process has been made simpler, but a couple of steps are still involved.

Rollover Steps for NinjaTrader

1. In NinjaTrader’s Control Center, go to Tools > Database Management
2. The Database Management window should appear. Providing you are following these steps on or after the rollover date (see the list of dates here), the contracts needing a roll over should be listed. Click the Rollover button.
3. Go back to your chart(s) and you should see the new contract periods. For example, your ES 03-18 chart should now appear as ES 06-18. Keep in mind that markets like the CL roll over more frequently, so it’s good to visit the Database Management window on a monthly basis just to roll over anything that may need it.

Some traders prefer to roll over later than the rollover date. This is because it can take a couple of days for the volume to transition to the new contract. If you want to try this approach, you can monitor the volume on this page.

These pictures will help guide you further:

 

 

 

In late January, many media outlets said that the U.S. stock market was strong and resilient. Record highs were hit. Within a couple of weeks, the Dow experienced one of its largest losses ever. Many consider this to be a stock market crash. What happened?

Well, here are some of the possible explanations:

• Investors were worried high interest rates, bond yields, and inflation, so a sell-off occurred
• High frequency trading algorithms somehow caused the activity, perhaps by playing off one another or analyzing the markets and deciding that selling was the best option (a bug, development oversight, or maybe intentionally designed)
• After the market rose to new levels since the 2016 election, it was simply time for the market to regulate and come back down to “normal” levels

We retail traders have been dealing with increased volatility during this time period, even through today. Much of the time, the E-mini’s ATR (Average True Range) has exceeded levels safe levels for day trading (based on our assessment rules). For example, when the ATR is between one and four points, trading conditions are acceptable. During this highly volatile time, we have seen the ATR push 20.

Stock Market Crash: What You Can Do

What can you do? Sit on your hands, experiment, or engage in higher-risk trading. You can’t control the market or the conditions that may have caused the volatility. Yes, our methods have found many excellent trades, but if you decide to jump in on one of our signals, be very careful. A fast-moving market can easily flip direction and tag you out. If you’re going to trade, jump into simulation mode for a while first and get a feel for what it would be like trading with a live account.

Interestingly, the 2018 January Effect seems to indicate that 2018 will be an up year. If that’s true (and there is basis for historical accuracy), then what does that mean for this period of bearish activity? Well, by watching the video above, the markets may now be on the rise. If that’s the case, you can use the January Effect method to get in before the market reaches new highs.

 

Were you successful with any trades yesterday? The Atlas Line called out a clear winner, totaling about +2.5 points or +10 ticks. This short trade occurred in the E-mini S&P market at about 10 a.m. EST. The signal was generated at the close of the candle at about 2869. At that time, the Average True Range (ATR) was about 2.56. This is where we get the +2.5 profit target (round down to the nearest whole-point). While the maximum profit target may have been double that, once you’re in a trade, the rules say to closely monitor real-time conditions and adjust the profit and stop loss as you go. In some instances, an unexpected news event can dramatically increase volatility. If that happens, you may want to cut your losses and get out sooner than later. Fortunately, this trade was a winner with good volatility.

When trading, getting in as close as possible to the signal price is recommended. In this trade, John Paul got in within a tick or so. If you were trading with five contracts, the profit would have been over $600. Of course, the amount of contracts one can trade with is impacting by one’s ability to properly fund a trading account. Practice is encouraged, then after exploring the risks of trading and consulting with a financial professional, starting off with one contract is probably the best option.

Performance, Risk, and Approach

Students who are new to the price action approach taught by DayTradeToWin may consider the following:

• Reduce risk exposure by staying in a trade as little time as possible. Get in and hopefully get out with profit. The Atlas Line’s rules limit each trade to about 20 min. Often times, you’ll get out sooner.
• Before the trading day begins, check the financial news schedule. Market-impacting events are published ahead of time. You may want to stay out until the volatility subsides.
• Measure your trading success by looking at long-term performance. Look at each month and objectively compare the performance. NinjaTrader has an account performance feature that is useful in this regard. If you are unsatisfied, consider a new approach.