7 Ticks of Risk / 40 Ticks of Profit!!

Hello Traders,

Dec,19th,2009

We had a great question emailed to us today and would like to answer it in the blog so everyone is aware of the answer. The question was "Does your indicators and methods work on Range Charts?". The answer is YES, all of our methods and indicators work on all time frames with any style of chart meaning; they will work on second, minute, tick, range, volume, daily, weekly and Monthly charts.

Here is a example of a 4 Range with the TF (Russell) on Dec 18th.

The blue bars came in at the low of the move warning us that a big move was about to happen. Once the move started and we see that is a up move we wait for the 2nd set of Green bars for our long entry. Using a 4 Range chart we know that are stop will be MAX 8 ticks which is 2 bars. No matter if there are 5 red bars or just 1, as soon as the bars go back to green we know that is our defined signal to enter the trade long.

Notice how the bars stayed green all the way up and so does our Moving Average, this will give us a visual that we are trading in the proper direction and it is easier to hold the trade. From the Blue bar low telling us a big move is going to happen then the price goes up 45 Ticks, then we ultimatley get stopped out of the trade with 40 Ticks as we move our stop to the low of each now blue bar that is printed. This gives us a defined exit just like we had a defined entry. Once a bar closes it will never turn back to a different color meaning; once the bar closes green it will always be green FOREVER, we know allot of systems change the bar back to another color even after 3 or 4 more bars have been printed. Our system does not do that.

The 4 main things to look at on this chart is (1) How big the stop was (2) How much drawdown we took on the trade (3) the blue bars gave us a great "heads up" as to when the move was starting and ending (4) the risk to reward on the trade. Seeing how the bars stay green and red for confidence in realtime is also another great thing to take note of.

If you have any questions regarding our indicators or trading methods feel free to email us at anytime at trade@eminischool.com

Happy trading!

Turbo Scalper Shorts +8.00

Hello Traders,

12/17/2009

Today we hade 2 nice Turbo Scalp Trades to the short side. The first trade was from 1102.00 with the price falling down to 1097.00 on the first push down. The second trade was from 1098.00 down to 1094.00. Each trade had a max gain of +4.00 points or +8.00 points taking both trades.

When looking at the chart we are not only wanting to point out the profit potential but really the most important part is seeing where are stops were on both of the trades. We place our stops 1 tick above the last high (the green bars before the short signal fired off). As the price falls we lower our stops and follow the trade down.

We always want to confirm our Turbo Scalp Trades to make sure we are only taking trades in the direction of the 3 and 10 Min Kill Zone charts. If both the 3 and 10 minute are not saying the same thing (which would be short in this example) we skip the trade. We always want Multiple Time Frame confirmations that we are scalping in the proper direction. Then we take our direction then narrow the entry down by using the Turbo Scalp Trading Methods.

Our Rule is 2 Winners in a Row , Stop Trading and Bank the profits for the day!!

For more information on the Turbo Scalp and Kill Zone Trdaing System please go to www.eminischool.com or contact us at trade@eminischool.com

Happy Trading!

When the ES is slow....

Hello traders,

Today i wanted to write a quick article on trading with regards to taking trades out of boredom or frustration when the ES is choppy and not moving fast enough to keep you intrested. One of the worst things you can do as a trader is to take trades out of boredom, it will program very bad habits and you will most likly lose on the trade as even if you enter in the right direction it is very hard to hold the trade to the profit target if the markets are trading slow. So what this will do is alter your risk / reward on those trades.

When the ES is trading slow try looking at the Russell symbol (TF) as most of the time the TF will trade faster than the ES. Each full point in the TF is worth $100.00 unlike the ES where each full point is worth $50.00.

Also the TF seems to break harder one way or the other if you are a breakout trader. We are not breakout traders we always want to enter on pullbacks, but if you are a breakout trader the TF is a great contract to trade. We beleive the reason whey the TF breaks out harder than the ES is because there is not as much hedging going on in the TF as there is in the ES. This is just something we have noticed in our years of trading.

The TF also trades more stocks if you like trading stocks. The TF trades like a AAPL or GS something that really moves throughout the day and the faster it moves the quicker you can bank your profits. Some people will say the TF is too thin, but this can work to your advantage if you are on the right side of the trade, plus unless you are trading more than 100 lots we would not be concered about the TF being thin.

Keep an eye on the TF if you feel like you are getting bored or frustrated during the day trading the ES if the ES just seems to be chopping back and forth for the day.

The chart above is a 3 Minute TF chart. We had a very nice sell signal (the 2nd set of reds) for a nice 6.00 point winner on the short side. Also notice how on both legs down the blue bars came in at the low of each of the moves to give us a very high odds of a turning point which nailed the low of both of the moves down. Looking at the chart would you trade long against our sell signal? It is very key in your trading to have a real time visual on the market to keep you trading in the right direction!

Happy Trading!

www.eMiniSchool.com

ES Day Trading!

Hello Traders,

Fridays action was back and forth but our Blue bars did a nice job of telling us we were at the High of the day and at the Low of the day with our Blue Bars.

With Thursdays sell off at the close we had a very nice sell signal on the 10 min and the 3 min then the market dove into the close with Blue bars Nailing the Low of the day on thursday as well.

If the ES stays above the 1075.00 level we have a good chance of breaking to new highs with our upper targets being 1126.00 then 1162 then the highest target being 1234!

We are getting a negative divergence at this high but going into next week we will be watching how Tuesdays market closes.

Happy Trading!

www.eMiniSchool.com

NinjaTrader + New Pricing!

Hello traders,

News Update: We are active with Ninja trader!

We are proud to announce that eMiniSchool has partner with Ninja Trader to deliver our members more variety of charting platforms!

We are very pleased to offer the NinjaTrader platform to our clients for many reasons but one great reason is that you can get started with NinjaTrader for Free! You could easily pay hundreds of dollars per month for products with less functionality but with NinjaTrader all you need is access to a real-time or historical data feed based on your requirements and their advanced charting, market analytics, system development and trade simulation can be used for Free!

NinjaTrader has excelled in the area of trade management with its innovative Advanced Trade Management (ATM) technology which protects your open positions through predefined strategies that you create which semi-automates stop loss and profit target brackets on order entry, trailing stops, auto-breakeven stops, and much more…

NinjaTrader is also a true end to end strategy development and automated trading platform. Develop your strategy concept, construct it, historically test it, optimize it, live simulation test it and then live deploy it all through your account here at our firm.

Please continue read about NinjaTrader’s many powerful features and how it can enhance your ability to effectively trade the markets.

This is a great way to have a charting platform with a lifetime license to cut down your long term trading overhead. Also NinjaTrader has more indicators then e-signal and it is easier than Trade Station to use.

eMiniSchool is always striving to deliver the best trading tools to our traders.

IMPORTANT ALERT: If you already have our system and would like to get a lifetime license with Ninja Trade there is NO fee to change platforms. Just simply email us and we will take care of you.

PRICING UPDATE: On Nov #14 the price of our system will be raised to $3995.00

You will receive 23 educational videos (3 hours)

PLUS 4 hours live mentoring/ trading.

Both the Kill Zone and Turbo Scalp trading Systems!

Lock in the low price of only $1395.00 today, before the price goes up. We want you to get the discount and learning how we trade can truly change your trading career FOREVER!

Learn about NinjaTrader here: www.NinjaTrader.com

Click here www.eminischool.com to go to our site and lock in the low rate, Remember Nov #14 is the absolute deadline for the $1395.00 price!

P.S Everyone who buys our system before Nov 14th will also receive our member only emails for FREE for TWO years. This is a $69 monthly value! Thats a $1656.00 Value YOURS FREE!

Are you a breakout trader?

Are you frustrated like so many other traders that are trying to trade the futures markets by placing buy stops above proir highs or sell stops below prior lows?

The one thing we stress over and over again to all of our traders is THE S&P’S DO NOT WANT TO BREAK OUT! In normal market conditions 75% of the time the market is non-trending on an intra-day basis. Yes throughout the day we might make a new high or low from the prior day, but when day trading we don’t want to fight the fact that the S&P’S don’t want to break out. We actually want to be exiting or trailing our stops tight at decision points like a prior high and low.

Trader’s first start out trading breakouts because it is the easiest trade to learn due to the fact it is very easy to see a prior high or low on your charts, BUT in real world trading the odds are stacked against you trying to catch a breakout trade. Not only are the odds stacked highly against you but your risk is far greater than the reward you may receive if the trade does work out. Did you know that most all highs and lows are re-tested before the trend continues? This is where you enter a trade long off of a prior high and then the price comes back down to re-test the breakout point and you cover your trade thinking “maybe it is not going to break out this time” then the price consolidates at the breakout point then continues higher BUT YOU HAVE ALREADY COVERED YOUR LONG POSITION!!

You must already be in a trade as it approaches the prior high with a prior signal getting you in the trade long. Once in a trade as it approaches the prior high there are things we go over in the course that tells you if we are more likely to break that prior high. You must have a cushion of profit going into the breakout point incase the breakout does NOT occur.

Trading breakouts in our opinion is the easiest way to let you emotions take control of your trading. We call the breakout point the “decision point” and we do not want to be entering a trade at a risking decision point PERIOD!

In this video we will go over the difference in how to read up moves and down moves. There is a big difference when it comes to breaking out going long OR breaking out going short.

Click here to download your free videos

HUGE PROFITS IN CME!

CME is a stock that is not to be taken lightly meaning a wrong move can be very costly as the weekly to intra day swings can be very large. On the other hand having a defined trading appraoch with indicators that give you a edge trading CME can produce huge profits in the stock or trading the options.

In the chart above you can see there were blue bars at the bottom of the chart and the indicator is LOW meaning a big move is going to start. The price was around $180.00) From there the price had a initial spike to $250.00 (Nice gainer) But that wansnt even the true buy signal. The true buy signal came in on the 2nd set of greens where i wrote LONG on the chart. You can see once the bars turned back to green the stop was only one bar (the low of the last red bar) NOT all the way back down below $180.00 like most traders are taught. That stop is simply to big for the reward the stock can produce. Our stop was about $10.00 points with a target of $320.00 or about 100 points! 10:1 risk / reward. The options were trading at $10.00 on the day the buy signal triggered, then making a high around $95 on the option!

Looking at this chart once CME took off to the upside you will notice that the blue bars came in to tell us that the move is over up at $330.00 which is a great place to exit all of the trade and be flat as a correction is going to occur.

The blue bars give us a high odds area for the start and the end of a move no matter if it is on a daily chart of a 5 min chart the indicators are dynamic and work on all timeframes. If you would like to see specific charts or have questions please email us at trade@eminischool.com

www.eMiniSchool.com

Finding the Low (Blue Bars)

In our prior post we were talking about the ES and that the 950 area would be a sell as that would potentially be the end of the 5th wave up. Since then the ES broke out hit the 950 area then dove 65.00 points to make a low at 885.00.

Notice how on the 30 min chart we had blue bars right at the low of 885.00 this gives us a high odds turning point in realtime so we known not to short after the blue bar prints. Notice how after the blue bars we had a upmove then turned back down to take out the lows. Since there were blue bars on that low we are not thinking the low will be taken out and actually want to look to take the next long signal on the smaller time frame.

The blue bars tell us when a big move is going to start and end in real time. Along with the levels we use to confirm our market outlook. If you have any questions or would like to see other charts please let us know. You can email us anytimne at trade@eminischool.com

www.eminischool.com

925 - 950 is the S&P range

For the last 7-8 days the ES has basically went sideways with the 950 area being a critical resistance level. Tomorrow we will be watching the 942.00 level as this could be the short term resistance level that could hold the price down on the smaller more intra-day time frames. The 925.00 level is now the support zone (the prior support was 875.00). The 30 min chart looks similiar to when we were near the 875.00 support zone before we broke higher. Even though the last 7-8 days has really been a non event, tommorrow could be the day where we finally get some movement one way or the other.

Some stocks like GS and AAPL have had some selling pressure on them the last few days. Keep an eye on these stocks as more follow through to the downside could lead the market lower, or at least keep the resistance holding the market down at this level.

www.eminischool.com

ES Inverse Head & Shoulders?

Looking at the ES on a daily chart we have the downward sloping 200 day moving average that closed today at 927.50. We are sill in the wedge on the 30 min chart and today we did not clear the 915 level again, the high that was made today was 909.00 with 910 being are upper level on the day. We are slowly making low highs on the 30 min, but those lower highs have not been confirmed by taking out any of the 30 min lows around 880.00 -875.00 area.

The daily chart looks as though we could possible be nearing the neckline of the Inverse Head & SHoulders pattern. If the market stalls out here and starts to re trace we will keep an eye on this pattern. If the pattern does hold at the shoulder line there could be great oppurtunites in the weeks ahead.

If this is the 4th wave which is corrective we still have the chance at pushing higher , but like we waid before we would be a seller of that rally. The upper level we would be looking at if the market broker higher would be the 940.00 level.

Until we break one way or the other it is hard to initiate a fresh position long at these levels. There are some individual stocks poised to make a move higher that is the only reason we still feel as though we could make one more run to new highs on this move. We are keeping a close eye on the 30 min wedge to see which way we go at this level. The 200 day moving average on the 30 min chart has flattened out today which means we should get a move one way or the other very soon.

www.eMiniSchool.com

Watching the $133.90 level on GS

There is no doubt that GS has had a very nice move to the upside from the 11/21/08 low of $47.40 to the high that was put in place today at $145.50 , that is nearly a 300% move in six months. Can GS keep the stong momentum from this level to go another 60 points to the next major resistance level that was put in palce back on 5/02/08 at $203.00 or is it time GS will start to retreat back to the $100.00 level?

We wont know for sure until it starts to make it's move, but looking at the chart at this level the odds would seem to lean more towards correcting this 300% rally and come back down near the $100.00 level rather then extending up another 60 points from here. This will be a good indicator to the overall market holding here at 8,300 on the DOW or a move lower.

We are specifically watching a weekly close below the $133.90 level on GS. Even a daily close would trigger more selling in the stock as $133.90 would be taking out last weeks low. Today GS tested the high at $144.86 made back on 5/19/09 and buyers did NOT take out the highs with big buying pressure, we actually closed down $5.00 from the high of the day at $145.50 which was .60 cents higher than the high that was made on 5/19/09.

Maybe traders did buy the breakout but then quickly reversed there thinking and covered their longs as GS started to breakdown at the end of the day, but being that we could not take it out the highs of 5/19/09 and close above them makes us think that buyers will think twice before trying to play the breakout again if it occurs before we take out the $133.90 low.

Keep an eye on the $133.90 level on GS it might give you a heads up to which way the market is going to go if GS breaks this level before the ES breaks the 875.00 level.

www.eMiniSchool.com

ES Short Term Resistance holding 915'

Yesterdays post we talked about the 915.00 level in the ES as short term resistance. Today the market made a high of 913.00 then dove 21.00 points to close at 892.00. We also noted that we are in a range with the low of the range being 875.00 and the higher level of the range is 930.00 and that we could bounce around between these numbers for the next few days.

The fact that 915.00 held the market down sets a short term bearish tone to the markets, and we wouldn't be suprised to see more downside action tomorrow. The 875.00 level will be a battle but if we break that support bigger funds will take note of that and probably stop themselves out of long positions.

Some of the stocks that have lead this move higher such as MON and POT got crushed today (MON) chart is looking the worst of them, but this could be a sign of profit taking as the ES can not break through the the high side of this range.

On the 60 min ES chart you can see we are making a flag type pattern and also forming a wedge, this pattern can still go one more time to the upside , but we would be a seller of that breakout if it happens. There is both time and price resistance for the rest of the week meaning: if we cant break out to new highs by the end of the week, we will most liekly start the correction that everyone is waiting for.

Click here

ES 875 Held, What Now? +SRS update

As noted in the proir post over the weekend we were looking at the 875 area as a crucial level in the ES. This is a widely known level that everyone is talking about as it is the support level. Today we gapped lower at the open to the 878 area and that was the low of the day as buyers stepped in and took the ES up 33.oo points from the initial morning low. 

Looking at the 60 minute chart we broke through the trendline lows on 5/12 then re-tested the highs and the trendline lows on 5/19 around the 923.00 area. We are still below that low closing today at 908.75. The short term resistance is 915.00 that we could not manage to close above today. Although todays rally was impresive we are still pausing on initiating long positions at this level.  

There is a possiblitiy of breaking the 1/6/09 high at 943.00 and hit the 950 before having a major sell off, but seeing that we are in the upper range of this move swing trades long might get traders caught in the market right at the potential highs of this move.

If feels like the longs are squeezing the shorts here and it might take a little more of a move to the upside for the shorts to cover, but that is usually a great place to start looking for shorts especially if we get panic buying near the top. If we get huge volume breaking the 943.00 high we would look for a reversal in the near future off that level. 

Until then we have to acknoledge that 875.00 did hold today and we could see a battle within the 875 to the 930.00 zone for the next couple of days.

We did not get a trigger in SRS long today and looking at the chart if SRS breaks the $19.50 level  we would be looking to enter our bull call spread near the $17.80 level.

SRS ready to DOUBLE?

We are looking at SRS (UltraShort Real Estate Pro shares). SRS has made a double bottom at the $20.00 level and could be setting up for a nice swing trade long. If you are the type of trader that wants to wait for more confirmations you can look at the $26.00 level as the trigger to enter a long trade with the target being around $45.00 to $50.00 a share. 

SRS along with SKF, QID, and SDS moves fast as they are Ultra shares and can move double what the counter index the ultra share are tracking. As you can see if you look at a daily chart of SRS the high was around $300.00 a share and now we are sitting at $20.00! 

Do we think SRS can make it back to the $300.00 highs? No, we dont but SRS along with SKF look like a nice risk / reward trade sitting down here at the lows. Proir support is near the $50.00 level which is now resistance, so we would be looking for a re test of that support / resistance level in the next few months, if not sooner.

Another way to participate would be to purchase the OCT SRS $25 calls , but they are expensive at this level closing Friday at $6.10 per contract. The $50.00 OCT SRS calls closed at $2.35 if you were looking to place a bull call spread. If we were looking at doing a bull call spread we would buy the $25.00 calls then wait until SRS reached the $30.00 level to sell the $50.00 calls bringing in more premuim on the call we would be selling. Yes, doing a bull call spread limits your upside profits, but the $50.00 strike is more than 100% away from the current price of the stock. Think about that you can buy the stock and sell a call 100% away and bring in 10% on your position right now! 

In doing a bull call spread your risk would be the difference from the call you purchase $6.10 and the call you sell $2.35 for a total risk of $3.75 with a max gain around $27.00 dollars, if SRS closes above $50.00 by octobers expiration. If SRS does in fact go up to the $30.00 level and then we sell calls we could get a net credit just for participating in the trade. 

With a risk of $375.00 doing the bull call spread (at current levels) for a potential of profiting $2,700 per contract, SRS is a good stock to keep a close eye on!

S&P Update 5/23/2009

Is this market rally coming to a end?

The S&P 500 has had a monster rally from the March lows there is no denying that, but as everyone knows the market can not go up in a straight line forever. From the March lows the Weekly charts have kicked in pushing this move from oversold to overbought conditions on a daily chart with no real pullbacks. The fact that the market didn't have a healthy pullback to stabilize this move up then push higher makes us concerned with this move.

Is this the start of a new bull market or is this just a bear market rally? That is the million dollar question that everyone is arguing about and the more they argue the more people get stuck in thinking their thoughts are 100% the sure thing. This can bea dangerous mindset when it comes to the markets, nothing is for sure EVER!

The more everyone argues the fact we are in a new bull market the more the market can change meaning; the more everyone has a set in stone outcome of this move the more they are willing to hold the losing trades longer and not acknoledge significint changes that are happening on a daily basis. 

Even if the March low is the bottom would buying 35% up from that low be a good entry spot? We dont think so, and looking at the S&P chart we are starting to get confirmations to that theory. Looking at the daily chart we broke down to the lows (the March low) from there we rallied straight up to the January 8th high (Resistance) and in the process of doing that all we have completed is a trendline low re-test which is still bearish. This pattern happens on a 1 min chart all the way up to a monthly chart, but the outcome is usually the same and that outcome is there is massive resistance at this level. This is a normal pattern that needs to be aknoledged at this time. 

Yes, the March low could indeed hold and the market rallies up higher, but the market needs to pullback and HOLD then break the 930.00 high with new fresh buyers within that move NOT traders or investors chasing the move to the prior highs (which is resistance). Pullbacks that hold are healthy for the market and we have not have that yet. This could be a bigger move within a bigger move, but until we have a pullback and hold we feel as though buying here is chasing the price which is never a prudent thing to do.

We cant look into the future and know for sure the market will hold on the pullback we can only act upon it if it happens. If the S&P's take out the last swing low of 875.00 we would anticipate more to the downside with the lower target for the pullback around 800.00.

A easy way to play this would be to buy Puts on the DIA, or buy the inverse ETF's such as SRS, SDS and SKF.