so trader is this is video to some answering some questions from clients
from traders on day trading futures and Forex once again if you haven't read our
while disclaimer please do and we will be looking at some charts so please go
to full screen you'll be able to do that by clicking on the button on the lower
right hand corner now another question that comes in is slippage on the stop
losses absolutely or can I should say I should quote the question can you get
slippage on stop losses absolutely at times you'll see the market will sell
through and fast-moving markets I had done three tick slippage on 10 contracts
one day last week so it can happen particularly in low-volume markets where
there might be a lot of contract sitting there and that they'll sell straight
through your stop so you can get slippage on your stop loss and you
definitely all that's going to happen at times now the way I operate as a trader
as a scalper is all put in a limit order to take profits now a limit order you
can take profits at a specific level or you can use limit orders to open a new
position so if an example if I was to enter the market at this level here you
can see on my screen I can have my limit order if I'm say trading forex sorry
futures let me get this right I'd be six tick above there so this is actually a
share chart but it all basically operates the same so likewise if I've
sold into the market I can have a limit order to buy so to sell or to buy so
this really when you look at this lots of different types of orders so spend
some time working out which order is right for you now one thing I did want
to point out was a stop order so let me just go and have a look at this and let
me show you where you may use a stop order so what we're looking at here
trade is the ES 1000 volume bar or share bar as they
called it on tradestation and there's one pattern that i talked about regular it's
called the rule of two now the rule of two is where you get to four candles
closing in the direction of your trade I love the rule of true rule of two let me
get this right on forex it works an absolute treat on a trading Forex and
range chart now what you may do is to confirm that momentum is continuing you
can put in place a stop order that is a order to buy one tick above this candle
here and it doesn't even have to be above this county you may have a maybe
at a swing higher a swing low with some other trading rule that you have to
actually by using a stop order so you can actually place one tick above or of
course if you're going to use this if it's a buy stop or a sell stop you can
go one tick below if you want to selling into the market there's a whole lot of
things you can do there the next thing I want to work of recycling talking a
great deal about over the last few weeks is the 89Bs targeting previous swing
highs or swing lows and yes it's been working an absolute treat now what you
may choose to do it is to still have let's just say hypothetically if you
were trading to can I sorry two contracts is still scalping the market
for your six to eight tick on your first contract and trailing your second or
setting in place here and exit a limit order opposite here you'll swing high or
swing low so in this particular case we've had our 89B and up it goes and
your exit could be up here likewise you've had your 89B your exit up here
89 be exit up here now if your targets two hundred dollars per contract per day
you only need a couple of hours a day and you're doing
well now just for record-keeping I highly recommend that you go and keep
records on these or keep your trade starts because it also gives you a great
deal of confidence in your trading when you can go back and look at it
statistically most of you are aware that with the 233 tick which I trade during a
straight hours what I do is alt do a quick I'll record the day's trade in
action because on TradeStation your phone to load up any more than ten
thousand candles it becomes a real pain and by the end of a week like on a fast
movie market there might be a couple of hundred thousand candles so what I do is
just over a three minute video just quickly record or markup my chart and it
just allows me to go back and review because let's remember trader is what is
our business really about what do we you up let me refresh it what is one thing
we want to become really good at well trading is nothing more than a pattern
solving exercise and that's what I'm constantly looking for is patterns now
for an example with the 89B in targeting it's like of a blinding flash
of the obvious for me for years I've been trading but because I'm so focused
on scalping it's only because of coaching one to one that I really did
really someone said oh wyd you're doing this it's straight in front of me the
whole time and because the 89 and that 200B's you have much deeper
pull backs and of course you've got a much greater risk reward you can get on
most of them a good two to one so there's some great opportunities here so
by recording the past action of your trading it allows you to go back and to
really keep a statistics I might will make it a lot easier anyway to go back
look at patterns and that sort of thing now another question from a student is
he's gone back on a couple of setups and he's got a 65-percent win-loss ratio how
does he improve that you hear me talk about this regularly is the earlier
you start trading a trend the better or more accurate your trading setups are
going to be so one thing you may want to me once a really closely monitor is
after you've had more than three trades in a trend you want to become more
cautious so let's just have a look at this out little intermediate trend that
we've had set up just here okay so we see our trigger line go through a 34 so
our 8 is now under the 34 so what that is giving us and these are all coming
under the 200 that we've got a market of a short side now we actually then have a
nice t1 it's also a t10 and it there's our t20 and away it goes so you've got
one trade two trades three nice 89B for In what do we now want to do
want to be a lot more cautious so the sooner we enter a trade in a new trend
the more accurate our trading signals are going to be now for sixty-five
percent is fine if you get in a good two to one like on these 89 bounces so it's
okay still to have sixty-five percent win-loss ratio however when my win-loss
ratio is extremely high my wins it's because I like to trade early in a trend
now also then if you look at this here you've got a T25 T25 T25 now you're on
this candle remember you'll stop is two ticks above here you've got here a t25 now
by the way you may be excused if you didn't if you had a waited remember i
like to wait for four candles where they're stopped two ticks above here and
why we're talking about stops let's just point out this right here so in a
fast-moving market let's just say here the market really ran away from you here
and you're using a market order where do you place your stopped because if you go
to place you stop two ticks above your swing high here you've got a 12-14 tick
stop which means as a mere bare minimum your target is got to be at
least the one to one on a risk/reward as a day trader or at least I recommend
that so just be aware of that so consideration maybe then in really fast
moving markets you still have your heart fixed stopped because you do have
momentum and one more thing before I sign off on this video is going for your
target you'll see this happening if you've got a limit order in that is to
exit at a specific price you really want to see price tick through in other words
you'll see the market kiss or touch your exit your limit order regularly and this
happens to me virtually every day you've heard me say that if I've got just say
hypothetically on the NQ I've got say a fourteen tick target once I go plus foot of
twelve ticks I'll usually go break even plus one so worst case scenario i walk
away covering my commissions my brokerage and time and time again you'll
actually have this and as a day trader it'll happen to you every day you'll go
down you'll kiss your price you don't get filled and it rebounds and it goes
up through back into your stop loss if you haven't gone the break even so
what do we do about that well if you see that you're going down and you've kissed
your target once or twice and you haven't been filled on your limit order
strongly consider exiting or at least going to break even if you've got a
really small target if you've got say a 6 tick target on say the ES go plus one now
it can be frustrating too because sometimes you'll go plus one and you
know what happens that it goes back touches you take you out and continue
straight on you know what that's going to happen to you regularly as well
Athens to me all the time in other words I've got a 6 Tick target I go plus 5 I go to
plus 1 in other words break even plus 1 it comes back takes me
out of plus 1 then it continues it turns round traders that is trading you know
that's just the way it is so limit orders if you keep getting touched if
you haven't already gone the break even plus one I strongly recommend you to
consider doing that