Trading Concepts, Inc.

Transcription

1 Trading Concepts, Inc.

2 About Trading Concepts Since 1994, Trading Concepts has provided investment education and personal mentoring, market analysis, online trading tools and portfolio management techniques to thousands of people from all over the world. Every day, our proven high-reward trading strategies help traders successfully navigate the markets and chart paths to financial security. In fact, we not only stand behind our pledge to provide the highest quality investment education and trading resources possible, We Guarantee lt. Trading Concepts provides practical, step-by-step, easy-to use, high-profit, low-risk, low stress trading strategies. Avoiding overly technical or theoretical complicated material, Trading Concepts represents a practical, balanced approach to trading profitably in today s markets. Since our inception in 1994, we have enriched the lives of an ever-expanding number of students in over 52 countries worldwide. Trading Concepts quickly established a reputation as one of the industries finest educational companies due to the powerful trading strategies that we ve developed. Combining powerful futures, stock option trading strategies with sound trade and money management techniques, Trading Concepts has been able to help Individual at-home retail traders gain the power knowledge base that had previously only been available to professional institutional traders. Today, Trading Concepts teaches new and experienced (and everyone in between) traders worldwide how to succeed in today s markets. We demonstrate step-by-step trading strategies in clear, concise terms, mixed with analogies and examples throughout all of our educational programs. You will therefore gain the correct mindset and money management techniques for trading whether you re a beginner, intermediate or more experienced trader. Trading Concepts, Inc. Page 2

3 Day Trading E-Minis With an Unfair Advantage A Step By Step Guide to Profiting Consistently Day Trading E-Mini Futures Copyright by Trading Concepts, Inc. All Rights Reserved This training program, or parts thereof, may not be reproduced in any form without the prior written permission of Trading Concepts, Inc. No claim is made by the Trading Concepts, Inc. that the trading strategies shown here will result in profits and will not result in losses. Trading may not be suitable for all recipients of this ebook. All comments, trading strategies, techniques, concepts and methods shown within this program should not be construed as an offer to buy or sell Stocks, ETFs, Foreign Currencies, Futures, and/or Options they are opinions based on market observation and years of experience. Therefore, the thoughts expressed are not guaranteed to produce profits in any way. All Opinions are subject to change without notice. Each trader/investor is responsible for his/her own actions, if any. Your request for the Trading Concepts Day Trading E-Mini With an Unfair Advantage ebook constitutes your agreement to this disclaimer and exempts Trading Concepts, Inc. from any liability or litigation. Important Notice - Risk Disclaimer: Trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the markets. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to buy or sell Stocks, ETFs, Foreign Currencies, Futures, and/or Options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed in our training program. The past performance of any trading strategy or methodology is not necessarily indicative of future results. Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not actually been executed, the results may have under - or over - compensated for the impact, if any, certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those that may be shown. Trading Concepts, Inc. Page 3

4 Table of Contents What Are E-Mini Futures?... 5 Why (DAY) Trade E-Mini Futures?... 7 Why (DAY) Trade E-Minis over FOREX?... 8 You Don t Have To Be A Slave To Your Computer ALL Day!... 9 The 4 C s of Trading Success Simplicity vs. Complexity The 4 Step Sequence to Successful Trades The Core Price Structure and Rhythm of All Markets! What Are E-Mini Futures? - Quick Summary First Half-Hour (30 Minutes) Breakout Strategy First Half-Hour UPSIDE Breakout Strategy First Half-Hour DOWNSIDE Breakout Strategy Trading Concepts, Inc. Page 4

5 What Are E-Mini Futures? E-Mini futures are contracts to buy or sell the value of a specific stock index at a specific price on a specific date in the future. The E-mini futures track the most popular broad-based stock index benchmarks in the financial world. Launched between 1997 and 2005, E-mini futures are among the fastest growing products in the industry. At one-fifth the size of their standard counterparts, these contracts have found an audience among professional and individual investors alike. The four most popular E- Mini futures consist of the following: The E-Mini S&P 500 futures contract which is the world s most actively traded stock index futures contract, with over 2.2 million contracts traded on average per day. The E-Mini NASDAQ-100 futures contract which offers diversification potential with underlying index holdings that span major industry groups computer hardware and software, telecommunications, biotechnology, and more), with over 310,000 contracts traded on average per day. The E-Mini Dow futures contract which represents nine economic sectors (financial service, technology, retail, entertainment and consumer goods), with over 130,000 contracts traded on average per day. The Russell 2000 Index Mini futures contract which represents the most widely accepted measure of small-capitalization stocks trading in the U.S., with over 175,000 contracts traded on average per day. All E-mini futures contracts are traded completely electronically via electronic order management software on a PC or through a registered commodity futures broker over the telephone. E-mini futures are appealing because of their excellent liquidity and around-the-clock availability. Trading Concepts, Inc. Page 5

6 Businesses and individual traders trade E-Mini futures for different reasons, but primarily to try to profit from or protect themselves from changes in the price of the underlying indexes. Financial professionals, such as pension and mutual fund managers, typically use E-Mini futures for managing risk and hedging portfolios against adverse price moves. Others, such as day traders or position traders, trade these products to speculate on the price fluctuations of the stock market. E-Mini futures closely follow the price movement of their respective indexes, typically referred to as the underlying or cash indexes. If in trading futures you buy an E-Mini futures contract, you hope to gain from future price increases when you offset your trade by selling the contract. Correspondingly, if you initially sell (sell SHORT) an E-Mini futures contract, you hope to gain if the price of the contract declines. The rapid price changes associated with stock indexes and E-Mini futures create continuous trading opportunities. Trading Concepts, Inc. Page 6

7 Why (DAY) Trade E-Mini Futures? E-mini futures are among the fastest growing products for a number of reasons. Highly liquid, very active, and volatile markets with wide enough daily trading range for plenty of trading opportunities. Profit no matter which way the market moves; up or down. Trade electronically virtually 24 hours a day easy and cost-effective way to access the markets from around the world! Use of leverage provides the individual retail trader with more flexibility (day trading margins as low as $500 per contract). Easily participate in broad market moves by trading one market, one chart, instead of trading individual stocks. A two point move can be up to a 10% ROI. Trade E-Mini Futures with an account size of $2,500 or less! Trading E-Mini Futures is a more efficient use of capital! A trader has only to put up a fraction of the amount of margin. Compared to Stocks/ETFs, a trader only needs $1,500 minimum to day trade the E-Mini Futures versus $25,000 minimum to day trade Stocks/ETFs. No market research required. Easily participate in broad market moves by trading one market, one chart, instead of having to choose individual stocks. Trading Concepts, Inc. Page 7

8 Why (DAY) Trade E-Minis over FOREX? If you are new to trading E-mini futures, you will find it helpful to understand the differences between trading E-Mini futures and trading FOREX. Day trading E-Mini Futures are much more predictable on the smaller time frames and the intra-day price movements are much smoother. Tight Bid/Ask spread. Compared to trading the FOREX market, the E-Mini Futures Bid/Ask spread is only one tick while trading some of the major FOREX currency pairs may be up to 4 to 5 pips! The FOREX market is just fine in trading off of the bigger time frames, however, in my experience, the E-mini Futures contracts are much more predictable in nature on the smaller time frames. Trading Concepts, Inc. Page 8

9 You Don t Have To Be A Slave To Your Computer ALL Day! There are certain times during the day where the market becomes very predictable I will show you exactly what these times are, and how to successfully trade them! These times only consist of 2-3 hours a day, therefore you do NOT need to be glued to your computer all day! MORNING Price Action: 10:15am ET to 10:45am ET expect a counter-trend move of some sort in the first 45 to 60 minutes of the day s trend or bias, if there is one. POST LUNCH Move: 1:00pm ET to 2:00pm ET expect a resumption of the overall day s trend (or upward or downward bias of the day) if: the overall trend is UP and the market is trading DOWN off the high, or the overall trend is DOWN and the market is trading UP off the low. AFTERNOON Move: 2:00pm ET expect either: A resumption of the day s trend if there was no move from 1:00pm to just before 2:00pm, or A counter-trend move of the day s trend if the market is testing the high or low of the day. DELAYED AFTERNOON Move: 3:00pm ET the 2:00pm move will help dictate what may happen at 3:00pm, expect either: A counter-trend move of the day s trend if the market is testing the high or low of the day, OR A resumption of the day s trend if a counter-trend move occurs around 2:00pm and the market is trading down off of the high of the day in an uptrend or up off the low of the day in a downtrend. Trading Concepts, Inc. Page 9

10 Key Times of Day Trading Concepts, Inc. Page 10

11 Key Times of Day You will be amazed at how predictable the market can be when you completely understand these key times that I m about to show you. These Key Times of Day is like a roadmap in knowing how and when to trade the e-mini futures intraday. This information will greatly help you in determining what the e-mini futures market should do, and most importantly, when they will most likely do it with incredible accuracy. Day trading the E-mini futures contracts in my own personal trading experience (by day trading the S&P 500 since 1988 and then the e-mini s since inception in 1997) is perhaps one of the most predictable markets, in terms of when and where the market should make reversals and resumptions (of prior price trends) throughout the trading day. The E-Mini futures (along with many stocks that closely follow the e-mini s) have a somewhat definable time pattern that occurs at consistent intervals throughout the trading day. Although this isn t 100% accurate (nothing is though), it s powerful enough to help gauge what the market "should do" and "when" it should do it. These patterns occur frequently and consistently enough to make it a very, very valuable trading tool to have at your disposal during the trading day. Trading Concepts, Inc. Page 11

12 The 4 C s of Trading Success Confidence Control Stems from having a method that gives you an edge in trading. The ability to execute and manage your positions according to the rules and guidelines of your trading method. Consistency The byproduct of Confidence and Control. (Daily) Cash Flow Generating Cash Flow from the Markets on a Daily basis. These 4 C s are the building blocks to any successful Trading Business! Trading Concepts, Inc. Page 12

13 Simplicity vs. Complexity Many traders have little to no understanding of price action and the market structure. So they wind up using too many technical indicators and their charts end up looking like a meaningless mish-mash of colored lines and squiggles. Just as soon as they feel like they ve finally cracked the code using a set of technical indicators for making extra money for their family something happens. For many traders, they lose their edge and go from feeling great about themselves to doubting as to whether they ll ever make it as a trader. What traders think will give them more clarity in their trading actually multiplies their confusion. They re suffering from what I like to call Analysis Paralysis! They re all over the place, and not surprisingly, so are their trading results. You must know what I mean, right? We ve all been there! What traders think will help improve their trading actually prevents them from becoming consistently profitable. So, how do we as traders fix this problem? If your charts even remotely resemble the chart on the right, I highly recommend getting rid of all of this junk. Clear the slate. Clear your head & start over. Simple IS Better! Trading Concepts, Inc. Page 13

14 I have yet to meet a trader that was consistently profitable for any significant amount of time by trading a barrel full of indicators thrown on a chart. There s a lot more to successful trading than merely using technical indicators. Believe it or not, the simplest trading methods work the best and are the most robust! Too many traders, especially beginners, feel that using more technical indicators will help make them become more successful... They feel that the more complex the trading strategy the better they will do. That is simply NOT the case! In fact, I would say it s exactly the opposite. Look, ALL commercially available technical indicators are derived from price and volume alone. Therefore, technical indicators are lagging; this means that any signal generated from an indicator will come after the signal generated by price and volume alone, if you know how to read it. Price Action alone needs to be the cornerstone and foundation from which a successful and long lasting trading methodology is created. Price Action is everything, and areas where price has turned in the past are likely to be areas where it will turn again. Trading Concepts, Inc. Page 14

15 The 4 Step Sequence to Successful Trades The following sequence forms the cornerstone of any and every sound trading methodology or system that exists today. 1) Determine the Context of the Market The Simple Truth About Trends. 2) Determine a Valid Trade Set Up A Trade Set Up is NOT a Trade Entry. 3) Enter the Trade With Clear and Objective Trading Rules. 4) Manage the Trade With Specific Criteria for Managing Risk and for Determining Profit Objectives. Trading Concepts, Inc. Page 15

16 The Core Price Structure and Rhythm of ALL Markets! What I am going to show you here can be used in ANY MARKET & ANY TIME FRAME and NOT just the E-Minis. Remember, the more complex your trading method the less robust! The simpler your trading method the better! Technical indicators are derived off of Price Action. To successfully trade the markets, all you need to is understand Price Action and have a simple and specific Trading Methodology or EDGE! There are only 3 Primary Waves (or TRENDS) in the Markets: 1) UPTREND A Series of Higher Highs and Higher Lows 2) DOWNTREND A Series of Lower Highs and Lower Lows 3) SIDEWAYS Market A Series of relatively Equal Highs and Equal Lows The Market can do nothing else but comply with these 3 basic Market Cycles. Identifying which Wave the Market is in is vital to successful trading, this is what The Simple Truth About Trading Trends is all about pure Price Action! There is no other movement or motion possible in the Markets. The Markets do NOT move in a random fashion. The Markets ALWAYS move within the framework of an underlying Market Wave. These following principles form the cornerstone of a consistent and successful Trading Methodology. Trading Concepts, Inc. Page 16

17 UPTREND: A series of Higher Highs (HHs) and Higher Lows (HLs). Trading Concepts, Inc. Page 17

18 DOWNTREND: A series of Lower Lows (LLs) and Lower Highs (LHs). Trading Concepts, Inc. Page 18

19 SIDEWAYS Market: A series of relatively Equal Highs and Equal Lows. Trading Concepts, Inc. Page 19

20 What Are E-Mini Futures? - Quick Summary What Are E-Mini Futures and Why (DAY) Trade E-Mini Futures? Why (DAY) Trade E-Minis over FOREX? You Don t Have To Be A Slave To Your Computer ALL Day! The 4 C s of Trading Success Simplicity vs. Complexity The 4 Step Sequence to Successful Trades The Core Price Structure and Rhythm of ALL Markets! Stop wasting time and money in searching for the Holy Grail. The Holy Grail is your ability to confidently and consistently execute a successful Trading Methodology that fits your personality and temperament. You need to learn and acquire the confidence to think and trade for yourself. Develop the CONFIDENCE to think and trade for yourself! Trading Concepts, Inc. Page 20

21 First Half-Hour (30 Minutes) Breakout Strategy Once the Market moves in either direction off of the OPEN and proceeds to penetrate UP through the HIGH or DOWN through LOW of the First Half Hour (30 Minutes) Initial Range, a new TREND potentially begins in the direction of the penetration. BUY Entry: If the Highest HIGH of the First 30 Minutes is penetrated to the UPSIDE then BUY the Market. Use a BUY STOP order to enter LONG. SELL Entry: If the Lowest LOW of the First 30 Minutes is penetrated to the DOWNSIDE then SELL the Market. Use a SELL STOP order to enter SHORT. DO NOT ENTER the Market with a BUY STOP or a SELL STOP on.00 s or.50 s, but rather on.25 s and.75 s. Trading Concepts, Inc. Page 21

22 First Half-Hour UPSIDE Breakout Strategy BUY (LONG) Entry Once the HIGH of the First Half Hour has been penetrated to the UPSIDE, you will look to: BUY the market on a BREAKOUT one to two ticks (on.25 s or.75 s) ABOVE the HIGH of the First Half Hour. Initial Stop Loss (ISL) The Initial Stop Loss (ISL) needs to be: placed slightly BELOW the LOW of the Price Bar or Candlestick that penetrated UP through the HIGH of the First Half Hour, or placed slightly BELOW the most recent Pivot Low (PL), whichever is LOWER. Profit Objectives (POs) Three logical Profit Objectives whenever you are looking to BUY the market on a BREAKOUT above the HIGH of the First Half Hour: Profit Objective #1 (P.O.#1) is 1.00 ES Point ABOVE from where you bought LONG the market. Other markets, P.O. #1 is slightly BELOW the Fibonacci Extension of the Total Range of the First Half Hour. Profit Objective #2 (P.O.#2) is the 1.50 Fibonacci Extension of the Total Range (the HIGH minus the LOW) of the First Half Hour. Profit Objective #3 (P.O. #3) is slightly BELOW the 2.00 Fibonacci Extension of the Total Range (the HIGH minus the LOW) of the First Half Hour. Logical Trailing Stop (TS) As each consecutive Price Bar or Candlestick makes a New High, continue to move a Trailing Stop UP to slightly BELOW the LOW of each consecutive Price Bar or Candlestick. If any of the Powerful Price Patterns develop while you are in a trade, IMMEDIATELY bring your STOP UP to slightly BELOW the LOW of the Powerful Price Pattern. This remains true the whole time that you are in a trade. Trading Concepts, Inc. Page 22

23 First Half-Hour UPSIDE Breakout Strategy (BUY Entry) Trading Concepts, Inc. Page 23

24 First Half-Hour UPSIDE Breakout Strategy (BUY Entry) Trading Concepts, Inc. Page 24

25 First Half-Hour DOWNSIDE Breakout Strategy SELL (SHORT) Entry Once the LOW of the First Half Hour has been penetrated to the DOWNSIDE, you will look to: SELL the market on a BREAKDOWN one to two ticks (on.25 s or.75 s) BELOW the LOW of the First Half Hour. Initial Stop Loss (ISL) The Initial Stop Loss (ISL) needs to be: placed slightly ABOVE the HIGH of the Price Bar or Candlestick that penetrated DOWN through the LOW of the First Half Hour, or placed slightly ABOVE the most recent Pivot High (PH), whichever is HIGHER. Profit Objectives (POs) Three logical Profit Objectives whenever you are looking to SELL the market on a BREAKDOWN below the LOW of the First Half Hour: Profit Objective #1 (P.O.#1) is 1.00 ES Point BELOW from where you sold SHORT the market. Other markets, P.O. #1 is slightly ABOVE the Fibonacci Extension of the Total Range of the First Half Hour. Profit Objective #2 (P.O.#2) is the 1.50 Fibonacci Extension of the Total Range (the HIGH minus the LOW) of the First Half Hour. Profit Objective #3 (P.O. #3) is slightly ABOVE the 2.00 Fibonacci Extension of the Total Range (the HIGH minus the LOW) of the First Half Hour. Logical Trailing Stop (TS) As each consecutive Price Bar or Candlestick makes a New Low, continue to move a Trailing Stop DOWN to slightly ABOVE the HIGH of each consecutive Price Bar or Candlestick. If any of the Powerful Price Patterns develop while you are in a trade, IMMEDIATELY bring your STOP DOWN to slightly ABOVE the HIGH of the Powerful Price Pattern. This remains true the whole time that you are in a trade. Trading Concepts, Inc. Page 25

26 First Half-Hour DOWNSIDE Breakout Strategy (SELL Entry) Trading Concepts, Inc. Page 26

27 First Half-Hour DOWNSIDE Breakout Strategy (SELL Entry) Trading Concepts, Inc. Page 27

28 About Todd Mitchell I began reading about, studying and researching the markets back in 1987, while I was still in college. Then, in 1988, I started to actively trade the markets with real money. My interest, which quickly led into fascination, in the futures and stock market began when I used to manually update my father s charts on a daily basis. In 1990, when I graduated from college with a Business Finance degree, I decided to trade full-time because I had seen, firsthand, how much money could be made trading. After a few successful trading years following college, I tweaked and perfected my trading strategies. I decided to use my knowledge and experience to launch Trading Concepts in 1994 to help fellow traders, just like yourself. Trading Concepts quickly established a reputation as one of the industries finest educational companies due to the powerful trading strategies that I developed. Combining powerful futures and stock trading strategies with sound trade and money management techniques, I have been able to help Individual at-home retail traders gain the power knowledge base that had previously only been available to professional institutional traders. Today, I teach new and experienced (and everyone in between) traders worldwide how to succeed in today s markets. I demonstrate step-by-step trading strategies in clear, concise terms, mixed with analogies and examples throughout all my courses and personal mentoring program. You will therefore gain the correct mindset and money management techniques for trading whether you re a beginner, intermediate or more experienced trader. I not only thank my dad to this day for introducing me to the markets, but for teaching me many Valuable trading lessons that I still use today. Visit to Learn More! Trading Concepts, Inc. Page 28