Trading Results – Four Days of Price Action System

The last few days using the Atlas Line have been quite profitable. The signals have been nearly-dead on. We’re not sure why John Paul uses the Bounce signals, as many of his other videos mention turning this feature off. Regardless, the Long and Shorts were very accurate. Using the NinjaTrader platform, John Paul scrolls through the most recent four days.

Basically, the rules of the Atlas Line are as follows:

When two closes occur above the plotted line, go long (a Long signal is also produced on the chart)
When two closes occur below the plotted line, go short (a Short signal is also produced on the chart)

Stay in the trade until one of the following occurs:

You make profit based on the ATR rules (use a period of four for the ATR)
You hit a prove-it stop (price closes above or below the Atlas Line once in the opposite direction from which you entered)
You hit a time-based stop (20 minutes or four candles on a 5-min chart)
You hit a catastrophic stop (also based on ATR)

As you can see, the rules for entering and exiting a trade are straightforward. They’re taught in detail in the live training that’s included with purchase.
Additionally, you are taught how to use the S and P symbols that appear on the chart – indicating entries for additional Strength and Pullback trades.
You will of course have losing trades. Many days are profitable, some are break-even, and a few are losses. The recent trades page provides a history of recent trades taken by John Paul.

High Frequency Trading – Speed and Consequences

As explained in the above video, high frequency trading is the quick execution of buy and sell orders by a computer algorithm sent to a financial market. Keep your trading stable among the fast HFT world by watching more trading videos. Many of these high frequency orders are placed in bursts, hoping another algorithm will pick up and buy or sell based on the aggressiveness of another “robot.” This type of trading now accounts for around 70% of all orders processed in the major exchanges, such as the NYSE and CME. Computers with the most direct access have a distinct advantage over competing robots, as they know what price will be ahead of competitors. This created a race to build the fastest fiber optic line from Chicago to NYSE. The reason for this is the Chicago commodities markets influence the indices trading in the NYSE. The price of crude oil is related to the Exxon stock and vice-versa. One can easily understand why companies have spent millions trying to get the most direct route; whether blasting through a mountain or broadcasting through soon-to-be-built towers. In fact, professional trading firms have rented servers inside the exchanges themselves for the shortest physical distance possible. The NYSE has gone through the trouble to provide equal cable length to all servers inside its 20,000 square foot server room. This raises concern as trading has become a game of who can program the most profitable robot, disregarding the underlying economics. The flash crash of 2010 demonstrated a pitfall of high frequency trading – we still cannot account for the hundreds of billions lost (that have since rebounded) during the three minutes or so of the crash. Purportedly, one man’s algorithm (and sizable account) created a domino effect among the other algorithms, creating a vacuum that was only stopped by an emergency “breaker” flipped in the exchange. This mini-documentary has audio produced by Radiolab.

Predict 2013 E-Mini Trading Using January Effect

Ever heard of the January Effect? At Day Trade to Win, John Paul describes it as an accurate way to determine if price will be up or down by the end of the year compared to its price at the end of January of the same year. Sounds complicated? Watch the video. If you take a look at January, 2013, you will notice that price closed higher at the end of the month. January was an up month. This will also hold true for the entire year. At the end of December 2013, John Paul claims price will be higher than the closing January 2013 price. Now, there will be pullbacks along the way. When price drops to estimated bottom levels throughout the year, professional traders will buy the market expecting the overall trend to be profitable. This January Effect is known among the professional trading community. In 2012, price followed the January Effect. Although you may find a few years where the January Effect does not hold up, overall you will see a distinct trend – one that hedge funds, high frequency algorithms, and financial institutions will keep in mind. For the average retail trader, you likely won’t be holding positions long enough for the January Effect to matter. At Day Trade to Win, they focus on smaller time frames. The longest they’ll hold a trade for is typically 20 minutes or four bars on a five minute chart. In most cases, the profit target will be hit first, or if the trade goes against you, the prove-it stop. Trading dynamically using price action is important – it’s adaptive.