Some new and exciting changes for 2010

Hi Folks,

As many have heard me say over the years, I have 1 motto that pushes me every day.
In a word that motto is ‘IMPROVE’

·         Do better today than you did yesterday

·         Learn 1 new thing that can improve your trading

·         Deliver more than you promise

 

Every year since becoming a trading educator, I sit down around this time of year and make a list of all the comments, criticisms, requests etc.. that have been asked  of me over the last 12 months,  I then attempt to improve our products and services accordingly.

Over the last year there has been one comment that has dominated all others.
 “How can a smaller trader (1-2 lots) possibly hold a big trade when the markets can get so choppy?”

 

 THE ISSUE AT HAND
While it is true that the power of Market Profile cannot be denied, and our methodology has demonstrated time and time again how to capture the big rotation of the trading day, sometimes grabbing 90 plus % of the day’s range….
It is also true that smaller traders may not have the ability to hold the trade and may be more inclined to take a smaller profit.

It is also true, in my own opinion that the last 8-9 months the E-mini SP’s have been somewhat more ‘noisy’ than I have seen in prior years

In addition, using a scale out trade management style, a smaller trader who does not, or cannot participate in the larger moves will need a very high percentage of wins in order to compensate for full stops

THE SOLUTION
The solution is therefore to take a negative and turn it into a positive, let me explain;

Staying with the assertion that in fact the markets are noisier / choppier than they were previously  means that when the price hits a resistance level for example it is more likely to pull back than push through.  Trading the breaks as we often do, we would expect our entry to go against us by 2-3 ticks before rallying through the resistance level.
With the increased noise however , that pullback is more like 8-10 ticks, which means using a much wider stop than we are accustom to…

INTRODUCING THE 5 X 5
The 5 By 5 Trade addresses all of these issues in an incredibly easy to use setup, let me explain

The term 5 By 5 refers to a quick scalp that uses a 5 tick target and a 5 tick stop

Let’s Trade Inside The Noise!…
What we are witnessing are 3 minute candles that are 10 ticks wide!
By accelerating our charts, and relying on the same TTZ core principles of Market Structure + Price Action, we can trade ‘inside’ the candle and grab some quick profits.

IDEAL FOR SMALLER TRADERS
This quick 5 X 5 is ideal for smaller traders for so many reasons:
1. More trade setups during the day (as many as 3-4 per hour, or up to 20 a day)
2. No Scaling out. The math is easy, all in all out for 5 ticks.
3. Less dependence on trading with the trend
4. Automate your trade management

DEMONSTRATED LIVE
At the recent Las Vegas Traders Expo, I demonstrated this setup by taking a live trade in my own account.  I approached the trade as a small lot trader and took 5 ticks out of the market on 2 contracts +$125.
 

HOW IS IT DONE
The 5 X 5 as mentioned is built on the same core principles of TTZ.
1. Trend vs. Range determination
2. Trend trades only in trending markets
3. Fade and trend trades in range bound markets
4. Trade with MP Market Profile Structure
5. Use Order Flow/ Price Action for execution
While our 3 minute setups considers all of the above equally, the 5 X 5 places more weight on #5 . Use Order Flow/ Price Action for execution

WHAT’S NEXT
There is a big difference between a concept and a system. Trading ideas or concepts while they form the basis for building a system, are NOT a system. A trading system must be:
1. Clear
2. Concise
3.Objective
4.Easy to Identify
5. Easy to Execute

As an 18 veteran of the trading industry I can assure you that far too many traders attempt to trade successfully using ideas, or concepts before they have been wrapped into a well defined Method or System.

I do not make that error. As with our 3 minute TTZ entries, the 5 x 5 will be a set of clearly defined rules and conditions for entry, exit and management.

 

HOW DOES THIS AFFECT THE TTZ CHAT ROOM?
It doesn’t change our focus at all.
The 5 x 5 will be a self contained scalping setup that beyond the introduction and explanation on how to trade it, should not require any ongoing hand holding. Like I said the setup must be clear and objective.
The focus of the chat room, has always been, and will continue to be focused on understanding Market Profile, Determining Market Structure, and finding TTZ 3 minute trades that setup and offer the potential of BIG MOVES. That is the power of Market Profile and we will continue to teach, explain and demonstrate TTZ on that basis

I truly believe that TTZ offers something for every trader, now more than ever!
Newer traders learn the fundamentals of technical analysis, and placing trades.
Experienced traders, discover the Power of Market Profile, and locating BIG Winners.
Smaller scalp traders can now find multiple opportunities throughout t the day for 5 tick winners

As always, I am committed to improving your trading and mine.
 If you’ve been a member of TTZ for some time you have seen how we always strive to improve.