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Trading Insights

Time Cycle Indicators Do It Again

Trading Insights
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Check out this chart from today's emini S&P (August 8th, 2011)

 

time cycle indicator for ninjatrader tradestation

time cycle indicator for day traders

 

Once again, I'm amazed at how just waiting for the right time - the repetition of the correct behavior pattern, produces such volatile movements in the anticipated trading direction. I'm also amazed how overlooked time cycle indicators are, especially when you consider that time cycle indicators help with a multitude of psychological issues that plague traders in every market and time frame. Getting into a trade too early - getting out of a trade too late. Not holding trading profits long enough, or moving stops and giving a trade room to breathe. And then the paralyzing trades where traders can't do anything but sit and stare at the screen.

Time cycle indicators like the Flux address these issues by focusing a traders attention on a specific time - forcing them to look at specific behaviors at those trading times. The time cycle will either present itself - and it's conditions (reversal behaviors, for example) or it won't. If it's repeating - you'll see the conditions repeat at that time and have the confidence to take the trade. If it's not repeating - you won't see any of the conditions of your setup and the trade should be walked away from until the next time cycle indicator time.  It's that simple. And the simple act of walking away from your desk when the cycle is over, is immensely therapeutic. You can't make a bad decision if you're not near a mouse to execute a trade.

Time cycles have redefined the way we look for trades. Are they cosmic forces that just move people magically to do things at certain times? Or are the markets - and the institutions that move the markets - bound by routines and behaviors like any other business?

Or is it a combination of the two?

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

Time Cycles in Day Trading with Market Chaos

Trading Insights
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Once I started trading markets with Flux time cycle indicators and tools, when I started delving into the data and mining it for patterns that were either there or not - and testing their predictability moving forward - I stopped doing something that I was conditioned to do.

I stopped watching the news. Financial papers. TV (especially TV).  Econs? Phfsh....

I want you, for a moment, to allow your eyes to scan this photograph:

You know what's most interesting to me?

The fact that the dots - which represent time cycles that were known about 1 week before the actual moves - appear more often than not near actual moves.

When you know these times in advance- you begin as a day trader to anticipate changes in market direction. The time cycles end, and the price cycles end, right about the same time.

You'll see an emini Nasdaq trade above - one that I waited an entire NYSE session to get to.

A lot of setups came and went on my trading charts waiting for it. But as the time cycle approached - I almost watched the exhaustion and turn coming in slow motion. I could "feel" the momentum of the entire market dying, and shifting back downwards. And I was amazed that the time cycle indicator - predictive 1 week out into the future - was showing me the minute - to the minute - when that move should- and did- occur.

So as you look at those dots (non-photo-shopped, I Eagle Scout promise) and you start to see what happened at those times - 1 week before the time cycles were set to actually kick in - ask yourself the same question I asked myself 3 years ago...

"How on earth, is that possible?"

Unless of course - the news....the econs....the widespread "propaganda panic" is all just one giant smoke screen.

Something to consider as a possibility. Until then - keep checking in on our weekly webinars to see how you can harness these time cycles for yourself.

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

The Trading Watch...trading time cycles

Trading Insights

What is the coolest wrist watch you have ever seen?

There are literally thousands of unique designs and cool function in wrist watches today.

Much like trading indicators, but as a day trader in Stocks, Futures or Forex, wouldn't you love to have a watch that told you when the time was right to place a trade?

That is exactly how I relate to what the Flux Time Indicator does...when we are trading time cycles. It tells me when is the best time to look for the trade to occur.Whether you are a Swing trader, Scalping trader or Longer term trader, We all know about looking for the right price but what about the right time? Is this even really relevant?

Lets think back for a minute, its like me as a kid ,when I  just got my first wrist watch. After that glorious day, I knew when supper was going to be ready! No more guessing. Mom made supper at about the same time every day. No more playing outside until I had that funny feeling in my stomach, then running a half mile through the woods to get home, only to discover that either supper isn't ready yet, or I missed it and now all that is left are the scraps.

With the Flux Time Cycle Indicator, ( My "Trading Watch" if you will), I'm now on time for the trade when we are trading time cycles. What, no way you might say! I use this tool every day I trade, and teach classes on its many facets. Its alway neat  to hear the comments from most new users. For what seems like the first time in their trading life, they are  actually on time for the trade. No more chasing the trade, or jumping in just 3 minutes too soon, only to watch their stop get hit then, the market go straight to the target!

Now they know when its coming, and 'wear' it when they are trading time cycles, and  just like me when I was a kid, they can keep on playing until the time is right to watch for the trade.

Unfortunately its not available in wrist watch form, but if it were, that would be the coolest watch ever!

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

Time Cycle Indicator Addiction!

Trading Insights

Yesterday afternoon I was assisting a veteran Flux Time Cycle trader with a Ninjatrader platform issue. Good traders are not necessarily good computer techs! In our conversation (while I was working on his ninja) he laughed and said , you guys are like drug dealers. I was immediately taken back, What do you mean? I asked defensively.

He said, " I have been trading for a lot of years, and I've been good at it, and I have used a lot of stuff in my time, but this Time Cycle Indicator is the only one I can't seem to live without". "I didn't have it today when my platform messed up, and for the first time I realized how much I needed it".   I have to admit, I have never been compared to a drug dealer  before,  LOL.

Most day traders know "It" is there, "It" is always there. Some unseen force that drives everything, is a part of everything. You know its there, but you just can't put your finger on it. It is Time. Now to a new Flux trader, he  has a way to identify that force, and to track It. With that comes a newly found sense of power, and confidence. One that was not there before. I have to admit it is very fulfilling to watch the enlightenment and the transformation into a more confident trader.

From the things I have read, I guess its kinda like the first taste of a new drug. This transformation almost always goes the same way. First its disbelief, then amazement, then after a few weeks, traders cant seem to live without it.

Today 8/4/2011 the futures markets could only be described as down.Way down! The key to not only surviving the day,but being profitable through it, was timing. The Flux Time Cycle Indicator had us short from 10:17 this morning. Most of the day! How is that possible? No one could have seen this coming. No Trading indicator could have seen it with that kind of precision! Or could it?

Pre-Market analysis

The aftermath

In this mornings Flux Time Cycle  Training class, at 8am we drew a vertical line at the time of day we expected to see the E-mini's and 4 other futures markets turn.The Time Cycle points for the day, both major and minor, were known in advance. The drop today really was not much of surprise to most in the room.Most of them have seen this before. Of course it is always fun to see the new guys reactions when the market stops on a dime and reverses, right on time! The time we said hours before!

That initial reaction by the new Flux user when he sees his new Time cycle Indicator live on his computer screen can only be described as "priceless"!

LOL, I guess in some ways, we may be like drug dealers after all.............!

 

 

 

 

 

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This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

Futures Trading: A cautionary guide

Trading Insights
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I came across an interesting search of "Futures Trading" results in the Google search engine today. It's one of those trading articles where I sort of scream at the screen and want to choke the person on the other side of it that wrote the original article.

Look at this quote from tradingfutures.biz:

"...Think about it : if it were possible to devise a system for trading profitably, the owner of that system would become almost infinitely wealthy, and the markets in which he traded would cease to operate as indicators of real value. It's just plain silly to think that there's some way you can varnish your toe-nails while a 'system' gets you rich. If their system worked, it wouldn't be in their interest to sell it. The fact is, successful trading requires sound judgement and always involves some degree of risk.

Examples of pseudo-scientific mumbo-jumbo that is guaranteed to lose you money are :

~ The notion that markets move in waves, whose motion can be scientifically predicted. This is a particularly popular one because "after all, you only have to look at any chart to see that such waves exist". Yes, but try predicting the level of any given wave at any given time and you will find it is as futile an exercise as doing the same thing with real waves on a beach...."

Boy, that sure sounds pretty researched and heart felt, doesn't it?

When writing about stop loss orders, that same author writes * the following regarding their opinion:

"...So yes, you need to have a stop loss order in place, but it needs to be a long, long way from your original position and its triggering should mark the end of your campaign. If you do it right, it will almost certainly never be triggered, to the chagrin of your broker and to your enrichment...."

Right there, I take everything the author has said, ever will say, or is thinking about saying - and I throw it out the nearest window of the tallest building I can run into and climb up.

Why Michael? Isn't he trying to help futures traders?

Why? Because it flies in the face of everything I've ever witnessed since I started getting involved in the trading community over 6 years ago.

I've seen people trade without stops. I've watched them lose the fortunes of friends, families, and church members that trusted them with their futures - the futures of their spouses and their families. When someone says to trade with huge stops - or not use them at all - they lose instant credibility with me. I think it's a criminal statement, after watching the futures traders' lives post account explosion. Go back and ask the guys who didn't have stops on 9/11 what they think of that statement.

Secondly - I've met and seen traders that do nothing but trade systems mechanically - day in and day out. I've developed my own futures trading systems from scratch that traded 1 time a day - that were profitable 94 out of 100 recorded instances. I've shared systems with other people and had other people share their systems with me. The truth is - trading systems and methods are universally accepted as a possible source of income. Read "the New Market Wizards" with Jack Schwager, and you'll see how 18 traders around the world all subscribe to this theory to one extent or another. If you don't start out trading without a methodology - you're doomed to failure. The idea that you come to the market every day, making "judgement" in the moment, is an equally horrifying statement to me. I'd love to introduce the author to a trader that I knew that lost $3,000,000 dollars trading the S&P, with $250,000 profit targets and stop loss orders. Having lost it all, "making judgement" they tried to convince me that they didn't need a system....that they were emotionally "in control". It was frightening to listen to her speak...

Last and not least - the author tries to "debunk" the existence of predictable cycles. I know - from my observation of the real world - futures trading or otherwise,  that time cycles exist. We wake up every day, to a room full of customers - to a trading webinar each week filled with people who were given the prediction times the day before - and ask the question, "was this market predictable, and if so, what percentage of the time?". Week after week - the numbers come back from the feedback chat box in the trading webinar dialog box. "60+%......70%...." or sometimes higher. If these cycles didn't exist, we'd be out of business by now. The trading community would have hung us out to dry on every message board and every trading forum online. We'd have been sued for sure.

Trading, day trading, swing trading....if it's forex, options, futures trading - whatever kind of trading it is - needs to be approached somberly and with great fear and respect for the industry. This is not a country for old men, or women. This requires a level of dedication and commitment to excellence far beyond any other industry I've ever been involved with. To throw up a web page that says the things these guys are saying is pretty outrageous - and it hurts to read it.

I'd love to introduce them to my friend...whose futures trading account got down to $250, and his broker let him trade with margin. His goal was $250 a day, using $250 a day - or 100% returns, daily.

Why would anyone share their futures trading system - or share what they're using to make money? Simple.  You meet a guy like my $250 friend....like the man who lost everything he, and his friends and family ever had - and it changes you. Keeps you centered - and convicts you to help anyone that stops long enough to listen.

* (taken from www.tradingfutures.biz.com)

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

Timing Indicators

Trading Insights
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Timing indicators are a misunderstood class of indicators. If they're in NinjaTrader, or Tradestation, or MetaTrader, they can be easily overlooked because on the surface, timing indicators are not obvious like other lagging indicators used by traders in futures, forex, and the like.

I always tell people, timing indicators don't ask you to forget everything you've ever learned about trading the markets- but rather - they politely ask you to remember everything you've learned about trading the markets and applying that information at certain times each day. Instead of looking at head and shoulders patterns, double tops, double bottoms, or candle reversal patterns every minute of every day - timing indicators allow traders to sit and expect those patterns to recur at certain times of the day - allowing them to conserve emotional energy for the proper times.

What amazes me most about timing indicators, are their apparent disregard for news events, or outside disturbances like econs or reports. For example, look at this 60 minute chart on the Emini Nasdaq:

It's clear to see the cycles, ie the red and green markers, play out in the overall market movements. What scares most new timing cycle traders is how those times were pre-determined a week before those times were arrived at. Despite all the news - all the chaos and calamities - the cycles still kicked in.

The deeper we dig into these cycles, the more we see we have to learn and develop. It's been an amazing journey and I'd be lying if we said we thought we'd found it all. I'm glad to see that timing indicators are important to you - and we're looking forward to showing you what we've found and learned.

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

The time cycles of the debt limit crisis

Trading Insights
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The time cycles of the debt limit crisis, fascinate me. Mainly because the markets - forex - equities, are not supposed to have any order in these environments. The moves are taught to be irradic moves. You shouldn't find any predictive meaningful cycles or patterns in them as it is a herd of people all processing information at the same time, based on the minute by minute digestion and processing of the available trading information.

In short - how could anyone say with any certainty what the markets would do?

The world is too chaotic - one move to the next - one moon cycle to the next.

It's filled with Osama's and Obama's - it's filled with Irans and i-rate extremists. They are all prone to go on TV or YouTube at any point in time and disrupt the natural flow and ebb of the trading universe. There's no way we can say with any certainty that the market will go up or down or sideways a few minutes in advance, let alone a few days in advance, right?

One look at that chart with one short definition puts a huge wrench in our perceptions, though. The definition being that the green dots, the red dot, represented "predictions". Predictions that were a week old. They were saying, seven days before the market ever got to that point in time - "we should go up, now"...."we should go down, now".

After watching this now for 3 years, and working with hundreds of customers that are watching for these same time cycle patterns in their own day trading - I can say with reasonable authority that these cycles exist. People trading 44 tick charts, and 240 charts, are all walking away saying the same thing,

"The markets are not random".

We'll keep watching these longer time cycles. They are great harbinger of turns, and even good filters for identifying trend direction on shorter time frames. There's no telling what else we'll find as we continue to explore the time cycle indicators.

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

Trading Indicator Balance

Trading Insights

This afternoon I had a conversation with a Pro trader. He is new to trading family here and an already very successful trader in his own right.

But he knew there was a missing component to what he was doing.

We were discussing some of the parameters in his new time cycle indicator. The excitement and exuberance over the newly found freedom, and trading insight is something I never get tired of hearing. Sometimes the smallest things can trigger a thought that can be so profound, if not written down it would almost be a sin. Today this came to mind.

In the conversation something started to become overly clear to me about most day traders.  I guess I really already knew it - and that was the overwhelming majority of them are so unbalanced in their approach to the markets. I say this, because when you get used to having a predictive timing indicator that gives you actual insight into the upcoming market moves, you tend to get somewhat spoiled and see your previous imbalances.

Most day traders give about 95% of their attention to price , and or price based indicators. Is that a bad thing? Not really, and for the majority of day traders it is all they know for many reasons. For example, if I look in my Ninjatrader indicator list, I see about 150 price based trading  indicators  and 4 time based trading  indicators. I have experimented with most of the price indicators over the last several years, and actually use about 3 of them regularly. I have used my Time Cycle trading indicators every day for about the last 3 years, and couldn't trade without them at this point .

How is it that we have become so one sided in our approach to day trading  that we do not consider something as significant as time. I have seen trading indicators that reference everything from yesterdays market price at close, to the position of  the stars and planets. Even entire trading platforms that look like you need a physics degree to decipher, and yet none of them deal with the time cycles of the markets. This seems so unbalanced to me in the light of all the knowledge we day-traders have accumulated over the years.

The power of "time" itself, the one unstoppable force that we must all deal with everyday, like it or not!  So with a force so strong, why has it been so ignored by the vast majority of retail day-traders, and stock traders alike?

Oh,  few guys over the years figured it out, and were very successful with it. Most of them sold only pieces of their knowledge, or were so brilliant that they couldn't effectively communicate what they saw to the average person .Guys like WD Gann, and Welles Wilder were in these categories. I tried to study them some, but it seemed way over my head.

I guess I am spoiled at this point, and I sometimes forget that only a few years ago I was in the darkness too, staring at the charts on the monitor for hours on end, wondering , "is this the right place to get into the market?".  Killing hours looking for the one thing I needed to know the most, the" time" the market  is  expected to turn. For me, that one "time cycle indicator" leveled the field, and it was the same for the new Flux member I talked to this afternoon.

 

It kinda reminds me of the star wars series, the Jedi studied the universe and were always looking for one thing, "Balance in the force". For us Day-traders, we have had hundreds of trading indicators based on price ,but the trading indicator based on" Time"  brings "Balance to the Force", don't miss out on the obvious!

 

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

Trading Freedom with the Flux

Trading Insights

Have you ever considered why people do the things they do?

I ask folks sometimes why they began day-trading, one typical answer is "freedom"  Do you have the freedom in your trading you thought you were going to have when you started? Lets think about this for a minute. Many day traders I talk to  are stressed and  in reaction mode all the time. Why? Well lets look at the typical trading mentality I come across.

Trader "x" has a theory (trading system) about the particular futures market he trades. He surmises that when the price action does that special thing, the "candle wiggle" lets call it, at a trend line then the market will repeat the same behavior he has observed many many times before. So he is always staring at the right candle on the chart, you know the one , the one that is still forming, the one that is going to do the "wiggle " that will lead to the home run trade he has been looking for all day...

Suddenly he sees the "wiggle", and the market is close the that magic trend line. Oh could this be the one, he has sat in front of the computer monitor all day, and now is the chance he has desperately waited for? Now, will he react the right way? Or will he make a hasty decision in this moment he has so longed for..

Sound familiar? It did to me,I have" been there and done that" as the expression would go. Not anymore, now I do not react to the ever changing market price conditions, now I wait like a hunter for the right time to strike. No longer "reacting" to just the price, but now "acting"with the current price  conditions at the right time of day. The Flux indicators give me the ability to look ahead and have an expectancy about the time that the market should move, or not move.

If you are a trend trader, and are looking to get into a move for a while, wouldn't you want to know that at this time of day, today, that the market typically goes into a choppy range?

This is the kind of information that the Flux indicator users have in advance, in fact , there are some Flux users that watch the indicator early in the morning or the day before,  then determine the time of day that they will show up to "work".... and then look for their candle to "wiggle", but they no longer  have to stare at the screen all day, anxiously wondering, whats next?

That's the Flux freedom!

 

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!

Trading in the Zone with these 12 steps

Trading Insights
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Trading in the Zone. Huh?  What zone? I thought I was trading in my office....there's a zone?

The following principles are taken from the “Trading in the Zone” by Mark Douglas. I refer to it's teachings constantly in our video series, "Basic Training for Traders". If Trading was a faith, and it had a bible, I believe it would be Mark's book.

Here they are in numerical order:

The 5 Fundamental Truths of Trading:

1. Anything can happen.

2. You don’t need to know what is going to happen next to make money.

3. There is a random distribution between wins and losses for any given set of
variables that define an edge.

4. An edge is nothing more than an indication of a higher probability of one thing
happening over another.

5. Every moment in the market is unique.

The 7 Principles of Consistency:

1. I objectively identify my edges.

2. I predefine the risk of every trade.

3. I completely accept the risk or I am willing to let go of the trade.

4. I act on my edges without reservation or hesitation.

5. I pay myself as the market makes money available to me.

6. I continually monitor my susceptibility for making errors.

7. I understand the absolute necessity of these principles of consistent success
and, therefore, I never violate them.

In "The Disciplined Trader" for example, Mark Douglas points out that typical traders often avoid creating principles and rules, because they simply do not want to take responsibility for the results of their trading. They like the mystery and intrigue of the markets - of thinking that they have some input on what the markets are doing when they trade. They enjoy the working out of it all, taking their best guesses and going against the big boys head to head. They have something to talk about in the golf cart on Saturday - something to share at the dinner table after the movie. They love sharing their opinions in chat rooms, and being asked their opinions by others - the camaraderie of it all.

None of this has anything to do with actual trading.

So print these rules out - and get serious about your profession.

 

 

Watch A Free Demo

This 60 minute session will review the basic concepts of the Flux tool set, and help you understand why the Institutional traders have a vulnerability, and how we can exploit that vulnerability inside of a rules based trading system and money management strategy.

Watch The Demo - TODAY!