ToTheTick Support and Resistance Blog

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Fellow TTT’ers,

Hope all is well with you.  Quick note today – today is Fed Day.  My experience with fed days is that they are not worth trading.  Price movement is not as “natural” as it usually is, rotations are off, the market can be jerky, and the volume is usually quite low until the announcement.  In fact, the zones usually perform the worst on fed days, because of the aforementioned reasons.

So my word of advice to you is, unless you have a nice track record of success trading fed days, this is a good day to sit out, and do something else!

Good Trading,

Greg

Fellow Traders,

I often get the question the same question asked by members – “Why did the zones for (pick your market) not change much from yesterday to today?” So I figured I would answer in a blog post for all to see.

As you are probably aware, our support and resistance zones are made by taking into account various factors – Previous day/week/month highs and lows, swing points in the market, volume profiling, Fibonacci, etc.    When we see confluence in an area, we typically put a zone there.

Many days are range bound, and see price move within a tight range.  On these days, new high and lows are typically not made, and the zones typically hold very well.  So the input that we use to determine the next days zones does not change, or if it does, it changes very little.

So what you see in these cases are zones that held very well the day before.  Since no new factors/input are in consideration for us, and the previous factors for putting a zone in a particular place are still present, it makes sense to leave that zone in the same place for the next day.

Hopefully that makes sense to all.  As always, please feel free to contact us with any questions/thoughts.

OK, here are screen shots of today’s action on all 5 markets that we cover.  Take a look at the TurningPoint signals that occur in the zone, or slightly above(for a short) or below(for a long), and you’ll see some excellent set ups today.  There is no reason you shouldn’t be making profitable trades with this combination of zones and signals!

I know I’ve said this before, but I really am almost done with the updated TurningPoint manual, so stay tuned!  Hopefully I complete it this weekend!

Good Trading,

Greg
Founder and Chief Market Analyst
www.tothetick.com

Fellow ToTheTick’ers,

Hope all is well in your world!  Today I want to make a short announcement, then show some trade examples from today’s sessions on the TF, Euro, Crude, and the FDAX, our new market.

So I just gave the announcement – we have officially launched zones for the FDAX.  It took me awhile to get the feel for that market, but the zones are looking great!  Take a look at today’s action.

You can see how price moved up at the start of the session, stopped dead in our zone, and sold off the rest of the day.  Both of the lower zones pictured here acted as support, and the upper of the two acted as both support and resistance.  The day session ended right in our lower zone.

In the TF, Euro, and Crude, it was the same story.

In every market we caught the high and the low!  Luck?  No.  It’s the reasons why we put the zones where we do.  If you remember, the zones are where there is a confluence of factors all together that make for strong support or resistance.  So it’s not surprising at all to see price hit a zone and reverse.  In fact, I’m surprised when that doesn’t happen!

Hope this helps your trading.  Remember what I preach – the zones should be considered areas that you are interested in “doing business” in.  Wait for price to get there, look for your triggers to be present, and if so, and the risk is within your plan, take the trade.  If not, wait for the next one.  There’s always a next one.

If you are wanting to get the FDAX zones, you are a Ninja user, and you are subscribed to all markets, you already have it!  Just apply the indicator to an FDAX chart and the zones will appear.

Please comment here, send me an email, hit me on skype, or post on our Facebook page about requests for other markets.  We are putting our plan in place for additional markets now, so now is the time to be heard!

Good Trading,

Greg
Founder and Chief Market Analyst
www.tothetick.com

Take a look at the 5 minute Euro chart today.  After a few early sell signals that didn’t yield much, we got a reversal at the high of the day, right at the top of our zone.  From there we moved down the rest of the day, bouncing at our next zone down, then eventually moving down to our next zone.

Hope your trading is going well,

Greg

Founder and Chief Market Analyst
www.tothetick.com

You can see clearly how being patient, waiting for the flush out to occur, can lead to a better entry and more profitable trade.  Yes, you may miss some nice winning trades, but the goal here is to be profitable with minimal risk, not take every possible trade!

I hope this short lesson was valuable to you!  Feel free to provide feedback, and look for additional postings every week or more.

Good Trading,

Greg
Founder and Chief Market Analyst
www.tothetick.com

Fellow ToTheTick’ers, I hope that trading is going well for you!  With the increased volatility in recent months, the market has provided excellent opportunities to make money.  Our zones are consistently calling the highs and lows of the day.  If you are not consistently extracting profits out of these markets, please contact us as soon as possible so we can assist.  With proper risk management, there is no reason not to be making profits in this current environment!

This week only, we are offering a special promotion.  We are offering our 6 month subscription to all markets, including the NinjaTrader indicator and the TurningPoint System, normally $495, for only $295, with 3 bonus months kicked in(9 months total).  We want to make our services affordable to all, and we know that the longer you watch the zones, and trade the zones, whether sim or live, the better you will be at extracting the large profits available from the typical reaction when price enters one. In addition, anyone who subscribes this week(open to new or existing subscribers wishing to extend their subscription) will get a one hour training session with me, where we go over trade set ups, zone trading methodologies, etc.

If you choose to take advantage of this offer, please use coupon code “fall11″ when ordering.  In the meantime, good trading, and look for an announcement later this week of a new service we will be offering!

Good Trading,

Greg and Joel
www.tothetick.com

So who knows what POMO is?   Hopefully all of you.  If you are a trader, you should get familiar with this term.  Google it.  Because POMO has created this bull market, and will continue to fuel it for the foreseeable future.  As a daytrader, it is critical for you to know this.  The trend is up.  It’s been up, and as long as POMO continues, it will continue to be up. 

The short answer is that POMO is the FED’s program to print money and give it to the banks.  Yes, those same banks that nearly took down the most powerful economy in the world.  Knowing about POMO is important, but it is even more important as a support/resistance trader.  When the market is allowed to flow freely, the market moves in patterns.  The patterns do not always work, but the majority of time they do.  Which is why we trade them.   But, when an artificial element is introduced, such as $100+ billion per month of free money to our largest financial institutions, EVERY MONTH, then the game changes.  Throw historical patterns out the window, for the most part. 

So why am I writing this?  Because I want you, as a support/resistance trader, to keep this in mind when trading.  Especially the ES, TF, and YM.  Markets that are correlated with stocks that will be bought by banks that are flush with free money.    You’ll notice when the POMO activity is in play, these markets rally.  Retracements to the downside are small.  When this happens, when price moves up to our zone, pauses for awhile, then continues up, don’t look to short the next zone, unless a) you have a very strong set up, and b) you keep your risk smaller, and look for smaller targets.  Don’t make the mistake that many make, thinking, “It has to stop somewhere, I’m going to keep shorting, eventually I’ll be right”.  Remember, the market can stay irrational longer than you can stay solvent.  On trend day(mostly up these days), keep your powder dry, look for retracements back to our zones to enter with the trend.  Then extend the trade when price action tells you to.  Exit just short of the next zone, and wait for the next opportunity. 

When the market is trending, take trend trades.  When the market is range bound, take ‘em all.  Typically the market is range bound around 80% of the days.  That will not be the case as long as the massive money giveaway continues.  The link below shows the exact date that this massive injection of money will take place.

http://www.ny.frb.org/markets/tot_operation_schedule.html

One other note – we are having a lot of success using TurningPoint on various charts, like the 1 minute, and Renko, in multiple markets, but especially in crude.  Crude is amazing.  On a typical 20 tick range day in the ES, oil will move 250 ticks.  It trades like ES used to, many years ago, before the S&P became as manipulated as it is today.  If you are interested in this fast moving market, ping me.  Let’s get on skype to discuss.  We’ll also be discussing it in our next webinar.

Good Trading,

Greg

Did someone shut down the ES market and not tell me?  I don’t recall getting that memo…

So two things I want to express in this post.  After reading you will see why I am asking the question above, about becoming a crude trader.

1) Be very careful trading these markets!   With volume so slow, and the “normal” players mostly not around for the holidays, the market will most likely not exhibit it’s normal behavior, if there is such a thing.  Which means, the methodologies that you use, where you are trading S/R levels that are areas where those now-absent market participants are usually waiting, won’t work as well.  Why?  Because of the now-absent participants.  The fib guys, the OHLC traders, etc, are mostly gone.  Volume is pathetic.  So the market can me moved easily by little volume.  Maybe this is a good time to take some time off from trading, evaluate your plan, see what is working, and what isn’t, and improve on it.

2) Have you seen crude lately?  More specifically, our zones, and our TurningPoint System, on crude?  If I were to show you a system that produced over $1,800 on two trades with $60 total risk, would you say I’m crazy?   Take a look at the chart below:

This is today’s action in crude.  Ok, so the first trade signalled 1 minute before crude inventories were released.  More risk there, but the signal was valid.   Over $1,100 move up, with $20 of risk.   2nd one, pure money.  Signaled at 89.04, went only 4 ticks against you, then moved 74 ticks down.  That’s $740 in possible profit, with only $40 of risk.  It doesn’t get any better than that.  Not all trades are that good, but many of them are.  The key is to a) take the valid TP signals, b) minimize your risk(take small losers), and c) let your winners run.  It’s that simple.  What are you waiting for?

Play it safe,

Greg
www.tothetick.com