ToTheTick Support and Resistance Blog

Fed Day

greg — Tue, 13 Mar 2012 15:51:50 +0000

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

Why the zones sometimes do not change much from day to day, and today’s charts

greg — Wed, 07 Mar 2012 20:24:50 +0000

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

Trade Examples and New Market

greg — Thu, 23 Feb 2012 03:27:32 +0000

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

Euro Chart for 2/14/12

greg — Wed, 15 Feb 2012 02:18:43 +0000

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

Two TurningPoint Signals on the 5 min TF chart today, 2 beautiful winners!

greg — Mon, 13 Feb 2012 23:12:25 +0000

To Your 2012 Success!

greg — Wed, 18 Jan 2012 03:45:19 +0000

Fellow ToTheTick’ers,

I hope this new year finds you well! As part of our 2012 plan, we will be amping up our education efforts, as many of you have requested. As most of you know, our #1 goal is to help every member improve their trading. While every trader is different, our common goal is to trade as proficiently as possible in order to make the type of income we desire.

With that in mind, the most common question I get from other traders is this: ”How do I trade the zones profitably?” While no one can guarantee profitability(and run the other way quickly if someone does), I have basic rules for you to follow when trading the zones and TurningPoint which should increase your success.

Rule #1: Be patient, and wait for the trade to come to you. Don’t force a trade! Especially fight the urge to find another trade right after a losing trade. It is so easy to want “revenge” on the market, and get our losses back quickly, so we take another trade quickly, after a loss, without the proper set up. Then we typically end up with two losers in a row, and contemplate throwing our monitor out the window. :) Personally I ignore all setups unless they are in one of our zones, no matter how good the set up looks. TurningPoint signals are very good entry signals when combined with the zones. Ideally wait for both to occur.

Rule #2: Favor the top half of the zone for a short entry, bottom half for a long entry. Many times price will move into our zones, consolidate, then get one more push (flushing a lot of people out) before reversing. In the case of a long entry, look to enter in the bottom half of the zone, or even up to 4-6 ticks below it.

Rule #3: Look for “normal” market behavior. I put this in quotes because normal is relative. The market can do anything it wants, anytime it wants. But as you’ve seen, a typical day consists of rotations up and down. When that is occurring on normal volume, you should have plenty of excellent trading opportunities available to you. Conversely, if price is trending, especially on higher than normal volume, be wary of entering opposite of the trend, even if you get consolidation in one of our zones, TurningPoint signals, etc.

Rule #4: Keep your losers small, and keep your emotions out of it. I know this can be difficult. But in my opinion this is the #1 most important skill to develop and execute on each day. No one wants to take a loss on a trade. But you MUST look at losses as a cost of doing business, not as a “losing” or “failed” trade. As long as you followed your trading plan(which will be covered in a subsequent post), and you executed the trade according to that plan, you should be just fine with that loss, knowing that you are trading a system that ultimately has returned more than it has lost. But if you have a big stop, or move it when price goes against you, hoping you can eventually get out of the trade at breakeven, I can guarantee you that eventually you will suffer a large loss that will wipe out much of your account. Yes, you will escape many losers doing this. But it will only take one loss to crush you. Don’t do it. Ever.

Take a look at the Euro from today’s action. Perfect example of why I recommend Rule #2.

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

Sierra, Tradestation, and Trade Examples

greg — Wed, 28 Dec 2011 02:20:14 +0000

Fellow ToTheTick’ers,

I hope your holidays have been great so far! I’ve enjoyed the rare time off ONLY taking care of 5 kids…:).

A couple of housekeeping notes – if you have TradeStation or Sierra, hold tight. The updated indicators with the TurningPoint signals should be ready shortly. I would promise by the end of the year, but with programming, you never know. But I expect worst case early January for both. If you have either of those platforms and are having issues, contact me, and I will extend your subscription for a month free.

Due to popular demand, I am going to be sending out some chart/trade examples from time to time. I am also in the process of updating the website, and getting an “owners manual” completed for the TurningPoint system. Stay tuned, I am working as fast as I can to get this out to all of you.

Ok, so examples of support and resistance trading, and the TurningPoint system, and where/when to enter, and where/when NOT to enter. As most of you probably know, entry is key to a winning trade. It’s not the only factor, but it’s a big one. Enter too far away from the swing low, and you can get nicked out, then price goes your way. So for me, my best entries are typically when price penetrates into the zone by 50% or more. Which means that, ideally, I enter in the middle of the zone or lower(as much as a point or so below the zone, for a long entry) after getting a TurningPoint signal. Sometimes I get more aggressive, but not usually.

OK, onto trade examples. Take a look at the chart below. This is the TF market, 5 minute chart, from 12/1/2011. You can see how price reacted to our support and resistance zones. Traders looking to play this market had a beautiful long signal around 730.1 at the close of the 8:40am central bar, which resulted in a nice 120+ tick move($1,200). We stayed out of the short in the 737 area due to no TurningPoint signal. Then between 10:15 and 10:35 price moved into our support zone and retested, with two TurningPoint signals. The safer entry here is somewhere in the middle of the zone, like I mentioned above. Had you done that, you would have seen just a few ticks of heat at most, and a nice 70+ tick move up. Our resistance zone in the 737 area held nicely, but we got no short TurningPoint signal.

In the next example in the ES market on 12/14/2011, I’ve highlighted 6 potential entry points, but only 3 of them confirmed by TurningPoint signals. Those occurred at around 10:30am, 11:48am, and 1:36pm(all US central time). The 10:30 and 1:36 were easy winners. The 11:48am saw a 2 point move after the entry signal before continuing higher. But the 10:30am entry gave you 10+ points($500) with at most 3-4 ticks($37.50 – $50.00) risk.

Fellow traders, the better you get at trading, the easier it is. There is certainly a learning curve. Your job is to preserve your capital until you get good enough to get more aggressive.

I’ll be posting these on a regular basis. As usual, please email or skype or post here with your questions or comments. Trading these signals is fairly straightforward, as long as you understand them.

Hopefully you are taking this extremely low volume time to do other things, like spending time with family, or reviewing your trade journal(you do have one, right?), or both. Or maybe reading a book on trader psychology. Whatever you choose, it’s probably more productive than trying to trade during these very slow times.

Happy Holidays,

Greg

Founder and Chief Market Analyst

www.tothetick.com

Promotion This Week Only

greg — Tue, 20 Sep 2011 01:47:22 +0000

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

POMO Means Trend

greg — Sat, 15 Jan 2011 21:48:36 +0000

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

Am I becoming a Crude Trader??

greg — Wed, 15 Dec 2010 22:10:58 +0000

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