This article and video is about an E-mini trading strategies secret because I’ve received a lot of requests for this very thing.
I’m not surprised because the S&P 500 E-minis are one of the most actively traded markets in the world. They’re also one of the most reliable to trade. I think they’re much easier to trade than individual stocks, especially for day trading.
Enjoy the video and please leave your comments below.
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Hey, thanks for coming watching this video on E-mini trading strategies secret. Iâ€™m going to share with you one of my favorite E-mini trading strategies today. And, by the way I am doing this on the E-minis because I like to trade the E-minis, but this will also work for stocks, and Forex, commodities because I trade those markets as well. And I use the same principle when I trade those markets. So this is really for anybody who is doing technical analysis.
The bottom line of this E-mini trading strategies secret that we’re going to look at today is using multiple time frames. Now using multiple time frames is a very common technique used in technical analysis. And what I mean by that, just to be very clear, is over here we have a 5 minute chart, and then we would compare that on the chart to the right, which is a 15 minute chart.
Now donâ€™t get caught up in the time frames, I normally donâ€™t even trade 5 minute charts too much. I like to trade like a 2 minute chart or tick charts, but for swing trading and trading options, Iâ€™ll also use daily charts, weekly charts. For investing, I use monthly. So you can do this with various fractals or scale. And by that I mean various time intervals. So weâ€™re looking at different markets in different time frames.
THE KEY TO MULTIPLE TIME FRAMES WHEN TRADING THIS E-MINI TRADING STRATEGIES SECRET
I like to use a 3 to 1 ratio. If this is my setup chart, the 5 minute chart. Then my longer term time frame is going to be 3 times that, which is a 15 minute chart. And I call this chart on the right, the energy of scale or the fractal energy. Using the term “energy of scale” is probably little more accurate than fractal energy. But, you can call it whatever you want as long as you understand the idea, weâ€™re looking at the same market but on a different scale, different time interval.
Okay, now this is a traditional approach, using multiple time frames, however there is a problem with the traditional approach in my opinion. In that approach, by the way itâ€™s going to be a little controversial here because you’re going to hear things different from other people. And thatâ€™s okay. But you know, here is my opinion. Here’s how I look at it.
The traditional orthodox approach is to say only take a trade on your setup chart, the shorter term chart on the left, if it’s in the direction of trend of the longer term time frame. Thatâ€™s the traditional orthodox approach.
BREAK WITH TRADITION!
In my opinion, that is not optimal for E-mini trading strategies secret, or any other market. And the reason for that is, well two fold, it was never optimal, even though in the old days we used to be able to get away with that. Iâ€™ve been trading for 49 years, so I remember those days and a lot of the classical technical analysis books would tell you this.
You could get away with it back then because you didnâ€™t have things like massive retail traders with direct access and low commissions. Getting in and out, in and out, in and out. And back in those days, we also didnâ€™t have high frequency trading, algorithmic trading, you know things that computers you know in just a split second, placing orders and cancelling orders, covering orders, things like that.
The result of all these new things is that markets are choppier now. And trends generally donâ€™t follow through as much as they used to. So thatâ€™s one reason that this technique doesnâ€™t work very well anymore.
THE TRADITIONAL APPROACH WAS NEVER OPTIMAL
Now as I said, that technique was never really optimal and the reason for that is because trend. Trend is defined, if you look it up in Websterâ€™s dictionary, is defined to extend in a general direction. So the upper rewards are being extended in general. Therefore meaning a long term move, and thatâ€™s what makes trend trading so great is that because trend, by definition is a long-term move.
If we get early into a new trend we can get a very good reward to risk ratio. Which is what we are always looking to get of course when trading E-mini trading strategies secret. So trend trading is great, but one of the downsides is that trend is always a lagging indication. By definition. And I donâ€™t care what indicator we use or whatever. It’s going to be lagging. So thatâ€™s a bit of a problem.
So where it becomes a problem with this old style of, this old technique of using multiple time frames is youâ€™re then saying well I am going to confirm my trade on the short term chart with a lagging indicator on an already 3 times slower chart. Therefore the 2 time frames are not synchronized very tightly. And that causes a problem for timing your entries.
WHAT’S THE SOLUTION BARRY?
To overcome that what we do is now we use a faster indicator on the longer term chart. And I like to use momentum. Thatâ€™s my momentum indicator down here. It’s actually the line that turns green and red. So here is my trend indicator. And by the way, this, you know you can use all kinds of different indicators, Iâ€™m not going to get into specific indicators today. So this is my trend indicator. As you can see it’s down here. But momentum is up.
So theyâ€™re contradicting each other. And you can see price is moving up dramatically. But this is not necessarily the long term move, and thatâ€™s why trend is angling down. But momentum responds much more quickly. So on todayâ€™s choppy markets that is actually very, very helpful.
So if we go over here, and let me bring up my global cross hairs now, so we can see where our charts align. So here is one of my trade setups, and can actually even take it over right there. That being a little aggressive, thatâ€™s very conservative setup there. And in this “X marks the spot trade.” BTW, that’s the E-mini trading strategies secret I’m showing you today. And basically we have the red line angling down, the black line angling up. Those are the 50 SMA and the 15 EMAs. The red line is the simple moving average, 50 simple moving average. The black line is the 15 exponential moving average.
THE E-MINI TRADE STRATEGY
The setup is very simple. There’s a little more to it but the basic structure is this, where we have 50 MA angling down, 15 crossing it. And price gets above, gets above the 50, it retraces right into that cross. Right into that X. so X marks the spot. That’s theÂ E-mini trading strategies secret setup.
We need also couple of other things. We need our cycle low to say it’s time for that market to stop going down. And here is the momentum indicator and it stays above zero. So therefore it’s also saying, so here is your zero line, that momentum is strong to the upsides. So we need all of that. And then finally we also need confirmation from the higher time frame.
When we use our global cross hairs, there we go, You could see that on the longer term chart, the 15 minute chart, where the vertical line is, that is showing us that yes the momentum indicator down at the very bottom, the green line coming up that is angling up. However youâ€™ll notice that the red line above price is angling down which is our trend indicator. So this gives us a faster, accurate, more timely signal to confirm our trade entries.
If I was using trend, if I used the old traditional technique, as Iâ€™d know I can only trade in the direction of trend of the longer term time frame, Iâ€™d be kept out of a very very profitable trade here. So thatâ€™s the principle, and it works very very well. Again as markets change and things change, technology changes, we need to adapt, to be flexible and this is something that believe me, well save you a lot of money.
THE FILTER THAT KEEPS YOU OUT OF OTHERWISE GOOD LOOKING TRADE SETUPS ON THE E-MINIS
First of all it will get you more opportunities than you would otherwise be kept out of. But by using the, I call it really a confirming indicator. I wonâ€™t take the trade unless it’s confirmed by momentum, on the next higher time frame. And believe me, by doing that that saves me a lot of money. Otherwise good looking setups will be filtered out by making sure that momentum is on my side on the next higher time frame.
So thatâ€™s it for today, if you liked the video and you are watching this on YouTube, please click the thumbs up icon below. And leave a comment, telling me what youâ€™d like me to cover in future videos. Or what you liked about this one.
Also, I am giving away one of my very favorite trade strategies. I call it the Rubber Brand Trade. You can get it absolutely free. It has a really high win loss ratio. It’s a simple strategy. You can learn it in about 26 short minutes. So get that video explaining that trade strategy, by clicking on the image in the top left corner. Or if you are on a mobile device, click on the little â€˜Iâ€™, with a circle around it, in the top right corner of this video. And once you do that, I will personally email the first video to you absolutely free.
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