Australian SPI futures - long trade

[Cyber56]

MTPredictor long trade on the 5 min. chart of the March 07 SFE Australian index futures...

TS3 setup - automatically found by the software - with clear set-up support and a strong risk/reward outlook.

Result: +5.4 times profit on the close.

What I am finding with the SPI is that there are not too many setups with MTP, but when they occur they are normally quite profitable.


{Note: minimum tick movement = 1; tick value = A$ 25}

[tmeinert]

Hi Cyber56,

I have been using MTP for about 3 months or so and unfortunately have not had a single successful trade. I only trade on an EOD basis and find that MTP rarely picks up any good signals. That has led me to become impatient and enter some trades which I probably shouldn't have.

Interested to hear your experience with the ASX market. Have you had similar issues? I don't doubt that the software works but just find that I hardly ever get any real signals.

Appreciate your feedback.
Tom

[MLiddy]

Hi Tom,

In reply to your post on trading the ASX EOD, thought I'd share my experience with MTP. I've only been using it a bit longer than you, for about six months. In this time, only taking basic trade setups, I've had only 19 trades, and am up 2.84R. I personally think that this amount of trades doesn't give the metrics time to work, and trading a system with a 40% win rate, it's quite possible to have long losing streaks. I've had much more success with US trades so far, but I imagine that this is purely due to the greater frequency which allows the maths of probability to start working. In the same time I've taken 64 US share trades for a 26.34R Gain.

I trade ASX 300, S&P500 (plus remaining Nasdaq 100), Cac 40, Dax 30 and FTSE 100 Stocks, to give better oportunity (and therefore Expectunity). Really in today's world it doesn't matter where in the world the underlying instrument trades, I do all of this off one platform with CFD's and my money is kept in Australia. My trades are all with the trend of the market and preferably the individual stock as well.

Also, I'm finding that the more I learn, the more trades I find and the better I assess them. It's a long road, but the support that you get from the team at MTP is second to none.

Good luck with it all

Cheers
Matt

[Cyber56]

Hi Tom,

I personally don't trade on an EOD basis and currently I only trade SPI, U.S. futures and occasionally Stoxx 50 futures on an intraday basis.
I do find that the SPI requires a lot of patience waiting for a valid setup but I find they are worth the wait.
Matt Bowen sent out an email a couple of days ago titled "Most Traders Live Quiet Lives, Full Of Desperation" - well worth reading again especially
Point 2 - Most traders have zero patience ....
This is one area that I still need to work on !!!
I haven't used MTP to trade ASX stocks so I can't really comment.

Best regards,
Cyber56

[Cyber56]

Another TS3 trade setup came about today - DP (in yellow) coincided with the min Wave C WPT.
Trade exited at ATR stop for a R/R of 2.8

[Matt Bowen]

Part 1 (Part 2 will be in the next thread)

The first half of this e-mail presents a problem many traders have...and the second half of the e-mail gives the solution, so make sure you read it all.

Have you ever heard the phase: "Most men live lives of quiet desperation?" Well, how about this: "MOST TRADERS LIVE QUIET LIVES, FULL OF DESPERATION".
Why? There are two (2) main reasons:

1.) Because Most Trading Systems Don't Work... and Never Will!

Some of you already know this to be true, but most of you do not. It can take a trader years to figure that most systems do not work. You see, in the trading world there are so many "Software Systems, "Seminars" and "Vendors" and "Trading Companies", who are all competing for your dollars and they are going to tell you exactly what you want to hear. The problem is what you want to hear and what you need to hear is the difference between throwing your money away OR depositing money in your T-bills account.

2.) Most traders have zero patience and are not educated about money management.

So few people succeed in trading because they have no patience, they want to get rich quickly. In the long run, patience counts more than any other element except knowledge. This happens to be why we give you so many free reports, we are trying to get you to think like a professional who makes money, not like an amateur who loses money.

If you talk to most amateur traders: Traders who have been trading less than 3 years (especially the ones who have been trading for a year or less), what they really want is a 10-minute solution packaged up so they can pour it into their morning coffee and now they are "Joe trader" for the day. Where do traders come up with cockamamie ideas? From the same stupid vendors who sell these people on the idea that they can make 1000% each year. It's not the traders fault for seeking out these returns, it's the idiot vendors and brokers who want the commissions and the sales from the products... THIS IS WHY THEY TELL YOU WHAT YOU WANT TO HEAR. I had a guy just yesterday tell me we are doing the samething. I said: "Are you kidding me?" Why in the hell do you think nobody talks about risk management??? First of all because most of them don't understand it. Secondly, 95% of all vendors focus on "ENTRY".... sorry charlie, but the money gets made on exits, not entries. Most of the trading industry tells you what you want to hear because...that's what sells product.

Case and Point:

If I say hey Johnny, I've got a system that makes 273% ... does that get you interested?

Now try this one... Hey Johnny, I've got a system that works 38.9% of the time.

Now you tell me which one you are more interested in? The first one, right? Because most people think the second one is broken or they are going to tell me to go jump in a lake (whichever comes first) :D
The truth is they are both the same system: http://www.mtpredictor.com/pricing/RTRecordold.html

MY point here is that the trading industry only tells you the first scenario... because that's the one you are interested in and that's what sells... they are not going to tell you that 61% of the trades were stopped out. This is no different than a running a business, it's not how many people come in the door, it's what is getting bought. If 100 people come in car dealership and buy nothing... what do I have? OR if 10 people come in my dealership and we sell 3 cars what do I have? Just because you have traffic does not mean you are making money... very important lesson for traders.

Trust me folks, I'm a former broker and I've sold technical analysis software for over 14 years (I started in the business 10 years before that). So,I know exactly how these idiots think because I've worked for them. Are they all bad? No, there are some very good brokers out there and there are some honest software companies who really care about your success. My point here is not to scare you away, but to let you know that Pareto principle of 80/20 applies here: 80% of the people in this business are either morons who have no idea of what they are talking about and they are simply out to separate you from your money. Whereas 20% of the people are successful traders or brokers who are knowledgeable and can help you become a better trader or investor. I know this sounds pretty harsh, but believe me in the last 10 years this industry has gotten a "black-eye" from some of the slickest internet advertisers and promoters I have ever seen, these people do not know how to trade (nor do they care to), but they are experts at building flashy websites that attract hundreds of innocent people(what they call suckers) trying to learn the trading business.

Case and Point:

Several years ago I was invited to Futures Expo and we were seated with some of the most prominent software vendors in the country and I overheard a conversation that not only upset me, but rattled my melon. The two software vendors were talking about why they hated doing the expo events, but enjoyed the money and perks. The one vendor leans over to the other and says: "This is one of the few businesses where you can be completely full of S*** and get paid for it". It was the last expo I ever attended and for good reason, I never met so many knuckleheads in my life. Just remember this, most professional traders are not going to be walking around at an expo event. About the only thing that you will find at an expo is this game called "Show and Tell"(I will explain this in a minute), so don't expect to go to an expo to learn how to become a professional trader...what you should expect is to get sold a piece of software, by some bozo the clown who couldn't make it in the real world of trading so, he joins the circus act of vendors who sell systems that don't have a chance in hell at making any money. Either way, they could careless about your success. I don't know about you, but I wouldn't want to be mentored by a clown... this is why you REALLY need to talk to these vendors on the phone. Find out and ask questions, does this person really know what he or she is talking about or are they just trying to sell me another software program.

Don't try to be logical when buying a technical analysis software product.

They are going to "SHOW" you their system and "TELL" you how much money you will make. Remember the game called "Show and Tell" when you were a kid, you know where you got to stand up in front of the classor a small group of people and tell everyone about your favorite subject or your hobby? Well this is no different, the vendor or trading company is going to entice you to see things their way, they want you to believe their product is the best, it's only natural...they are trying to sell you something.

In the trading world vendors and software companies play the "show and tell" game all the time, except the80% of vendors who are con artist, don't tell you that their favorite subject is "Sucking the cash out of your wallet" and giving you a product that they themselves can't even trade. How do I know all of this? Part of it is because I've been in the industry for 24 years and I've worked for many of these screwballswhen I first started out in the business. The other part is because I have bought many of the products just like you or people you know, I never made any of my money back because many of these systems had negative expectancy ratios. I've even been burned by one company and mis-lead customers so bad that the Federal Trade Commission took over the case from the CFTC (Commodity Futures Trading Commission). The company was prosecuted and the vendor was forced to close down the company.

Believe me, there are some real shady characters in the trading business and I'll give you a hint on how you can tell if you are dealing with one right now. If they are calling you every day or every week trying to get you to buy the software then that is a red flag. Any vendor who cares about your success is not going to be calling up every other day ramming their software down your throat by some broiler room sales person who needs to make his monthly sales quota. Why is this? Because if the company wants you to succeed they are going to want you to take your time and learn the software as much as possible BEFORE you buy it, not after you have been sold. If you feel pressure...hang up the phone, you will probably save yourself a lot of money and time.

Please go to the next post and read Part 2

[Matt Bowen]

Ok, I'm going to let you in on a little secret... (and get ready because I guarantee you have not heard this before)

There are three (3) components (or requirements) to being a profitable trader:


Investment Strategy
Money Management
Understanding Yourself



Investment Strategy

This is the single biggest issue most amateur traders worry about. They think, if I can find the right software program this will solve all of my problems...trust me, if you found the right software program you wouldn't be reading this right now. In addition, this one of the reasons investors and traders jump from one software program to the next...looking for the "holy grail" only to find that they become more and more frustrated as time goes on because of their lack of success.

The most important part here is that you use a strategy that fits your situation, resources and skill level. Fail to do this and I don't care how good the system is...the trader will never be able or follow the plan because they are always second guessing the system or they can't follow it because their vocation does not permit the time to trade. If you are not a day trader or you don't have time to sit in front of the screen, then don't buy a short term trading system. Most traders who are trading 100k account or higher do not day trade simply because they do not want to be bothered by the intra day attention and they are looking at much larger moves. So make sure you are trading the right strategy for you.

Money Management

The second one here is responsible for more traders failing to make money than any other problem. I have seen more people blow-out trading accounts and it's all because they were using too much leverage. Want a good example? Take a look around at the Real Estate market. Real-Estate by itself is not a bad investment, but most of these "no money down", opportunity seekers are licking their wounds and searching for ways to get out of their leveraged nightmare...(these people are just now finding out how illiquid a Real-Estate investment is) and I can guarantee you they will look at trading in a whole new way once the smoke clears.

Ok, back to the money management... The effect of leverage can be in many other investments such as Stocks, Bonds, Futures, Options and even Penny Stocks, but here is the key: You have to be able to come back and play the game again if you take a series of losses. What this means is you need to take a calculated risk and invest or trade an appropriate amount for taking on the potential risk for the potential reward. You do this by controlling the leverage through position sizing.

Understanding Yourself

The final, and most important area of investing and trading success is understanding how you will react to various investment scenarios. Comfort plays a huge roll in being a successful trader or investor. In other words, make sure you choose the right time frame to trade from. When an investment or trade is appropriate it's as easy as watching someone breath. Conversely, if you take an investor and turn him into a day trader, you will see someone come unglued in a matter of minutes.

Before jumping into any trading or investment strategy, think about what type of person you are. Are you the impulsive, decisive, strategic or tactical day trader? Do you like to remain distant from the intraday movements? Or do you even want to be involved, maybe you prefer to have your money professionally managed and you want to try and take a very small percentage and manage it on your own. The bottom line here is that you must design your investment/trading program around yourself because this is your money and only you know yourself best.

Several years ago I was mentoring a group of traders for a live day trading workshop and one particular trader who had been with our company for quite some time was not successful. I could tell he looked uncomfortable (almost like a little kid who need to go the bathroom, but didn't want to raise his hand to interrupt the class, ha ha) In any case, I confronted him and said: "You look stressed, are you ok?" He said: "No, not really...I feel like my heart is going to jump out and land on my laptop!". I said: "Let me ask you something, how long have you been feeling like this?" He said: "Pretty much since I started trading intraday, when I look at the screen my eyeballs feel like a slot machine!". Immediately, I worked with him during the seminar on setting up his trading on and end-of-day basis so he was only looking at daily bars and placing his orders once a day. To make a long story short, he not only became profitable, but he has had several triple digit return years.

Again, this proves a major point...just because your trader friends Tom, Dick and Harry are more comfortable trading intraday does not mean it's right for you. In fact, I have worked with many traders over the years who discovered they too were trading a time frame that was beyond their skill level and this was preventing them from being profitable. I personally do much better trading on an End-of-Day basis and the only way I found this out was because I like trading both time frames. However, after reviewing my performance metrics it was clear that I did much better by trading when I was relaxed and away from the screen during during market hours.

If you are interested in seeing how this all ties together, please visit the link below (You might want to print this document as it's about 15 pages long). Also, make sure you watch the video.

Click here -------> http://www.mtptrader.com/MTPredictor.html