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One of my favorite tools is the Smart Super Trend Tool (SST). It can be used for a variety of techniques like trailing stops in a trending market or as a support and resistance or zone tool in a consolidating one. One of my favorite patterns for the consolidation variety is what I call three tags in the box pattern. To see this pattern on your charts there are two steps. 1) Draw the box and 2) identify the pattern.
Let's do a couple examples for the short side. To draw the box, take the highest red and blue markers on the SST in a move.
You can highlight this using the Ctrl F12 key in NinjaTrader and extend it out into the future:
Notice the pattern leaves the box twice and returns to tag into it. The best patterns have declining highs as shown:
Here is another trick that works again and again. Very often the market will extend off these patterns by a 261, 361 or 461% extension off the height of the pattern:
SST is a key component of the Smart Patterns trading system and is in many respects a system unto itself. The patterns we have discussed also work very well with the Smart Patterns Bloodhound template shown in the above screenshots (red and green background colors that act as an excellent triggering system with a variety of bar types)
A student who has been with me for several years asked that I post this on the blog, wanting to show his progress. Nothing is more rewarding than knowing you have help another to achieve his dreams and aspirations!
This is a testimonial - to your years of research and building a set of tools for us novice traders who unfortunately cannot be in your trading room due to several constraints. I'd love for you to post it in your blog.
I switched to trading the December CL contract yesterday, taking a short position based on Support & Resistance analysis from your tools, and even with the position going a bit against me yesterday after my initial short, electing to use your rules of not sacrificing more than 2% of my portfolio, elected, way after the pit closing hours yesterday, to strengthen my shorts by adding to my short position a little before 5 pm and closing out today, again, strictly by using your tools, volume analysis and your Daily Targets tool. This is a testimonial for your years of work in helping traders learn, not entirely a day-trade example but for me it was simply amazing allowing me the luxury of focusing on work (my day job) for the rest of the week! Thank you!
Reviews appearing here were received via email. They are individual experiences, reflecting real life experiences of those who have used our products and/or services in some way or other. However, they are individual results and results do vary. We do not claim that they are typical results that consumers will generally achieve. The testimonials are not necessarily representative of all of those who will use our products and/or services. There is a substantial risk of loss in futures trading. Past performance is not necessarily indicative of future results CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
The following charts are from a student reporting his progress for last Thursday and Friday (Oct 2nd and 3rd, 2014) using the Smart Patterns Day Trading System. Past performance is not necessarily indicative of future results. There is risk of loss trading. To see the webinar click here. To get the system, click here:
When trading Stock Indexes using the Smart Patterns Trading System there is one pattern that helps you to be in better trades; Confluence. Look for your favorite set up patterns in multiple Stock Indexes at the same time. This is especially true when using the Smart Patterns Trading System from IndicatorSmart. For example, by looking for the Basic set up in the Russell, Nasdaq and Emini S&P all at the same time, it lessens the probability of getting caught in the chop and increases the potential of getting caught in a directional move. Let's look at the three charts:
At about 7:18 Pacific time, all three markets lined up with the Type 2 buy set-up. With this occurrence, you trade your chosen market in accordance with the confluence of the markets. You could also use the DOW futures as well in your analysis. With this elegant yet simple technique you will trade less and more likely be trading when the markets are moving. If one market is lagging the others this can be alright and sometimes the lagging market is the best one to trade because it can need to play catch up.
Good Trading to You!
Using Supply and Demand Zones in trading intraday is an important part of an overall strategy in making a determination as to market context and for making lower time frame decisions about how you are trading. Using 60 minute charts with SmartZones, SmartColorBars and a 89 period moving average applied, we can often discern where the market is going. Let's take a couple examples from today's charts in order to illuminate these factors:
In the above chart, we can see the market tagging the higher zone just off the open and finding rejection there and coming back down into the trading range that was defined in the overnight price action. Following this the strong rejection at the zone (greyish blue area), we can see the market began to sell off. At this point, we would suspect the market is going to test into the lower zone and this is exactly what it did, finding support there by days end. This sort of thing is not uncommon. Today one might not have expected such a range expansion. It is also not at all uncommon for the market to have substantial range expansions off the EMA on the chart. The SmartColorBars are also a short tern trend indicator that can help us to identify trending situations. In addition to tagging the upper zone early in the day, the market also tagged the SmartDailyTarget up in that range (a product that is also available through IndicatorSmart that predicts highs and lows with a known probability). The market also retagged this region on the supply and demand SmartZone on the daily chart (image not shown). So, there were about 4 reasons or more for the market to be turning in this region. Following the above occurrences, the market began selling off and providing multiple excellent selling opportunities through the end of the session.
We can also find another pattern worth knowing in the ES for today. The ES has been trading at new highs for 8 sessions or more on the daily chart. When this occurs, the market has to be analyzed differently than it does when in a trading range. Today the ES tagged its lower 60 minute SmartZone from above. The interesting thing about this test is, it is actually pretty rare to see this and the market made a solid upward run off the 89EMA:
All the above tools and techniques are taught in more detail in our ESSP trading system and course. For more details about this system, visit the following page: http://indicatorsmart.com/product/es-smart-patterns-for-bloodhound/
If you have questions or interests in improving your trading, send us a note. We are happy to help.
That's all for now....
Rob Blog, Discretionary Trading Indicators, Intraday and Day Trading Indicators, Momentum Trading Indicators, Trade Position Management Indicators, Trader Mentorship and Consulting - Learn to Trade, Trading Courses and Trading Education, Trading Tool Packages, Trend Trading Indicators 0 Comments
Rob Blog, Discretionary Trading Indicators, Intraday and Day Trading Indicators, Momentum Trading Indicators, Must Have Indicators, Trade Position Management Indicators, Trading Courses and Trading Education, Trading Tool Packages, Trend Trading Indicators day trading, Emini S&P, learn to trade, trading systems 0 Comments
We have a lot of new students and so I would like to review today's action in the CL. I traded in the CL today because we were between two zones. If you would like to learn more about this trading method you can view the webinar with Shark Indicators by clicking HERE
Rob Blog, Counter Trend Trading Indicators, Discretionary Trading Indicators, Intraday and Day Trading Indicators, Trade Position Management Indicators, Trading Order Flow Indicators, Trend Trading Indicators, Uncategorized supply and demand indicators, support and resistance indicators, trend trading 0 Comments
Smart Super Trend (SST) analyzes patterns on charts and order flow associated with them and marks out these area on your charts. Due to the design, you can use the lines in any number of ways to understand what is going on in the market you are trading.
To list a few:
1) As an entry trigger (three different ways)
2) As a trailing stop.
3) As a supply and demand pivot system.
The first entry Trigger system you can use on the Smart SuperTrend is when you initially get a new line. For example, if you get a new blue line under price, then SST is telling you there is strong buying and price is not immediately likely to come down and back through the most recent bars. For any of the patterns, it tells you this based on the order flow within the bar- so it is showing you something you cannot see and something about the quality of the movement inside the bar. A Trigger line is often after a line of the opposite color, but it does not have to be in all cases (to view charts larger than shown, click them and press the ESC key to return).
Once a signal line is issued and price begins to move, SST will often move the line as price moves. So, in the above mentioned blue buy line, it would be moving the blue line up, trailing price as it goes. As soon as the line moves to a second new position from the first (i.e. a blue line is added above the first one), we call it a Trail line. The second Trigger system is to trade a break of this Trail line.
The third Trigger is the most stringent of all because you want both conditions. In this case, we get the blue buy line but wait for price to go through the trail line. This method is telling you two important things that give you a confirmed entry. In plain English SST would be saying (for a buy), I am currently moving through an area of strong selling in price from the past, but at the same time, I am seeing very strong buying activity that supports the higher price change. In this way, I have a kind of value area price breakout that is occurring on strength. So enter on the Trail line on a stop. In this case we would want to set the tool offsets tightly and look for areas of good trade placement where the change in balance is occurring.
You may choose to trade SST on its own, but your best opportunity with these triggers will be to filter it with a support and resistance analysis (i.e SmartSupportResistance, SmartVolumeProfile, LogikVolumeWand, floor pivots etc.) or oscillator reading techniques (tools such as the SmartSuperMACD or SmartMomentum). As is the case with any good system, there are usually elements that are working against one another; a constraining element that identifies context and a triggering system.
The nice thing about SST as a triggering system is it is trying to make sure you are entering where your entry is somewhat protected due to the order flow. This can stack things in your favor a bit, giving you an edge.
SST can be used as a trailing stop also. We discussed how the signal line is followed by a trail line. As a line trails price movement, SST is saying (for our upward moving market) I see strong buying as we go higher so the market is not that likely to go lower here so it is safe to move the stop higher to this area. Of course as the market goes higher and higher you may wish to protect your position even more using discretion because SST is always placing the levels outside of the bar (below in the case of the upward moving market), and it may be appropriate to tighten more for your money management.
SmartSuperTrend can also be used as a zone supply and demand system. When markets pivot, there is a shift in supply and demand, and from where buyers are in control and sellers are in control. These are important areas on charts. When you see a market turn and you see a red and blue line that defines that pivot area on the chart, you can draw a box forward from that point. Because this area is made of strong buying and strong selling, it defines a battleground area on the chart where supply and demand shifted. When pricing comes back into that region, you will often see a turn again. So you look for appropriate signals around those points. These are always counter-trend type scenarios, so you can use tags into these areas to enter with a bigger trend or if the market is, for example over bought and is tagging into one of these zones.
There can be a bit of an art to drawing zones as in the above example. You first identify a pivot on the chart and, while using SST in Backtest mode (as shown above), find the most recent red and blue lines or the highest for a swing high pivot or the lowest for a swing low pivot and draw it. Experiment and adjust your technique as you go.
Sometimes the market will not be moving much and will consolidate within a zone or between a red and a blue line. In these cases, SmartSuperTrend is telling you to use caution because you are trapped between two areas of strong buying and selling. This is true because SST should be outside the lines if the market is trending (above a blue line and below a red line). If it is between them, then the market may be consolidating and caution may be the best policy.
So what is so Smart about SmartSuperTrend? It can be used in many ways to meet your needs- As a triggering system, as a support and resistance and supply and demand system as a position management system. It can also help you to know when a market is in consolidation. These are all excellent applications of SmartSuperTrend. This is particularly true when used prudently in conjunction with other systems, SST can give you an excellent edge in your trading. Get Smart and get SmartSuperTrend today!