Universal Market Trader Trading Blog

If your an active trader like myself, you have been stuck in some very slow markets so far in 2010. The volatility that we saw in late 2008 and 2009 has completely left the markets, making it diffucult to see consistent profits on our usual markets. For a lot of day traders, trading futures and forex have been the places to be. Trading the futures markets is my choice personally. The index futures are very popular for day traders and historically have provided some nice trading environments. However, so far this year that has not been the case.

So far in 2010 we have seen a lot of tight ranges and low volume price action. These are phrases that can send day traders running for cover. The nice part about the UMT is that it gives you the flexibility to change your markets so you can go where the action is. Markets that have shown some nice movement over the last few months are the currency futures. You don’t have to be a forex trader to look at these markets. They will look like a spot forex market and trade like a future.

The market I’m going to highlight today is the Euro Currency. Combining this market with the use of range charts has proven to be a really nice combination. One of the nice features about this market is that you can trade it in both the European session and the U.S. session. We track it on a range chart of 5. The range charts do a really nice job of filtering out the chop that we can see in the markets. Over the past few months this market has produced some very nice results. I highlight Monday’s session in the video below.

In today’s environment it’s crucial that you have  a system that gives you the flexibility to move between markets that are showing nice volatility. The UMT is a system that does just that. The system is the same regardless of the market you are looking at which makes any change very straight forward.

If you are getting tired of watching the index futures move sideways all session, take a look at the currency futures. You might be surprised at what you find.

UMT Euro Futures Video

The turtles.  Many trader’s out there know this story.  An ordinary group of people being taught how to trade.  All learnt the exact same method…same rules….totally different results.  One of their rules was to be consistent especially in taking the trade signals that were presented and how to “buy in” to a trade.

The first trade they had was in heating oil.  Keep in mind, they were not looking at charts on their computers.  Nope.  They were using charts from tabloid sized newspaper and had to update the charts at the end of the trading day.  Nobody knew how the trade would do especially that it would take out the previous years high.  Price rose from $.80 up to a little over $1.05.  For those that followed the system, especially the position size, their account exploded.  How many held full positions?  One.  The others found reasons not to be fully involved and gave reasons such as too risky, gone up too fast, thought the move would not last due to contract expiration.  They were all given strict rules.  Not following them on a whim, a hunch or thinking they could predict the market cost them some decent profits.

What is the point?  It should be obvious.

Unless YOUR trade plan has strict rules for standing aside on a trade…take the trade.  Deciding to risk 2% on each trade? Do it for every trade.  These rules should not be pushed aside because of a subjective whim or hunch you may have.  The trade you decide to not take part in OR use a fraction of your planned risk, will be the winner.  The one you jump in with both feet may win or lose…but you were consistent.  Consistency is one of the four keys that poured from the Turtle lessons.

1.  Trade with an edge
2.  Manage risk
3.  Be consistent
4.  Keep it simple.

Funny how many traders forget these basic four lessons.  It could account for the many many traders that get slammed out of trading every day.  Why traders lose their stake.  Why traders complain a system does not work (especially when others are doing very well with it!!!!).  You do not need to be a scholar, a PhD or a former member of the deans list.  You do have to be smart…and being smart means following the habits of those that have succeeded before you.

Did you find out why there’s more to life than time intervals?  If you missed this educational webinar, be sure to catch the recording:

Click Here for the Replay!

You know what I mean by ‘time intervals’, right? 1 minute, 5 minute, 15 minute charts, etc.  It seems many trading systems are optimized for time intervals – and depending on your charting platform (like MetaTrader), they may be your *only* option.

But believe it or not, time interval is only one choice among many when it comes to trading!

Specifically, we discuss:

-          Tick Charts

-          Volume Bars

-          Range Bars

Not to mention, who they are best suited for, pros and cons and caveats and caution flags for each. These questions will be answered in detail by my expert team of professional traders.

Forex, futures, stocks and options – we’re going to have some great information for all of you.

Click Here for the Replay!