Live Trade Example - Setup 1 and Add ons to Maximise Profits

A Thing of Beauty - Setup 1
The Rewards of Waiting for the Setup to be Just Right


Woke up this AM to see that EU trend just before Franfurt Open, so I thought it was good time to relax and have fun with little Adam and Sarah. My too angels. (Dare I say that LOL)

Patience and Discipline - We Get Paid to Wait


After much wait , which was NOT boring, was fun. I was just watching the price nicely go into a saddle on m5. and keeping an eye on m1. as soon as M5 created a saddle point (setup 1) aims levels nice and tight M1 turned an even "a thing of beauty" Picasso Setup,  Setup 1 (saddle point). I was so excited and so confident I added on on every aims level I could see. Even a balance line trade. The path of least resistance was down and I was in tune with the market. Hence the path of least resistance of the "energy" of "pips" was in my "pip bank".

With 4 entries and a lovely drop got me +100 pips in no time.

But how did I do it? 

It was NOT just 5 minute trade. It included all the time of being patient and discipilne througout the London session. Just when othes left their screens I sat down (hehe)

The fruit of this Mantra.
Keep Things Simple. As simple as they are. Don't try to constantly improve things.
"Let go of the thought to make things better,  they are already good and getting better every second all by its own. All you have to do is enjoy it and allow it"

Luckily I took pictures just after I took my first entry and then add on. And later at the end. so I'll post all the  pictures. I really hope this helps. May it boost your confidence. It sure helps me.

Have a nice weekend everyone. 

Watch how the first Entry was stuck inside AIMS but was coming off a proper Setup 1

A Look At M5. I have M5 and M1 on 2 Screens. Since I trade Only EU on these Time Frames its rather Relaxing

By this time the trend was confirmed. As soon as the trend is confirmed "Be Aggressive".  You can see 2nd add on pending below current AIMS Level

And now the 2nd Add On triggers.

Finally trailing candle too me out just above the "Bullish Divergent Bar". a Total of +42 + 34 + 28 + 23. I'll let you do the math.  Just imagine they were all .5% risk at 15pips. What do you get

ps: please dont worry about the purple line one this picture. its still under testing. it is very good and I'm still working on establishing a solid rule for it. A lot of people new to the sysetm would initially find themselves stuck during range bound markets. Following this help greatly but like I said, i will give its own space in a separate post. so bear with me please!

How to Trade the Dots - AIMS Entry Indicator

Here is a beautiful trade for this morning. Using NO LOGIC. Just wait for alert. Put pending. Wait for Alert Exit.
Simple is THIS!

Setup 1.  At the time of putting pending order short, it was Setup 1. That is the alligator was sleeping and price was inside aims and dot was inside aims as well (meaning the candle with the red dot was still inside aims.)

Setup 2. At the time of trigger the alligator had opened up already. So we put our pending around Setup 1. but by the time our order triggered it had converted into Setup 2. Setup 2 usually comes right after Setup 1. But Setup 2 can at times come without Setup 1.

How to trade the Dots

Another fine example. It was not that easy though. It required patience and discipline. One thing that I learned from my friend Bill was this, Patience and Discipline. and no its not Bill Williams, (I wish) its another trader of the ghetto. So patience and discipline go hand and hand. One cannot exist without the other. Some say its the same concept two dimensions. I'd like to show here how you can put two charts side by side, either on one monitor or using 2 separate monitors and asses the situation without looking at any other time frame at all. Point to note AT ALL. I shall talk about the purple line some other time.  Explanation on the chart please click to enlarge to see the full picture.

Ok I know what you're thinking, i did not exit on the blue dot but dont you worry about that. In order to start trading "Stress Free" you must train your self to enter using dot and exit using dot. and with time before you know it you will learn how to take maximum out of a trend. That will be the time when you will know without knowing how you know but you just know. It only comes after consistently staying in the now. That is taking entry setups and exit setups without thinking. Gradually your intuition develops and you just go with the flow. you're in the zone.

Setup 1. On the right the M1 Chart is an example of Setup. Alligator is sleeping (lines inter twined and flat, AO close to Zero Line.  while at the same time if you looked at M5, it was
Setup 2. Looking at M5 chart we see that at the break of first AIMS Level outside Alligators mouth, Alligators mouth is already opened up to the downside. Though we had earlier entry using our "Edge" , that is the M1 entry. This minimises our losses and increases our Profits. 

Nice Trade - Setup 2 Entry

An Example of Setup 2 First Entry.

note that by the time I entered, Alligator was nicely open to the down side. and the first entry was essentially at the break of the first AIMS Level outside the Open Alligator's mouth. We need to start our campaigns closer to the point from where the alligator opens up its mouth. This was we avoid getting in too late into a trend. I must say the second entry was way too late but sometimes there are other factors in the market that I take into consideration and act accordingly.


An Example of  SETUP 2 - Open Alligator

Setup 2 - How to Trade the Dots

Just wait for the Dot Alert then 

Check the Setup Rules

Setup 2 Example

Now wait for Exit signal. If you took short trade, like below, using a Red Dot alert wait for Blue Dot. 

If you took a long trade using a Blue Dot wait for red dot to exit. Could it be simpler than this?

Edit: 25th July 2011

Empty Chart followed by explanation of how to count Elliott Wave in 10s and How make entries and exits on Dots

Empty Chart.

Find happiness and fulfilment in your life!

If you want to find greater happiness and fulfilment in your life, 

You must begin to live in harmony with the natural rhythm of the universe.

You must choose to live in a place of gratitude, 

greater peace, and higher conciousness. 

You must learn to follow your bliss, 

do what you love, 

and make time to find joy in your life. 

It is your natural birthright to be happy, 

and it is your obligation to express yourself

through your natural gifts and talents in a way that brings you joy. 

By doing so, you are also making an essential contribution to the world we live in.  

(Jack Canefield)

The markets are a natural phenomena. 

Chaos is the code of life. 

Our setup is based on Chaos. 

Trading chaos is trading in sync with the natural law of the universe. 

Isn't it amazing to know that when we trade our setup we are in line with the natural order of the universe?

and now time for some
Stress Free Trading Example

"To Choose to Choose or not to choose"

I'd like to quote something very important here.

"The market will always be a reflection of you"....
"If you are not having fun trading, you are doing it all wrong"....
"most important choice in the world is ,'either to choose to choose or not to choose'"
If you choose to follow a mechanical system you have not really chosen to trade the market.
and all mechanical systems will fail. You need to see through your need to be dependent on others.

"Your true nature is all you need. "  Let it show you what you do not need.

Every trader and investor wonders if there is great secret to successful trading - and there is. But it is not really a secret. It has been right in front of us all the time.


Listen quietly for a moment. Everything can change right now. Learning to hear this supreme secret is no more difficult than choosing whether to swim against the current or to let it carry you safely down-stream. 

Let the secret speak to that secret part inside of you. Listen to it now. It is showing you

THE HOLY GAIL, 

which is

Want What the Market Wants

Trading Chaos 2nd Edition p. 44

Came back from late Gym

I had put a pending on m5 to target 5th wave. that hit its target for 29 pips. but what happened was interesting. market was really volatile. So I targetted 5th of that spike up and this is what I achieved. off to bed now

Count Elliott Wave in 10 Sec

Example of Setup 1 and Setup 2. In the Chart below the blue arrow that point to the Red Dot is the spot which we Call Setup 1. The next AIMS/Fractal Level immediately after it broke down is what we call Setup 2. At the Red Dot alligator was sleeping. While at the second break Alligator mouth was open to the downside. 

 

Updated 11:00 BST

Setup 1 and Setup 2

A quick 70 pips with 1st Position off Setup 1 and add on with Setup 2.
Price is out of Alligators mouth and out of AIMS on Dailies, H4, H1, M15, M5 and was just setting up (Setup 1). Put pending with minimum risk at 26, and then when the breakout was confirmed, alligator opened its mouth using Setup 2 made second entry. 

 

ps: The secret Purple Line is something I have not talked about! 

What do you ask at the end of a Trading Session/Day/Week?

Typically traders ask these questions

*          How much money did I lose today?
*          How much of my trading account have I destroyed today?

or the affirmative questions,

*          How much money have I made today?
*          Home much has the account grown today?

Regardless of the questions above and the answers to them, this attitude is going to disappoint you. It is going to frustrate you and promote fear of trading. Its going to invite anxiety and confusion. Its going to put you in to the dreaded downward spiral.

So what should we ask? What is the Correct Question?

Many traders, particularly beginners, look at how many trades they won or lost during the day. End of the week they look at home much have they made or lost.

While it is also important to know how much money you make during a certain period the question to ask at the end of a day is not "How much money have I made".

The question we should be asking First and Foremost, is , in the words of Bill Williams,

"Was I in tune with the market?"

Bill Williams writes that we need not know worry too much about the balance of account at the end of a session or a trading week. Rather our primary focus should be on the "Flawless Execution of our Plan".

We need ask ourself these questions

1. Did I take all good quality setups?

if not, we need to find out the reasons. It could any combination of the following;

a. Procrastination
b. Absent Mindedness / Lack of Focus and Concentration
c. Fear of Putting a trade
d. Fear of losing
e. over analysis or paralysis of analysis.

2. Did I exit the trades that I took correctly?

if not, we need to find out the reasons, it could be any combination of the following:
a. Greed
b. Fear/ of in some cases desire of closing break-even
c. Fear of not hitting a perfect exit, right at the peak of that wave.
d. Hoping for price to come around

3. Evaluate trades taken as per rule and trades taken against rules separately.

If after the above analysis you find that you have been disciplined and taken all the trades according to the plan but still lost money that week or day,

pat yourself on the back, have a date with yourself, reward yourself and have some fun time.

Why?

Because you have shown "Successful Traders Traits".

You have exercised the art of  "Wanting What the Market Wants". 

You have used the "The Holy Grail of Trading" 

You have exercised being "In Tune with the Market". 

and when in tune with the market that is when
=======
in The Zone
=======

iTradeAIMS.com

Do you know the system inside out but still not making money?

If you are one of those who know their system but still either consistently lose money or not making money you might want to read this.

You may be suffering from two inter linked things. Fear and Procrastination. They are both the main reason for failure. It is the opposite of decision and Lack of decision making skill is on the top of reasons for failure as agreed by many scholars and writers around the world.

The ability to quickly and effectively arrive at a definite decision is the difference between successful and non successful traders/people. Hence the 10second rule.

Do you think you can take a setup within 10sec? If not procrastination might be the cause.


The fear of trading is what gives birth to procrastination. Its the killer of all opportunities.

How to cure Procrastination:
There are many books on this very important topic. I sometimes suffer from this and all the "coulda, shoulda, woulda" kill me afterwards. Bill Williams was asked what was the worst thing that could happen to him and he pointed towards procrastination. I would put in words like so, "If I were to see a setup and not take it that would kill my trading"


"Procrastination is always based on a dysfunctional world-view, such as that "short term relief or pleasure is better than sacrifice for long-term rewards," along with irrational disregard for negative consequences. The procrastinator fails to engage in the appropriate course of action either due to a distraction of some sort or an inadequacy in their own behaviour. Various distractions and incompetencies that can cause procrastination include, but are not limited to:

• Addiction
• Anxiety and fear
• Arrogance, pride
• Aversion
• Bad habits
• Discouragement
• Disorganization
• Distraction
• Family problems
• Fear of failure
• Feeling overwhelmed
• Frustration
• Illconceived goals and unconscious motives
• Indecision
• Lack of awareness
• Lack of morals
• Lack of time management skills
• Low ambition
• Low frustration tolerance
• Low self-esteem
• Low tolerance to stress
• Objective conflict
• Paranoia
• Perception of difficulty
• Poor attitude
• Poor self-control skills
• Poor study skills
• Rebellion
• Resentment
• Self-centeredness
• Self-deception
• Uncertainty"    (http://en.wikibooks.org/wiki/Overcoming_Procrastination/Causes 

In later posts I will share how I deal with Procrastination problem and what is my Mind Exercises routines. They help me stay in control, relaxed with sharp focus and happy.

The Girl said, "EURO Dollar Red Dot Five Minute"

This is how the Entry Alert Works! Am loving it!

When the Alert comes, wait for it to setup. Some times its setup already. Today at the time of the alert it did not look like it was going down. But after a few candles it was all clear. Entry at 1.4337. I exited prematurely (the left won today) for 50 pips. Did not add on did not stay through. Perhaps the "fear" of NFP obscured my vision.

=================================

To get the template and indicators click here.

=================================

EU H1

A Perfect Red Dot Entry Signal, Wait for Rules and Put pending below AIMS

Entry Indicator Example

Question! Inner or Outer AIMS Levels

The Question is when you have a saddle point should I take the inner fractals or outer fractals. 

In the following picture you'll see that I took a third entry from a saddle point. At first I choose to set pending order at the AIMS level marked by yellow horizontal line showing outer most fractals Level was at  1.4290 for I set PO at 1.4289 that is 1 pip below AIMS Level for shorts as per rules for short trades.
Later I felt like it was ok to move to inner most fractals. The reason was that now I thought price had travelled enough sideways inside even a tighter range. there are advantages and disadvantages of it. its always a subjective decision. outer most fractals are safer , in that you dont get whipsawed but the downside is that you give back more if it turns around on the contrary inner most fractals has more chance of whipsaw but potentially smaller risk and larger gains. So the same universal law of risk applies, the higher the risk the higher the return should be.

A perfect Morning for the Dots on M1

I'd just like to show how to dots alert me to trades when we have setup 1, saddle point and later re entries into a trend.

M5

ps: dont worry about the purple line, I'll explain in time!!!

How I Caught 50 Pips in Flash

As soon as I finished answering Erik's questions, I heard Heather utter these words, "EURO Dollar Red Dot One Minute" (thank you Michael),  I looked and saw a spike and retrace immediately put pending and out for 30.
similar for Swissy (usdchf) on m5 and out for 50 pips in a flash!

These charts they do have a structure! they do eventually complete the fifth wave!
dd




Swissy!
Entry was timed on m5, picture and fibs from m15

here is how the swissy looked on m15, I got my TZ1 and TZ2 from this)

Question Time!

Thank you Erik for your questions. I'll try to answer as best as I can!


5 questions please:

When M5 is at saddle point:


Option 1.
If AIMS levels are two shallow
WE bracket the market using outer most fractals of M5

1) You mean you will not wait for an entry on M1 but a break of AIMS levels on M5?

Imran:  Yes, we bracket outside M5 only. and we might add on once the trend is confirmed, using Aims levels on m1, or m5 or both.

Option 2.
If AIMS levels are Deeper then 15-20 pips
and/or the outer most fractals are wider apart,

2) You mean 15-20 pips from a AIMS limit to an other or from AIMS limit to Red line?

Imran:  As a guideline for EURUSD on M1 time frame,  if AIMS Level are farther apart more than 20pips then its too much risk. And yes I mean from one AIMS levels , i.e. from either Upper AIMS Levels to Lower or  vice versa. If you chose to exit on candle close of red line then you need to see how far is your entry from red line. if that is over 20pips chances are you might have to sit through a retrace.

We find a saddle point on M1 and bracket it.
or Target a First bar of AO and Break of AIMS setup on M1.



Rule 3. Is AIMS Level Close to Red Line?
e.g M1 <15 pips M5 <25 pips.
(Rule 3 Modified 28/04/11)
3) It s 15 - 25 pips from AIMS limit (fractal) to the red line, right?

Imran: Since we always make entry on the break of AIMS we dont want our entry to be too far from red/green line. since that would mean that if it turns around we might be hit with a bigger pip loss. but if you adjust your %age risk / lot size according to where your stop loss should be, then it should not bother you too much apart from the fact that the farther away from alligator's mouth you are, the more chances of price retracing back to it and that when it does you may get a bigger pip loss. 

4) Set up 2 Open Aligator:
If the alligator is opening and this a set up 2, would not be the AO not at the ZL? Would u entry the trade, if the alligator is opening and if this is the 3rd or 4th bar of the AO?

Imran: AO should be close to ZL, when Alligator mouth is open most of the time it wont be first bar of AO, the first bar of AO is a term I use for timing entry roughly near the cross of ZL of AO. so yes it could be that AO has already crossed over, but not travelled too much.  (not peaked yet)

Most Important Concepts
First bar of AO setup always catches Wave 1 and 2 no matter candles show it or not.

4) Sorry i dont understand this. A wave 5 would not start with a first bar on A0 as well?

Imran: A wave 5 may also start with first bar of AO, and in that case it will help you catch the 1-2 of the 1-5 sequence of the fifth wave, we know that 5th is impulse wave and it is also made up of 1-2-3-4-5 waves. In my expereince if I see 3rd wave on m5, its usually easier to catch 1-2 on m1 for the 5th wave. but everthing has a downside to it. e.g. if m5 has completed a third wave and you trade on m1, you will be trading through a 4th wave and thats not a good place to be. perfect example is todays session. Asian was 3rd wave on m5 and through London and NY session it stayed through the 4th wave. 

5) If M5 is not at a saddle point but M1 is. What would be the set up? Would you entry the trend in the same

direction than M5 trend only?

Imran: when you find a saddle on m1, you'd put a pending in the direction of m5 alligator. but if you see that m5 has already completed 1-5 sequence than as per rules of saddle point you'd bracket it. 

Remember the most important bit of saddle point is that you must play with smaller lots. once the trend is confirmed that's when you add on a higher lot size. so when you lose you lose less, when you make you make big!!!

THANKS A LOT Imran:  thank you Eric!!!

ERIK

Update to previous post

AU

Is now in the fourth wave!

EU, possible set for further longs, blue dot with an AIMS level... one could go long

Ucad, at the lows, we need a bit sideways here, but still could be ready for fifth down

EJ, also done alot and needs a sideways so we could have a tight gator even on h4

UJ, now set for long and short. bracketing is the way to go.

Swissy, now confirmed in 4th wave, we wait!

NZDUSD, interestingly has been wonderful pair that I have ignored might start trading it again.