trading atts with clarifications...clarify, simplify & multiply this has been the motto of...
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Trading ATTSWith Clarifications
WWW.ACTIVETRENDTRADING.COM
DENNIS W. WILBORN, SR.
“It doesn’t happen every time, but it does happen all the time.”~~ Yogi-ism: from Mike Trager
Clarify, Simplify & Multiply
This has been the Motto of Active Trend Trading from the beginning!
We continuously work to Clarify & Simplify through refinements to the system to make it objective and easy to both learn and use.
The purpose of all presentations is to provide our fellow Active Trend Trader Members a jump start to accelerate progress up the Learning Curve.
We welcome suggestions on how to improve the learning process!
Trade Wisely & Profitably,
Dennis W. Wilborn
Founder & Lead Technical Analyst
DisclaimerU.S. GOVERNMENT REQUIRED DISCLAIMER – COMMODITY FUTURES TRADING COMMISSION
FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALS O LARGE
POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN
ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS.
DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS IS NEITHER A SOLICITATION
NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION I S BEING MADE
THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE
DISCUSSED IN THIS TRAINING. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR
METHODOLOGY 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 RESU LTS DO NOT
REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN E XECUTED, THE
RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN
MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PRO GRAMS 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.
ALL MATERIALS PRESENTED ARE FOR TRAINING PURPOSES ONLY . TRADERS SHOULD PAPER
TRADE ANY NEW METHOD PRIOR TO RISK OF PERSONAL CAPITAL.
Objectives-
- Show Specifically how to Trade the ATTS system
- Not every trade is a winner
- Whipsaw is still a reality with any Trend Following System
“It doesn’t happen every time, but it does happen all the time.”
Copyright 2012-2015 Active Trend Trading
Target Shoot—But How?
The Trigger: Close Above/Below the 8 Period Moving Average
Entry: Pullback to around the 8
Apply Back to the “8”
“Vision is the art of Seeing Things Invisible!”
~~ Jonathan Swift
“People Only See What They are Prepared to See”
~~ Ralph Waldo Emerson
“Observe things how they are;
See things how they can be!”
~~ DWW
Copyright 2012-2015 Active Trend Trading
Back to the 8 Period Moving Average
- First close above the 8 day EMA after a downtrend has started will fail
- Often the second move up after a long downtrend has a higher probability of success
- Know the date of Earnings
“It doesn’t happen every time, but it does happen all the time.”
Copyright 2012-2015 Active Trend Trading
Example of 1st & 2nd Time Failures
1 2
3 Third Time Leads to a Runner
The Set Ups
Prerequisites: Close above the 8 Period Moving Average
1. Target Pullbacks to around the 8 period moving average
2. Establish Stop Losses
3. Establish Profit Targets
4. Establish when to move Stops
RulesThe initial 8 Period EMA Trigger has fired
1. Define value of 8 period EMA
2. Place Conditional Order at a defined level
3. Stop Loss 2% on Intraday Triggers; 4% on Daily Triggerso Once up by 2% Intraday or 4% Daily—move stop to close below/above 8 period EMA or
B.E. but choose one!
4. Profit Targets: T1 = Intraday 2-5%; Daily 5-20%o Options take profits at 30% & 50%; use close below/above 8 day as trailing stop on
remaining contracts
5. If price movement triggers a longer term chart consider using the longer
term chart to exit on a close below the 8 Period Moving Average—Will be
covered next week.
USE SIMPLE SPREADSHEET TO CALCULATE PARAMETERS
EXAMPLES—DAILY
Touch 41.08Stop 4%: 39.43
T1 10% = 45.18
T1 5% = 43.13
Touch 39.86Stop 4%: 41.45
T1 5% = 39.86 (Didn’t Make It)
Touch 41.25 Stop 4%: 39.6
T1 5% = 43.31T1 10% = 45.37
Close Above 8 dEMA
1
2
EXAMPLES—DAILY
Touch 124.92Stop: 127.41
T1 10% = 112.42
T1 5% = 118.67Touch 114.09Stop: 116.37
T1 5% = 108.38
Live Examples
1. All the touches we see on daily charts are not actually touches during
trading hours!
2. Estimate proximity to the 8 day EMA. The more you do it the better you
get.
3. The estimating factor: It depends on the size of the Stock, but typically
around 10¢ and $1.00
Copyright 2012-2015 Active Trend Trading
Live Examples
1. All the touches we see on daily charts are not actually touches during trading
hours!
Copyright 2012-2015 Active Trend Trading
Copyright 2012-2015 Active Trend Trading
YY
1. Want to enter YY for a Pre-Earnings
Run—Earnings (11/11 AMC)
2. Close Above the 8 day EMA (57.47)
3. Define Entry Criteria: Pullback to
57.75
4. Conditional Order Stop-Limit: 57.75
x 57.85
5. Stop Loss if filled 4% of fill amount
6. T1 = 7.5% of fill amount
T2 = 15%
7. Number of shares = Capital / Price
$17500/57.75 = 303.03 shares round
to 300 shares
8. Place Order with One Triggers Option is
available to trigger the stop loss, T1 and T2
orders
The Order: Think or Swim
Copyright 2012-2015 Active Trend Trading
Conclusions
1. Clarify the Trigger – Close above the 8 day EMA
2. Clarify the Entry – Pull back towards the 8 day EMA
3. Also applies to other time frames
Copyright 2012-2015 Active Trend Trading
Copyright 2012-2015 Active Trend Trading
Copyright 2012-2015 Active Trend Trading