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[MUSIC PLAYING]
Adam Halpern here.
I'm the president of Indicator Warehouse.
About two years ago, in late 2010, I created a
folder on my desktop.
I called it the Ultimate Day Trading System.
This file is were I kept every note and every request for any
feature one of our trading customers sent
to Indicator Warehouse.
And many of these requests we've been able to accommodate
with new indicators or upgrades
to our present inventory.
But there was a section of the file that
took on its own life.
In fact, it became the subject of ongoing conversations with
veteran trader and my original teacher, Eric Senft.
Let's face it.
There are plenty of good systems out there.
But they all have one thing in common.
They all force you to wait for the good setup.
Have you ever heard this one before?
Trading should be boring.
Or, you need to sit on your hands and
wait for a good signal.
That's called being a disciplined trader.
The problem is, this is incredibly hard to do,
especially when you sit there staring at an endless river of
price action and potential profit
flowing across your chart.
I think you'll agree with me.
It's pretty hard to just sit there and watch other people
make money 24/7, while waiting for your system to alert you
with a good setup.
Often, our patience runs dry, and we get sucked into taking
a trade just because we're so darn tired of waiting, and
would rather take the risk of a bad trade than wait for a
better opportunity.
In a nutshell, it sounds simple.
Traders wanted a system that showed them a lot of good
trade setups with as little risk as possible, and of
course as much consistent profit as possible.
DTS, as we call it has not one, not two, but three signal
generators, each designed to look at an instrument or
correlated instrument in different time frames, in
order to reveal the maximum number
of good trades available.
The cool thing with DTS is that you can take three trades
at once in three different frames, never missing a good
opportunity for a solid trend, swings, or scalp trade, all in
one system.
What we're going to talk about today is we're going to have a
little bit of an overview of what we spoke about at
yesterday's presentation, just hit some of the high points.
And then we're going to look at that Diversified Trading
Systems, or DTS, and show you how we've taken some of those
important features that we discussed yesterday, and
actually incorporated them into what we consider to be
the best trading system out there.
And I'm going to tell you why that is.
So first a little bit of an overview.
With a complete trading system, we are looking to
incorporate three variables.
A trading system needs to have an entry, and exit strategy,
and a money management strategy.
That is what a complete trading system entails.
Too many trading systems only focus on the
entry part of the equation.
Because, let's face it, that's the sexy part of a trading
system, finding a good entry signal.
But I'm going to show you today why having a high
probability entry signal is not the be all end all that
everybody thinks it is.
Too many people get caught up with tweaking the signal that
they never really learn how to trade.
So with DTS, we've incorporated all three of
those components into one big package.
Now the horse that I was beating to death yesterday was
that everything needs to be clear and concise.
You want to be able to generate a clear signal.
You want to know without a doubt, yes I should be taking
this trade, no I should pass on this trade.
And we've endeavor to do that, again, with DTS.
Now the nice thing about DTS is that it is actually three
systems in one.
Now you can purchase just one of these systems.
However, it's been designed to function as three separate
entities all working together.
You see, most systems fail because they don't account for
changing market conditions.
There's the old adage that if the only tool you have is a
hammer, everything tends to look like a nail.
Well with DTS, we actually have three systems.
On the top here, we have the Hawk Micro-Scalper.
In the middle we have the Falcon Swing Trader.
And at the bottom here, we have the Eagle Trend Trader.
Now what makes DTS unique is that each of these signal
generators, the scalper, or the swing trader, and the
trend trader, all are designed to look at the market from
their specific point of view.
In other words, we haven't just taken one signal
generator and transposed it across the board by changing
the time frame.
What we've done is we've actually developed a scalp
specific system, a swing trade specific system, and a trend
specific system.
So each of these systems looks at the market in its own
unique way.
And they're designed to pick up the certain characteristics
of each time frame.
The other unique thing about DTS is that you can trade it
practically on any market you want.
You can see here on the Hawk Micro-Scalper, I have the
E-Mini S&P. Here in the middle, on the Falcon Swing
Trader, I have the Mini Russell, the TF.
And then here at the bottom, I have the 6E Euro on the Eagle
Trend Trader.
Some people like to trade totally unique markets.
You could, if you wanted, let's put
soybeans here on the top.
You can put soybeans on your scalper.
Look at that, looks like it was a pretty nice scalping day
for soybeans today.
We have a stock index here in the middle.
And we have occurrence here at the bottom,
on the trend trader.
So the market mix is something that is unique to DTS.
You can incorporate any market you want.
And similarly, if you wanted, let's say you just wanted to
trade the Russell across the board, and you wanted to
capture trend trades in the Russell, you wanted to capture
swing trades in the Russell, and you wanted to capture
scalping trades in the Russell, well DTS allows you
to do that too.
Sometimes, when the market is making bigger moves, you will
actually get, say for instance, if the Mini Russell
is in a strong uptrend, you'll actually be able to generate
scalp signals against the dominant trend as the market
is making a larger reversal.
Again, that's something that's totally unique to DTS.
And that's because each indicator has been designed to
look at the market in a certain way.
All right, let's just take a quick look at what each of
these look like.
And I'm going to show you some of the options
available with each.
Now we've tried to de-clutter the
charts as much as possible.
This is the Hawk Micro-Scalper.
It's going to generate most of the signal.
So you're going to see a lot more signals on the Hawk than
you well on the Falcon Swing Trader or
the Eagle Trend Trader.
And what we've done is we've designed it so that you
actually get a warning dot before the
market prints a signal.
And we've added an additional feature, in that you can
actually turn your audio, you have an audio warning here
that you can turn on and off.
So when the market conditions are met, it will
actually say Scalp.
So you can go to your Hawk Scalper, and it will alert you
to the possibility of a trade.
So what this does for you is, you don't have to be glued to
your charts.
You can have your charts going.
You can be reading a book, playing your guitar, knitting
a sweater, or whatever.
And as soon as the program tells you Scalp, you go turn
on your Hawk Micro-Scalper.
And you say, oh yes, all right.
There's a warning dot.
And we've got green bars.
We have a green micro trend line.
We have a green macro trend line.
And we have a green filter.
And so that's a buy signal for us.
When the parameters are complete, we print a buy
triangle and a hash mark, which is a suggested entry.
Now when we actually work with the DTS, and if you choose to
join us in the DTS profit run, you're going to see that we
have certain little nuances.
We don't always enter on the hash mark.
But the hash mark is a suggested entry point.
You can see this signal worked out very well.
We were able to scalp out to our first profit
target quite easily.
And we even have the option of trailing a stop on this
particular trade.
And it actually looks like we got two good little scalping
trades here within the space of about a half an hour.
So this is the Hawk Micro-Scalper.
Let's take a quick look at the Falcon Swing Trader.
And you can see that the Falcon Swing Trader is going
to have a different look to it.
The Falcon Swing Trader only has the one trend line.
And you'll notice that the trend line does change color,
depending on whether or not it has a bullish or bearish bias.
There is also a Falcon Swing Trade filter along the bottom.
And the signals are generated pretty much the same way.
First you generate a warning dot.
And in the case of the Falcon Swing Trader, if you have the
sound alert turned on, it will actually alert
you and say, Swing.
So you can go check out your Falcon Swing Trader.
You'll see that there's a warning dot.
And then the next bar, we print a
triangle and a hash mark.
And you can see it's green across the board.
We have green bar, green trend line, green filter.
And a very nice trade, as a result.
This is actually my favorite set up in the Falcon Swing
Trader, where we have a green trend line.
We generate a sell signal to the downside.
Now this is a sell signal that we would not take, because
it's not in sync with our trend line.
But seeing that the sellers are actually tripping a signal
that fails, it just makes us that much more confident to
take this buy signal.
When you see this signal develop on the Falcon Swing
Trader, it's almost as good as money in the bank.
And you'll see it happen time and again.
Like I said, my favorite trading signal in the Falcon.
Here is actually an example of the thing in reverse, where
the market came down.
Trend line changed color.
We got a buy signal that failed,
followed by a sell signal.
And you can see a nice opportunity to the downside,
very easy for the swing trader to capitalize on the
heart of that move.
So that's how the Falcon Swing Trader interprets the signals.
And once again, what we're doing is we're trying to keep
it as simple as possible so that we have green bars, green
filter, green trend line.
It prints a hash mark.
That's our intended entry.
So that's the Falcon Swing Trader.
Let's take a look at the Eagle Trend Trader.
And this one is really designed to try to pick up
some bigger moves.
Well, there haven't been too many big moves in the stock
indices the last couple of days.
A whole lot of choppiness going on.
And you'll notice that with the Mean Renko Bars, which is
unique to DTS and Indicator Warehouse--
this is our own proprietary bar style.
You can use DTS on any charting style you like, but
we do recommend that you use the Mean Renko Bars.
And the reason we do that is the Mean Renko Bars are just
fantastic for highlighting support and resistance areas.
It's quite obvious here where the buyers are--
right down here--
where the sellers are at-- they're right over here.
So we can place our trades accordingly.
If it looks, here we can see the buyers
came in a little early.
It looks like they're holding this area right through here.
And so we get a buy signal after that.
And you can see we're struggling a little bit here.
But that is a buy signal.
Let me put the 6E on here.
Because the currencies do tend to trend a little bit better.
Just for an example, so I can show you what it looks like.
Here you can see this was a textbook trade.
We have this trading band on the Eagle Trend Trader.
And what this trading band shows us, it shows us
directionality.
And it also shows us when to stay out of the market.
I like to refer to this as the neutral zone, just
like in Star Trek.
In Star Trek they had the neutral zone, where the
Romulans and the Klingons were hanging out.
This is the same kind of idea.
If you're trading in the neutral zone, you're just
asking for it.
So what we're looking for is we're looking for
opportunities that develop outside of this neutral zone,
outside of this trading band.
You'll notice the trading band has what we call a soft edge,
which is at the bottom here, and a hard edge.
Generally speaking, when the soft edge is below the hard
edge, we expect prices to lower.
And when the soft edge is above the hard edge, we expect
prices to head higher, simple as that.
You can see if I scroll back here a little bit, we can get
some very, very pronounced moves out of the Eagle.
It doesn't mess around.
It gives you a signal.
You can see the signals are fewer, but that's the way it's
been designed.
It is designed to recognize emerging market trends.
When you finally get a signal, you can expect a little bit of
follow through.
Same thing here.
We get a signal to the downside.
And we get some follow through, signal to the
downside, and some follow through.
So that's the thing with the Eagle.
It's designed to recognize trends.
It's interpreted the same way as the other two systems.
We were trying to stay consistent with our signal
generation, namely that you're going to get a warning dot.
The system will tell you Trend, so you can go to your
Eagle chart, and you see what's developing.
When all the trade parameters are met, it will print a
triangle and a hash mark, which once again is your
suggested entry point.
After which the market will tail off from here.
So that's the Eagle, the Falcon, and the Hawk.
Now you'll also notice that to the right here we have our
money management.
This is what we call our risk manager.
And perhaps I should show this on the Hawk, because it's
going to be a little bit nicer to see on the Hawk.
So here's the Hawk.
And a lot of times lately we've been following the mini
Dow on the Hawk.
So let's throw the mini Dow up here.
I still have some lines from this morning.
All right, so here's our risk manager.
Let me show you how risk manager works.
This thing alone is worth the cost of the DTS system.
And I'm going to show you an example why.
What most traders do, or fail to do, is properly capitalize
their positions.
They over capitalize their losing trades, and they under
capitalize their winning trades.
In other words, they lose more than they can afford when the
trade goes south on them, and they don't earn nearly enough
when the trade works out in their favor.
Because quite honestly, nobody knows where the
market's going next.
We say jokingly in the room, if you're chart is like mine,
it's all black over here.
It's easy to trade back here.
It's easy to trade on the left side.
It's not so easy to trade on the right side.
It's all black.
Nobody knows where it's going next.
So what you need to do as a trader is you
need to protect yourself.
And you protect yourself by never risking more than you
can afford to lose.
So that begs the question, how much can you afford to lose?
Well with risk manager, we have two strategies available.
We have the risk model, which will only risk a certain
portion of your account.
And we have the volatility model, which takes recent
market volatility into consideration when calculating
your risk exposure.
Because this is the YM, and it's a low value per tick
market, and that's actually a good thing, because it will
allow us take a sizable position, and capitalize on
what the market is giving us.
Let me show you an example.
So here we have the risk model set up.
We're risking 2% of our account.
I have it preset that I'm going to have
one target in play.
You can have as many as three targets, or no
targets, if you choose.
But I'm going to go with one target, and I'm going to turn
the runner option on.
So now let's say we've got a scalp signal printing.
We don't, but for the sake of the example let's pretend.
So we've got a scalp signal printing.
We know there's some resistance up here.
So it looks like I have another little tool on here,
which is an add on.
It's called the LogiCounter It's going to tell me that
this bar, if this bar finishes strong, it's
going to print at 131.41.
Well the hash mark is programmed to print one tick
above at 131.42.
So I can actually anticipate where that hash
mark is going to print.
And because it's going to print above this area of
resistance, I would be OK with taking that 131.42 hash mark.
So let's set up that way.
So we're going to enter 131.42.
And I do it simply with the click of a mouse.
It couldn't be easier.
Now where are we going to place our stop?
Well if you're like the average trader, who trades a
one lot or a two lot, you're going to stick your stop right
here below the bar, to try to minimize your risk, right?
Alright, but what happens?
The market usually brings you in, flounders around a little
bit, stops you out, and then turns around and goes in your
intended direction, leaving you sitting at the side of the
road, wondering what went wrong.
Wouldn't it be nice to be able to place your stop down here,
below the swing lows?
Sure it would.
But right away I hear everybody crying, well I can't
afford that?
Well how do you know?
Look at this.
Risk manager automatically calculates how much I can
afford to risk.
So risking 2% of my account or less, risk manager says, all
right, that will cost you $450 if you're wrong.
And you can go long with three contracts.
So our scalping target is usually a $50 profit target.
It's a high probability target.
I'm going to scalp out with $100 on two of my contracts.
And I'm going to have one as a runner.
So if this market explodes and heads higher, and I can tell
you it happens a lot--
look at here.
Take the signal to the down side--
actually I'll set up this way.
Take the signal to the downside,
so there's our signal.
There's our entry.
Let's say we place our stop up here, near our macro line.
OK, $420 risk.
We're short four contracts.
We're out with two on target.
So we've got $100 in the bank, in the account, and we're
trailing two more.
How exciting is that?
You automatically get out on target.
It automatically figures out for you how many
you're going to trail.
And you're able to capitalize on the rest of this move.
So if the market explodes and you catch a runner, you're
actually able to make a lot more money.
And I can't tell you, when the market is moving nicely, not
like it has been the last few days, but when it's moving
nicely, how many times this will happen.
So that a very exciting tool.
Now to make all this active--
let me go back to the current price.
So we're going to enter 131.42.
We're going to place our stop down here.
We're going to risk about $450, $460.00
All you need to do is click your Place Order button.
And now it is a live trade.
It's as simple as that.
A couple of clicks of the mouse and
you're ready to trade.
And if you don't like the trade, you cancel the order.
Clear your lines, and you just set up however you would like.
Now before we leave this, I just want to show you
something else.
You might say, well Eric, I really want to
set my stops tighter.
OK, let's set your stops tighter.
So we're going to enter 131.42.
And let's say you want to run your stops right here, just a
couple bars behind.
Oh, wait a minute.
I'm still risking the same amount.
I'm still risking $450.00
So you see the only thing that changes is your position size.
Your risk amount does not change.
So if this trade fails, you still only lose $450.00 Of
course if this trade works out, because you have more
contracts in play, you make more money.
But if you were at the seminar yesterday, we had that Paul
Tudor Jones quote.
Essentially, Paul Tudor Jones, one of the most successful
traders of recent times, he focuses entirely on this part
of the equation.
He's never risks more than he can afford to lose.
Now let's say you're still not comfortable with $450.
You just can't wrap your head around it.
OK, that's fine.
Let's dial it down here to 1%.
Let's set our trade 1%.
We're going to cover way down here.
Look at that.
We can still do this trade for $150 bucks And I'm sorry, if
you can't afford $150--
like that, that's nothing.
That's a rounding error.
So it allows you to adjust the parameters to take the trades
based on how much you can afford.
And it's the same thing, even if I set this tighter.
If I want to cover below or around the macro line here,
it's still $180, but we can get in now with two contracts.
So it allows us that option to have the runner in play, with
minimal risk to our account.
You can actually dial it lower still, depending on your
account size.
You can dial it down to a half a percent or quarter percent,
whatever you choose.
So a very exciting tool on the risk manager.
And I'm going to show you an example of how important
position sizing is.
But before we get to that, the last part of the tool is the
Profit Manager.
And that's what this little blue dot is down here.
Now Profit Manager, we actually have a dozen
different profit strategies to choose from.
We have the bar high-low, which is a proprietary one, to
Indicator Warehouse.
It's our own unique stop trailing strategy.
There's percent trailing, average true range, fixed
tick, simple moving average, whole moving average,
exponential moving averages, weighted moving averages,
Bollinger bands, swing highs and lows, parabolics, and
super trend.
And each of these are fully customizable and adjustable.
And you can do that all from your Indicator window, from
your panel.
You choose Profit Manager.
And you choose whatever your strategy happens to be.
And we can adjust all the settings here, however you
would like.
Now I only have the current bar turned on.
But an interesting facet is that you can either turn it
off so it doesn't display at all.
Or you can turn on all the trail of dots, so that you can
see how your profit strategy would have played out.
So for instance, remember this little trade right here that
we were looking at?
So at this stage of the game, here is
our hash mark printing.
So there's our entry.
And it looks like super trend is saying, OK, well your stop
should be up here.
So there's my stop.
So for $475 at risk.
So it seems like risk manager saying 2% of your account,
you're going to be risking about $500 or less.
I can get short five contracts.
I banked $150 right here on three of them, and then I was
trailing two more on the way down.
And if I exited where super trend took me out of the
trade, I would have exited here.
Or of course I have the option of getting a little bit more
aggressive, and manually adjust my stops also.
Let me show you something interesting with super trend--
I don't know if we're going to get enough market activity.
I'm just going to place an order.
Oh yes, by the way, you have all these different market
orders that you can choose from.
You have a market order, a limit order, stop limit, and a
stop market.
So you can adjust that, as well.
So let's go in.
I'm just going to show you, we'll see if Profit Manager
actually picks this up.
All right, so now we have a live order.
I'm going to change this to dollar amount.
We're short 20 contracts.
Granted, this isn't really the way we would set up the trade.
But for the sake of the sample.
Now I can turn Profit Manager on.
I know that's not visible to you, because it's actually
here in the menu bar.
And I know that's not displaying on the screen.
But I can turn Profit Manager on.
And now if prices head lower, Profit Manager will
automatically roll my stocks down for me.
So I can quite literally leave my computer.
And I have.
I can go to walk the dog.
I can go have breakfast, or a cup of coffee, or whatever,
and not have to worry about my trade.
Because Profit Manager--
I don't know how well you can see it, but it went from the
blue dot, the dot has turned red.
That tells me that Profit Manager is actually active.
Did you see that?
I tried to roll the stop away.
And Profit Manager picks it up, because I've turned Profit
Manager on.
Of course, I can turn Profit Manager off, as well.
All right, so those are some of the high points of DTS, and
why it works so well.
Like I said, we think it's the best trading system
out there bar none.
[MUSIC PLAYING]
All right, we've got our first target on our scalp trade.
It looks like things are headed our way with our other
two trades.
All right.
First profit target off on the Falcon, as well.
Currently working three trades at once here.
Already out of our first scalp trade with a small winner.
Made our first profit target here on Falcon Swing Trade,
waiting for our--
Profit Manager has picked up my trade on the
Falcon Swing Trader.
Looks like we may be getting yet another scalp trade
setting itself up.
Another entry here valid, down, price taps.
And we are beating up on the low of the day.
I'm protecting one tick here.
I've already got a winner on this one.
Let's protect what we have.
I've got a couple of nice winners under my belt.
There we go.
Now we're taking off here.
Here's what I'm going to do.
I'm going to grab, there we go.
Beautiful.
Number two.
Once again we've made yet another bar.
I'm trailing the bars, trailing the tops of the bars.
I want to protect every bit of profit that I possibly can.
What three signal generators can actually do for you.
Very exciting stuff.
A lot of different trades going on at once.
That's the cool thing about DTS.
And I just got another Falcon entry signal.
Currently protecting 22 ticks on the Eagle.
And I am protecting 25 ticks on the Falcon.
[MUSIC PLAYING]