It really looks like an expensive scam.
But unlike others in this lucrative branch, the design of his website is not bad.
Unfortunatly, it still a scam, give your money to the Red Cross, it's a better idea .
If someone have something as good as he says/writes, why renting/selling it ?
He just uses a 1 min chart without indicators. After an expansion bar he waits for price to retrace a little further than the midline of that expansion bar. Then he enters in the direction of the prior trend. This is a with-trend setup. It assumes that the retracement was triggered by profit taking and that the original trend will resume. I do not know if any additional filters are used.
For ES the target is 3 ticks, the stop loss is 6 ticks. So your profit would be 3 ticks minus transaction cost (USD 4.00 per round turn) , the loss 6 ticks plus transaction cost.
Profit per contract and trade : USD 33.50
Loss per contract and trade : USD 91.50 (including 1 tick slippage)
So you would need a success rate of 73% just to break-even. No errors allowed.
I do not think that this is a special opportunity and I would not pay for that advice, but try to develop a setup myself.
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Getting a 73% rate is a little hard because the area where he enters is where a lot of stop running occurs. A lot of stop gather right outside the expansion bar so you very likely will get a 'pop' as stops are hit. You have to be quick sometimes the pop doesn't last long. But you can get in and out if the pop moves three ticks.
Traders do know this, and they will play games on the tape to get traders like this to bite.
This system is well-known and widely used amongst professionals. All rational traders can use it, if they do not trade their own money. They get a bonus for the large part of their trades and the employer or the taxpayer takes the one large loss that comes up occasionally. Moral hazard is all about false incentives.
If you trade this system yourself, you are not confronted with moral hazard, but you need to take some money out of your account regularly, before you blow it all up.
I looked at the videos and noticed that he uses old tops as new bottoms for support, and old bottoms as new tops for resistance , you just put in your order at the level of the old top/bottom and hope for a fill 3 ticks away, and pray that your 6 tick stop loss is not hit. I believe that this strategy would have a slight edge , but I don't know if that edge would be enough to cover commissions and slippage (if any). I will sim trade it on Ninja Trader using replay data and give you the results. I don't know what ATO or Atlas Line is - feel free to share!
As for the question about why alleged successful traders sell their systems , I would say the answer is very simple : make risk free money! I would like to have more than one income stream, but I have one stream coming in and 100 going out, thus I remain with J.O.B. - Just Off Broke.
One red flag for me is that the scalper guy says that if you manage to make just a few wins from his method then you should walk away for the day. Why would you do that? If I had a consistently profitable reliable strategy then I would want to milk it for all it's worth. To walk away is like saying "if you are lucky enough to get 2 or 3 blackjacks in a row then walk away before you lose it back" - that's gambling WITHOUT an edge, not with one.
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In my experience when you scalp for 3 ticks and your risk is 6 ticks ideally you would trade more contracts to make your daily target and minimize the number of trades in a day because 1 losing trade nullifies 2 winning trades (without covering commissions). So if you start out with a winner or 2 count yourself lucky and walk away, go play golf, spend time with family, etc. Its when these type of scalp trades consistently lose that you get in trouble trying to win it all back the same day or week and get further in the hole.
I ran the replay data and traded ES using one minute candles. I looked at price only and used old tops and bottoms as levels to trade with the trend. 3 of 4 trades were winners and the result was a small profit . However I wouldn't trade it live you need to maintain a very high win rate to make decent profits, it's just too hard to do that.
It's marketing: just trade for 1hr a day and your done! Now you have the rest of the day to sail your yacht, lay out by the pool, or get in 18 holes down at the country club. You're living the American dream!
I watched some of his webinar videos on YouTube. He claims to have 80+% win rates.
If it were 90%+ it would be worth considering, me thinks. If 73% is needed to break even, then in a perfect world 80% would do, but in my world 90%+ would be needed to make up for inevitable losses due to human weaknesses.
I tested it again just now 8 winners , 2 losers ( not counting one loser, trade #5 , in which I went against the trend - a kamikaze gamble trade, the human weakness I mentioned! ). That is $150 for the day. I might try this strategy on SPY then I can take 2 lots (200) and scale out. Oh, it doesn't include commissions that would be $50.
For the 15th, 6 trades, 4 winners, 2 losers, gross P/L of $0.00 , after commissions would be -$30. Conclusion is this isn't the way to trade. I'll replay 16th data tomorrow and use 2 lots for a second profit target of say 6 tiks, see how that works out.
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