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Trading the Jam way


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Trading the Jam way

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  #121 (permalink)
Juno Beach
 
Experience: Advanced
Platform: Ninja and TS
Broker: Optimus Futures / Matt
Trading: multiple
 
JamTheTrader's Avatar
 
Posts: 135 since Sep 2009

This is a very reliable pattern and can be traded in 2 ways. First lets go through and describe the pattern then we will get into discussions about trading it.

Three successive pushes to a top or bottom with near Symmetry and Retracements often meet Fibonacci Ratios. When each successive leg is less then the previous leg it tells you that a possible reversal is pending. Volume is also another tool the technician can use to help determine the weight of the evidence.




When trading this pattern in a reversal fashion, I like to see more supporting evidence such as divergence forming on the MACD, RSI or our Q-Filter. Having areas of support or resistance is also something to watch for and when we get three pushes into support and resistance with divergence, this can lead to a very nice high probability reversal.

https://content.screencast.com/users/jamthetrader/folders/Forum pics/media/9a6fc674-9fb4-4724-9c04-216f533b2f9b/3 Pushes Chart.JPG

Notice in the chart above that each successive push is less then the previous push. This is telling you that the market participants are getting tired and your market is getting ready to attempt a reversal. Remember that at the right edge we never really know what the market is going to do, but with good analysis and supporting evidence, we can make higher probability decisions.

There are 3 ways to trade this pattern,

As a reversal off of an area when the third top is in place
Wait for a break below the trendline supporting the bottoms then your setup
Back in the direction of the original trend if the three pushes pattern is not at any areas and no divergence is present. In this case wait for the pullback to meet a fib ratio then look for your entry pattern back in the original market direction

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  #122 (permalink)
Juno Beach
 
Experience: Advanced
Platform: Ninja and TS
Broker: Optimus Futures / Matt
Trading: multiple
 
JamTheTrader's Avatar
 
Posts: 135 since Sep 2009

Before we start getting into the basics of Trade Entry, I would like to list some of my references that I use.

1. Trade Chart Patterns like the Pros - Suri Duddella
This will be the best investment as a quick reference book for anybody trading chart patterns and will save you a lot
of time and money buying other books. While I do not trade the way these are outlined in the book, I do use this
book as a reference quite often, in fact it is falling apart and pages falling out I have used it so much, I need to buy a
new copy

2. Pring on Price Patterns - Martin Pring
When I started my trading career, Pring was the first author that I studied. In fact I bought
most of his courses and material at the time and do not regret any of it.

3. Encyclopedia of Chart Patterns - Thomas Bulkowski
Good reference

While I have many good books in my library, these are specifically for chart patterns and highly recommended. If you can only pick up one of these, I would recommend Suri's book first.

JAM

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  #123 (permalink)
Quebec
 
Experience: Intermediate
Platform: NinjaTrader wt Rancho Dinero's profiling tools
Broker: AMP/CQG
Trading: ES, NQ, YM
 
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Posts: 3,878 since Oct 2009
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Hi Jam, glad to see you post some of your thoughts. I was wondering do you have an anchor or bread and butter trade setup, one that provides you a consistent positive result and you could talk about for hours ? Did you specialize in one particular setup ?

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  #124 (permalink)
Juno Beach
 
Experience: Advanced
Platform: Ninja and TS
Broker: Optimus Futures / Matt
Trading: multiple
 
JamTheTrader's Avatar
 
Posts: 135 since Sep 2009


trendisyourfriend View Post
Hi Jam, glad to see you post some of your thoughts. I was wondering do you have an anchor or bread and butter trade setup, one that provides you a consistent positive result and you could talk about for hours ? Did you specialize in one particular setup ?

Trend,

I could talk about all of this for hours as for one particular setup, yes I have a couple that I really like and use daily. Here is the problem however, if you don't know all of this other stuff, how will you know your market structure and know when "NOT" to take the setups?

Everything that I am sharing here is building a foundation of understanding and will be used in higher time frame analysis as we move into the area of trade entry.

For trade entry, I use chart patterns only and do not enter on any indicators at all. With chart patterns I can control my risk a little easier.

Hope this helps,

JAM

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  #125 (permalink)
Quebec
 
Experience: Intermediate
Platform: NinjaTrader wt Rancho Dinero's profiling tools
Broker: AMP/CQG
Trading: ES, NQ, YM
 
trendisyourfriend's Avatar
 
Posts: 3,878 since Oct 2009
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JamTheTrader View Post
Trend,

I could talk about all of this for hours as for one particular setup, yes I have a couple that I really like and use daily. Here is the problem however, if you don't know all of this other stuff, how will you know your market structure and know when "NOT" to take the setups?

Everything that I am sharing here is building a foundation of understanding and will be used in higher time frame analysis as we move into the area of trade entry.

For trade entry, I use chart patterns only and do not enter on any indicators at all. With chart patterns I can control my risk a little easier.

Hope this helps,

JAM

But what about if instead we specialize in one setup only. It seems logical to think "all of this other stuff" would become secondary, don't you think ? Why trying to swallow an elephant if you can eat a small tick


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  #126 (permalink)
Juno Beach
 
Experience: Advanced
Platform: Ninja and TS
Broker: Optimus Futures / Matt
Trading: multiple
 
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Posts: 135 since Sep 2009


trendisyourfriend View Post
But what about if instead we specialize in one setup only. It seems logical to think "all of this other stuff" would become secondary, don't you think ? Why trying to swallow an elephant if you can eat a small tick


So, are you saying is that you should only know one setup such as moving average crossover, and this will work if you know it well enough? What you might be forgetting is the years behind the screen it takes to develop the skills to see patterns develop to choose the best spots where that moving average crossover (example only) might actually work.


One entry might be good, b ut how do you know what market structure is telling you? when is that entry not good?

BTW, I wouldnt swallow the elephant, but instead take it in small bites

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  #127 (permalink)
Quebec
 
Experience: Intermediate
Platform: NinjaTrader wt Rancho Dinero's profiling tools
Broker: AMP/CQG
Trading: ES, NQ, YM
 
trendisyourfriend's Avatar
 
Posts: 3,878 since Oct 2009
Thanks: 3,507 given, 4,952 received

If i were to teach someone how to trade, i would focus my efforts on two things: the importance of the process of becoming specialized in 'one thing' in regard to price action and the process of becoming a good thinker.

A good example of what i had in mind regarding specialization is in my opinion the guy who is called the Gap guy. Someone that trades the Futures markets could possibly focus on the 1 minute range and maybe add the initial balance into the mix and try to become an expert about price action around these levels. There could be the last half hour of trading which offers very good opportunities. In fact, when you focus your attention on one thing and do it with diligence then you eliminate many things which for all intent and purpose are secondary and more of a distraction than anything else. Let's consider another example which occurs frequently, price makes a high and low during the globex session (night session for someone who resides in the Eastern time zone like me). When price makes a repeated visit to these levels during the day session, how could you possibly try to profit from these significant levels ? Could you develop your bread and butter trade setup around these levels ? How should you proceed if you have no experience ? etc. That's the type of practical concerns i would try to address before making people read books or lose their time trying to talk about thousand of patterns they may encounter.


JamTheTrader View Post
So, are you saying is that you should only know one setup such as moving average crossover, and this will work if you know it well enough? What you might be forgetting is the years behind the screen it takes to develop the skills to see patterns develop to choose the best spots where that moving average crossover (example only) might actually work.


One entry might be good, b ut how do you know what market structure is telling you? when is that entry not good?

BTW, I wouldnt swallow the elephant, but instead take it in small bites


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  #128 (permalink)
Juno Beach
 
Experience: Advanced
Platform: Ninja and TS
Broker: Optimus Futures / Matt
Trading: multiple
 
JamTheTrader's Avatar
 
Posts: 135 since Sep 2009


trendisyourfriend View Post
If i were to teach someone how to trade, i would focus my efforts on two things: the importance of the process of becoming specialized in 'one thing' in regard to price action and the process of becoming a good thinker.

A good example of what i had in mind regarding specialization is in my opinion the guy who is called the Gap guy. Someone that trades the Futures markets could possibly focus on the 1 minute range and maybe add the initial balance into the mix and try to become an expert about price action around these levels. There could be the last half hour of trading which offers very good opportunities. In fact, when you focus your attention on one thing and do it with diligence then you eliminate many things which for all intent and purpose are secondary and more of a distraction than anything else. Let's consider another example which occurs frequently, price makes a high and low during the globex session (night session for someone who resides in the Eastern time zone like me). When price makes a repeated visit to these levels during the day session, how could you possibly try to profit from these significant levels ? Could you develop your bread and butter trade setup around these levels ? How should you proceed if you have no experience ? etc. That's the type of practical concerns i would try to address before making people read books or lose their time trying to talk about thousand of patterns they may encounter.

Great point! Specializing in a specific setup or group of setups is important and in the context that you have laid it out, yes it works this way.

For myself and my trading, I specialize in these price patterns and techniques that I am sharing and trade with them every day. I look at these levels, I study these patterns and trade based on them on a multiple timeframe basis! Everything that I am teaching here I trade with. Trend, feel free to add any trading methodology that you have and we can all learn

JAM

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  #129 (permalink)
Dallas,TX
 
Experience: Intermediate
Platform: NinjaTrader, OpenQuant
Broker: Zaner/Zen Fire
Trading: ES,6E,6B,GC,CL
 
Posts: 598 since Nov 2009
Thanks: 176 given, 120 received

JAM,

do you have that chat room to watch your trades?

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  #130 (permalink)
Site Administrator
Manta, Ecuador
 
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emini_Holy_Grail View Post
JAM,

do you have that chat room to watch your trades?

Under his name on every post is his website, which has the info.

Mike

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