Our 4 Phase Plan To Get You Trading The Emini Futures Like A Pro – 100% Mechanical
___________________________________________
If you can follow this four part plan with our Power Trend System and stay disciplined you are on your way to success.
Phase 1 – Get Started And Trade On SIM for 1 Week
It is very important that you first spend your first week following the Power Trend System on SIM MODE just to give yourself time to work through the basic mechanics and witness for yourself how the system performs over the series in different market conditions WITHOUT any emotional influences or attachment to live capital. This prevents the dumb-luck of potentially hitting a few draw-down days in bad market conditions right off the bat, losing money and deciding it’s not working BEFORE the system has a chance to recoup the losses and move on to profitability. The hallmark of any good system is that it will automatically self-correct over the series of trades, but one has to stick to the series for this to work. If you rush into things in a live account, incur upfront losses, get emotional and quit out of fear … you shoot yourself in the foot. Slow, steady and methodical is the better approach.
The Basic Beginning Strategy
Phase 2 – Begin Trading LIVE with 2 MES Micro Contracts And Take Profits At Target 1 and Target 2
To keep things real basic and the initial risk low we recommend EVERYONE get started following the Power Trend System with only 2 Micro contracts and take profits at Target 1 and Target 2 – using the main wide system Trailing Stop. You will enter with 2 micro contracts (MES) at market after the official trade Entry Confirmation and then immediately place a sell limit order to exit 1 contract at T1 and a limit order to sell the other contract at T2. Place your initial protective stop loss at the system stop level and then just move your stop when the system alerts you to do so. (Note: If you notice price getting super close to target 2 you have the option of discretionarily deciding to tighten your trailing stop more than the system). Follow this for 3-weeks and this will complete your first month.
Phase 3 – Graduate To 3 Micro Contracts and Still Scale Out Your Exits At T1 and T2.
At the start of your second month you can graduate to 3 Micro Contacts and follow the same exact approach except that you will now Sell 2 Contracts at Target 1 and Sell the remaining contract at Target 2 (or the trailing stop – whichever gets hit first. Since the Trailing Stop will have you at “virtual breakeven” once Target 1 gets hit, this will typically ensure you come out of any trade that hits T1 with a profit.
Phase 4 – Scale-Up To 4 Micro Contracts – Scale Out Your Exits At T1 and T2 (same as above) but hold the final Contract for a “Runner”.
Once you’re ready to take the next step and unleash the full power of the Power Trend System, you can scale-up to 4 Micro Contracts and follow the same exact approach except that you will now Sell 2 Contracts at Target 1 – Sell 1 Contract at Target 2 – and hold the 1 remaining Contract as the “Runner” and just manage it using the Trailing Stop. The advantage to this will become apparent on the occasional “long-range day” where the price hits both T1 and T2 and just keeps trending in the same direction for a massive move.
Since the trailing stop will be right at your Entry when T2 gets hit, there’s literally no risk of holding any additional contracts once you’ve locked in gains at T1 and T2. With the “runner” contract in place, you will typically see the price tag the trailing stop somewhere between T1 and T2 but on occasion – on certain occasional “long range days” in the market – the trailing stop will surpass T2 and then your runner can really score big points. This is going to be a function of the market itself, but we know that big market moves occur and this is the way you’ll capture a bigger point gain that you’ve probably ever imagined.
How To Pyramid Your Way To Even Greater Profits
___________________________________________
If you follow our 2 month “Getting Started” plan following the Power Trend System mechanically you should be well on your way to gradual consistent profits in the futures market. At this point you have the option of simply following the T1-T2-Runner strategy and increasing your position sizes each month using a simple Contract Progression Strategy, i.e. 2, 3, 4, 6, 8, 10 etc.
The important thing to remember is that BIG POINTS ARE SCORED WHEN PRICE HITS TARGET 2. And also on the occasional “RUNNER” contract – on certain days where the market makes a significant directional move. So you want to build up to the point where you are able to hold a “runner” contract that hits the occasional home-run. Long-range days are guaranteed to occur, it’s just a matter of realizing they don’t occur every session.
There are many possible variations on trade management using the Power Trend System but the most important thing to keep in mind is to keep it simple and low risk at the beginning starting off with the smallest unit size (2 micro contracts) and only advance to build size based on performance over time.
___________________________________________
Possible Scaling Variations
NOTE: This is where the discretion comes in. There is no set rule on how many Contracts to trade or how to scale out.
1 contract and sell at T1 (mostly viable when the max stop is in play – using the Aggressive Protection Level)
1 contract and shoot for T2
1 contract hold with trailing stop (the best option for trading 1 contract)
2 contracts sell one at T1 and one at T2 (basic beginning strategy)
2 contracts sell both at T1
2 contracts sell 1 at T1 and hold other 1 for runner with trailing stop
3 contracts sell 2 at T1 and 1 at T2
3 contracts sell 1 at T1, 1 at T2 and hold 1 for runner with trailing stop
4 contracts sell 2 at T1, 1 at T2 and hold 1 for runner with trailing stop
Remember, each alert has a Max Stop of 18.00 points per contract and while it’s fairly rare that comes into play, you want to be aware of the potential max loss on a full stop-out. Also keep in mind that the system will issue a maximum of 3 filled Alerts per session. So the maximum potential loss in any given session is -54.00 points times the number of contracts traded. (it’s unlikely you’ll see this occur, but it’s important to know).
The best strategy is to adjust the number of Contracts you trade based on market conditions. Trade aggressively in fast markets and conservatively in dull markets. See How Market Conditions Affect the System for more information.
Summary
Your “Trading Plan” is to start off with 2 Micro Contracts and scale up slowly over time.
Only add a contract if the prior 2-3 week period was profitable and your account size has grown.
If the prior 2-3 week period was not profitable – stay at the same level until it is.
A new user has to get used to the idea of trading “big points”. So trading the Micros is basically trading “lunch money” – and over time that gives the proper perspective.
Many new users are used to trading the Full-size Contract for a few ticks or points, so the Power Trend System with its wide stops and huge targets, requires a completely different mindset – which can only be properly achieved over time – without the stress that goes along with trading “size”.
So a 10 point stop or shooting for a 20+ point target doesn’t affect the “mindset” like it does trading full-size contracts. Once a user gets used to the big swings using the Micros then the day to day moves don’t seem as dramatic.
Trading lunch-money for a period of time allows one to get a feel for the ebb and flow of the system performance through different market conditions over time, without the emotional attachment of worrying about serious money.
The idea of scaling up slowly over time – and only adding a contract after the prior couple / few weeks have been profitable helps “regulate” things – and the idea is that by the time you scale-up to trading real money, you’ve already grown the account to compensate for the difference in “size” of what you’re trading day to day.
Then, when a drawdown week comes along, it’s just relative and you don’t even flinch. It’s just giving some back – and is usually due to poor market conditions.