Q. What are Futures?
A. See Definitions and Examples
Q. How Do Futures Differ From Other Financial Instruments?
A. Futures differ in several ways from many other financial instruments. For starters, the value of a futures contract is determined by the movement of something else – the futures contract itself has no inherent value. Secondly, futures have a finite life. Unlike stocks, which can stay in existence forever, a futures contract has a set expiration date, after which the contract ceases to exist. This means that when trading futures, market direction and timing are vitally important. You will usually have some choices when choosing how long you want to make a wager for.
Q. What is a Tick and How Much is it Worth?
A. Each Futures contract has a different minimum tick increment. And since each market has a different tick increment then the monetary value of each of these ticks will be different as well.
Here are the some of the values of the markets that I trade:
Contract Tick Value/ Tick
Crude Oil (CL) .01 $10
Gold (GC) .10 $10
Rus 2000 (TF) .10 $5
MidCap (EMD) .10 $10
Nasdaq (NQ) .25 $5
Dow (YM) 1 $5
More Info can be found on the CME Group Website
Q. What is the Aroon Oscillator?
A. The Aroon Oscillator is the difference between Aroon-Up and Aroon-Down. These two indicators are usually plotted together for easy comparison, but chartists can also view the difference of these two indicators with the Aroon Oscillator. This indicator fluctuates between -100 and +100 with zero as the middle line.
Q. Does this work on Ninjatrader 8?
A. Not yet. We will be working on an upgrade for NT8 in the future. If you are using NT8 and would like to license the program, please let me know and we will take your request under consideration in deciding when to do the upgrade.
Q. How much capital do I need to run your system?
A. Each contract that I trade costs between $500 and $1,000 for intra-day margin under normal market conditions if you do not hold the trade past the 4:30pm EST. Therefore, if you trade 3 contracts at a time, you need $1,500 to $3,000 but I would recommend funding your account with $10,000. You could trade 1 contract at a time and you would need $500 to $1,000 per trade and maybe $5,000 would be a fair amount of capital to start. If you are running the strategy on multiple markets at the same time, you would need to have enough capital to trade multiple markets simultaneously.
Q. What are those pink and blue arrows on the video?
A. The pink marker shows the price you have sold at, and the blue marker shows the price you have bought at. There is an arrow corresponding to the bar where the trade took place.
Q. How does the system know when to close out a trade?
A. Each trader must set up a Auto Trailing stop strategy in the “ATM” settings before the strategy is turned on. I provide my settings if you want to use them, but ultimately, each trader has to decide how to trail their positions once the trade is placed. Once you make that decision, the strategy will automatically implement those instructions.
Q. I have traded stocks but I have never traded futures. I don’t know anything about futures. Can I still use your system?
A. You do need to open a futures account which is separate from your stock account. There are a few rules that are unique to futures contracts such as the expiration dates and when you have to switch your trading to a new contract. Otherwise, I don’t think you will have a problem getting up to speed with futures trading.
Q. What markets do you trade?
A. CL (Oil), GC (Gold), 6A (Austrailan Dollar), 6B (British Pound), 6C (Canadian Dollar), 6E (Euro), NQ (Nasdaq), YM (Dow), TF (Mini Russell 2000), EMD (Midcap 400). I stay away from the ES (S&P 500) because it is difficult to get a good wave.
Q. How do you decide which markets to trade?
A. I look at the charts and see if there have been large waves and good retracement signals and not too many choppy signals. I need long trending markets in either direction for my trades to make money. Although my signals usually avoid the choppy markets by design, I won’t get many signals in a choppy market because choppy markets have short wave lengths. My system counts the wave lengths to determine if the signals will qualify for a trade.
Q. What times of day do you like to trade?
A. I tend to make more money at night (10pm to 8am because the markets have been trending better at night.) I generally stay away from the opening bell as the markets tend to reverse trend too quickly for a good trade. I also avoid news announcements to prevent a sudden change of trend. This is why I needed to develop an automated strategy because I found that I was asleep during some of the best trading opportunities.
Q. How does your system know when news is coming out to avoid trading?
A. I look up the news calendar on www.forexfactory.com and plan my avoid times accordingly. However, in general, news comes out at the same times each day so I can basically program to avoid certain times consistently and I would be ok with those settings.
Q. How much can I lose per contract per trade?
Each trader will set those parameters themselves in the ATM (Auto Trail Stop ) settings. You always want to have a trailing stop loss and most likely a target price which is simultaneously entered at the time of the trade. I have videos to help you set up your trailing stop settings the way that I have mine. See the Members page to download my current ATM settings
Q. How much do you make when your trades are successful?
Q. How long do you hold your trades?
Most trade are over in a few minutes. I think my longest trade turned out to be 8 hours because the market never made it past my 4 tick minimum then I eventually closed out by 4:15 to avoid over night margin requirements. It really depends on the pace of the markets and times of day. I also want to close out my positions by 4:15 pm and try not to take any new positions after 3:50 pm so that I don’t have to worry about over night margin requirements
Q. Why do you have a Small Trade and a Large Trade Setting?
A. My thinking was really based upon the “runner contract”. When trading multiple contracts, I typically have a short term target, say 8 tics, and a runner contract that has a much higher target with a trailing stop after bringing my stop to break even after the first contract is sold. The so called “free trade” or “runner contract” will not get sold out at the smaller target in hopes of reaching a larger price target. The problem I was having with the small trades was that I was taking the risk of losing on the runner contract but I was mostly breaking even on the runner contract. Therefore, I was taking risk and not getting rewarded for it. Therefore, I wanted to have the option of not placing a “runner” trade on the Small trade settings to lock in profits on the small trade at the initial target on all contracts. However, on the Large Trade, I wanted to have the “runner trade” because the likelihood of the trade reaching a larger target was greater based upon the prior wave count being large. It also slightly affected how many ticks I would allow before I jumped the trailing stop to lock in some gains before hitting my initial target in my ATM settings.
Q. I’ve never seen charts that look like these before. Why do they look so different and why not use more technical indicators?
A. The beauty about these charts are that you can see market structure without much of the “noise” of the market and it helps you focus on the trend and the “tail” signals that I use to count the waves. I’ve added a few moving averages to filter out the signals.
Q. What are the minimum requirements to run NT7?
A. To run NT your system must meet these specifications:
||Windows XP, Windows Vista, Windows 7, Windows 8 or Windows 2003 Operating System
||Minimum screen resolution of 1024 x 768
||Minimum P4 Processor or higher
||2GB RAM (I highly recommend 4GB RAM)
||Microsoft .NET Framework 3.5 (pre-installed on most PC’s or can be downloaded below)
Download Microsoft .NET Framework
Q. What broker do you use to trade with?
Q. What data feed do you use?
A. I’m using NinjaTrader Continuum.
Kinetick is a data-feed only provider and not related to a brokerage. If you are only looking to use NinjaTrader for trading in a simulated environment then you could use Kinetick. Kinetick data starts out at $55/month and additional exchanges can be added to view real time data. You can view more about Kinetick at the link below:
Continuum and Rithmic are brokerage connection technologies that are integrated with your brokerage account when you connect to NinjaTrader. The majority of clients use NinjaTrader Continuum as their connection technology as they will provide futures and some index data. Rithmic also provides futures data but does not provide any index data.
Q. Does NinjaTrader Charge for their platform?
They do charge for a lifetime license to give you the lowest commission rate. However, you don’t have to pay that and you would be charged a higher commission rate. I think if you use the program for a couple months, you would be much better off buying the lifetime license. Contact firstname.lastname@example.org
for more information.
Q. What is your best trading market?
A. I can’t recall which one is best, but any liquid market that trends is fine. By liquid, I mean the spread between the bid and the ask is usually not more than 2 ticks. I will say, I don’t trade the ES (S&P 500 Mini) because I find it not a good market to trade.
Q. Can you show me your live trade results?
A. No due to compliance reasons. Past performance is not a guarantee of future results and every trader will have different setting and different risk parameters so my results are going to be unique to my own settings. That is why I give out a 1 week free trial and do not charge a large upfront fee so the users can get a chance to see how it works for themselves. I can’t think of another automated trading program that gives you the ability to really kick the tires for such a low entry point without charging a large upfront fee. That’s how confident I am in my program.
Q. What makes your system better than other systems out there?
A. I haven’t seen another system out there that is as simple to use as my system. When systems are too complex they prevent the user from making timely decisions. My system is clean and clutter free of multiple ancillary indicators. Also, most other systems out there charge large upfront fees to use their program. After you purchase their program, if you don’t like it then you are stuck with a program that you will not be using. That is a waste of money. With my system, there is no large upfront cost to really see how the system is working for you. You have a 7 day free trial so you can run the program in simulation mode for a week to see how to adjust your trailing stops and various signal settings. I know it can be overwhelming at first but I am here to help you every step of the way to get you to learn how the program thinks so you can make the necessary adjustments for the markets you are trading.
Q. I’m having trouble installing the software. Who should I call.
A. Please call me at 516-317-7217 and I will try to walk you through it or get NinjaTrader support to help resolve the issue.
Q. When do you need to close out a trade so you don’t have to come up with overnight margin requirements?
A. Technically you must be out of your position by 4:45pm EST, but I don’t hold positions past 4:15 PM. You can get back in after 6:00 PM EST and you can hold again until 4:45PM then next day.
Q. It takes several minutes to load the ProRangeMarketAO Strategy. How can I speed up the loading process?
Depending on how much RAM you have, your computer may be slow to load the ProRangeMarketAO Strategy. When the strategy loads, it draws all of the prior signals for the number of days you load the data on your charts. If your computer is taking too long, adjust the number of days that the program loads. On the chart, hit Control+F > Select Data Series > Days To Load and reduce the days to load to 5. If your computer is too slow, consider a Virtual Private Server (VPS) and that you can run the software on the VPS and you should be fine. The benefits of the VPS is that they are running 24/7 and have a high degree of reliability which you want when you are using an automated trading system. See Interserver.
Q. What happens if you lose power or internet connection while your system is on?
If you lose power or internet connection, the trailing stops will not trail and no new trades will be executed. The current stops and targets will be still in the system that will be executed if the market reaches those stops or targets even if your computer was shut off. To avoid this problem, I recommend setting up a Virtual Private Server from Interserver
that has 99.9% reliability.
Q. When I run the strategy, how do I see the trailing stops, the trade markers and the ATM Settings on the chart?
A. The ProRangeMarketAO strategy will only tell you the trade signals where it would enter the trade. In order to see how the trade would be managed after entering the trade, you need to pull up another chart with the same market and the same range settings and AO settings in the “chart trader” mode. Either make the two charts side by side or pull them up on a second monitor. That is the mode where you can manually enter the trades and see the actual trades being executed. I have a video on that topic as well.
Q. During the free trial period I get a message to contact the vendor when I turn on the strategy. Do I need to do anything?
A. No. During the 7 day free trial period, although the program will tell you that you have to contact the vendor, it should still work if you turn the strategy off and turn it back on again.
Q. When I start a chart the range bars seem really high up in the chart and out of sight. Is this normal?
A. If your charts don’t look normal, you can hit the little F icon in the upper right corner of the chart which will re-calibrate the chart.
Q. How do I know if the program is working during the trial period?
A. When the strategy is enabled and the program signals are on the chart, it is working. If you open a second chart in Chart Trader mode, you will be able to see all the trade markers that took place if you set up the markers initially on the chart trader mode.
Q. The “Signal” on the chart has been staying at “sell short” for a while. Does the system know when to go long or short automatically?
A. Yes. The system will know which way to take the trade automatically.
Q. What is your trading philosophy on trading during rollover dates?
A. You want to rollover as soon as possible to avoid getting sold out by your broker for getting too close to delivery date.
Q. Do we set the quantity of contracts in the ATM and not within the parameters?
A. Yes you set the contacts in the ATM settings. You can have a different ATM setting with different contract amounts in each ATM setting for each signal that is generated so you can have 1 ATM setting for each signal, e.g. Small Trade, Large Trade, Aroon Oscillator (AO), Bounce 50, Bounce 20. Some people use one setting for all signals, but that is your own decision.
Q. If the the 20, 50, 100 and 200 are all true does that mean the trade would only be initiated if it bounces off all 3 EMAs?
A. No. The when the EMAs are set to true, that means the signal will only be generated if the sequence of the EMAs is in the correct order. By that I mean 10>20>50>100>200 for long trades and 200>100>50>20>10 for short trades. If any of those EMA’s are set to False then that EMA will not need to be in the correct sequence for the signal to be generated. The most common problem with bounce 50 filter is the 10 EMA may not be in the correct sequence when the trade pulls back for a bounce 50. Therefore, I like to make the 10 EMA set to false for that signal to capture trades that are all in the correct sequence except for the 10 EMA.
Q. In some videos you had the AO crossover set at +/- 80 and others you had it at +- 0. How do I decide which to use?
A. The rule of thumb is that the shorter the range bar, the more you want to make it harder to trigger an Aroon Trade. Therefore, with a range 35, I can use +/0 because the bars are much larger and have given the market enough time to create a change in momentum signal.
Q. How do I decide what period to set the Aroon Osicillator?
A. The larger the range bar, the lower the AO setting. When you have small range bars, use a higher AO period to filter out choppy signals.
Q. I see you had different videos of shift 2 and shift 4. How do I know which one to use?
A. Shift 4 means that there are 4 tics between range bars. Shift 2 means a new range bar is generated with every 2 tics going in the same direction. I have decided to use the shift 4 for now. I think it reduces bad signals since when the market breaches a prior resistance it tends to jump a few more tics. By setting it to 4 tics then the market has to move 4 tics past the prior resistance for the small trade or large trade setting thereby giving you less false signals from quick jumps after resistance has been broken.
Q. I need an explanation how I change the bounce settings and what they mean?
A. The true/false after each EMA only pertains to the sequence of EMAs. If the sequence of EMAs are correct then the signal will be generated.
Q. How do you suggest to fine tune the Max Lookback bars and the Maxlookback reverse bars and small trade distance when we play with different range bars. Is there a rule of thumb based upon the range bars?
A. I would put a large number for lookback reverse bars when using small range bars so it will use the countertrend move as a retracement low for the next wave count in computing a large trade ATM. For lookback, I have been using 0. The lookback is when you want to overlook a tail in trying to gain a larger trade count.
For small trade distance, I use about the range bar for the distance. E.g. Range 8 use target of 8. Think about the market symmetry concept to determine the future wave projection.
Q. Does each signal act independently?
A. Yes. Each signal is designed to work separately so you can choose which signals to focus your trading strategy on.
Q. What does number of bars to take the signal mean?
A. I designed the Aroon signal as both a counter trend early entry or a trend momentum trade that does not require the market to retrace and then continue. If you are not using the Moving Average filters, then you may want to put a large number of bars to take the signal to ensure that the counter trend signal will only come into play after a significant trend move.
Q. How do I prevent my OCO trailing stop and target from getting cancelled at the end of the day if I am still in a trade past 5:00?
A. When you go to each of your ATM settings, under TIF drop down menu, which means Time in Force, you change the day setting to GTC. This is extremely important!!! Otherwise your stop loss and target will get dropped at the end of the day and you will have a naked trade sitting out there.
Q. Is there a way to automatically close out a trade before the overnight session cut off?
A. Yes. Under the Tools > Options > Misc tab, you can set the time to flatten the trade. If you don’t want to have over night margin, then you should flatten by 4:40 EST at the latest. I usually do it around 4:14). The next step is to go to the chart trader mode and right click on the order entry side below the ATM and click the “Close at Time” option. This will automatically close the trade at the time you set in the Misc tab.