This section shows the process of using MTPredictor End-of-Day 4.0 to identify exceptional trade set-ups, evaluate their Risk/Reward outlook and manage the exit strategy of the selected 'ideal' trades.
EOD 4.0 makes excellent stock trading software, futures trading software, forex trading software or options trading software. Most traders will monitor a portfolio of such markets, so the first step is to scan the database...to cut the list to only those with a high probability of ending their simple ABC correction to a trend, and then resuming that trend. See 'The 3 key Trade Set-ups' for the importance of the ABC correction.
With MTPredictor, this is a very simple procedure - simply select the criteria to search for and run a scan. In Standard Use, the three familiar trade set-ups - TS1, TS2 and TS3, all sub-dividing into a simple ABC pattern, are pre-ticked on the main page of the Trade Scanner. So, to scan a database for any of the three set-ups unfolding now, just click on 'Show me':
Also pre-ticked for Standard Use are the three restrictions. The Scanner will search for markets that meet these three criteria: they are in an ABC correction-to-trend, either at or very near the Typical price target (using Fibonacci numbers) and are showing signs of price reversal. They are potentially a simple TS3 set-up, a TS1 set-up or a TS2 set-up. (For more information on the trade set-ups, please click here).
As can be seen above, two results from scanning the S&P 5000 were identified as a potential set-ups.
Note that for Advanced Use, simply un-ticking the 'Typical Wave C WPT' restriction enables an expert user to scan also for trade set-ups emerging at the two Wave Price Targets either side of the 'Typical' - the 'Minimum' and 'Maximum' zones. The expert user may also scan for additional Elliott Wave patterns, for example, Wave 2orB, Wave 4 and Wave 5's.
The next stage is simply to double-click name in the list and the chart is drawn automatically. Simple and quick.
The trade set-up is confirmed visually on the chart itself as, by double-clicking on the chart name from the Scanner list, the set-up analysis found by the Scanner is projected automatically onto the chart:
As can be seen here, the software automatically displays the three essential criteria for a standard MTPredictor trade set-up:
- A simple ABC correction - here, a correction down against an uptrend for a TS3 low
- The corresponding Typical Wave C WPT (Wave Price Target) support area (in pink )
- The price reversal bar, colour-coded blue for buy
This confirms that HSY was potentially in a simple ABC correction down, reversing off a good support area (the typical Wave C WPT here) and showing signs of price reversal up (trade set-up bars incorporate specific reversal patterns). Now is the ideal time to consider a new Long trade.
The next step in the process is vital - to evaluate the trade's potential profit vs. loss. To achieve this, the powerful T module in the software can automatically both analyze the trade set-up and display the appropriate profit targets on the chart. Please see the chart below:
But, far more important than simply projecting the profit targets, the Analyze function in the T module calculates the trade's Risk/Reward ratios - what the profit would be at each of these projected profit targets compared with the initial (money) risk needed to take the trade. Using MTPredictor's Isolation Approach™ to Elliott Wave, the precise Entry Price, Initial Stop Price and Price Targets are known and Risk/Reward can be calculated.
Critically, the Analyze function also shows the price at which 100% of the initial risk will be covered and the price at which the profit will equal 2-3x the initial risk (enabling the trader to confirm that the first profit target is at least in the blue 2-3x risk zone). Please see the window below:
Here, this trade had the potential to return approximately 5.5x initial risk at the first profit target, (higher orange zone above) As such, this was clearly a very good trade to consider.
A buy order to enter long can be placed now, one tick above the high of the blue reversal bar. If filled, a protective sell stop is placed one tick below the last swing low. Precise entry and exit levels eliminate trade and risk confusion.
This is all that is needed in MTPredictor to identify low risk/high return trade set-ups.
The software is designed so that all that is needed to identify an ideal trade set-up with a strong Risk/Reward profile is a simple chain of mouse clicks. In particular, the Trade Scanner ensures that valid set-ups need never be missed again.
Moving forward in time, this is how this particular trade worked out:
The market rallied very strongly over the next few weeks. Using the standard trade mangement guideliws would have resulted in a profit of approximately 11x the initial $ risk required to take the trade (ignoring slippage and commissions).
Can your current software program identify, evaluate and manage such low risk/high reward trade set-ups as simply and decisively as MTPredictor ?
Please look though the Examples section for more recent trades on your preferred timeframe.
Using Elliott Wave for the business of Risk/Reward trading is now possible with the MTPREDICTOR™ 4.0 series!