Pro Trader 1 DAY 2 Flashcards
what is an odd enhancer
a scoring system that objectively measures the quality of a trade setup based on S/D: structure and location scored on 0-2: 2 best 1 good 0 poor
Odds Enhancer #1
How FAST did price leave the level?Lesson: The stronger the move away from a level, the more out of balance S/D is at that level2 = 1 to 3 ERC candles1 = 1 ERC but have some smaller NRC mixed in0 = no ERC
Odds Enhancer #2
How much TIME did price spend at the Level?Lesson: The less time price spends at a level, the more out of balance S/D is at the level.1 pt = 1-4 candles0.5 pt = 4-9 candles0 pt = more than 9candles
When coming out of a level, do you want to see a solid or hammer/shooting star type candle?
(would rather see solid candle out of level rather than a shooting star/hammer)
Odds Enhancer #3
How FAR did prive move from the level before RETURNING?Lesson: The farther price moves away from a level before returning, the larger the profit margin potential and the probability of a successful trade.reward to risk(4:1 is best, 3:1 is good, 2:1 poor)
Odds Enhancer #4
Has Price returned to the level?”RETRACEMENTS”The fresher the level, the higher probability that price will turn at that levelif came close, but doesn’t touch zone, it is still a retracement-0.5 pts for every shallow retracement
1 - 4 odd enhancers
how fast did price leave level? how much time did price spend at the level? how far did price move away before returning to the level? Has price returned to the level?
how to use proper location and structure of S/D zone?
Proper location : intermediate timeframe Structure: small time frame Use Proper Location to ID S/D zones Use Structure to measure risk and draw Proximal/Distal lines Finding smaller zones within Larger zones
what is max number of candles to accept in zone
6 in a daily tf, but that is a 1 point
Filled
when a trade order’s entry price is met and the trade becomes live in the market
execution
the completion of a buy, sell, short or cover order
slippage
the difference between the quoted price at the time the order is sent, and the price at which the trade actually executes
Market Order used for, positive, negative
An aggressive order that is filled at the price that is available at the moment of process used for: entering and exiting a position immediately - #2 and #3 order positive: immediate execution negatives: slippage : not getting the inside bid/ask
Limit Order used for, positive, negative
a passive order that is limited to the price specified, or better (all orders require a quantity) used for: specifically planned entries and exits positives: no slippage. may get price improvement negatives: may only get a partial fill or not get filled at all
Where is STOP LOSS shown in Tradestation?
STOP LOSS is shown in the Trade Manager Window under the ORDERS TAB
Stop Market used for, positives, negatives
A stop market is triggered at a specific price. Once triggered, a market order is placed to exit the position. used for: stop loss to exit trade positives: risk management, you will get out negatives: possible slippage
Stop Limit used for, positive, negative
A stop limit order is triggered at a specific price. once triggered, a limit order is placed to enter or exit the position. not for the novice trader. used for: confirmation entries or breakouts positives: you MAY get filled at a better price negatives: DO NOT USE AS A PROTECTIVE STOP. THERE IS NO GUARANTEE YOU WILL GET FILLED
what entry can you use stop limit order
3 entry DO NOT USE to manage risk
What order to use for LONG? Exit for Profit (target)
Sell Limit Order
What order to use for LONG? Buy ABOVE current price
Buy stop limit order buy stop market order
What order to use for LONG? buy at current price
buy market order
What order to use for LONG? Buy BELOW current price
Buy limit order
What order to use for LONG? Exit for Loss (Stop Loss)
Sell STOP order
What order to use for SHORT? Exit for Loss (Stop Loss)
Buy Stop Market Order
What order to use for SHORT? Short ABOVE current price
Sell limit order
What order to use for SHORT? short at current price
sell market order
What order to use for SHORT? short BELOW current price
Sell Stop Limit Order Sell Stop Market Order
What order to use for SHORT? Exit for Profit (target)
Buy Limit Order
Bracket order used for, positive, negative
A bracket order is an order that has an entry, stop and exit that is set all at once used for: set and forget it positive: ease of use, fast execution, for all orders at one time, excellent for many styles of trading, one button push trading negatives: multiple bracket orders to learn can be confusing at first
2 ways to place bracket orders
- place an OCO/OSO order (using the order bar in trade station) normally used for longer term trades 2. use the Matrix (DOME: depth of market execution) - not good for investment long term trades
OCO
Order cancels order or Once cancels other
OSO
Order sends Order or One Sends Other
name red arrows
Name red arrows
SET Summary: BUY
profit target: sell limit, above current price entry: buy market or Limit, at current price or below stop: Sell stop Market, below current price
SET Summary: SELL
Stop: Buy Stop market, above current price ENTRY: Short market or limit, at current price or above Profit target: buy limit, below current price
bid
max price that a buyer is willing to pay for a security
ask
min price that seller is willing to receive for a security
spread
difference between bid/ask price. a key indicator of liquidity of asset. the smaller the spread, the better the liquidity
6 odd enhancers from XLT
- strength of price movement (how FAST move awayfrom zone)2. time at zone 1 pt3. reward to risk ratio (profit potential - how FAR)4. retracement5. big picture6. arrival to zone 1 pt
Odds Enhancer #5
Big Pictureonly odds enhancer that you can use HTF to score.2 = if you are buying impulse1 = if you are buying mid on sideways trend0 = if you are buying correction
The Curve
1st fresh Demand to 1st Fresh Supply
Odds enhancer #6
arrival to zone1 = firm/far/fast arrival to Zone0.5 = medium0 = drop base drop base - because creating supply/demand zones as it comes down to zonedoesn’t apply for people who are set and forget
3 ways to enter a tradeaboveatbelowfor long and short
bracket ordersprofit target, entry, stopfor long and short
Advanced Odd enhancer 1
bigger picture supply/DemandThe trend is your friend until the bend at the end.The bend at the end will be able to be spotted by looking at the big picture tf and spotting the S/D zones that the price is approaching
Advanced odds enhancer 2
levels on top of levelsthe stronger the proximal level the higher probability that price will turn at the distal level4 entries scenerio, 1 stop at distal of B1. enter at prox of level A2. enter at prox of level B3. enter 50 at% A, 50% at B4. use ballastic entry. wait till candle close inside zone A. then follow entry as candle closes lower into zone. C = distance between level A and BC
Advanced odds enhancer 3
Stock and Bond Relationshipbond/stock have ALMOST inverse relationship (sometimes they move in tandem)people buy stock when economy is good, they have money to riskpeople buy bond when economy is bad, they don’t have money to riskTLT (bond etf) vs SPY- if supply of TLT and Demand of SPY hits at same time, is a odds enhancer
Advanced Odds Enhancer 4
Market InternalsSectors
Market Internals
Money flows from one sector to another depending on what stage of the market we are in
Advanced Odds Enhancer 5
Time of Day
Advanced Odds Enhancer 6
The Curveon HTF distance between first demand and first supply from current price2 = if you are buying low on curve/selling high on curve1 = if you are buying mid on curve/sell mid on curve0 = if you are buying high on curve/sell low on curve
