Normally we will watch the ES as a 'heads up' in the live room while placing calls on the Dow e-Mini futures contract. The symbols are YM #F in eSignal or @YM in TradeStation For more on why we like trading the YM please see this FAQ post http://www.puretick.com/faq.html#YM

To help our traders new trades manage their risk when will following trades, please apply the following guide lines:

1). New traders should use a simulator/paper trading account for 1st two weeks
2). Get used to our trading style and see it work before increasing size
3). Personal discretionary Calls are high risk and only to be taken by pros
4). Seasoned traders should trade around 1 contract per $5,000 in your account. New traders should trade 1 contract per $15,000 in your account for the first few weeks. Trade a smaller size until your used to our system
5) Always take partial profits at +7 ticks. If your trading 2 contracts and were short, you'd cover 1 when you were up 5 points. This allows you to lessen your risk right away and hold for larger gains
6) We do not like to place low probability trades during the lunchtime doldrums, or "dead zone", which occurs between 11:45 A.M. EST and 1:45 P.M. EST We may call trade alerts during these times, but take them in a simulator if you are a newbie but do not use cash. We recognize that some of our clients want to be alerted when all signals fire. If we are in the trading room and a trade fires we will call it. But those trades will not be part of our official track record.


There are 2 additional functions we generally review before placing a trade. The 2 functions are Filters and Setup Bias (trigger). The Filter is determined by looking at a set of 4 parameters that tell us what kinds of trades we want to take during the day, long or short. Another way of looking at it is to say that the day's trend has a good probability of moving in an up or down direction.

A trade entry setup (or trigger) is determined by looking at a number of parameters that tell us what the price is likely to do during the shortest time period. Our theory is that short term price movement happens in waves. These waves carry prices back and forth within a longer period trend. Our time tested setups give a good probability of prices moving in the direction of the wave we climb on board.

Combining Filters and Setups means that we look to trade in the direction of a trend after a price retracement has occurred. In other words if our Filters determine that the price is likely to be in an uptrend during the day, we look to buy when the shortest of time frames has a sell off which causes that time frame to become oversold. Then we look for the next setup to tell us that the price is reversing its oversold condition (the resumption of the longer time period uptrend). This process is reversed for days where we expect the trend to be down and are looking to short rallies. There are also various high probability setups that Alex may alert our traders of as they begin to signal.

Lower risk room calls are made when the Filter and setup both agree---The Filter says buy and the setup is calling for a long gives you a much greater edge. You may use a normal position size for these calls. These trades are suitable for newer traders and more experienced traders. Since these situations need more parameters to be in agreement there will be fewer trading calls made. These trades tend to be correct a greater percentage of time. They are in our opinion the best ones for newer traders to take because a higher win rate will do more to put our newer traders in a better state of self-confidence, and a good personal psychology is essential to becoming a successful trader. In addition, the setup takes a longer period of time to develop so our senior traders are able to call attention to the room before the signal occurs. Even the stop loss can be reasonably calculated in advance in order for the trader to understand the initial potential risk of the trade before entering it.

Higher risk room calls are whenever the short term parameters indicate the probability for the short term trend to change direction or reverse. These calls are taken without regard for the Filters. Please use a smaller position size when playing these calls. Since they may conflict with the Filters there are usually more signals occurring during the trading day. They are by nature counter trend trades on the shortest of time frames. The danger is that an overbought market can continue to be overbought especially if the Filtered longer term trend is being traded against. One should trade these calls with a smaller position size. ex: If you normally trade 10 contracts, use 4. Money management and allocation is key in this business.

The Personal Discretionary Calls are simply the trades taken by the senior trader based on intuition and market experience. They are the lowest accurate of trades taken in the room. They also may be immediately exited at the senior trader’s discretion, if it appears the trade is not going to work and before the stop occurs. It is not recommended that anyone actually follow the trades but rather observe. The senior trader will report his rationalization for taking the trade. We feel something may be learned by watching the senior trader make a typical error or trade on emotion. And if something is learned by room members and they do not have to take a loss, then that is a good thing.

When a call is made, we feel the ideal way to enter the trade is to put half of one’s normal position on “at the market,” then the other half at a price that is slightly more favorable to the trader. This should not be confused with adding to a losing position. Many times as a call is initiated when the price is beginning a move more rapid then it has in the previous few minutes and a buy will occur higher than a couple of minutes ago and a short will occur lower than a couple of minutes ago. So even a tiny pullback within the immediate price bracket, tends to give a trader a more favorable entry point. The stop is usually set at one level. Entries and targets may be given at multiple levels. Typically the senior trader will suggest newer traders exit half of their position at a certain price then the balance at another price if the trade becomes even more profitable. Alex and the other more 'seasoned' traders in the room may hold their positions for a more favorable exit. Depending on your skill level, you may wish to make the decision to exit at that time. Our trading results page will reflect Alex's fills and exit levels.

Once again, please remember that these entry and exit techniques are to be used as part of our trading plan. More experienced traders are welcome to modify these rules at their benefit. We want you to learn and develop your own profit taking skills as well. We're not here to create drones.

New traders, please remember to take partial profits at +7 ticks. If your trading 2 contracts and were short, you'd cover 1 when you were up 5 points. This allows you to lessen your risk right away and hold for larger gains

New Traders: This takes us to whom we define as new or more experienced traders. Anyone with less than 12 months of trading experience should be considered “new” traders. In addition, we prefer to add anyone trading for any length of time, who has not experienced a profitable period lasting 3 months or more to the ranks of new trader. It would be time to unlearn what one is doing. Perhaps the market has made a drastic change, or that expensive back tested, curve fitted system has finally burnt out.

Important: Please also read Bear's blurb on how to use/follow our trading calls: http://puretick.com/BB2/viewtopic.php?t=49

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Alex L Wasilewski