ES array triggers

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AMMO Rules 2.26.03

1) Assess yesterday's market action for

a. Momentum patterns

b. Scenario patterns

c. Range
The last objective (scenario or momentum) from yesterday is the first objective for either the overnight or the day session

d. Determine the dominant trade or number for the day (you may place a resting order to get in that trade.) If you are in it you have the chance to catch the entire days range.



2) On the open if the mechanical trade supports a move to that objective the trade qualifies if

a. Buy must be above the starting point (scenario#) or

b. The sell is below the starting point

c. Otherwise the mechanical trades work best the second time through

d. Mechanical trades must be a sufficient distance from their first objective to allow a profit



3) The function of a VAR number is to allow some discretionary range for the trader to adjust the trades to current market conditions. They are to determine entry points, not stops (stops are a fixed distance from the actual number, not the fill price). The 3 point stop is adjusted so that the stop is not on a whole number.



4) Momentum numbers

a. Traded for the breakout only when the previous day was a momentum trend in same direction

b. Otherwise they should be faded the first time the price enters their sphere of influence, if it's the dominant point

c. If there is a double bottom or a double top within 1.5 of the momentum number it should be faded

d. They should be traded for the breakout either the third time up or if they penetrate the previous test

e. If penetrated, on the first attempt or subsequent, and they confirm, they should be entered in the direction of the penetration on the retracement



5) Scenario trades are determined by what happens in the market

a. Initial determination is made by the initial range which may be determined by anything from the first minute to the first 10 minutes

i. Trend moves will tend to happen very quickly

ii. Non trend moves may take longer to develop

b. The opening action will eliminate at least one possibility

c. Scenarios are adjusted during the course of the day by what occurs or by what fails to occur: a middle scenario can change into a first or third scenario by failing to reach a target

d. In an up scenario

i. Buy the starting point or on the mechanical buy number

ii. Take a profit at the first up objective the first time up if it is not penetrated. (you may reverse for a scalp trade)

iii. Sell a double top that is contained by the 1st up objective

iv. Buy the third time up

v. Buy the 1st up objective if the initial thrust penetrates (penetration in this case is defined as the target number greater than the VAR)

vi. If penetrated and not already long, then buy the number on the retracement

vii. 2nd up objectives

1. take a profit first time hit within the VAR and potentially fade it

2. sell a double top

3. buy the third time it is touched or if it is penetrated on the 1st or 2nd attempt ( i.e. if it breaks the previous high plus the VAR)

e. do the opposite in a 3rd (or down) scenario

f. Middle scenario

i. Buy the first down objective and sell the first up objective (either order) - don't fiddle in the middle

ii. If the momentum number is contained between the starting point and the first objective and the market holds within 1.5 this could be the high or low of the day and this could be the actual 1st objective

iii. A double bottom or top on a momentum number between the starting point and the 1st objective is likely to be the high or low of the day.

iv. If there are no momentum numbers between the starting point and the 1st objective fade the objective the first time and on an apparent double top or bottom join the break out once it is penetrated on any attempt, the scenario has changed



6) Preemptive trades

a. The artistry of this system is in knowing which signals take priority over other trades. Once in these trades stay in them instead of taking scalp trades in the opposite directions.

i. This may be determined by double numbers but not necessarily

ii. This may be determined by the relative positions of the numbers

iii. This may be determined by what was the most significant number or pattern from previous days

iv. This may be determined by the chart pattern at a particular point

b. A dominant signal has directional priority

i. You may want to manage trades by taking profits and reentering

ii. Avoid exiting the position too soon to take a scalp trade in the opposite since this precludes building a position in the direction of the trend



7) The trade you talk yourself out of is the trade that you should be in

8) The one factor that you don't express and that you hold on to is the key to the trade

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Originally posted by Bruce Johnson

http://www.ammotradinggroup.com/

The guy finally got through chemotherapy

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