Saturday, March 21, 2015

Challenge update: target 2 accomplished, next target: US$ 20,000

After 27 trading days we completed Stage 2, moving on to Stage 3 now with the objective of US$ 20,000, increasing trading size to 4 lots now.

The more we achieve, the better we feel, feeling good means easier trades, letting it run to targets or getting stopped out does not affect psychological capital, putting me totally in the "zone".

The Stage 2 target means US$ 15,000, that is a 50% profit from the initial capital of US$ 10,000, if I was able to take this account to US$ 15,000 in a little more than just a month, no doubt I can take it to US$ 100,000 in the future ahead.

I'll keep you updated on the progress.

Best of luck.

Learn s simple system that works day in, day out. Click here ==> Diamond Setups.

Sunday, March 15, 2015

Consistent little bites will take you high, rules profit

Many beginning traders ask me:

- "How much can I make a month trading ES (S&P500 e-minis) with US$ 10,000?"

I like to answer that question with a couple of other questions:

Do you have a tested system that has a good win ratio?

Do you have a sound risk management strategy?

Does the system allow you to pull the trigger every time BEFORE the entry price gets tested?

How often does the system signal entries?

If the answer is yes to all or most of the questions above, then you must be grabbing money from the markets frequently, as long as you accept the randomness of the outcome and only leave at your target price (take profits) or if stopped out (small loss), profits will take care of themselves in the execution of 10, 20, 30 and more trades.,, not a single trade or two.

We have been trading over 5 years now using our Diamond Setups system, it gives us a consistent win ratio from 70% to 90%+.

The system generates an average of 25 trades a week on ES, below I show a typical week, let's use a possible outcome for 20 trades on the example below:

The STOP we use is always 2 points (8 ticks), winners make an average of 2.50 points, sometimes it makes much more than that, mainly when we have trend days, but we will use only 2.50 here just to give us an idea on the possible $ returns.

If we get the minimum return of 70% win ratio, out of 20 trades we'd get: 14 winners and 6 losers, what would that mean in US$?

14 winners ==> 14 x 2.50 = 35 points

6 losers ==> 6 x 2.00 = -12.00

Total in profits ==> 23 points = US$ 50.00/point = Total = US$ 1,150.00 per contract.

With US$ 10,000 you could trade 2 contracts, at least until you reach US$ 12,000, the result above would bring 20%+ in one week.

I think anyone who knows how to use a trading platform would be able to achieve that as the system we use is totally visual, you see it, you trade it, ahead of price getting tested.

Patterns repeat themselves over and over again, so when we see a pattern we like we act on it without reservation or hesitation, day in, day out, making our accounts consistently grow.

See below what you could expect when trading using the Diamond Setups:

- We watch the market waiting for a pattern to show up

- When a pattern we like shows up we calmly insert our buy/short orders including our predefined STOP and target.

- We sit back and watch the price either test our target and give us a profit, or hit our STOP LOSS (in 10 to 30% of the trades)

- No matter whether stopped out or with a profit, we just wait for the next setup.

Some traders like to stop trading after they reach 2 winners in a day and just start fresh the next day.

2 winners a day would give you 5 points a day, 25 points a week!

Just as an entertaining exercise, let's consider we took profits at only +2 every time and we ended up making just 15 points a week, let's see how big we could grow our account in just 3 months (12 weeks) increasing the size we trade every week:

Week1: US$ 10,000 - 2 lots - +15 pts = US$ 11,500

Week2: US$ 11,500 - 3 lots - +15 pts = US$ 13,750

Week3: US$ 13,750 - 5 lots - +15 pts = US$ 17,500

Week4: US$ 17,500 - 8 lots - +15 pts = US$ 23,500

Week5: US$ 23,500 - 10 lots - +15 pts = US$ 31,000

Week6: US$ 31,000 - 15 lots - +15 pts = US$ 42,250

Week7: US$ 42,250 - 20 lots - +15 pts = US$ 57,250

Week8: US$ 57,250 - 25 lots - +15 pts = US$ 76,000

Week9: US$ 76,000 - 30 lots - +15 pts = US$ 98,500

Week10: US$ 98,500 - 40 lots - +15 pts = US$ 128,500

Week11: US$ 128,500 - 50 lots - +15 pts = US$ 166,000

Week12: US$ 166,000 - 60 lots - +15 pts = US$ 211,000

That looks impossible, doesn't it?

But that's what you'd get if you could make just 3 points a day on ES, starting with a measly US$ 10,000, 2 lots on ES, even making just 2 points a day it's already really good, think about that.

Only the strong minds who commit to do what has to be done will be able to make it happen.

"Impossible only means that you haven't found the solution yet" - Anonymous

Sunday, March 8, 2015

Challenge update: Stage 1 complete - next: US$ 15k

I like to tell the traders who trade with me in our trading room: - "if we were able to meet the first target (it was a difficult environment on ES when it was close to its ATH (all time highs)) then we will be able to meet the next target, the last and beyond..."

Stage 2 target is at US$ 15,000, trading with 3 lots now, we need another 20 points on ES to reach the new target, which I estimate to be achieved from one week (if we get lucky) to max 2 months, I'll keep you updated on how we progress as usual, we already start with a small advantage of US$ 500, so this journey will actually be from US$ 12,500 to 15k.

We have been using a scalping system risking only 2 points per trade that has been yielding an average of 25 points a week, we'll be trading this system this week so we might meet that target real faster.

Discipline and a sound risk management are key to success in trading, we do not know what the market will do, so take all good setups, if wrong, get out, but if it works, let the profits run.

Bear in mind: The only rule that MUST NEVER be broken is to take a BIG LOSS, do not let that ever happen to you.

"Set your target and keep trying until you reach it." - Napoleon Hill

Trade well, best of luck! ;-)

Sunday, March 1, 2015

Challenge update: First month done: +14%

Hi traders!

The first month of the new challenge to take a US$ 10,000 account to US$ 100,000 has come to and end.

It was not easy to start trading a "small account" again, we need to win right off the bat or we go under water and that's exactly what happened on our first week, we lost, but we made losses up on the 2nd week and have closed the month with a decent +14.29% profit, not bad!

Although I did expect to reach our first target at +20% on the first month, it was not possible, it's always difficult to have a flawless execution, we end up taking profits too early on some trades, mainly after a loss, when it's a must to shrug it off and continue trading, taking the good opportunities that the market gives us without skipping any of them.

That's the reason why I always put a lot of emphasis on the state of mind of the trader, a trader needs to be really cold blooded mainly after a couple of losses, most tend to skip trades and by doing that they let the winners go, if you need to make money for your expenses from a small account, oh boy! I wish you luck, that's really, really difficult to make as emotion gets in the way.

Well, now we are ready to start our second month heading to the first target, besides the current day trading system we use, we also follow a scalping system for traders who like to take several trades a day with very small risk and modest targets, we have been following the results for such system this past month and it has been making an amazing average of 25 points a week on full size!

The system is really simple to use indeed, it's hard to believe it works so well, by risking just 2 points on ES, targets range from 2 points and up depending on the volatility of the market, and, as a real Diamond Setup it has a win ratio of 70%+,  I'll let you know how we do in March.

Make sure you have a plan for trading during the month of March and act on it, there will be great opportunities in the markets as usual, trade well.

Best of luck.

Sunday, January 25, 2015

New Challenge: from US$ 10k to 100k

Hi folks!

I'm approaching the challenge target at US$ 100,000 on the account we started trading last August, 2014, with just US$ 10,000, a great achievement indeed, all done in real time in our trading room.

To be very honest I did not expect to fulfill this target so fast but we got a great window of volatility in the last couple of months that has allowed us to meet that target in such a record short length of time of only a little over 6 months.

It was a great learning experience indeed for myself as I was able to put myself in beginning traders' shoes who are usually trading with a relatively small account, it made me remember how difficult it is in the very beginning to break the first barriers on Stages 1 and 2 (see trading plan below), which I do think are the most difficult ones, after breaking those first two we know it's just a matter of time (and discipline) to break through the next ones.

I did enjoy that 6 month journey so much that I decided to start it all over again, our initial plan was to grow that account up to 1 million Dollars, but as many traders have missed the beginning of the first challenge and have asked me to start again that I decided to listen to them and start it all over again, we'll start a brand new challenge on the first Monday of February, 2015.

If you want to participate you need to be a member of the Diamond Setups website where I call our trades and show exactly what I'm looking at on the charts to take a decision, members earn while they learn how I do to be consistently profitable by following a simple set of rules that I created and improved in over 25,000 hours of screen/trading time.

So we'll start trading a US$ 10,000 account with 2 contracts on ES (S&P500 e-minis) using strict risk control and by increasing the size we trade (or decreasing, if we lose and go back to a previous stage)  at the targets as shown below.

We'll go through each Stage, trading daily in our trading room until we complete the challenge's target at US$ 100,000 on the 7th Stage.

Stage 1 starts with: US$ 10,000 
Trade size: 2 lots
Target in US$: 12,000 – In ES points: 20
Time to reach target: 1-2 months

Stage 2 starts with: US$ 12,000
Trade size: 3 lots
Target in US$: 15,000 – In ES points: 20
Time to reach target: 1-2 months

Stage 3 starts with: US$ 15,000
Trade size: 4 lots
Target in US$: 20,000 – In ES points: 25
Time to reach target: 1-2 months

Stage 4 starts with: US$ 20,000
Trade size: 6 lots
Target in US$: 30,000 – In ES points: 35
Time to reach target: 2-3 months

Stage 5 starts with: US$ 30,000
Trade size: 10 lots
Target in US$: 50,000 – In ES points: 40
Time to reach target: 2-3 months

Stage 6 starts with: US$ 50,000
Trade size: 15 lots
Target in US$: 75,000 – In ES points: 35
Time to reach target: 2-3 months

Stage 7 starts with: US$ 75,000
Trade size: 20 lots
Target in US$: 100,000 – In ES points: 25
Time to reach target: 1-2 months

Join us at Diamond Setups, click here.

Tuesday, January 13, 2015

Challenge Update: Phase 6 Complete

We finally met our target at the 6th stage of our challenge at US$ 75,000, next target now at US$ 100,000, expecting to get there before 04/13/2015.

As usual we will increase the size we trade a bit more, now at 20 contracts on ES, if we lose and go back to US$ 50,000 we will decrease the size back to 15 contracts,

I'll keep you informed on our progress.

Best of luck in your trading.

Sunday, January 4, 2015

Stopped out... Next!

Do you want to be successful in trading in 2015?

If you have an edge then all you have to do is to follow the rules strictly pull the trigger every time you see that edge, if stopped out, just wait for the next setup and make sure you take it when it shows up.

If your STOP LOSS is not hit then stay in the trade and trail it until the market takes you out of the trade or your target is tested, it's as simple as that.

The problem is what most traders do instead is to skip the next trade when they get stopped out once, or they either try to outsmart the market by trying to buy it "cheaper" then what their edge is telling them and end up missing the trade by a couple of ticks or they just skip the trade due to the fear of getting stopped out again...

When they use their edge and take the trade another decision theys need to make is about whether they will scale out or not. Usually the best decision is to always use the SAME strategy as they did on the previous trade. If the trader feels better by scaling out, then they should scale out on all trades, but in my experience I see that most of the time "all in, all out traders" or "full size traders" do better than those who like to scale out. Of course these traders who hold FULL SIZE get stopped out more often but when they're right they make up for all the losses and much more, putting them ahead of those who prefer to scale out.

Let me give you an example on ES (S&P500 e-minis), the instrument I day trade on a daily basis:

Suppose you bought 4 contracts at 2050, if you like to scale out, your strategy might be to take half off at +2 points and then another contract off (25%) at +3 points holding the last contract until market takes you out. For this example we will suppose market gave you 10 points, so, you'd have made a total of: 4.25 points on FULL SIZE (half at +2, 1/4 at +3 and the last 1/4 at +10).

While those who bought and held full size have made a FULL 10 points, or more than double what you have made. If the average STOP size they use is 2 points then they'd have to be stopped out 5 times in a row to give all the profits they made back while the one who scaled out will give it all back in only 2 trades that they lose...

If you know that your edge gives you a win ratio of 60~70% then there is no reason to scale out. We DO NOT KNOW which trades will work before we trade them, some will work and some will fail, as traders we need to accept and live with that, that's the name of the game, there is no system that has 100% of winners.

Trading is not about one or two good trades but about a good SEQUENCE of well executed trades, our job as traders is to take all setups our edge tells us to take and manage the risk accordingly, that is all there is to it.

You will know if your edge is good after you've taken: 10, 20, 30, 100 trades, and not 2 or 3 trades.

So, in 2015 do the right thing and take ALL TRADES on your favorite instrument, unless you don't have an edge.

If you don't have an edge I can teach you a good methodology that you can expect to work on 70-90% of the trades, if you day trade ES or swing trade currencies (EURUSD, USDCAD, USDJPY).

It's a really simple learn and use, all visual. When you sign up you will join us in our trading room where I make the calls on the instruments I mentioned above and I show you exactly what I'm looking at on the charts to take that trade, you will learn when to pull the trigger exactly the same way I do to be consistently profitable.

Check our website to know more about the system and feel free to send me email with questions in case you have any doubts/questions on what we do. Click here: Diamond Setups

Let's make it happen in 2015, you can do it!

Happy New Year!