Pictures are worth a thousand words -

Here is an alert from today -

** ALERT  **  Time= 1040: The current price action
is bearish. Short positions taken on upside rallies
may be beneficial between now and the close.

Great week! This must have been the most volatile week in a decade or two. S&P500 Emini futures were trading of up tp 4-5 million contracts a day!

We prediced last Sunday that the market would decline from Monday into the lows of Thursday and rebound from there.

Certainly the Federal govenment intervention in the stock market operation has coused the 100point+ rally in the last 2 days. However, our members were quite satisfied with 80-90 point gain by Thursday lows.

Another great week for EminiForecaster -

In an attempt to put the current financial crisis into perspective, today’s chart illustrates the 10 largest Chapter 11 bankruptcies in US history. As the chart illustrates, the bankruptcy of Lehman Brothers earlier this week dwarfs all previous US bankruptcies. The US government has taken the approach that some companies are ‘too big to fail’ as failure could have devastating systemic effects. In the case of Lehman Brothers, however, the bar as to what is too big has been raised - considerably.

We have been running this new feature - morning alerts for about two weeks now and the response from our members is great.

First update comes out at 10 am and shows what kind of day it is fixing up to be and then usually at 10:05 or later we alert our members of a long or short entry for the rest of the day or until the satisfactory profits are reached.

Here is an example of today’s alert with a results graph (click to enlarge) -

and here are some more examples from the past 2 weeks -

Of course this tool is not perfect and here are a couple of losers -

Here is how you can use Daily Guidance Alerts to help you trade -

- Do not trade against the alerts

- If the alert corresponds with the G-Line for that day you have a higher probability of a successful trade

- Gives you overall direction of the market and predicts the direction for the rest of the day

- In today’s volatile markets you can pick up 10-30 points a day

- Can be used for people who just want to trade once per day

- Losers are small and stops can be used

- Options traders can benefit greatly from our alerts as well

- We make improvements to the alerts based on your input, so when you join our team you too will have a hand in further development of this feature

If you still wonder exactly how this works here is a corresponding video recorded by Rob 2 weeks ago for our members, since then there have been some changes and improvements to the alerts -

By the way the forecast for this week is working out great, I won’t share the details but let’s just say we are nailing it!

To take advantage of the new feature and our G-Line forecasts sign up today -

September 16th, 2008. I don’t like to brag but lately too many traders have been getting hurt in the markets and I think it is unfortunate. Today for instance was one of the most volatile days I can remember - AIG opened below $2, a day after a 4% sell off, FED meeting, bankruptcies, well, you know the rest of the story.

As you know I trade all over the place, without stops, indicators or other clutter.

My only tools that are available to everyone are EminiForecaster.com G-lines and MarketDayTreaders.com G-signals - that’s it.

Having said that, today, I was able to outperform myself! When volatility kicks in I reduce the number of contracts I trade, sometimes down to only 1. This is good because I know I will get all the benefits (and risks) of a volatile day like today. Just look at today’s 5 minute chart and calculate an average bars’ range, some 20 months ago that was the range of an entire week!

Anyway I traded like a maniac trying to beat the signals using my intuition and experience. And here are the results:

- 10 round trip trades

- $4,500 or 90 ES points

- quit trading for the day at 3pm EST

- made about 33% on that particular account

Here is how G-Signals from MarketDayTraders.com performed today (with a 5 point stop) -

click here for more history charts

Not bad, as you can see I took advantage of some of the trades that were recommended -

To learn more about G-Signals go here http://MarketDayTraders.com

Images are copyrighted by TradeStation (TM)

Market has plummeted as was forecasted. Today - Tuesday market lapsed down as much as it was supposed to go down today. So the market performed what I call a “snap-back” to the G-Line. This happens often and you can see that in our past forecasts

Here is what I mean -

Depending on what the forecast looks like for the rest of the week a trader can either cover his shorts at the open or move his stop to lock in the profits.

This is a great example of why our forecasts should be used primeraly for weekly swings and not intraday noise.

Here is another example of the snap-back on the entire week -

1. Get caught up on your unanswered email
2. Update your To-Do list, goals
3. Call people you haven’t spoken in a while
4. Visit gym for god’s sake!
5. Write a trading plan for Tuesday and the following week
6. Finish reading that book that’s been laying by your bedside
7. Go outside, get some fresh air
8. Analyze your account equity and find ways to improve your trading
9. Get social - traders tend to be isolated/antisocial. Join online social networks like twitter, myspace, youtube, facebook, trade2win.
10. Spend time with your family members!

From EminiForecaster.com we wish you a happy Labor Day!

Let’s look at the last 12 months and pick the best forecast results. But before we do that let’s first talk about the statistics of what we do so we can better under understand the implications of it all in the grand scheme of things.

We use 15 minute bars for our charts. There are about 130 bars in a week, so if you nail the direction for the week and the pivot/turn point to the bar (a perfect forecast for one pivot point) then the math comes out to be  (2*1/135)  a 1 in 270 chance from random (by the way, the 2 is for the direction of the forecast).  Therefore, picking at random, you’d expect to guess this correctly about 3.7 times in about 2 years time, or just under twice a year.

As this is achieved progressively with any accuracy, the odds against achieving this become staggering.  For example, if you were to pick two consecutive weekly market turning points with perfect accuracy, the probability of achieving this would be 2* 1/270 * 1/269, or 1 in 36,315.  That is one time in 36,315, 2 week periods or, once in many lifetimes!  Beyond this, the computations become increasingly complex, but as you can see, the odds against achieving consecutive accurate forecasts defies any reasonable measure very quickly.

Yes you can possibly get dumb (or smart) luck or pick up a tip or just use your experience/intuition but most people do not have those skills yet. I wouldn’t rely on indicators/oscillators for this task either, read Rob’s post where he takes apart this long-living myth.

This is where G-Lines come in. Keeping the 1 in 270 chance in mind let’s look at our Top 5 forecasts in the last 12 months. We will start in descending order -

#5. May 2008. Monday - a holiday, projected low on Tuesday comes in as projected missing by a couple of bars - market takes off for 40 points. Thursday afternoon market makes a projected high to the minute! While reversing on a dime we pick up another 5 points by Friday close for a total of 45 points or $2,250 per contract -

#4. October 2007. Monday low comes in to the bar, Friday high comes in to the bar. Market tried to deviate from the G-Line but it snapped back right to it just as fast. Total for the week - 50 points or $2,500 per contract -

#3. August 2008. Monday high comes in within several bars though going up a bit more than expected, in terms of the forecast it was nearly perfect. Market declines into both of the projected lows of Wednesday and Thursday giving us a nice 35 point drop. market starts taking off a bit early but still within projected lows. In fact if you look closely Friday and Thursday switched around - that happens sometimes. Further, market goes up into projected Friday high for another 25 points. The reason why this forecast is at number 3 spot is because we nailed 3 pivots in 1 week (I won’t even tell you the odds on that one!). Profit total - 60 points or $3,000 per contract -

#2. October 2007. High comes in on Monday open as forecasted and low comes in on Friday close to the bar! Simply put - perfect forecast. Profit total - 60+ points or $3,000 -

#1.

Monday looks pretty good - total match. Up from there into Wednesday high area for a nice 15 point pop. Then here is where all the fun begins. While “trend followers” are jumping head over heals on this market at the end of Wednesday, we know what is coming - instant death! Market plunges over 60 points by Friday projected low completing our forecast. Total profit - 75+ points or $3,750 per contract -

We do our best to have these type of forecasts as often as possible, but we cannot control the market ;-) . We just show what the market SHOULD do, it is up to it to follow our forecasts. When you think in terms of statistics and probabilities you will start to grasp the task at hand, however, we have proven in this post that predicting market perfectly is absolutely possible.

For more of our recent history go here http://eminiforecaster.com/history.html

Serious traders have rules they ‘follow”. I too have a set of rules… somewhere. Once you’ve made a few hundred mistakes and a few dollars you start to follow rules automaticaly. A good rule to have for trading rules is not to have too many rules because then it is hard to break them if you only have a few and you don’t beat yourself up (as bad).

Here is a list of my favorite rules-

- Don’t lose money

- Trade only in the direction of G-Lines

- Use stops (with discretion)

- Set weekly goal (10 points for me)

- Be patient (but dont miss a move!)

- Accept a loss and move on

What is your favorite set of rules? Leave us a comment below