Over the past several months, I have been receiving email from Rockwell Trading on their various webinars and promotional offers. So I decided to check them out and decided to attend a webinar where their President spoke for about an hour on how he likes to day trade futures. The guy's name is Markus Heitkoetter, and he really knows his stuff. Normally when I attend these kinds of webinars, they are 10% content and 90% sales pitch. But, this was a totally different experience.
First of all, there were no boring powerpoint slides. Markus just brought up his charts and started talking and showing us what he was talking about. If he needed to write something down, he typed right on the charts. I really liked this hands on approach and it left me with the impression that this guy practices what he preaches.
More importantly, he really taught me things. He started by saying that he watches the futures markets using range bars and not time based charts. He said that since price volatility is what counts, that we should look at the markets using price volatility charts or what he calls range bars. Each bar is a specific tick size and a new bar only forms when the range has been exceeded. In the webinar he focussed on trading the Emini S&P using 8 tick range bars. I had never heard of this concept and it instantly made sense as a unique way to view the markets. Markus guessed that only about 10% of traders use range bars and he believes this gives them an edge in their trades.
Markus then talked about his favorite three indicators and how he uses them. Bollinger bands are used to determine the direction of the market; the MACD helps to reinforce market direction; and the RSI is used to tell the strength of the move. Armed with this knowledge, he then selects one of four trading strategies take best advantage of what he sees.
At this time, Markus pulled up the Emini S&P chart for that day and took us bar-by-bar through the day's trading session and showed how he uses the Bollinger bans, MACD, and RSI to tell him what the market is doing. On this day, the markets were initially moving sideways and he said this was when he liked to scalp the markets. He then told us about the Seahawk scalping strategy and the fact this was a very high winning percentage strategy where you only look to take a small piece out of a sideways moving market. The downside is that the risk to reward ratio is 4:1 and should be only used when the market is moving sideways. Now I understand whay it has to have a high winning percentage to be successful.
As Markus continued to moving through the emini S&P, we noticed that the market started to trend higher. He explained that as the upper bollinger bank turned up and the MACD turned the bar colors green, that we could look at entering a Simple Strategy trade. As the RSI start to climb, it confirmed the strength of the move and I saw how to enter a trade where our profit target was 12 ticks and our stop loss was 8 ticks. Markus said the winning percentage of this strategy was not nearly as high as the Seahawk strategy, but with a risk reward ration of 2:3, you could make money if you only had a 50% winning percentage.
As I said earlier, I have never attended a trading webinar where I received so much practical information. Markus even said at the beginning that his goal was to provide us with information we can use right away in our trading. He was true to his word and has given me much to think about. In my experience, he is one of the best at what he does!
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