Ray's Chart Set Ups



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Ray's Chart Set Ups








People have asked me many times, with your development effort, your dedication to customer service how do you find the time to trade? Really, its not that difficult. What's difficult is monitoring your computer screen all day waiting for set ups or, taking the marginal set up because you need something to do. We have all been there, forcing the trade because your bored. What I find is by devoting time to NinjaTrader it can help keep me focused on trading the right set ups and waiting for them to come.

Following is a set up that I have been trading over the past month. I have spent a few months forward testing it with much success. I started trading this live with one contract September 1, 2003. I am not sure what name to give this, so I will call it the Ninja set up for lack of creativity. The initial concept of this set up came from a user (Ben) back in June. He provided me with the idea of using a Time Series Forecast indicator applied on a weighted moving average which in turn was applied to the data series. For the most part, I have no clue, nor do I care what these indicators do. All I saw was an uncanny ability to pinpoint some market turns. With some tweaking and testing and more tweaking, I came up with a discretionary set up that fits quite well for my style of trading.

The Ninja Set Up

The set up is a multi-time frame set up for the ES that uses a 630 tick to generate bias and a 70 tick chart to generate the signals. The trade attempts to scalp 2.5+ points with a 1.25 stop. The average duration of each trade is around 8 minutes.

A trend indicator is used to generate bias on the 630 tick chart. To build the trend indicator, you will need the following:

- 10-period WMA using the 630 tick chart as a data source
- time series forecast (TSF) indicator with a period of 5 and a projection of 18 applied on the 10-period WMA.

The indicator is bullish when:

Current TSF value > TSF value using the WMA value of one bar ago

The indicator is bearish when:

Current TSF value < TSF value using the WMA value of one bar ago


You can download a copy of the trend indicator for NeoTicker here.


Plot this indicator on a 70-tick chart as a histogram. You will end up with something like the image below.

The basic idea is to only go long when the trend indicator is bullish (green) and go short when the indicator is red (bearish). The actual trade signal is generated on the 1st retracement after the trend indicator changes state.

1) After trend indicator changes state, wait for retracement

2) Retracement must be in the 38% - 62% fib zone

3) Wait for a reversal candle and enter on the tick above the reversal candle (for long reverse for short)

4) Exit based on the NinjaTrader strategy as per the image below. What is not displayed is the BE+ value of 0.75 points.

This does seem like a very simply enter on the pullback of the 1st change in trend. In fact, this is very much what it is with the exception that the trend indicator filters out when or when not to enter. I also mentioned that this set up is discretionary which means that I personally do not enter each set up that I get. I also use 5 and 15 minute time charts with 20 and 200 MA to filter out set ups that come at times of low probability based on those charts.


Below are actual live trades with this method for the time period September 1, 2003 - September 19, 2003.


The statistics are based on trading only one contract. The one area that I have been unhappy with is the low Avg Win/Loss of only 1.24. In my forward testing months of July and August, I had average between 1.7 and 1.8. I believe that the past few weeks have been an exception due to the tight ranges we have seen. The trades have not followed through as much as during the summer. Overall though, the method is tracking to generate 20+ points for this month.

Below are two actual trades that I took over the past week.

As time permits, I will add more and more of the various set ups that I trade myself.