Your Power Emini Desktop Alert Software includes 2 separate trading algorithms for each Futures instrument. The ES-M tab in the software runs the Momentum Breakout System, which is intended to capture LARGE POINT MOVES (10, 20, 30, 50 points) on days where the market makes a big directional, trending impulse move. See this page for the Momentum Breakout System Overview.
The Power Scalper algo (ES-S Tab) (documentation below) is for more active intraday trading – based on tighter tolerances and a different calibration of the Dynamic Trigger Range. The Power Scalper runs the same Momentum Breakout System algorithm, but the different calibrations means the Dynamic Trigger Range is much narrower and you will see a lot more alerts throughout the trading session.
System Documentation for Power Emini Power Scalper System
The new ES Power Scalper Algo (ES-S Tab) is designed to alert you to Price Impulse Moves of 1 to 4 Points and is very adaptive to changes in price direction even within a larger scale direction impulse move.
Notice above how the market made a large scale up move off the open of 10 points. The Power Scalper may give you several entry points in the direction of the overall move but also alert you to counter-play the move if a deep pullback is detected.
Watch This Video On Trading the Power Scalper System
Ninja ATM Setup
Understanding ES Scalper Trade Triggers
For the MINIMUM ES SCALPER TRADE TRIGGER I recommended playing off the High/Low of the first PENETRATION BAR past the barrier. A CLOSE PAST THE BARRIER IS NOT IMPORTANT.
Set up a 1-minute OHLC Bar chart and the first bar that PENETRATES the barrier, at the close of that bar the HIGH/LOW becomes your NEW secondary TRADE BARRIER. NOTE: It is VERY IMPORTANT that you use this trigger off of a 1-Minute chart.
Analyze How Price Crosses The Trade Barrier
While it is recommended to key off the High/Low penetration bar as your new secondary trade barrier, there can be exceptions to the rule. Be suspect if you get a parabolic type LONG-RANGE surge past the trade barrier, (1-2+ points) as your failure rate will near 50/50.
ES Scalper Setup Examples
The examples below show the basic types of 1-minute setups you will see with great frequency on the trade barrier penetrations.
Example #1 is the basic single bar penetration. You can play a 1-tick move past the outer range of that bar.
Example #2 shows a 1 bar pullback after the penetration bar where you will see a lower high or higher low in the case of a short.
Example #3 shows several consecutive bars with the same high/low after the penetration.
Example #4 shows a longer pullback wedge/flag formation that occurs after the penetration. You normally see this after a long range penetration bar and you will see multiple pullback bars that revert back towards the barrier. In this example you can see a pullback of 3 lower highs after the penetration bar.
Understanding The Scalper Auto Trailing Stop
The System Auto-Trailing Stop for the Scalper Algo is designed to accelerate fast and help you capture quick moves. i.e. once a trade takes off in our favor the trailing stop will kick in when the system detects there is enough wiggle room between price and the barrier. This will typically be a move of 1.0 point past the barrier.
It is recommended you use an INITIAL protective stop based on the specific trade configuration you are using and employ the trailing stop for a secondary part of your trade AFTER you hit your first delta target.
Once a trade moves in our favor we will see scenarios where the price will be bracketed in between our Scalp Targets and the Trailing Stop. i.e. the trade becomes a WIN/WIN … we will be taken out by one or the other. Either results in a profitable trade. Note: If you do not purposely pull profits at one of the designated scalp targets you may be able to stay in trades for much larger point gains should the market throw us a big impulse move to work with.
Tips For Trading the Power Scalper:
1) You are NOT going to be able to trade every Alert – so your goal is to be very selective. The Dynamic Trigger Range shifts constantly throughout the session and may issue 20+ alerts per day (not including after-hours). The Alert Software is designed to give an Alert every time price crosses a Trade Barrier. That doesn’t mean every attempt will follow-through.
2) In choppy markets you will see the price attempt to escape the Trigger Range – poking through it in both directions – but then price reverts right back into the range over and over. These are the type of choppy conditions you want to avoid. When the market is dull, low volume and range-bound (like around the lunchtime lull or during the summer doldrums), you want to trade when there is “action” – not during dull periods.
3) Most days it’s better to trade early in the day and then wrap it up for the day – don’t over-trade. The best price action and volume typically comes early in the day. However many days you want to avoid the first 5-15 minutes if the price is chopping up and down in a range. Wait for the price to escape the opening range.
4) Be extremely careful if you are trading outside normal market hours. Our back-end algos run around the clock but you want to trade YOUR preferred instruments during active market hours. Also be aware of extra margin requirements to trade the Globex session. Best to stick to normal hours, though occasionally the system will catch a significant pre-market move – usually if there is news or something driving big volume before the regular market open.
5) Trade on Sim for the first couple weeks at minimum. It’s going to take at least that much time to become familiar with the behavior of our system – and the nature of the Dynamic Trigger Range over multiple types of market sessions. You will need time to get familiar with trading using the Entry strategies.
6) There are basically 4 ways to take entries – and each will have varying degrees of success in different market environments. The analogy we like to use is that if you are playing baseball and you are up to bat, you are going to swing differently at a curve ball than you would a fastball. You would swing the bat differently if you were trying to get a base hit than if you were trying for a home run.
– wait for a 1-minute close past the Trade Barrier (conservative)
– wait for a 1-tick move past the micro barrier (the high or low of the penetration bar)
– place a limit order 1-tick past the barrier (super aggressive)
– wait for a technical formation at the barrier to develop
7) Since you are Scalping – be certain to take profits quickly when they are there. Also be sure to move the stop quickly when there’s a chance. If ES moves say a point in your favor it’s imperative to take a profit or sell a partial position – or move up the stop. This is why it’s called Scalping. Don’t be afraid to get stopped-out at breakeven.
8) If you are primarily going to be trading the Power Scalper algos, you really should bite the bullet and download a Demo of NinjaTrader and use our Indicator on the Ninja Chart. The Scalper is fast-moving and having everything (including the alerts) plotted right on the chart – and shifting in real-time – makes it completely worth it. You can run the indicator on Ninja and still use a different broker for execution. Get a Free Demo of NinjaTrader with Real-time data here