Track 'n Trade Bulls 'n Bears Trading System
Trade Demonstration: Trading Through Whipsaw
In this Track 'n Trade Trading Trading video, I want to talk to you about Whipsaw, Sideways markets. Now, it's easy for me to bring you in and show you a chart that looks like this, and say, 'Oh, isn't the Bulls 'n Bears great? Look, it gave us a wonderful signal of the bottom of this big trend, and look at how much money we made!' That's easy, you know, the Bulls 'n Bears is wonderful in that way. It has that ability. It has that capability of giving us these long trends and that's why we love the Bulls 'n Bears. But markets are not always in big, long trends like this. Often times, markets are in sideways channels. If you can't make it through, what we call a sideways channel, or through a Whipsaw area. You'll never make it, to the big long trends to pay you back the money that you would've made, had you been able to get to it. So, we don't want you to lose all your money, getting through a real ugly nasty area, like this one here.
I'm going to take you through this real ugly. nasty sideways market. In a trading scenario, using the Bulls 'n Bears, showing you how to cut your losers short, so that when you get to a nice trend, you can let your winners run. If we don't know how to manage our positions, when things are bad, we'll never make it to the good times.
That's what this video is all about- cutting our losers short, letting our winners run. We know this is going to be ugly, we know we're going to lose money throughout here. But I want to take you through this type of scenario and show you how to make it through there, without losing everything. So that you can cut your losers short and let your winners run.
We're going to come back here and we're going to start trading this market, right here. As we come along, we're going to trade, now we've got our Sell Signal. We're going to analyze this for a quick second. look at it, and we're going to say, okay, yellow followed by a red. The red Price Bar closed lower than it opened. It closed lower than it, then the previous Price Bars closed. So, although it's not a very big Price Bar, it wasn't a very big day, it is a Sell Signal, nonetheless. It is a Bearish Sell Signal. Now, Bearish of course we're using a margin account, so we can actually sell them, sell short. Go short the market. That puts us into a position in the market where we actually profit when markets drop.
We're going to come in here, and we need to open up our account. Let's open up our account, with, let's give it $10,000. We're going to do a margin account, becuase we're going to go short. Let's say we did this, we are in a time machine. Let's say we did it December 1st, we opened our account with $10,000. We're going to come in here, and we're going to place our order. I'm going to place our order just below the low, and I'm not going to get in with a market order. I'm going to use a Stop, on this one. I'm going to Sell, let's sell 50 contracts. We're just going to trade 50, eh, let's make it 100. Let's do 100. We'll trade to 100 contracts. Now we're going to Confirm. As we go forward, we see if we got filled. We did, we got filled! Now, where are we going to place our Stop? We can come in here and we course we can place in a couple different places. One place is behind the previous Price Bar, which is my favorite place. We could break it apart, but again, my favorite thing to do is to place it behind the previous price bar. Use the Bulls 'n Bears systems, use the Blue Light System, the Parabolic SAR, or whatever we want to do to break that apart. As the market continues to move forward. My favorite thing, is to get the market into an area of break even. Once we get these things to break even, then we can start making money.As that market moves forward, we want to give it a little room to grow. But we got stopped out. We take a loss. Okay? But we held our stop close, and you'll notice that we didn't have it way back here, where we lost a great big chunk of money. We had a close, that's cutting our losers short and letting our winners run
Trading is like playing a game of checkers, you're not going to win every single hand. You know you're going to lose some. But at the end of the game, you win. Okay? You still win the game of checkers, but you don't win every single hand. That's playing checkers, that's trading the markets.
We have to wait until we have an opportunity. Here's another, now look! It's saying go long in the market. So, we'll come in here, we're going to place our order just above the high of this market. We're going to buy 100 shares, we're going to confirm that order. We're going to step forward, we got into the market, where are we going to put our stop? put our stop behind the previous Price Bar. We're going to sell 100 shares behind the previous Price Bar. Let's step the market forward, and as that market starts to rally, we can break it apart. Let's say we're going to come in here and go Edit Order. We're also going to Trailing Stop, let's change that over to 50 on a stop. That gives us the opportunity to put 50 more somewhere else. We can put 50 more up here a little bit tighter, right behind that Price Bar. We're going to say, Sell 50 on a Stop. Now we broke our Stop into 2 different locations. As that market comes back around, and we got stopped out. So, we hang onto the next Stop. See, what that did by breaking that Stop apart is it reduced our risk a little bit. It stopped us out a little bit closer to the market, and we're holding a little bit further back on only half of the shares now. We're only risking half of the shares that we initially had. Now, we're going to wait, now as this market moves..oh, now we got stopped out again. Now we lost, again. Now we're getting a little frustrated, we've had a couple trades, but we just have to keep moving forward and wait for the Bulls...OH! The Bulls 'n Bears is giving us a Sell Signal. It's saying look, here's yellow followed by a red. That's a Sell Signal to go short the market. Look at it, it closed lower than it opened, but it closed the same as yesterday's close. Not a very good Sell Signal. Once again, I don't want to use a market order to get in. Let's use a Stop Order. If it goes, and if it drops below and it continues down, we're going to get into this market short. We're going to go ahead and we're going to Sell 100 shares. That gives us that opportunity to break them apart into multiple shares. We're going to step the market forward, and this time it went back to yellow. At this stage, we've gone from yellow to red, which is a Sell Signal, back to yellow, again. So, what do we do, here? In this situation, what we do is we cancel that order. I'm just going to right click on it, hit Cancel the Order, just Delete it out of there. We don't want to deal with it. That's another way that the Bulls 'n Bears can protect us, from going short a market, that we don't want to go short in.
It's gone back to Neutral. Now it's gone Neutral, again. Neutral, again. We just sit on the sidelines, and we wait. Now it's green! Now, this is not a very good green Price Bar. Look, it's an inside day. The high is inside of the previous Price Bars high. The low is inside of the previous Price Bars low. We have filters in the Bulls 'n Bears, if you come over to the Settings, notice I'm clicking on the little Bulls 'n Bears icon over here, it brings up the Settings in the left window. If we come over here, and we filter inside days out. Watch this, if I click that, that inside day goes away. We do have the filters which can clean those out for us. Now, I'm going to turn that back on, because nonetheless, it is a Buy Signal. We can come in here and we can go in and we can place our order. We can say Well, if it does break above that green Price Bar and I'm going to put it behind the, above the previous yellow Price Bar. Above the previous yellow Price Bar. Just because they're so close, and that's an inside day, it's a Buy Signal, why not, if the market rallies, let's go ahead and take advantage of it. We're going to go Buy 100, it's a Stop Order, so it has to rally, otherwise we don't get in. Step forward, nothing happened. It didn't rally. Let's go in and do the same thing as last time, we're going to go ahead and hit Delete the order, and we didn't take advantage of it. So, there's two trades, two Buy Signals where the Bulls 'n Bears kept us fro losing money. By changing the color Price Bar back, first, so that we knew we were not wanting to get in at this point. So, as the market moves forward, again, we're going through this ugly sideways market... here's a Sell Signal. Let's go through and do the same thing. We're going to come in, place our Sell Signal, Sell at 100, Confirm, step forward, and we're in the market. Let's come in and protect ourselves, we're going to put 100 shares, right behind the previous Price Bar, we're going to Buy 100, Confirm, if the market comes back against us. As that market, oh! Now it's coming back in dangerous territory, and we got stopped out, again.
As we go through these types of scenarios, we continually get stopped out, but we're taking very tiny little losses. Cut our losses short, let our winners run. Eventually, one of these is going to be the beginning of a big, long, run as we've seen. The market does eventually run, we don't know which one of these is going to be that big run, so we have to take all of the trades. We have to take every one of the Buy Sell Signals, we just have to manage our positions, so that if it's not a good one, and the market doesn't continue to run, we don't take a big loss. That's the thing about the Bulls 'n Bears, it can tell you when it a market it going to a positions, or setting up for a run, but it can't tell you whether it's going to run, or not. It can't tell you how long that run is going to be. So, it sets you up, says, let's take advantage of it, let's put some money on this market. If it runs, we'll be in good condition. We'll be at the beginning of the trade. If not, we get right back out, again and say, look, it didn't work out. Let's get right back out.
That's how we protect ourselves, through nasty sideways markets.