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The Ultimate Price Action Pattern With Darrell Martin

TradingPub Admin | August 22, 2014

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One if the key elements to successful trading is to have a plan that is simple to execute. You need to filter out the noise, and have a system in place that alerts you to opportunities, identifies pivots and triggers entry and exit points.

Darrell Martin, founder and CEO of Apex Investing, hosts a number of trading education events both on the radio and his website. He is also a special educational partner for the North American Derivatives Exchange or Nadex. If you do not know what Nadex is, see the free library we have put together to learn more about this exchange and how you can trade it.

Darrell shared a wealth of information during his class, and we have summarized it below along with a link to the full recording of the session.

Five strategies to trade the market:

  • Apex Elite Trend Strategy
  • Reverse Trend Strategy
  • Momentum Scalp Strategy
  • Profit Popper Scalp Strategy
  • Spike Striker Strategy

Professional traders see the market differently, and becoming more like them can help you reap results similar to theirs. Professionals are able to filter out the noise and have proper expectations of market movement. They see expected volume, price, and expected moves and are able to anticipate and thus make a move before the rest of the market does for maximum benefit. They do look at indicators and other support for their decision making, as well, but mainly focus on where the orders are, as most trading traffic will happen there.

Learning to read the market volume and using a trading system to go along with that ability can indeed turn you in a consistent trader. That is why it is imperative to learn and understand the market for yourself, versus being spoon-fed by a guru. If you can find a proper trading system that suits your needs, and have access to a professional for mentorship, you have laid a rich foundation for success.

But first you must have a defined trading system with the following characteristics:

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Using a system can help you accomplish the goal of limiting your losses and letting your profits run. Then you will need a price action driven method that has a volume element to it, to define the steps in your trading. These steps must account for how the market moves and for the trader psychology aspect to ensure the rules are implemented consistently.  Basically you have to believe in what you do, so you can stringently follow the rules and not deviate.

The next element you have to implement is to remove time from the equation so you can capture the big reversals of the market. Time-based bars are illogical and choppy, as well as can mess-up indicators. The market moves to fill orders and you simply need to use one pattern that captures that fact.

APEX ELITE MVP TREND STRATEGY

The Apex Elite MVP Chart below gives you a road map for trend-following trading.  The “A” stands for alert, “P” for pivot, and “E” for entry. Entry is executed 3 bars below where the E appears and exit is set for 5 above the P. As long as the order fills in a couple of bars you take the trade, if not you stay out of it. MVP is the Momentum Volatility Predictor Line and is the dashed line, depicted in the image below. The Apex bars help form a smooth- looking trend as seen in the graph below:

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The Apex Elite Trending Strategy is simple, you get an alert, pivot and entry and then you execute the entry and exit as mentioned above, as long as the Apex MVP line and trend line are the same color.

MVP REVERSAL STRATEGY

If there are two APEX formations in a row, as depicted below, followed by a reversal arrow, we take the reversal strategy.

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  1. 2 APEX in a row same color
  2. If short P's have lower highs, if long P's gave higher lows
  3. Ideally MVP line does not change color (ie from red to green) during the formation of these 2 APEX patterns
  4. The opposing MVP with arrow appears
  5. Enter 3 ticks above the high (buy green), low (sell red) of the bar with the arrow
  6. Trail stop with MVP Volatile offset line (red/green dashed line)

MOMENTUM SCALPS

If the actual volume is greater than the expected volume, as depicted in the image above, we have a momentum scalp trade. We go in the direction the bars closed and exit 3 ticks below.

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PROFIT POPPERS

Those are used on choppy market days when a trend is hard to define. The trade is executed by entering the E bar, versus 3 bars below it, as in the Elite MVP Trending Strategy. You then exit right before the A bar. It is bigger than a momentum scalp and normally is used when volume is not defined as well, and no massive runs are expected that day either.

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SPIKE STRIKERS

Some traders like to trade with time-based indicators, whereas this trade is based on volume spikes. If you see a spike you go in the opposite direction. If it is above it you go short, if it is below it you go long.

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In summary time has to be removed from the equation and a simple pattern has to be used to trade. Further, you have to filter your entries and set your stops. If you allow your stops to trail you can let your profits run. Learn to use expected volume and ranges, so you can trade more like a pro.

If you want to simplify your trading and learn more about these strategies, sign-up for the $7, 4-week promotional trial Darrell extended for the Apex Investing trading education - CLAIM YOUR SPOT HERE

WATCH THE FULL CLASS WITH DARRELL MARTIN HERE