How one trader uses eFutureVision methods & techniques to power his own trading business to success. George Dos Santos is a successful investor, trader & keen student of eFutureVision trading methods. This exclusive interview with George reveals some valuable insights, lessons, wisdom, and tips that all active traders can learn from. Many thanks to George. Enjoy!

Q. How & when did you get in to trading?

I’m a clinical psychologist (now retired) who came to the USA from Trinidad in 1963 and worked his way through college and graduate school.

After losing my first few thousand dollars in the stock market I started buying Mutual Funds such as Fidelity Magellan, Value Line etc. I opened an IRA account when they were first created and deposited the allowable $2,000/year into it. Peter Lynch had Fidelity Magellan growing at the rate of about 20% to 25% a year. According to the “rule of 72” my capital was doubling in value every three to four years.

When Omega Research offered their first end-of-day charting program, Super Charts, I purchased it and read Alex Elder’s “Trading for a Living” and John Murphy’s “Technical Analysis of the Futures Markets.” I learned a lot from them and I still use Super Charts to provide me with the bigger picture of the markets. Omega does not support Super Charts anymore since they now offer Tradestation but I still use it.

Q. Were you consistently profitable from the very beginning? Tell us about the trading methods you used and your early success (or lack of it!)

As soon as I started working full-time and saved a few thousand dollars I went to a brokerage firm and spoke to a broker who opened an account for me and bought shares in a medical company. Weeks later, I went to see the broker who informed me that the stock went to “zero.” I asked him why he did not call me while it was collapsing and advise me to sell it and he had no answer. Much to his surprise, I thanked him for teaching me a very important lesson, and that is that NO ONE was ever going to handle my investment decisions in the future. I told him that I would learn all that I can and make my own decisions in the future. So I was not successful in the beginning.

My early success was due to my learning all I could about technical analysis from Alex Elder, John Murphy and in 2000 from John Ehlers. I used those methods suggested by them. They included Alex’s “triple screen” approach, Moving Averages, MACD etc, John Murphy’s chart patterns, and John Ehlers’ MESA software, especially his “instantaneous trend line” and “kalman filter.” I also read many financial periodicals such as The Wall Street Transcript, Forbes, Fortune etc.

When I felt confident enough to do so, I sold some of my shares in Magellan and started doing my own investing using Super Charts and was quite successful. I had early success in the late 1980’s and the 1990’s owning technology companies such as Dell and Microsoft.

In the beginning I relied on moving averages, MACD and its divergences, RSI and Williams %R.

When John Ehlers published his article, “Adaptive Trends and Oscillators” in Technical Analysis of Stocks and Commodities in May 2000 I purchased his software for Super Charts and I have been using it ever since to indicate whether the market or stock is in a trending mode or cycle mode and if there is a crossing of the Kalman Filter above or below the Instantaneous Trend Line. His indicators, “Instantaneous Trend Line” and “Kalman Filter” are also available on Fidelity’s Wealth Lab Pro.

I sold most of my stocks and got out of the stock market in April 2000 when it was clear that on the Weekly charts, there was a massive divergence of MACD histogram from prices of the S&P 500 and many of the stocks I owned were beginning to falter.

At that time I was not comfortable shorting the market or stocks so I did not benefit from doing so during the bear market starting March 2000.

Q. Some say that every trader has to completely blow up his account at least once before he can become successful. Was that true for you?

Except for my first loss mentioned earlier I never completely “blew up” my account after that. I lost a lot of money on some individual investments but I never put all my money at risk at all. Years ago I had a large position in Vimpel, the Russian cell phone company and Putin put out a false rumor about their avoiding taxes and the ADR dropped significantly. I took a big loss on that one.

Q. If so, did blowing up change your views/philosophy of the market in any way?

Yes! It taught me that I have to take complete control of my money and investments and not rely on others to make investment decisions for me. I listen to, and read all the opinions offered but in the final analysis I will make the investment decisions.

It also taught me to pay more attention to position size.

Q. Have you been consistently successful with the eFuturevision setups? Tell us about  your experience so far

I made 99% of my money as an investor and not a day trader. Day Trading is something new for me. Since I do not presently have a futures/commodities trading account, when I viewed the videos on your site I decided to plot the indicators on the Fidelity software that I use and do some paper trading at first. It became obvious that the 9/30 system was providing very reliable entries and exits etc. I decided to use the 9/30 system with the Direxion ETFs, TNA and TZA which track the Small Cap stocks. They are leveraged 3X so there is enough volatility to get setups. The first 14 trades were winning trades. Then I had two losing trades. I don’t do this type of trading every day.

Q. Was there a ‘light bulb’ or catalyst moment when you realized you were consistently profitable?

When I realized that the first 8 trades were winners, even though the sample size  was very small, I began to think that there might be a high degree of reliability in the 9/30 approach.

Q. What is the secret to your trading success?

Having a trading plan and following it. If I deviate from it I usually lose money.

Q. What is your favourite eFutureVison setup & why? 

My favorite eFutureVision setup is the 9/30. It is clear, consistent, relatively simple and easy to execute.

Q. What are your strengths as a trader?

I’m really not sure how to answer that. However, I learned to be patient and wait for the setup to occur before I enter a trade and not jump the gun.

In addition, I learned to take a profit and not let a winning trade develop into a losing trade. Many of the losing trades that I have had even before using the 9/30 setup were the result of not taking a profit. Like most people I tend to do well on the entries but not as well on the exits.

Q. How long are you usually in a position?

With day trading the 9/30 I might be in a position for anywhere from 10 to 40 minutes.

In my regular position trading I can own a stock for months at times.

Q. What role does risk-management play in your trading?

It is a key factor. With experience I learned to make it a significant part of my trading or investing.

Q. What are you doing when a position goes against you? Are you using stop-loss orders?

I have been using stop loss orders.

Q. Does market psychology factor in your trading?

It is an important factor in the position trading that I do but not so much for the day trading when I do it. As long as I follow the entry and exit rules of the 9/30 the market psychology does not seem to be as important in the day trading.

Q. How do you handle distracting thoughts and emotions during the trading day?

The first thing I do is turn off the volume of the TV and its talking heads that are the source of most distractions. Instead I play relaxing music.

If I am not in a good place emotionally I do not do any trading or investing. If I make a bad trading decision I review it and attempt to learn from it.

Q. How do you prepare for the trading day? Do you follow any routines or do you take it as it comes?

On days that I am going to be active in the market I usually go to the gym early enough to get back for the opening of the market.

I get breakfast, download data etc. and get ready for the open.

Q. How many hours do you spend in front of your screens?

If I am day trading, I am usually in front of the screens from the open to about 11.30am unless I have an open position that I need to manage. I would usually take a break for lunch or do other things and return for the last 1-2 hours.

Q. Isn’t it hard to spend that much time in front of your PC? How do you stay focused for such a long time?

It can be quite boring at times but I am able to keep myself busy with other things like reading or looking at a DVD etc. Unless I have an open position I am able to read, make phone calls, check email etc while I periodically check the screens to see if a setup is developing.

Q. How do you like to relax away from the markets?

I like to workout in the gym, read, do some self-hypnosis, cook, meet with dear friends and take walks etc.

Q. What equipment do you use? (PC, charting software, data, etc)

For the long-term view of the market structure I still use Super Charts software where I determine the Monthly, Weekly and Daily market structure and whether the market is trending or not. In order to take a position in a stock the weekly and daily charts must be trending up.

I have a desktop and two Laptops. I keep my Fidelity Active Trader Pro and Wealth Lab Pro screens on the desktop and I keep Best Choice software on my laptop.

I also have some screening software like Telechart on my laptop.

Q. Which markets & timeframes are you using on your charts?

On Active Trader Pro I use a 3-minute, 15-minute and hourly charts of ETFs, TNA and TZA. I am very new at using the 9/30 so I am limiting my day trading to these two. Most of my money is in IRA’s where there is no margin allowing me to sell short so in order to sell short I use the inverse Direxion ETF, TZA.  I have found that I need to turn on the pre-market trading otherwise the charts are too chaotic for the first hour or so and more often than not the trend of the last hour of pre-market trading continues into the open of the NY markets.

Q. Would you recommend eFutureVision to other traders?

I certainly would. I believe that it is one of the simplest, affordable yet effective trading approaches available that does not require many years of experience in the markets to be successful.

Q. What’s the best piece of advice you have for aspiring traders?

Be humble! As soon as you begin to think that you are invincible the market will prove you wrong. Keep learning and keep a trading diary and good records for review so that you can learn from your mistakes. Find a experienced mentor or mentors and learn from them.

Watch Rick talk you through an emini futures trade in this quick 5 minute video.

Have any questions? Leave a comment below!

Why choosing the right day trading strategies for the market conditions is crucial to your trading success.

One of the most common day trading mistakes is applying the wrong day trading strategies for the current market conditions.

That’s pretty much guaranteed to give you a series of losing trades, high stress levels, and negative P&L.

The goal of this article is to provide a basic understanding of how markets really work and how to determine which day trading strategies may provide the best trading opportunities & results on any given day.

So let’s jump right in and get started…

According to dual auction market theory, markets can do only one of two things;

They can either move sideways, ‘rotating’ up and down between two price levels – otherwise known as a ‘consolidation’ or a ‘trading range’.

Alternatively, the markets can move directionally – otherwise known as ‘trending’. This occurs when the market breaks out from its trading range and moves directionally until the market begins to consolidate sideways again.

Understanding this dynamic is crucial for consistent day trading success. Why? Simply because being able to identify the current  market conditions means we can apply the most appropriate day trading strategies for those conditions!

Each of these two basic market conditions (consolidating vs trending) require very different day trading strategies. There is no one-size-fits-all solution. We must be able to adapt our strategy accordingly to fit the market conditions.

Why does this matter?…

As an example, ‘directional’ day trading strategies are typically most effective when the market is trending strongly. However, trying to employ a directional strategy while the market is consolidating in a tight trading range will more often than not get you chopped around and stopped out of trades.

The intraday emini Euro chart below illustrates these principles of consolidation vs trend discussed in this article so far.

Hopefully you now understand why we need different strategies for different market conditions. So let’s take a look at two basic day trading strategies.

Almost every other technical day trading strategy in existence is a variation on the basic themes outlined below. It’s important to understand them.

Reversion to Mean

In a trading range the market typically ‘rotates’ slowly up and down without much directional bias, usually on low volume from one edge of the range to the other. The market will continue to behave like this until a break out occurs.

When these market conditions exist there is only one strategy to consider; To buy the prices near the bottom of the range, and sell prices near the top of the range. The idea is to exit these directional positions as the market returns to ‘value’ by rotating back towards the middle of the trading range.

This is what’s known as a ‘reversion to mean’ trade, or playing ‘ping pong’.

The success of this day trading strategy relies on the market continuing to rotate sideways within its defined trading range. In other words we are betting that the market will continue to rotate up and down inside the established range.

Break Out & Directional

Sooner or later a consolidating market will transition to a directional / trending market. This occurs when the market ‘breaks out’ of its trading range, typically on higher volume and continues to move directionally in one generally sustained direction. When the market does break out, we have a couple of options…

Option #1 is to take a directional position during the break out itself, although this can often be a risky entry as ‘false break outs’ are common.

Option #2 is to wait until the market makes its first pull back after the break out and then take a directional position for any directional continuation. This is the safer entry.

Bottom Line

During an established trading range the smart choice is to either sit on your hands, or play ‘ping pong’ with the edges of the range taking profits when you can.

During a trending market however you want to use a break out or directional strategy and get on board the momentum to maximise your profits.

Whether you trade emini futures, forex, stocks, etf’s or options, being able to identify when the market is consolidating or trending is one of the most important skills a discretionary trader can develop when it comes to consistently applying the right day trading strategies for the market conditions.

Want to learn more?

For a high probability directional trading strategy with easy to understand trade rules, look no further than our very own 9/30 method. Get instant access at the top of this page.

Welcome to the video update for Thursday, March the 25th. Today’s video update will focus entirely on the emini ES futures contract. This is a good practice to follow at the beginning of the trading day, to see how the smaller timeframes fit in to the larger timeframes, hopefullly allowing you to better define risk and identify higher probablility setups. As Trader Rick has stated before, successful consistent profitable trading depends greatly on trade selection.

Watch Trader Rick start with the weekly ES chart and go thru smaller timeframes, down to the 5 minute chart. Knowing where price is on the larger timeframes will help you make decisions on the smaller timeframes. Ideally, a larger timeframe will provide support in taking a smaller timeframe setup.

One primary purpose of doing these exercise is to identify if a trend is in force or not, what the momentum is, where support resistance is, then take advantage of what we know. There will be times when the best trade is no trade.

Good trading!

Welcome to the video update for Friday, the 26th of February. If you are a bond or note trader please start moving to the June contract (M). Ok, first up is the daily Canada chart where we have two patterns under watch. One is the ab=cd pattern. The other?

Trader Rick discusses the weekly EUR/USD forex pair where we may finish this week with another doji. What follows several weeks of contraction? At some point, expansion.

The pattern to watch in Thursday’s trading for the stock indexes was the ab=cd pattern. Trader Rick reviews the 60 minute day session charts for the YM, ER and the ES. The ES was a perfect ab=cd. After 3 more hours of trading, price took off to the upside, closing on the highs in all 3 markets. Pays to watch the larger timeframes, both day session and all session!

Good trading!

Welcome to the video update for Monday, October 26th.  Trader Rick starts with the weekly gold continuation chart where loss of momentum is taking place.  Last week was an inside week.  Expect a breakout in the next week.  On the daily look for a possible slingshot and support at the lower keltner.

For forex traders, take a look at the 60 minute EUR/USD chart.  Possible ascending triangle.  On the weekly euro currency chart, price continues moving higher.  Upside target is given.  Careful taking countertrend setups!

The dragon pattern is still intact on the weekly Canada chart.  There are some signs of waning momentum.  The daily chart shows near term support.  An aggressive 9/30 setup is shown.

Trader Rick discusses the crude and the 10 year note markets, followed by the indexes.  Be sure to see the intraday short setup in the ES from last Thursday afternoon that failed to materialize.  Good illustration of the importance to use stop losses!

Good trading!