{"id":1933,"date":"2010-03-10T06:00:58","date_gmt":"2010-03-10T10:00:58","guid":{"rendered":"http:\/\/club.ino.com:80\/trading\/?p=1933"},"modified":"2010-03-10T10:54:42","modified_gmt":"2010-03-10T14:54:42","slug":"6-key-components-of-winning-trading-strategies","status":"publish","type":"post","link":"https:\/\/wwwtest.ino.com\/blog\/2010\/03\/6-key-components-of-winning-trading-strategies\/","title":{"rendered":"6 Key Components of Winning Trading Strategies"},"content":{"rendered":"

\"\"Today's Guest Blogger is Chris Dunn of Emini Academy<\/a>. Chris and the Academy specialize in identifying high probability trade setups in the fast-paced e-mini S&P futures market. Today Chris is going to share with us his key components in a winning trading strategy.<\/p>\n

---------------------------------------------------------------------------------------------------------------------------------<\/p>\n

Over the past 8 years, my team and I have been able to test over 200 different trading strategies and systems in the e-mini, currency, and equity markets.\u00a0 We've used and abused everything from standard indicators, to fully-automated trading systems.\u00a0 As a result, we found 6 key components that would repeat themselves in most of the winning strategies.
\n
\nThe purpose of this article is not meant to give you an all-inclusive list of what you need to have in a winging strategy; however, it\u2019s meant to show you the 6 key components we require of any strategy we choose to trade. Our required components are as follows: price pivot areas, momentum, multiple time frames, profit targets, entry strategy and high probability trade setups.<\/p>\n

1.\u00a0 Price Pivot Areas - When we talk about \"price pivot areas\", we're not referring to floor trader pivots or any single way of pre-plotting potential pivot areas.\u00a0 Rather, we're looking at what the market is doing now to determine current areas where the market has a high probability of changing direction.\u00a0 There are thousands of ways to find pivot areas.\u00a0 For example, you can use basic price support and resistance.\u00a0 Also, there are many indicators and oscillators that, when used properly, can accurately predict when price should pivot.<\/p>\n

\"\"
\n2.\u00a0 Momentum - It can be extremely valuable to add an extra level of perspective through \"momentum\" indicators.\u00a0 And since not all price moves are created equal, it's important to have the ability to measure the strength (or weakness) behind a move in price.\u00a0 Furthermore, gauging momentum into potential pivot areas can help you anticipate if an area should hold or break.<\/p>\n

\"\"
\n3.\u00a0 Multiple Time Frames - This has been an area of confusion for a lot of traders.\u00a0 I've seen people use everything from a single time-frame, up to a dozen time frames on a single market.\u00a0 We typically use two time-frames when trading a single market.\u00a0 This gives us different \"zoom levels\", which can help with pin-pointing our entries and managing our exits.\u00a0 We use our \"main chart\" where we look for our setups to line up.\u00a0 Then, we use a smaller chart as our \"entry chart\" to help us pin-point the entry and gauge short-term momentum.<\/p>\n

4.\u00a0 Profit Targets - We've seen a wide range of opinions when it comes to using profit targets.\u00a0 On one side of the fence, you've got traders who use automatic profit targets based on pre-determine dollar values.\u00a0 For example, Trader A might use an automatic target of 4 points ($200 per contract) on the S&P 500 e-mini futures contract.\u00a0 The other school of thought says that you don't need to use any targets, and only close the trade once the market shows conditions favorable to exiting the market.\u00a0 We use \"dynamic profit targets\", which give us a way to gauge the initial profit potential on a trade, but also leave us open to take profit prior to or beyond our initial target based on what the market is showing us in real-time.
\n\"\"<\/p>\n

5.\u00a0 Entry Strategy - Have you ever known that you were looking to go long or short, but didn't know exactly when to pull the trigger?\u00a0 If you answered yes, then what you are lacking is a structured entry strategy.\u00a0 An entry strategy is simply a set of rules that tells you when to pull the trigger and where to place your entry and stop.\u00a0 This is a vital piece of the puzzle that, if handled properly, can take a lot of the emotions and guessing out of trading.\u00a0 We typically have 3 entry strategies to any system.\u00a0 Basically, we look for entry characteristics that help us to execute a low risk entry and maximize the potential reward.
\n\"\"<\/p>\n

6.\u00a0 High Probability Trade Setups - When we bring all of the previous 5 components together, we look to structure what we call \"high probability trade setups\".\u00a0 Essentially, we're looking for repeatable, defined patterns that give us a distinct \"edge\" over the market.\u00a0 We want to know that every time we pull the trigger, we're going to win more than we lose, and our winners are going to be bigger than our losers.\u00a0 Some traders use fully-automated trading systems to take all the guessing out of their trade setups, while other traders use discretionary methodologies which rely highly on human intuition.\u00a0 At the Emini Academy, we use rules based, structured strategies that take the guessing out of what trades to take, but also allow our traders to trade the markets in a way that fits their personality and risk tolerance.
\n\"\"<\/p>\n

The most important thing is consistency.\u00a0 When you find something that works, stick with it.\u00a0 All too often, traders spend a lot of time and money \"system hopping\", or constantly changing their approach to the markets.\u00a0 The key is to find a strategy that you are 110% confident can pull consistent profits from the market, and then stick to that system.<\/p>\n

Best of luck in the markets,<\/p>\n

Chris Dunn
\nEmini Academy<\/a><\/p>\n

---------------------------------------------------------------------------------------------------------------------------------<\/p>\n

Chris Dunn is a professional e-mini day trader and the founder of the Emini Academy.\u00a0 The Emini Academy developed the proprietary MAP Trading Strategy for identifying high probability trade setups in the fast-paced e-mini S&P futures market. Chris will be doing a Free Live Webinar<\/a> on Tuesday, March 16th in which he will be offering Trader's Blog readers a special bonus. For more information and to enroll click here<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Today's Guest Blogger is Chris Dunn of Emini Academy. Chris and the Academy specialize in identifying high probability trade setups in the fast-paced e-mini S&P futures market. Today Chris is going to share with us his key components in a winning trading strategy. --------------------------------------------------------------------------------------------------------------------------------- Over the past 8 years, my team and I have been […]<\/p>\n","protected":false},"author":41,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[3093,3091,2049,349,2182,3092],"class_list":["post-1933","post","type-post","status-publish","format-standard","hentry","category-general","tag-6-key-components-of-winning-trading-strategies","tag-chris-dunn","tag-emini","tag-guest-blogger","tag-kenny","tag-trading-academy"],"yoast_head":"\n6 Key Components of Winning Trading Strategies - INO.com Trader's Blog<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/wwwtest.ino.com\/blog\/2010\/03\/6-key-components-of-winning-trading-strategies\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"6 Key Components of Winning Trading Strategies - INO.com Trader's Blog\" \/>\n<meta property=\"og:description\" content=\"Today's Guest Blogger is Chris Dunn of Emini Academy. 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