The Key Difference
THE THEORY OF RELATIVE TIMEFRAMES
Price movement is fractal in nature. This means price movement in one timeframe is the cumulative result of all price movements in many small timeframes that make up a large timeframe
Within any timeframe, there are only two directional movements that can be force – up or down.
One can never predict ahead of time, which directional frameworks will form, how far directional moves will go, or how long directional moves will last. No market ever moves in a straight line for long because buyers and sellers of different timeframes are always fighting for control.
The best we can do as traders is monitor a variety of timeframes, and see how these timeframes relate to one another.
A key premise of E=MC2 is that it never looks to pick a top or bottom in the major timeframe!
We can write an entire book about how picking tops and bottoms is the fastest way to the poorhouse in trading. Of course, tops and bottoms are always relative to a timeframe.
There are many trading approaches that will attempt to buy bottoms/sell tops in a shorter timeframe relative to the direction of a longer timeframe. These approaches try to buy at specific “pullback” levels (Fibonacci Retracement Levels, Support/Resistance levels etc.) These approaches contain merit, and E=MC2 puts this principle to use too, but in a much different way than by just focusing on specific pullback levels to buy or sell at.
Attempting to trade pullbacks at key price points can be very frustrating.
You miss trades that don’t pullback to what you think are key levels. You enter trades at key levels that never turn back around in your trade direction.
The key differnce between E=MC2 and many other trading approaches is that E=MC2 not only combines multiple timeframe analysis to make trading decisions in accordance with the fractal nature of price movement, but E=MC2 also lets the market determine the best way to enter on a pullabck according to unfolding market structure. E=MC2 also makes sure up volume vs. down volume confirms price behavior. You simply cannot have a sustained price move if it isn't supported by volume!
Small timeframes are used for optimal trade location relative to long timeframe price behavior, and in the end, when you combine big picture price direction with small picture trade location and sound trade management, all confirrned by volume, the overall probabilities will always be in your favor.
VOLUME AND THE MARKET – For a moment forget everything you have thought about price movement in the market. Forget about the value of indicators. Forget about overbought/oversold. Forget about predicting how far, or how long a price move may last.
The market cares about none of this.
The market is only about one thing in the end- filling the big orders of buyers and sellers in accordance with how patient, or how anxious, these buyers and sellers are at any moment in time.
We all know the constant tug of war between buyer and seller makes price go up and down, but E=MC2 takes this to a whole new level in an effort to uncover whether the buyers or sellers are anxious or patient, which allows us to uncover where and when high probability trade setups occur in relation to the level of buyer or seller anxiety.
The only way to do this is through VOLUME ANALYSIS. Proper volume analysis provides a way to constantly monitor which market participant is exhibiting patience or anxiety, and allows you determine when these conditions change.
In the end, the constant tug of war between buyer and seller is what drives price action, and you can take your trading to a whole new level if you learn how to measure who is winning the tug of war battle on an ongoing basis as price moves up and down in the market!
The E=MC2 books go into great detail describing how to monitor volume to determine whether the buyer or seller is winning the tug of war battle. We then are able to take this valuable information and apply it in realtime to uncover high probability trade setups.
TRADE MANAGEMENT - The reason successful trading is so difficult for so many is that three things must always be in place, and you can’t get any of these wrong - proper entry, exit, and stop.
A good entry from a risk/reward standpoint always takes into account trade location relative to multiple timeframes.
Good trade location always takes place on the smaller timeframe relative to the larger timeframe.
Finally, exits fall into place in accordance to subsequent unfolding price action starting with the small timeframe and evolving into the large timeframe price structure.
From a risk/reward angle we can take small losses based on the small timeframe, and large wins based on the large timeframe.
TRADE ORGANIZATION - Here is an example of the way E=MC2 teaches you to look at the market each and every day. You will learn to get in sync with market rhyhm which will provide you the trading advantage of having "big picture context" in place for all your trading decsions.
FRI - 11-12-2010
ES BIG PICTURE - Price holding above big picture 1200-1050 bracket setting path to new big picture 1280 high if price continuation can move past 1223. After gap breakout above 1200 price pulled back to test the 1200 pullback to swing support area. Price now sits inside 1216-1206 consolidation with an overall up bias as long as the 1200 area holds on any further pullback.
DAY SESSION PART 1 - (START) 1203.00 (OVENIGHT) - Price moves lower below 1216-1206 range all the way down to 1193 which is the true pullback to swing support for the 1200 bracket high area based on highs made during the first three days of November. Price rebounds strongly from 1193 all the way back to 1206 which is pullback resistance based on the 1216-1206 consolidation area. Monitor open to see if price can move back above 1206, or instead trade between 1206-1193. (GAP/FIRST MOVE/RETRACE) - Gap down but price is rolling over to an E=MC2 mechanical up trend from a C3 sell condition. Therefore, watch for first move up, and know you are still in a big picture downtrend on the 5-minute chart, which means to watch for trading trend to roll over to the downside in line with the big picture. The key will acceptance/rejection of the 1206 area. Price first moves up to 1208 area (pullback to swing resistance from yesterdays price action, and the first retrace then moves below intraday lows at 1202 to create a down bias for the start of the trading session.
Day session 1 E=MC2 opportunities - Buy 8:43, 8:50, 8:57 (C1) Buy 9:15 (C2)
DAY SESSION PART 2 - Price attempts to move above 1206 early but this move is rejected at 9:30 when price makes new intra-day lows, creating a powerful confluence first move-first retrace down bias- 1. 5-minute down trend that pulled back to resistance and rolled over 2. Rejection higher into 1216-1206 bracket 3. E=MC2 mechanical trend that turns down, all at the same time. Expect move to 1193 overnight lows until proven otherwise. After 1193 key support is reached a major triple volume divergence swing lower takes place signaling a counter-trend move higher. Price cannot test intra-day lows again, and the E=MC2 trading trend turns up to end the session.
Day Session 2 E=MC2 opportunities - Sell 9:35 (C1) Sell 9:52 (C2) Sell 9:59 (C1) Sell 10:49 (C3) Sell 11:01, 11:28 (C1) Sell 11:40 (C2) Sell 11:54 (C1) Buy 12:14, 12:24 (C1-C) Sell 12:48 (C3) Buy 14:01, 14:16 (C1)
SUMMARY - Overnight price moves substantially lower below 1200 to actual 1193 big picture support, and then rallies strongly higher above 1200 to start the trading session. The 5-minute trend starts in a downtrend from yesterday as E=MC2 watches the first move/first retrace in the context of the big picture as always which is now represented by two consolidation areas 1216-1206, and 1206-1193. Price fails to move higher into the 1216-1206 bracket which sets the stage to move to the lower edge of 1206-1193 bracket. From here price rebounds as expected and ends the session in the big picture 1200 pullback area to start next week.
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The E=MC2 trading method is a fully integrated trading program that incorporates the strengths, and eliminates the weaknesses of other trading approaches.
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STRENGTHS
(SAME AS E=MC2) |
WEAKNESSES
(E=MC2 ELIMINATES) |
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Mechanical Methods |
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Consistent Execution
Track Record of Performance |
Does Not Adapt to Changing Market Structure |
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Learn to Trade Courses |
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Market Structure defined
Trades based on Market Logic |
Fails to Tie trades into a Track Record of Performance |
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Trade Signal Programs |
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Real Trade Signals
Clear trading rules |
Black Box Approach - You are tied to the service for life |
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Even though E=MC2 integrates the best features of other trading approaches, you must realize that there will be challenges when you trade E=MC2 for real.
Making money in trading requires extreme discipline and patience. Even the best traders have trouble in these areas from time to time. E=MC2 builds these trading inefficiencies into its trading plan, and factors in obstacles that all traders face.
With E=MC2, the Track Record of Performance lets you know you are situated at the "starting line" with an excellent chance to succeed if you put in the hard work and effort - day in and day out!
E=MC2 is for the trader that is not looking to get rich quick, has the time to take trading very seriously, and is prepared to try something that requires a lot of discipline. If you don't feel this approach appeals to what you are looking for, then E=MC2 is not for you.
"YOU CANNOT TRADE LIKE A ROBOT!" TRADING REQUIRES HARD WORK, SKILL, AND DISCIPLINE LIKE ANY OTHER SUCCESSFUL BUSINESS VENTURE!
THERE IS NO HYPE HERE. You will not find any outlandish claims, generic selling points, or pointed testimonials. Instead, you will find a fully disclosed track record of performance that you can monitor each day knowing that it is based on the very same trading rules you will receive in the E=MC2 manual!
We do not make the same outlandish claims other trading methods do. Here are a just a few from other websites:
“Using a sophisticated neural network model, we produce intra day and daily charts or “snapshots” of the future direction of the market”
“Previously only large brokerage firms could afford the technology to produce sophisticated computer programs which could predict the future direction of the market in any timeframe. Now for the first time the technology is available to you!”
“101 wins for every loss in all markets tested. 3,938% return on investment, with 99.02% winners and over $210,000 profit per position without pyramiding.”
“Things are going great. I trade the system every morning until 9:00 am (PST) and then I head to work. I average $400-450 a week. It makes the house payment each month.
“I wanted to send you a copy of my log. I made $3,825 in 19 trades in my first 4 days of trading. I made back the cost of the home study course in only 4 days!”
E=MC2 simply discloses its trades and track record of performance, and then shows you real trading examples with account statement verification to show you the actual potential this method offers as "trading theory gets put into practice" so to speak.
We feel this is the best way for you to understand how the E=MC2 approach allows you to meet realistic trading goals and expectations.
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