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 support/resistance. 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 manual goes 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.
Here is an example of "Opening Comments" found in the E=MC2 BLOG http://wp.tradingcreations.com/blog/ that shows how the E=MC2 approach looks at volume, and market structure, each and every day:
Opening Comments- 7:00am- Price =1355.00.
THE NEVER ENDING TUG OF WAR - The E=MC2 trader understands the market is nothing more than a never-ending tug of war between patient buyer and patient seller. We go to great lengths in the E=MC2 manual to explain how we use volume to see who wins these tug of war battles as a way to categorize unfolding market structure. We then discuss how E=MC2 trade setups are designed to take advantage of the anxiety and patience that each side exhibits as these tug of war battles unfold.
In the end, this creates a trading approach that constantly falls in line with the natural flow of what is taking place in the market.
Yesterday’s decline was halted by the patient seller winning the tug of war battle near the lows of the day. We now know the patient seller sits near the high of yesterday. The deep pullback over night is fulfilling the needs of the buyers who are trying to exercise patience, while the patient sellers are still holding their ground above. In other words, the patient sellers haven’t caved in and contributed to the overnight pullback anxiety yet.
Therefore if price turns up from here, there is a strong possibility this will involve patient sellers winning the tug of war battle above by holding their ground to sell high. The patient buyers, on the other hand, will no longer feel they can get the lower prices have been desiring during the overnight pullback and will turn into anxious buyers.
This is why volume analysis is so meaningful, because we can see how and when these scenarios unfold, and the best trading opportunities develop when one side is patient and the other side is anxious at the same time. Therefore, the goal is to always try to go with this flow until conditions change.
So coming into this morning, we know the patient sellers are winning the tug of war battle at the moment.
How will we know when these conditions change? Easy. Price will move higher and reach a point where either there are no more patient sellers left and /or we will clearly see when patient buyers enter the picture at the highs the same way patient sellers entered the picture at the lows yesterday.
Or, price will move lower, and the patient sellers winning the tug of war battle now, will end up losing the battle, cave in, and get very anxious to sell as the patient buyers take over control, and this never ending cycle will start all over again in a new direction.
Again, the E=MC2 manual goes into great detail explaining how we monitor this tug of war at all times and how we use this information to our advantage to select high probability trade setups over and over again. We will update how this all unfolds later on.
E=MC2 options at open:
1. Price is right at key support where the patient seller has a last chance to make a stand. If so, C3 buys will develop.
2. If patient buyers win the battle C1, C2 sell opportunities will lead the way lower
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.
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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 to show you the actual potential this method offers. We feel this is the best way for you to examine this approach, so you can decide if these types of trades make sense for you!
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