Stock Trading For Beginners: Simple 3-Step Breakout Strategy Using Market Profile Software

Stock Trading For Beginners: Simple 3-Step Breakout Strategy Using Market Profile Software Trading chart used: $FB (Facebook) In this video you will learn a simple three-step breakout trading strategy. The strategy method used is Market Profile, which is a statistics-based market theory. The software used is: NinjaTrader trading platform, TAS Profile Scanner market screener, and TAS Indicators. Step #1: FIND First, let's define what we mean by a breakout: In this case, it's going to be when the market is IN THE VALUE AREA shown highlighted here, and then it BREAKS OUT AND CLOSES ABOVE this area. The Value Area and this breakout are defined by the Market Profile strategy method we are using, and these areas are displayed here using TAS Market Profile indicators. Next, let's decide on our timeframe… let's place a trade in the daily chart for this example. The good news is that this same simple breakout strategy method works for trades in any timeframe so you can use what you learn here to trade the weekly, daily, and intraday timeframes. Let's open up TAS Profile Scanner. This market screening software uses Market Profile theory to analyze markets, and then gives us information on what the markets are doing. We can use it to show us breakout trade opportunities. Now, this column is the DAILY column, and since we want to place a breakout trade in the daily chart we are going to be looking at this column --- what I'm looking for are markets that are JUST starting to break out, so I want to see the number "1" here. If the number in this column is ONE, that means that one bar has broken and closed above the Value Area so far. This stock looks good: I can also click here and see what "TAS SAYS" about it, and click here to see a quick-view of the chart. Looks good! Remember, we're looking for a stock that has just broken out and closed above the current VALUE AREA, and we see this happening right here. Step #2: EXECUTE I'm going to open up NinjaTrader (my trading platform) and on my screen I already have two Market Profile indicators called "TAS Boxes" (the one that is printing the horizontal lines) and "TAS Vega" (the one that changes the default bar chart colors). Now to place our trade, we could go long right here, at this most recent bar, and then place our stop at the level that is suggested by the TAS Box which is just underneath the bottom green "low value area" line. Notice that this stop level is below our defined VALUE AREA. If the market falls down to this level, it's no longer going to be in breakout mode --- and since we're putting on a breakout trade, we want to make sure to set our stop at a level where the market not longer fits our criteria. Step #3: MANAGE There are basically two scenarios that can happen here. The first scenario is that the trade moves against us before we can trail our stop to a higher level. In this case, the trade simply hits our original stop level and we are taken out of the position at a loss there. The second scenario is that the trade moves in our favor (this is the one we want!). In this case, we need to decide two things: 1) How we are going to TRAIL our stop level as our position moves in our favor, and 2) When we are going to take profits --- or in other words, when are we going to exit the position? For our stop trailing, we can again look to the chart… using the Market Profile method, we want to trail our stop so that, as NEW value areas form as our trade moves in favor, we are always keeping our stop JUST under the most recent VALUE AREA. For profit taking, there are also two ways to exit our trade to consider… 1) We can simply wait for our trailed stop to be hit, and take profits at this level, OR 2) We can watch the TAS VEGA indicator --- that's the indicator that changes the standard bar chart coloring --- for any display of a GOLD colored bar… what this bar will indicate if it shows up is a possible early warning sign that the breakout is slowing down and loosing momentum, so it can be a good idea to exit our trade at this level instead of waiting to be stopped out. ~ See all my other videos here: http://www.youtube.com/c/Stockmarketprofile Click Here To Subscribe - Never Miss A Video! https://www.youtube.com/subscription_center?add_user=Stockmarketprofile Remember to comment under my videos with questions, feedback and anything you'd like to share. Stock Market Profile http://www.stockmarketprofile.com/ Stock Market Profile Channel https://www.youtube.com/subscription_center?add_user=Stockmarketprofile Twitter https://twitter.com/SMP_Trading StockTwits http://stocktwits.com/TraderJesseJ Facebook https://www.facebook.com/stockmarketprofile/ Google Plus https://plus.google.com/+Stockmarketprofile/

Comments

1. Beginner here. Enjoying all your videos! Very easy for a novice to understand! Questions: How do I get the ninjatrader program? Does it come with the TAS vega and navigator? Is it compatible with Mac? Also, recommendations for which broker platforms are compatible with ninjatrader? Thank you!
2. I really love how simple your vids are! Whats the song at the end?
3. Why are all programs different such as Apple ones and PC are they all basically the same ?