Apex Momentum Scalp System Rules and ATM Strategy Setup


#1

Important tip use the Static DOM if doing this on the DOM so you don’t make a mistake. The issue on a dynamic dom is it “jumps around” so you middle mouse click to place a stop but then to adjust it you left click. If the price jumps when you do this you will accidentally place a limit order (not a stop limit but a limit) and get filled instantly (ie a buy above the market as a limit will get instantly filled). Just practice with a dynamic and you will see what I mean. A static DOM cost .10 a trade/.20 round turn and is worth it the commission and bid ask one an error alone (entry/exit) will more than pay for many a round turns. You know the difference if you see hold in the top left corner its dynamic.

NinjaTrader Version 7 http://www.ninjatrader.com/support/helpGuides/nt7/index.html?static_vs_dynamic_price_ladder.htm

The rules for momentum scalper are simple and using the ATM function on NT7 makes it even easier. Take a few moments to follow these steps and there are only 3 steps to doing the momentum scalper strategy on futures, forex, cfd’s stocks, etf’s

MOMENTUM SCALP TRADE SIMPLE RULES

  1. BAR EXCEEDS VOLUME (If Up close bar then Long Setup, If down close bar then short setup)

  2. HI/LO OF THAT BAR IS BROKEN WITHIN THE VERY NEXT BAR BY 3 TICKS (hi if up close / low if down close)

  3. BAR SIZE IS PROFIT TARGET (LESS 3 TICKS)

  4. STOP LOSS IS THE LOW OF SETUP BAR IF LONG, HIGH OF SETUP BAR IF LONG

  5. TRIAL STOP TO LOW OF ENTRY BAR IF LONG ONCE IT CLOSES, TRAIL STOP TO HIGH OF ENTRY BAR IF SHORT WHEN IT CLOSES

OPTIONAL TRAILING STOP EXCEEDING VOLUME - MAY TRAIL STOP USING DASHED MVP LINE (THOUGH USUALLY NOT AS PROFITABLE AS JUST SCALPING)

TIPS & CAUTION: A day where volume is consistently at or exceeding expectations ie more than 1/5 bars is usually a much better day to do this strategy. Not only are there more trades but the trades tend to work out better.

Use caution like in all trades when approaching a +1 or -1 deviation line or high to low as the markets often tend to reverse at these points.

I define close to a deviation as within 2 bars distance (ie tf we use 14 tick bars so within 28 ticks of a +1 or -1 Dev level or high to low dev (on deviation indicator the orange line) then no entries (or at least proceed with caution).

CHART Visual example:

Link to full size image:

DOM SETUP Visual Example:

Link to full size image:

NOTE: For ICE Exchange (ie TF) you must use a DAY versus a GTC order if your using Stop Limits

Note do this setting as well for doing multiple momentum scalps at once on the same instrument:


<img src=/uploads/db0876/1233/e88f1e5bbfdb140e.png">


#2

I posted a question about the momentum scalper trades in the help desk. Only reason I posted there was that I didn’t want to confuse people if I was messed up in my thinking (more so than usual anyway)!!! Here is what I asked and his reply is below…

Darrell - I watched the momentum scalper video and did a little testing. Used TF with 14 tick bars, only tested 1/14 - 2/14 from 0930-1530. Used 10 tick TP (I think you said 10 on the safe side in the vid, and 11 on the forum post today) and the low/hi of the setup bar as the stop. Just that small data set was about $1800 profit. Pretty cool system and so simple.

Had a question:

  • On 14 tick bars, some of the bars are bigger than others. For example, the average stop was 18 ticks (the hi/low +3 for entry, plus the 14 tick bar size, plus 1 tick above/below the high). On some bars, it was significantly higher, in the range of 23-30. For example, on TF, 1/28/14, the 12:17:56 bar is 26 ticks from high to low. I noticed it more when the market is heading into choppiness or reversing, or when there is a wick. The only reason I bring this up is because in the new post you talk about using the a custom ATM entry where you put the stop at the bar size. If you do that, and some of the bars are larger, then you would get kicked out more often.

-One of the things that I noticed with the larger bars, is that the bars trend longer with a lot less switching between red and green. Couldn’t you just place a buy order above and a sell order below as OCO orders on a bar before it closes (use the bar sizer as a guide) and then place the stop loss for the open trade? Instead of going for a full bar size, just go for a half bar size TP. At a visual glance it looks like you could grab a bunch of of 7 ticks over and over, with a much smaller number of losses. The ratio looks much more than 4 wins to 1 loss which should be profitable. I wouldn’t suggest it for scalping all day, but maybe for an hour or so… Just a thought…

Brad

Here was Darrell’s reply:

Super simple i love it…

Yes bars can be bigger based on wicks…if bar say opens up and moves down but not 100% down from the 50% mark of last bar and then goes on back up it will make a wick and be larger…

Did you see the momentum scalper post in the forum where i show the ATM strategy?

14 could be 27 ticks that is accurate

I noted on the instructions in the pictures to adjust the order on the dom to the low of the bar if it makes a lower low.

On an initial entry if the bar is that large one could simply choose to not enter the trade or cancel the entry as before their order is hit the bar will have formed and they will know the size. This is a great point we should highlight in the forum.

so your going either direction regardless of previous bars momentum close with volume? What is your stop loss better risk reward ratio with a 7 tick profit may not be enough… eats up more higher % amount of trade in commission as you make less doing 7 only… not totally opposed but you have to look at profitability as well as probability. You will always win more often going for less but you will also usually lose more when you lose so its that fine little balance.

You would not get kicked out at the bar size unless it went down 17 ticks (14 + 4 entered) this would not cause you to get kicked out more often unless it moves 17 ticks against you.


#3

I was looking at the difference in Nadex and NTB between bid and ask. I noticed the difference in the pricing ( to the right of the decimal). I submitted this question to the help desk.

In the momentum scalper video it said to enter 3 ticks above the high. If you look at ES on Nadex it would read 1880.2. But on Amp it would read 1880.25. On Nadex the entry would be 1880.5. But what is the entry on Amp? Is it 1880.5 or 1881. Also NQ is the same way on Amp. If the price is 3611 would the entry be 3611.25 or 3611.75? The real question is: What is the correct number to use for tick size on these two? Is it .1 or .25?

Here is the reply all chart rules are based on the charted instrument

So 3 ticks is .75 on ES


#4

NTB feed is a future

Nadex spreads are a derivative option

Indicative is not the future

Use tick rules ie 3 ticks above use es 3 ticks is .75 so always use rules based in the underlying marker not Nadex tick size.


#5

to set up the momentum scalp ATM strategy, is there a difference between “static dom” and “dynamic superDOM”? because i dont have the “static dom” option… is that something i need to purchase separately with ninja? or can i use dynamic superDOM instead?


#6

You can use either. But Static is a WHOLE LOT EASIER - pay the .10 its worth it.


#7

sorry so many questions on this atm. just wana make sure i have it all down… but when you enter on the DOM, do you enter with a buy/sell stop? or limits? and if its a buy/sell stop how can you do that on DOM? ive looked for videos on ninja but its all buy/sell limit orders on DOM… and i would rather enter with buy/sell stop to make sure it even gets to the price i want… if im looking at it wrong please let me know… because i dont want to enter above/below market and start the trade down before it even hits my price… ok i think i got it figured out. if you enter a STOP on the buy side thats a BUY STOP and STOP on sell side is SELL STOP. is that correct? thanks for your help


#8

I did this in the elite trade room Thursday to show you how to do it and how to practice.

Order type can vary by market.

Let me know if it resolves your questions

[video]http://m.youtube.com/watch?v=EPJFN4qNHB4[/video]


#9

very helpful. i appreciate all your support. i work full time days right now and i watch and learn and simulate all i can afternoons and weekends. im going to start trading full time in the second week in july. just want to learn everything back n forth. thanks a lot


#11

#12

Important tip use the Static DOM if doing this on the DOM so you don’t make a mistake. The issue on a dynamic dom is it “jumps around” so you middle mouse click to place a stop but then to adjust it you left click. If the price jumps when you do this you will accidentally place a limit order (not a stop limit but a limit) and get filled instantly (ie a buy above the market as a limit will get instantly filled). Just practice with a dynamic and you will see what I mean. A static DOM cost .10 a trade/.20 round turn and is worth it the commission and bid ask one an error alone (entry/exit) will more than pay for many a round turns. You know the difference if you see hold in the top left corner its dynamic.

NinjaTrader Version 7 http://www.ninjatrader.com/support/helpGuides/nt7/index.html?static_vs_dynamic_price_ladder.htm


#13

Did you consider using the Bar Range distance +/- 3 ticks rather than the bar size ticks +/- 3 ticks?


#14

Not sure what you mean. Except for maybe you mean using the diagnostic bar range indicator so your not waiting for the cancel to close to place your order. Yes this is a wise decision. You could also simply add the bar size plus 3 ticks above the say high of the bar previous to the setup bar. Either one will work.


#15

Should you use this strategy when the market isn’t trading or is choppy? Do we just simply take the setup in the direction of high/low of bar close on exceeded volume?


#16

do you mean when the market isn’t trending?

I use it so long as we have volume exceeding expectations more than 1/5 bars

A choppy day can be fine just depends on how choppy it is if its chopping in a very tight range you probably wont be exceeding volume that much anyway but if you see it in a tight range you may back off if volume is still exceeding. Often though the reality is chop is very much a hindsight. One thing i can say is it should win often very often. So if your losing more than your winning than i would back off of that market. I like to watch an ag, a fx pair, an indice, a metal, and an energy as one of those puppies is almost always moving.


#17

I think I answered my own question but thought I would post to check I got this ok, because still getting used to Ninjatrader. Whilst replaying and practicing some scalps with the DOM ATM setup, I entered two scalps on consecutive bars, so the first trade was still active at time of second entry. The second trade was added to the first currently active position and ATM strategy, rather than being submitted with a separately managed stop and Target.

Darrell shows taking momentum scalps on consecutive bars in the course, but it can’t work with the DOM ATM settings from the first post in this thread. I watched a Ninjatrader video called Advanced trade management level 2, and near the end I got my answer, that I needed to change the DOM properties setting for ATM strategy selection mode to KeepSelectedAtmStrategyTemplateOnOrderSubmission. This allows each separate trade entry its own separate ATM strategy.

So just want to check I got this right, any issues with using that setting and I’m correct in thinking we can enter momentum scalps on consecutive bars, or do people generally just run one at a time, wait until one is closed before entering a new scalp?


#18

Hey Woodzy, I did the exact same thing and it keeps the orders as its’ own separate trade or scalp. I believe that’s the correct way to set up.

Mark


#19

Woodzy thank you for setting the screenshots good stuff. Much Appreciated!


#20

Darrell,

Can Momentum Scalps be used on Nadex Spreads, or can it be used on Nadex Binaries only?

I’d like to stick to Nadex and not wander out into the forest for now as I’m new. I’m resisting opening a new account with NTB, and will try Momentum Scalping on Nadex Binaries, after I’ve grasped the DTP.

You mentioned somewhere that someone new like me should learn Nadex Spreads before Nadex Binaries. I’m taking your advice and can see why. The logic of Spreads is simple, especially on the DTP. I really like the simplicity of it all.

But if Momentum Scalping can only be applied on Nadex Binaries, if I do want to stick exclusively to Nadex for now, I’ll put it off into the future.

Thanks in advance for addressing my question.


#21

If the bid offer is tight enough (ie Gold spreads have a very tight bid offer spread) would also need a very low proximity. Also you need to have larger bars or go for more bars if the bid/offer is wider.