Using XTL to trade the emini

[TomJoseph]

The XTL is a study available in eSignal that automatically determines the Trend of the market.
It displays Blue bars to indicate an Up Trend and Red bars to indicate a Down Trend.

Here is an example of the emini chart with the XTL study.
The Red bars indicate a Down Trend in progress. During a clearly
defined down Trend, wait for a pullback. As long as the down
Trend has not changed, one can short the emini anticipating
the down Trend to continue.

The ideal place to enter a short is near Fibonacci Retracement
levels. In this example, the emini retraced to the 38% level
providing a clear and defined short entry.

The XTL study works on any time frame in the emini.

Thanks
Tom Joseph
eSignal

[silverxx12]

Very nice picture ,
but where do i start my fib reatracement from?? thats almost the crucial pt which i cant see too clearly on the chart ( sorry to trouble you) ie there are many pts in a chart from where to take it from not too sure in where though?

Hope to hear from you soon

[TomJoseph]

I personally like to draw the retracement from the previous high
right before the Trend is detected to the lowest pivot prior to
the corrective rally. This is how I have been using it since I
developed the XTL in early 1995.

When you draw the Fibonacci retracements in eSignal, both the
top and bottom anchor points are displayed on the chart.

Thanks
Tom Joseph
eSignal

[wombat953]

The ideal place to enter a short is near Fibonacci Retracement levels. In this example, the emini retraced to the 38% level providing a clear and defined short entry.

Tom - can we presume that this is equally true of longs, or do you feel that this is a characteristic better suited to shorts?
Also, is it your experience that the 38% level is the most frequently applicable of the various Fib retracement levels?
Thanks
George

[TomJoseph]

XTL for LONGS

This is applied across the board for Longs and Shorts. I have posted a Long example here as well.

As far as the Fibonacci Retracement: always remember we are trying to enter after a corrective
pattern inside the main Trend. The trade will be taken in the direction of the main Trend.

As such, the corrective pattern should not exceed 38% retracement. Almost half the time, the
retracement pattern will hold near the 25% level. If the corrective pattern exceeds the 38%
level, from experience, I tend to leave it alone as this may develop into something else.

Tom Joseph
eSignal

[wombat953]

Tom - many thanks.
Can I presume that the bar coloring from the trend identification algorithm is based on the proprietary XTL Study, and is only available with a subscription to AGET?
Thanks
George

[silverxx12]

Hi Tom ,

just got a few question on the strategy you mentioned, with regards to entering how does one know which fib level its going to bounce off could be either 32 50 or 62% levels , so how are you going to enter the trade through a break of the rtc and where will you keep your stop when you enter?

Secondly do you only enter a trade if the xtl stays the same color as in this case where only was red or are you also looking to enter the market if the bars remain black but don't change to blue .Furthermore how do you work your risk reward out - do you enter a trade only if the r/r is grater than 1.6

Lastly is there a way to use the aget scanner to find such trades?

Sorry to be such a bother but i think quite a few people are probably bothered by the same question

kind regards

silver

[TomJoseph]

First of all, you are not bothering me when you ask questions.
This is what this board is for. eSignal's goal is to educate the
customer.

I have posted a 5 min IBM chart with the same XTL pattern.
Let me post the rules so we all have a guideline.

BUY SIGNALS (XTL CONTINUATION TRADE)

a) The UP Trend should be clearly defined with XTL Blue bars.
b) Wait for a corrective phase.
c) Apply Fibonacci Retracements from the pivot low prior to the UP Trend.
Majority of the time the 38% retracement level applies. This was stated incorrectly
in my previous post.
d) Buy on the cross of the Trend Channel.

Conservative Approach is to take the trade only when the Blue bars continue to stay blue.

The aggressive strategy allows the trade to be taken as long as the bars stay Blue or Black
with no RED bars during the corrective phase.

QUESTION??

On this IBM 5 min chart, there is one more LONG trade. Can you spot it?

Tom Joseph
eSignal

[AB]

Attached is a chart of the 3 minute emini SP in today's trading using the rules Tom showed previously.

Andy Bushak
eSignal

[silverxx12]

Tom just one or two other questions on this trading strategy .

we don't enter trades of xtl continuations more than a 32 fib ret.?

do you only enter a trade if the xtl stays the same color as the cases shown or are you also looking to enter the market if the bars remain black but don't change to blue .

Furthermore how do you work your risk reward out - do you enter a trade only if the r/r is grater than 1.6

Lastly is there a way to use the aget scanner to find such trades?

[silverxx12]

Sorry to bother you again

when looking at some charts over the weekend came up with some questions

from where does one take the fib ret. from if there is a gap this is seen to frequent near the open when stocks sometimes gap and then retrace or should these kind of setups not be traded?

does it make a difference where one is taking the xtl cont . from ie at the end of a wave 4 - or from any other pt even near a formation of a wave 5 - is there any kind of preference or do the wave counts not come into account in this trading setup?

[TomJoseph]

If the retracement exceeds much over 38%, it usually means a loosing pattern and I tend to look for another trading oppurtunity.

If you are a conservative trader, you would look for trades where
the color stays all Blue during the pattern.

If you are an aggressive trader, the bars can change to Black
but you definitely cannot let it change to an opposite Trend
color. Example when going long, Blue bars changing to Black is
okay, but you never want to see any RED.

I personally trade very aggressive.

I like this as a stand alone strategy.

I am on the road and will be back Tuesday when I will post more
examples.

I would also be glad to set up a one hour web session
if you are interested.

Tom Joseph
eSignal

[fabrizio]

I would also be glad to set up a one hour web session
if you are interested.

Please count me in .

[gspiker]

Depending on the timing, I too would be interested in such a training session.

Garth

[silverxx12]

XTL CONTINUATION??

IS THIS THE TYPE OF TRADE TOM JOSEPH MEANT WHEN HE SAID XTL CONTINUATION??