General Trading Questions

  1. What do I need to enter into the trading arena?
  2. Are there any risks involved with trading?
  3. How much time does it take to learn to be a profitable trader?
  4. How much money can I expect to make from trading this method?
  5. What is pattern recognition?

Questions About our Program

  1. What if I've been trading for several years and can't make a consistent profit? Will your program help me?
  2. I don't have time to watch the markets all day, but I still want to learn this method of trading. What should I do?
  3. What type of teaching programs do you offer?
  4. Why do you teach your trading methodology?

Questions About the Markets

  1. What markets do you trade?
  2. What type of patterns and setups do you trade?
  3. Why trade the SP 500 E-mini contracts?
  4. How does the SP 500 E-mini contract trade in dollar value?
  5. I've never traded the SP 500 market. Could you explain what vehicle is used to trade it?

Questions About our Processes

  1. What time frames do you use for your trades?
  2. How many trades do you do each day?
  3. What type of orders do you use for your trades?

General Trading Questions

What do I need to enter into the trading arena?

Above all else, you must have a strong desire to learn to be a trader and a passion for the markets. You'll need to have some basic equipment such as a computer and an Internet connection; high speed is best. Access to a charting program such as Ensign, Esignal, TradeStation or other charting software is also necessary. Fibonacci retracement tools are also helpful for learning this method of trading.

Are there any risks involved with trading?

There are risks involved with trading and it's not suitable for everyone. It's imperative that you understand the risks involved and not trade with capital that you can't afford to lose. To make sure you fully understand the risks involved, please read the disclosure statement.

How much time does it take to learn to be a profitable trader?

Each person is different, so there's no standard answer for that question. Learning to trade requires a significant commitment of time and money that should be thoroughly explored by each individual. Some traders do well within a year or two and others may take longer. It's important to obtain education through a mentor or proven program.

How much money can I expect to make from trading this method?

Your earnings depend on your skill level and ability to follow a proven trading plan, the account size with which you're working, and following a risk management plan. We do teach a proven method of trading and although we can't guarantee success, we believe success is attainable by following the teaching steps given and applying them successfully.

What is pattern recognition?

Pattern recognition is simply a form of technical analysis. As markets move, they create patterns that repeat on a regular basis, offering traders opportunities to profit. We use a handful of specific patterns on a daily basis. All the patterns we use can be found in all markets and on all time frames. Using a trading method employing specific patterns allows you to accomplish several things:

  • Define an entry point in advance of a trade setup
  • Quantify risk and place stop-loss orders (most important for all trading)
  • Define profit targets and exits in advance

For more information on pattern recognition, refer to Trade What You See - How to Profit from Pattern Recognition by Larry Pesavento and Leslie Jouflas, CMT, Wiley & Sons 2007.

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Questions About our Program

What if I've been trading for several years and can't make a consistent profit? Will your program help me?

Yes, in fact, we've worked with many traders in that same situation very successfully. It's not uncommon for traders to spend several years or more trying different approaches to trading and finding themselves in a cycle of making and losing profits.

You may also have a lot of knowledge and have studied extensively, but haven't quite put the right pieces together to be able to trade consistently. You may have the pieces, but not the correct order to put them in. We put the pieces into an order that will put you on a path of consistency. We provide the structure and process so you can make a plan to help you achieve your trading goals. We provide additional support and education through demonstrating in the Live Charts Forum our experience in a real-time environment.

This method and program are suited for traders both new to the markets and those with experience. The TLO Mentoring Program will give you a step-by-step approach with a system of accountability to track performance and make adjustments as needed.

I don't have time to watch the markets all day, but I still want to learn this method of trading. What should I do?

Many traders have other obligations during trading hours. We offer the benefits, through TLO Mentoring Program, that take traders' schedules into account. Our website offers a full set of teaching tools that are accessible 24/7, including:

  • Archives of classes and webinars on various trading topics
  • Descriptions of trade setups
  • Tips on trading trend days
  • Trade management tips
  • Trading articles
  • Archived webinars and seminars
  • Videos on technical analysis tips
  • Recommended reading

If you participate in the TLO Mentoring Program, you'll also have access to sections on the website created just for you, including:

  • Workbook
  • Trading spreadsheets
  • Worksheets
  • Evaluation sheets
  • Metric worksheets
  • Preparation checklists
  • Materials for writing a trading plan

All of the information and materials can be used and applied to any time frame, so this is a great solution for those who can't watch the markets each day in real time.

What type of teaching programs do you offer?

We offer several different options for you to learn about our trading methodology. The TLO Mentoring Program, for traders wishing to learn to use a trading plan, control risk and develop their training as a skill, offers the following benefits:

  • Worksheets
  • Learn high probability setups in all time frames and markets
  • Learn how to make money as the markets decline
  • Learn how to build confidence and trade with confidence
  • Workbook and spreadsheets
  • Recorded coaching sessions from the coaching reviews
  • Learn how to minimize risk
  • Learn how to create and use a trading plan
  • Learn how to approach trading as a business

For more information on the TLO Mentoring Program, click here.

Why do you teach your trading methodology?

We went through the same learning curve as any other trader. When we started out, there wasn't nearly as much information, charting software packages and learning tools as there are now. Our philosophy for teaching is to help trading students see through our eyes and learn from our experience.

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Questions About the Markets

What markets do you trade?

We trade a variety of markets, including SP 500 Emini, Euro, Grains, Bonds, Gold, and Currencies, with an emphasis on the SP 500 Emini futures market. This is a choice market for day traders and position traders alike. Although we primarily trade this index futures market, we also closely watch the Dow, Russell and Nasdaq markets. We also trade and will call setups in the Euro Currencies futures market and other commodities and futures markets when we see a high probability trade setup.

What type of patterns and setups do you trade?

We trade a number of setups and patterns, including those that are for countertrend trading in a trading range environment and those that are for trading with the trend on a trend day. Many of the patterns we trade use Fibonacci ratios to determine the entry point, stop-loss placement and profit target objectives. We also trade setups that are momentum-based, meaning momentum in one direction has come into the market and we will trade setups in the direction of that momentum. We use momentum indicators that help us gauge the momentum. We trade primarily the SP 500 E-mini contract, where we find these setups on a regular basis.

Why trade the SP 500 E-mini contracts?

The SP 500 market is very liquid and trades almost 24 hours worldwide. It's an excellent market for day trading the pattern and trade setups we use, as they tend to form on a regular basis, offering trading opportunities and allowing us to quantify the risk in each trade with specific profit objectives. Of course, not all trades work and we always use stop-loss orders to manage the risk. Other reasons we trade the SP 500 E-mini contract versus the full-sized contract are the leverage and margin requirements. The margin requirements for trading the SP 500 E-mini are more favorable than those necessary for the large contract. Five SP E-mini contracts equal one full-size contract.

How does the SP 500 E-mini contract trade in dollar value?

The SP 500 E-mini contract trades in full points; the smallest increment is $12.50 (one-quarter point) and one full point is equal to $50 per contract. For example, a move in the SP 500 E-mini from 1545.00 to 1546.00 is $50. Other increments are one-half point ($25) and three-quarter point ($37.50).

I've never traded the SP 500 market. Could you explain what vehicle is used to trade it?

The SP 500 E-mini market trades in contracts on the Chicago Mercantile Exchange (CME). The contract size is one-fifth the size of the large SP 500 contract and is traded using the futures markets. Each contract trades in a specific month—March, June, September or December—and each month has a root symbol:

  • March - H
  • June - M
  • September - U
  • December - Z

The year of the futures contract is also designated in the symbol, which is used for quotes and placing orders. For example, the symbol for the September 2007 SP 500 E-mini contract would look like this: ESU7. For more information on the SP 500 E-mini contract, visit the CME website, www.cmegroup.com.

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Questions About our Processes

How many trades do you do each day?

This depends on the volatility in the market and the number of tradable patterns that set up. On average, we trade 1-3 pattern setups per day in the SP 500 E-mini market.

What type of orders do you use for your trades?

We generally use limit orders for our trades, but will occasionally use market orders for specific market conditions such as a fast market or possibly a trending market. We always use stop-loss orders on each trade, placing them immediately following an entry fill into a trade, and we also use a stop-limit order. Occasionally, we'll use OCO orders (one cancels the other) and GTC orders (good until canceled).
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If you have any questions that aren't answered here, please feel free to email us at [email protected]. Best wishes for successful trading!