Ryan Watts Emini Trading Program Review

Ryan Watts E-mini Trading

I started trading index futures back in 2004. My first year trading the ES (S&P E-mini) contracts was a long year for me as I was essentially gambling and I am a terrible gambler.

Fortunately, in 2005 I stumbled upon Ryan Watts and his Scalping the E-mini Futures & Forex learning program. I can not begin to tell you what an eye-opening experience it was for me. If only this program was known to me in 2004 it would have saved $1,000’s of my hard-earned dollars.

Having personally traded using Ryan Watts’ day trading system I think I can give a fairly non-biased review. Mr. Watts is a trader first and a teacher second and he uses these techniques everyday to scalp the ES (e-mini S&P), the YM (e-mini Dow) and he also trades the foreign exchange market (Forex). What you get with the Watts Trading consists of three parts, first being the e-book with charts examples and setups, second being the progressive flow exercises, and last but definitely not least you get lifetime access to the live trading room.

* The e-book gives you a detailed look at the mechanics of his process, the steps used to prepare for each trading day, and an outline that will help you stay focused in the work of your trading. All of the tools that Ryan makes use of are shown in the e-book with detailed information on each.

* What you get with the progressive flow exercises is a detailed step by step process that you will use to progress as a trader. Traders ought to gradually progress as their skills improve and that is what these exercises are all about. You can move along at your own pace and build the confidence you require to succeed.

There’s also lots of other useful pages on the Watts Trading Group page on yahoo groups. Chart templates are provided there as well which makes things much faster when you go to setup your charts. There’s also some.pdfs that helped me tweak my charts and make minor adjustments in my order entry. There are also suggestions from fellow traders from the trading room who like to share their knowledge as well and will lend a hand, too. One document that I found particularly useful was Mr. Watts’ explanation of the stages of cost action. It was great to see the way that he views the market and what cost action is all about.

I highly recommend Watts Trading for someone who desires a nice scalping strategy whether it be for Forex or index futures.

When I first bought and starting it, I found the live trading room the very useful. Mr. Watts is trading this exact process everyday so you can see his live charts as well, which is helpful to see some real example trades. In the event you need any assistance or have questions he has always provided it and will show you what criteria to use to take trades or pass on them.

Mr. Watts will also answer any questions you have about his trading process if he is in the trading room or always by e-mail. This is what helped me recover from a funk and make serious strides as a trader. Do not expect Mr. Watts to give calls because it is not a calling room, but will go over his trades after the fact. Trading the same market as Mr. Watts and when I took the same trade as him it helped boost my confidence.

Once you learn to trust yourself and the indicators (signals), you will find trading profitably and consistently a reality.

You can get more information by going to Watts Trading.

May your next trade be profitable.

Tape Reading and the e-Mini Futures

Origins

Tape reading started in the late 1800s, where traders used a ticker machine that is very similar to the ticker you see scrolling across the bottom of major news and business channels today. Early tape reading involved watching price volume closely, trying to determine which side, the buyers or the sellers, were in control. The same is true for today’s tape readers, although most have switched over to a Time & Sales window instead of a ticker. It is the same basic idea, just shown in a different format with more information.

Basically, the tape shows how many lots were filled at a given price and whether they were filled at the bid or the ask for any given market. Now although tape reading is possible on a number of different markets, I have found the e-Mini futures contracts to be superb due to their high liquidity. Every contract on the e-Mini futures trades at a different volume, so to stay consistent, I will be talking specifically about the mini S&P 500.

The Public Vs. The Pros

Volume is the single most important factor when reading the tape. By volume, I am referring to the number of lots being filled.

Most of the public traders are entering the market with only one to two lots. Professionals who trade for a living will use anywhere from a few lots to a few hundred lots. Universities, corporations, banks, and other large institutions will trade hundreds and even thousands of lots (please keep in mind we are talking about the mini S&P 500) at a time. The public is made up of all different kinds of traders. Some take the market seriously and use a system or strategy, while a great number of others picture the market as a casino. It is common knowledge that those who trade with these enormous amounts of money are simply not gambling with the market. When they take a position, they do so for a very valid reason. Which group of traders would you trust?.

Interpreting the Tape

It is very difficult to explain the tape without viewing it live. In general, these are the things to look for:

  • Which side of the market has the most volume?

You must always pay attention to this as it is the most important aspect of tape reading. Throughout the day, keep track of where the big players (100 lots and above) are putting their money. If you look to your Time & Sales window and see nothing but traders buying the market with lots sizes like 238, 120, 120, 495, 644, 80, 310, 176, etc., while there are only a few sellers with lots sizes like 58, 100, 63, you know the short term pressure is on the buy side. The same is true, just reversed, when determining selling pressure.

  • As price approaches the high or low of the day, does a significant amount of volume enter the market?

For example, you see that price is a few ticks away from the low of the day at 1523.50. All of a sudden, you see a few 400+ lots sell the market at 1523.75, and then a 1,000+ lot sells at 1523.50 and price moves down. Many of the public traders at this point may buy the market, hoping to get a double bottom; by reading the tape, we see that the true intention of the market is to make new lows. If you see a big player buying the high of the day, expect price to make new highs.

Experience

In the end, tape reading is more of an art than a science. It is not difficult to learn, but in order to get the feel of it, you should watch it live as much as possible during the normal market hours. The more experience you gain with the tape, the more accurate your calls will be.

I wish you much success in your trading!