Jacobs Ladders Weekly Rewind for the Week of November 12th
Jacobs Ladders is a trading system that provides perspective on high quality, profitable trade setups for day traders. The purpose of this blog is to educate day traders on this trading system and provide links to the levels on a daily basis. You may wish to bookmark this page.
The Subscription Service for Jacobs Ladders pivot system is now available. A subscription includes a 14 day free trial and includes all instruments and indicators that we cover and new indicators and instruments in development. It also includes our Think or Swim indicator. We are now working on a Ninja Indicator which we hope to finish later this year. Please post any questions you have to this blog.
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The objective of the Jacobs Ladders is to help day traders identify and capture a minimum price movement between any two adjacent pivot points. This system when used correctly will improve the consistency of winning trades and helps minimize risk and losses.
In this weekly blog series, I will point out set ups that occurred during the past week that are illustrative example of how to use Jacobs Ladders for day trading. These examples have been tweeted out on our public twitter feed, you can follow along here @the_artofchart.
For more educational information, please see the previous introductory post introducing Jacobs Ladders day trading system which can be found here.
Normally this past week is known to be a slow holiday tape. But for a day trader using Jacobs Ladders, you can still make a consistent 4 handles a day average on ES or equivalent instrument, there were plenty of opportunities.
Again the key is watching multiple instruments groups. Indices Energies, Bonds and Metals.. Watching the levels loaded automatically on the Think or Swim study makes it very easy.
500 Emini Set up Examples
Here I am highlighting two examples where even on very tight range days, if you focus you can get your 4 handles. The tape may be slow but it still moves between levels that you can lean on.
Copper is an excellent future instruments to make consistent handles because it typically trades from one level to another level. Here is an example from Tuesday:
Crude Oil Futures
CL was an absolute winner on Jacobs Ladder this week. CL moved during RTH and we has a good set ups on the levels. Every day there was at least a 50 tic move set up.
The Inventory report day gave a total 150 tics worth of set up both up and down. So enough set ups for a trader to capture at least one move worth 40-50 tics.
The key for inventory report trade is to watch where price pauses, find the nearest level and lean on it. I am attaching charts for all days as these are good illustrative examples
Natural Gas on Friday – Example of a trend down day and how to get an entry
As a reminder, Jacobs Ladders levels are arranged in such a way that when Price breaks above or below the two sided day area, it becomes a trending day in one direction.
When a trend day happens you can watch for signs fora conversion of a support level into resistance or resistance level to support.
Friday on NG was such a day. Price started selling off the open level and kept selling straight down. This was a first indicator. Then after a small bounce off Level Low, price broke below Low. It then showed two tell-tale signs of converting support as resistance
1. It printed three clean five minute candles below Low level
2. . These three candles produced lower lows
If there is a true trend down price action. then price should stay below the Low level. It is extremely risky to stay underwater on a short entry from level Low because it could bounce real hard so manage your risk and scale out of your position as appropriate for you.
Here are two charts explaining this. One is a zoomed in view and then the main day chart.
Jacobs Ladders TOS Study
If you are a Think or Swim user you can see all the levels loaded into each of the instrument’s chart by copying and pasting code for a study each morning. Links for the TOS study is included in the subscription and 14 day trial found HERE.
Here is how TOS chart will look like where you have a 9 cell grid for various instruments with levels loaded. You only need to update the study on one chart. Levels will load automatically on all other instruments for which Jacobs Ladders levels are available.
I hope this educational post helps you understand how to use Jacobs Ladders. Please look for our educational posts on our public twitter feed at @the_artofchart.