With ES_GemsBot.efs, ESLong.wav, ESShort.wav and ESTrail.wav files installed, here is how the Indicator works:
System entry prices are produced at the end of the last bar and are to be entered as limit orders as soon as possible. At the initiation of a trade, you see on the chart the Trigger Entry Price (TEP) and you hear the entry audio alert. The GemsBot indicator monitors the next bar to see if the TEP has been penetrated, in which case there has been a definite fill. If TEP is touched, in which case there may or may not be a fill, a new Chase Entry Price (CEP) is produced at the end of the next bar. Your limit order price should be shifted to the new level. This process is repeated, and a new CEP is produced until a penetration of the entry price has been detected. So when you are looking at a chart with historical bars, you know that there may have been an entry at the TEP level; but you are certain that there has been an entry at the CEP level.
The GemsBot indicator produces and depicts on the chart a stop-loss price at all times, which is subsequently shown as a stepped line. The price is monitored by the system and it keeps trailing when necessary, always nearer to the last price. It is imperative to have a stop entered and never to move it against you. You will hear the trail audio alert any time there is a change in the stop-loss price, which can only occur at the end of the latest bar.
There is no take-profit line, since this is variable, according to the number of contracts traded and your own profile as a trader. But you will find some take-profit guidelines in the following paragraphs.
How to trade with one contract
When trading one contract at a time, which is the hardest way to trade intraday, the entry should be placed at the TEP. If there is no fill at the TEP, then the entry should be moved to the latest CEP level when one is produced. Your stop should be placed at the stop-line level; and, of course, it should be trailed as depicted in the chart. Your take-profit level can then be set at the first instance when the stop-loss line starts to trail. At that moment, setting a take-profit level equidistant with the first stop-loss trail is a good practice.
Alternatively, a fixed take-profit price can be used at a minimum of 6 ticks; but your fixed take-profit price should be placed at many more than 6 ticks when the markets are volatile and the $VIX number is higher than 20.
How to trade multiple contracts
Trading multiple numbers of contracts at a time can be done in numerous ways.
A typical good practice when trading 3 contracts, is to start with entries at TEP and CEP levels with stops at the stop-loss level, which, of course, should be trailed as it is shown in the chart for all three contracts. Using a take-profit of 4 ticks for the first contract and 8 ticks for the second and leaving the third contract as a runner results in nice rewards when we have lengthy runs. In addition when the second contract has taken profit, shifting the stop of the runner contract to break even or to the stop-loss level indicated on the chart, whichever is nearer to the last price, results in a "free" trade. At times when the volatility is low, with a $VIX number and the daily ES range below 20, considering to take-profit at anything over 12 ticks for the runner, is a safe way to trade.
Trading larger number of contacts at a time, you should consider them as three lots and follow the above guidelines. However, when the market is moving fast, trading a small number of contracts with a market order the moment an entry signal is produced results in better entries. On the other hand, if the market is slow, leaving a few contracts at the TEP level when a CEP is produced is wise, since you will get a better entry if a small pullback occurs.
Time Frames
The recommended default time frame for intraday trades is 2 minutes. When the market is moving fast during regular hours the time frame can be reduced to 1 minute, while when the market is moving slowly, particularly during premarket hours, then a time frame up to 5 minutes may be used.
Certainly longer period time frames can produce satisfactory results, particularly when the daily range is tight. However, you should be aware that with larger time frames the stop-loss line is more ticks away from the entry price, or the last price when trailing, than what it is with faster time frames.The interval can also be set to tick, volume, range, or price change, providing limitless options to trading techniques to suit your trading style.
For example if you use a 10k volume chart during regular trading hours and 5k volume premarket you will get satisfactory results.