Since this is the first time that you will be trading from signals generated in a spreadsheet, you will find in this page recommendations on how to do so profitably right from the very first week. GemsBot is designed in a modular format and any of the Spectrum or Power trades produced for each instrument can be taken independently or in conjunction with each other.
Trading ES is a nice way to initiate you to the system. Second best choice is YM and then TF and NQ. Looking at all the cells in the spreadsheet is not advisable the first few days that you are in the room. Trying to learn the complete system all at once will create confusion. Following the guidelines in this page will assist you to get the best of the system in the shortest time possible.
There is a Three Week schedule that you should adhere to get to know GemsBot. Certainly if you are very experienced trader this time could be shortened or extended if you have never traded Emini futures before. In anyway you should spend sufficient time at each weekly level until it is absolutely clear and profitable for you before you progress to the next level.
Week 1
The Spectrum trades are the easiest to follow and trade during your first week. All you have to do is to decide on your maximum exposure to the market at anytime and then follow the recommendation in the Spectrum Trades page. No entry or exit prices to think about. Just one click on your trading platform to enter and another click to exit. Trading cannot be simpler than that.
In addition, of the five Power trades produced, you should focus your attention to the Synctrades. These are the less risky of all the types of trades and it has been measured that if you take all Sync trades for a week you will end up with a positive balance at the end of it. To differentiate the Sync trades from the other Power trades, the audio alert produced is a sound, that of a rachet, and not an audio voice alert.
For years traders have spend numerous hours trying to find a leading instrument that would give them advance warnings for trading their own instrument. The results have been disappointing since nothing that they discover lasts through time. However you will see in practice that whenever the four instruments that are monitored change trend direction, as it is measured by GemsBot, within one minute of each other they result in an ideal time to enter a trade for any of them.
The Sync trades are not only great to start out the Power trades, but they are also the trades that we all look out for and trade when the markets go through a choppy period. For the simple reason that during choppy periods there are no Sync trades produced and whenever they appear they signify the end of choppiness.
The only negative aspect of Sync trades is the small numbers of them that they are produced on an average day, around 6-8. However during volatile periods there are many of them produced, sometimes exceeding 20 a day. On the other hand there have been some really choppy days that only 1-2 are seen, if at all.
Sync trades are also ideal for traders that have little tolerance to risk and wish to build an account that has limited funds.
Week 2
Once you have accumulated experience trading profitably for a week the trades described above you should be focusing your attention and trade all three Main Trades , initiating your trades with a Trend trade that may develop into a Fast or Sync trade. Bear in mind that in effect the tree types of Main trades are just the way that the three possible stages of one trade as they develop. They are divided into three so that you may also choose to trade one stage independently, say for example only the Fast trade.
Whenever there is a new trend period we see an entry price in the First Entry Cell and an audio alert is produced. This is the only trade produced by GemsBot that is entered as a limit price, which is intentionally designed to be away from the current bid or ask. All other trades are entered at the current bid or ask price.
Once you have your entry in place, for the next one minute you should be fully alert. If you are filled at the limit price you entered there is no need to do anything else, but wait for an exit sign. If you are not filled and either a Fast or a Sync trade develops you should shift your entry price quickly one tick at a time until you are filled. Fast or Sync trades occur only within one minute of a new trend.
If neither of the above occurs and you are not filled at the initial limit order level, you leave the trade on during the trend period. You only remove it if markets run in the predicted direction for at least 8 ES or 15 YM, or 12 NQ or 12 TF ticks. It is not nice to be filled on a large pullback.
GemsBot provides clear exit signs for the Trend, Fast or Sync trade. They are produced when the Market Strength drops by at least 10%. At that time the background color of the first entry cell changes, the latest of the three entry cells is removed, there is a yellow background color in the current Market Strength cell and an audio alert is produced.
The reason that exits are depicted this way, as opposed to just removing the Trend trade value, has to do with the Continuation trades. Frequently, and more so when the Trend lasts for a while, market pullbacks produce exits that secure partial profit taking and offer an opportunity to re enter with the Continuation trades.
You will observe that at times all three trades, Trend, Fast and Sync trades are triggered during the same one minute interval, a pattern that we call ttt (triple trade trigger) and very rarely does not produce excellent results.
You should concentrate your trading as described above for as long as is necessary to see sustainable profitability before you venture into the next and final weekly level.
Week 3
Once you are profitable and comfortable trading as described above, you should start taking the Continuation trades. They are designed for advanced trading and serve three purposes.
Firstly they offer you an opportunity when you trade with multi contracts to scale in the market. You could be trading with lets say half of you contracts with the Main trades and go with full exposure when Continuation trades are triggered. You will observe that almost all the times that Continuation trades appear, the Trend trades are already successful.
Then they offer you an opportunity to re enter a trade that initially has either ended with profit taking or loss but it continues in the predicted direction with excellent results. Bear in mind that all great runs produce one or more opportunities to be entered with a Continuation trade.
Finally if you are inclined to take quick scalping trades the Continuation trades offer you a chance to do so trading them on their own, a large number of times each day. There are also periods when the market produces lots of quick reversals and these trades become very successful during these periods.
Trade Management
It is absolutely essential to use Trade Management with the trades produced with GemsBot. You will find the recommended values in the Trade Management page. The current levels of volatility for each instrument are shown in the spreadsheet and you should be adjusting the profit taking and stop loss values accordingly.
In brief, for ES the suggested default settings when you trade 3 contracts, which is the ideal one, is Stop Loss 8 ticks for all 3 ES contracts. Profit target 4 ticks for the 1st contract and 8 ticks for the 2nd contract. The 3rd contract is to be left as a runner and is to be exited according to GemsBot indications. The runner price should be moved to break even once the 2nd contract has taken profits. Trading 2 ES contracts at time the default condition is Stop Loss 8 ticks for both. Profit target 4 ticks for the 1st contract and the 2nd contract to be left as a runner. The runner price should be moved to break even once the 1st contract has taken profits.
Finally if you are trading 1 ES contract at a time, unfortunately no trade management can be applied since you can either enter or exit a trade. The default values are slightly smaller that the previous cases at 6 ES ticks Stop Loss and Profit target.
Concluding, the whole concept of Gemsbot is based on the following. Trade intraday frequently taking part profits early and leaving runners in, have small stop loss values and equally important exploit opportunities to re enter or to add when the markets moves strongly in the predicted directions.
That's all there is to it !
Thank you for your interest and support. Happy Trading !