You can use the UNI chart on other time frames as well. For instance, you can use it filtered, or unfiltered, on a 30-minute chart as a swing trading system.  Be sure to use Ensign's built-in back test function to give you a quick look at how the trade would look on the instrument and time frame that you are considering.  Simply click Charts -> Trade Detail. Very handy, when used in conjunction with the UNI chart! 

- Note this gives you 'unfiltered' trades only, i.e. it assumes that you take all trades that have the UNI setup, regardless of whether it occurs at a VPC line.

- Note if you use the method on a 5 or 30-minute chart, you might want to consider 'upping' the time-frame of the Natural Trading Range accordingly, to give you a nice filter.  Try a Weekly VPC, for example.

Stops are extremely subjective - that is, they depend as much upon your own personality as they depend upon the underlying trading system. There are many different stop methods.  Here are a few:

1. Fixed stop - a specified number of points, or a specified % of the trade value, from the point of entry.
    
2. Market structure stop - using previous low or high, or some other visible support / resistance.
    
3. Optimized Exit - using a predetermined indicator such as a moving average or Keltner band as your exit, regardless of whether the resulting exit is a profit or a loss.  This chart from the YM trade today is a good example.  The entry for the short was 12653, it then moved 88 points against us to 12741 before touching the Keltner to exit at 12689.  -36 points is much better than -88 !

Regardless of which method you choose, it pays to research trades for any particular method, to help  optimize the stop and to understand what kinds of draw-downs to expect.  I would recommend at least 100 trades of "data."  The best way to do this is to record each trade in a spreadsheet and include all the 'what if's of each trade - the high point, the low point, and the nominal Keltner exit.  Then use Solver (which comes with Excel0 to optimize the best stop based upon the criteria.

Trading with the Optimized exit can help you to achieve profits without getting stopped, and it can also help you to minimize your loss on a losing trade. But sometimes the market will move against you for as many as 10~20 ES points before a Keltner exit can be achieved. Make sure you build these into your scenarios so that you understand how frequently these may occur, and what your likely drawdown will be based upon the liquidity you have, the leverage you are using, and the particular rules of your online broker.

A "Seed Wave" is simply the first wave in a reversal.  It is the seed because all subsequent waves are based upon the amplitude of the first wave.  Typically the next wave - Wave 3  (Wave 2 is the intermediate retracement) is usually a Fibonacci growth ratio based on the Seed.  Typically it is in the area of 1.382 ~ 1.618.  Here, it was exceeded.

[07:08] <cuzzo> So what we are doing is catching the reversal trade.
We are not going for the momentum move if the market is going up or down at the current time?

[07:10] <enthios> Correct. This is not momentum, and the reason is simple: We NEVER know when there is going to be a momentum move, until it has ALREADY OCCURRED. It's a false idol. A dream.

[07:11] <enthios> But we DO KNOW (with a reasonable degree of confidence) what will happen WHEN prices touch the VPC. We don't know which VPC the market will touch - whether it is the upper, or the lower - We have no idea.  We only know what to do once one of the VPC's is touched. That's why the Universal is an objective method. Or, at least, as objective as they get. I don't' know of any other method that shows you, in advance, where you will go long or short. With clear targets, and a clearly defined entry and exit point

[06:54] <omar> Does the range makes so much difference?
Or better say, any reason to use range and not ticks or volume or anything?

[06:55] <enthios> tick should work fine. I used to use tick but in Ensign, using the IB data, they only had back data for 24 hours. If you wanted to go further back, they switched to a different data service. And the tick data was incompatible with the live tick data. However, you don't really need back data for tick charts. Only the most recent 24 hours. On the other hand, I now prefer range charts. Because you KNOW the high and low of the bar before it completes. That makes it much easier to enter a stop-limit trade for entry.
 

[06:58] <cuzzo> but if we want a faster chart what is a good choice?

[06:59] <enthios> Here's the bottom line: You are watching the VPC. That is the point at which you want to enter a reversal trade. Once you reach that point, you can use any method you choose, to get into that trade. Use a 60-tick chart, or 1-minute, or 50 range, or 5 range. Totally up to you. Recognize that there will be a trade-off. The 'faster' you get in the trade, the 'earlier' you get in. And sometimes that is not good. The EARLIEST you can get in, is to simply place a limit order at the precise VPC, and ignore any stochastics or other method of getting in. That is pure and simple. But the fact is, often times the price moves past the VPC - so you don't necessarily want to get in precisely at the VPC. So you want to achieve a balance.

Here is a good example of using a stop limit order to enter the trade.  With the new price range indicator (thanks to "Sputnik" in our trading room!), you can see the price that is one tick above, and one tick below, the current bar. In this case, it enabled you to enter a stop limit order for the short at one tick below the low of the signal bar, which was 1347.75.  As subsequent bar lows were higher, you simply move the stop limit upwards, trailing the stop entry until a retrace hits.  The actual entry is shown here as the base of the second bar after the signal, at 1348.75.  That's a savings of $50 per contract, on one trade.

Everything in nature is made up of building blocks.  Just as the universe is made up of atoms, so the market is made up of basic units called Market Structures.  And just as there are two basic part to an atoms – protons and electrons – so in the market there are two types of structures, Market Structure High and Market Structure Low.  Most price movement in the market can be defined in terms of MSL’s and MSH’s, and the ranges that are found in-between them.  Likewise, everything you find at enthios.com is, for the most part,  defined in terms of MSL’s, MSH’s, and the building block that they form together, 1-2-3 Reversals.

Market Structure Low (MSL)

A Market Structure Low (MSL) is the first sign of a potential reversal in prices from a downtrend to an up trend.  It is usually made up of three price bars (or candles): A low, a lower low, and then a higher low.  The “Low” is measured from the actual low of the candle, not the closing price.  Ideally, as shown in Figure1, the Low and Lower Low will both be “down” bars (where the closing price is lower than the open price), whereas the third bar, the Higher Low, will be an up bar.

Figure 1 - MSL

The MSL is actually triggered when prices subsequently move above the high of the third candle, as shown by the dotted line.  Of course, it is dangerous to enter a long trade simply on the trigger of a MSL.  But this book is filled with ample opportunities to use the MSL and MSH as triggers for different trades.

 A MSL can also be made up of two bars or candles when they both have the same low. This is known as a double bottom, as shown in Figure 2.  Again, ideally the first bar of the double bottom will be a down bar, and the second will be an up bar.   In this example, the second is a doji (open and close were the same), which is neutral.

 Figure 2: Double Bottom MSL

Market Structure High (MSH)

The opposite of a MSL is a Market Structure High (MSH).   It is the first sign of a potential reversal in prices.  A MSH is usually made up of three price bars (or candles): A high, a higher high, and then a lower high.  The “High” is measured from the actual high of the bar, not the closing price. 

Again, the MSH is triggered short when prices move below the low of the third bar in the MSH pattern.

Figure 3: MSH