From California, USA, John is a veteran trader. With 35 years trading experience he has seen it all. John has an engineering background that led to his technical approach to trading ignoring fundamental analysis (with one important exception).

John strongly believes in cycles. He’d rather exit a trade when the cycle ends or a new one starts. He uses the MESA principle to make predictions about cycles in the market and trades one hundred percent automatically.

In the show John reveals:

  • What is more appropriate than trading individual stocks
  • The one thing he relies upon in his approach to the market
  • The detail surrounding his unique trading style
  • What important thing underpins the market and gives every trader an edge

Interview

80: John Ehlers on Multi Time Frame, Fully Automated, Cycle Trading Success
00:00:00 00:00:00

Quote

“Learn about your trading system before you start putting real money down.”

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Recommended Book

Cycle Analytics for Traders + Downloadable Software: Advanced Technical Trading Concepts by John Ehlers
New Trading Systems and Methods (Wiley Trading)  by Perry J. Kaufman

Interview Links

mesasoftware.com

Register for his workshop, mention 52 Traders and receive John’s book (normally $135) for Free

Broker & Platform

TradeStation

Key Lessons

  • Don’t worry about losing money
  • Look at drawdown
  • Don’t look at profit
  • Most of the trading research ends in failure
  • Cycles come and go
  • Take what the market gives you
  • You’ll never know when your model is correct
  • There’s a danger in overtrading
  • 60% winners makes a good trading system
  • Be prepared to take losses
  • RSI is a good indicator if you know how to use it
  • Learn your system before putting money down

John’s Trading

  • When trading the daily, he holds a position about 10 days
  • Trades intraday with a fully automated system on the 15 min timeframe
  • John trades stocks indexes
  • He goes for 1:3 and even 1:5 risk to reward ratios, though doesn’t have a physical stop loss
  • He uses MESA and sine waves for calculating the market cycles
  • He know exactly when to enter and exit a trade
  • Uses multi time frame analysis to identify the right cycle

John’s Strategy of the Week

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HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN. IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM.

ONE OF THE LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION, HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF FINANCIAL RISK IN ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND LOSSES, OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING LOSSES, ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE MARKETS IN GENERAL, OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING PROGRAM, WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF HYPOTHETICAL PERFORMANCE RESULTS AND ALL OF WHICH CAN ADVERSELY AFFECT ACTUAL TRADING RESULTS.

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Forex, futures and options trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Don't trade with money you can't afford to lose. Our website, product contents, and materials are neither a solicitation nor an offer to Buy/Sell futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our website or in any materials. The past performance of any trading system or methodology is not necessarily indicative of future results. Substantial risk is involved. Forex trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the Forex markets.

Don't trade with money you can't afford to lose. Nothing in our course or any materials or website(s) shall be deemed a solicitation or an offer to Buy/sell futures and/or options. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on our site. Also, the past performance of any trading methodology is not necessarily indicative of futures results. Trading involves high risks and you can lose a lot of money.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.