Day Trading Super Systems
By World Cup Champion Trader Rob Mitchell
There are four basic concepts that can make up successful technical day trading. Price Action (patterns), Momentum and Order Flow. Then you bring in Support / Resistance and related concepts like Market Mapping which can tell you what is likely in a given segment of the trading day. One less often talked about part of trading is the benefit of order flow reading and so in this article I will cover that in the way I have been doing for years.
Order flow is like the pressure going through a hose and you can have order flow that is consolidative or that is associated with expansion. In the latter case it could be called order flow momentum. In the earlier, order flow trapping.
Traditional methods of reading order flow can be cumbersome. As I got older, I looked for solutions that would enable the reading of this with the absolute minimum amount of energy and inputs for interpretation to make things easy and intuitive. To accomplish this, I designed a tool that was structural. This opened the door for repeating patterns. But then we took it a step further by establishing specific probability profiles with any of the patterns so we have a solid idea of the outcome before the trade. Often these patterns are associated with specific price action (or not) and momentum patterns. In the prior issue of Trader’s World (Issue 76), I covered making Super Systems and, in this article, I am elaborating and getting into more detail of these amazing patterns. In that article I also covered probability stacking and the patterns in this article certainly apply to that, so enjoy!
The Smart Trapped Trader Oscillator (STTO or TTO for short) enables you to see order flow (trapping or momentum) in a glance. We generally keep it in the second panel of our charts, so when you look at charts below, we’ll be focusing on that second panel labeled TTO. We will cover 10 patterns that can be easy to see and utilize. When you combine these with other patterns, you get probability stacking for high percentage theoretical winners.
First off are the 3D Complex. Here you get first 3 dots (3D) ascending or descending on the TTO going with price movement or trend. If this is followed by a line break on the Smart Break Points (SBP) on the TTO panel, you will have what we call a 3 dot break. If the bar hooks back in the original direction following we call that 3DV (because it makes a V or inverted V shape). If it breaks the edge again and hooks, we call that 3DVE. So it goes in order 1, 2, 3, 4. as 3D, 3DB, 3DV, and 3DVE respectively. These patterns are generically 75% to continue and will probability stack with other patterns such as the T2 (that was also covered in a prior TW article). This kind of thing is telling you there is strong structure and order flow going with. With a T2 (a momentum pattern we use), this patterning should spec out to better than 90%, especially if done where you do not already have range expansion. In other words, positioning yourself for the range expansion and staying clear in the period immediately following.
Learning to see patterns like this can be quite rewarding.
Next we have the TTOP or TTO Pump. This is only used with the T2 momentum pattern we have discussed in prior articles, and is where the TTO is out of bounds (OOB) counter to the direction of the trade. OOB is where you have the TTO out of the 80-20 lines on the indicator. Another form of the TTOP is where you broke two prior SBP lines on the TTO (see below). This pattern is generically 84% to continue.
Next is the Single Bar Encompassing Pattern (SBEP). This occurs where the TTO encompasses two lines as in the image below. This pattern shows strong order flow in the direction of the break. It is preferred with trend and in the counter trend it is often preferred that you not be against it as it can save you having the market come back into you strongly. This pattern may be considered to be about 75% generic and adds with other patterns, especially where it is with trend and not on consolidative structure as mentioned previously.
Next is the TTO Lead Out (TTOLO) and the TTO Box (TTOB). The TTO Lead out occurs where the TTO is going with price and does a line break in the direction of the trade. A TTOBox is the same, but requires a double bottom or double top in price or a 5 tick trap (structure broken by less than one complete continuation bar). These patterns are generically in the 84% are on their own and add with other patterns.
Next is the Mid Line Hook (MLH). This pattern is adding and is showing a continuation pattern. It occurs where the TTO has hooked the 50% line on the TTO or has hooked above it for longs or below it for shorts. It can often happen with 3D patterns and where the Smart Momentum (Smom) and Smart Price Bands (SPB) colors match (which is often in a relatively high momentum situation).
Next is the Double Line Break (DLB). If the TTO breaks two TTO SBP lines in one bar, it is suggesting continuation in the direction of the break. Beware of being against this pattern.
Another TTO pattern that can be useful is the COD pattern. The COD pattern can also be called "Cross Over Divergence" and occurs where the TTO from reversal bar to reversal bar of the same color on uninterrupted structure is higher to buy and lower to sell. We do not have a specific stat for this but it is known to be adding as the forward strength of the TTO on these cases carries some momentum. Any Lead out by definition is a COD. Technically, the COD looks at the TTO relative to a prior bar. You could also look at TTO strength in absolute terms based on its magnitude only and for specific price action and potential stacking situations.
The R0Ob pattern. This pattern occurs where you get a reversal bar on the TTO that is above the 80 line or below the 20 line. This is often indicative of a strong market condition as it is difficult for the market to do this. This can also be done on a first continuation bar (called R0ob1) where it did not occur on the Reversal bar.
The 2DB pattern. On this pattern, what you will see is the TTO and price going together and then on a Reversal bar you will see the TTO break a line counter to the original move. This is the 2DB pattern and it is a continuation pattern. Often this will also happen with a 3DV pattern. In this case, you likely have some probability stacking in the direction of the pattern.
The 3D2 pattern. With this pattern you will see both the Smart Momentum in a 3 higher or lower dot condition on the TTO and a pending or 3 lower or higher dot condition on the SmartMomentum. This may also occur with a 3DV or 3DVE pattern as well. Sometimes the Smart Momentum will just be sliding along with the direction of the TTO 3D complex patterns. As long as these conditions are intact and/or pending as described on the SMOM, you have a 3D2 pattern.
The new TrapperTraderOscillatorAdvanced tool has several new features that enable you to see more that is happening inside the bars. One of these features is the Pressure Bars (PB). PBs can be beneficial in any number of ways and I will cover a few of them here. Be sure to ask in the trading room for clarification on any patterns if needed.
The PB Reference pattern. With this pattern, you be comparing the PB to a prior one in terms of its strength going with. For the PB condition, you will want the price structure to be intact, meaning a higher high or a lower low on RB (Reversal Bar). When you get this AND the PB is stronger than the first, it is adding to the movement continuing in the same direction as the pattern.
The TD pattern. On this pattern, you will see the TTO close on a reversal bar being encompassed by the Pressure Bar (PB) in the direction of the price patterning. It is preferred to use this pattern with the trend and we recommend trading with the trend in most cases; especially in the beginning. It is easier to parse the market out by price action and trend using market structure as taught in the room and/or with the Smart Price Bands. So, it is recommended that you would master this first before taking on counter trend. In other words, it is best to learn to be single minded before being double minded and mastering them in that order, or, just trading with the trend.
The 3PB pattern. On this pattern you will pay attention to the PB going in a sequence of higher highs or lows. This adds to probabilities for continuation in that direction. Use Reversal bars for this reference. There is another special case where you actually get the PBs fading before the RB AND it is also 3PB on the RB. In this case it is adding even more. This variation is called 2PB3. You can also look at PBs going with price (sequences of CBs) as a general trend continuation pattern. This is particularly true in the CL market and less so in others. I think this is true because CL can have protracted trend moves with strong order flow inside sequences of bars. Always be careful of these patterns after going a good number of continuation bars. If you are a trading room member, see the Probability inversion table in your members area resources to see general probabilities for getting a reversal. In other words, it is better in general to do these patterns, especially in sequences of CBs earlier on in the sequence.
If you have the TTOAdvanced, there are also other patterns available using the Chart Bars ( After you finish this article, you can learn more about the TTOA by clicking this sentence. ) With the Chart Bars, you can actually see the High, Low and Close of the TTO. One pattern with this is the Slingshot pattern. With this, you will see the TTO touching the 50 line with the immediate trend. Often these patterns are what we call the E2 pattern where a tail on a continuation bar has encompassed the brick of a prior bar. For the Slingshot pattern, this E2 condition is not required. With practice and experience you can, with the TTOA, begin moving towards being able to fire trades at almost any place on a chart. This is advanced usage so is not encouraged for beginners. You can also see Slingshot patterns on the regular TTO if you are monitoring the touches of the TTO to the midline but it is a lot to keep track of, so it is good to have a tool that can maintain that for you. This pattern of course is one we learned above called the Midline Hook (MLH) with the difference being you can monitor it live on an intrabar basis. This kind of trading and patterning can be fun as it is fast and prices often move away from these areas aggressively. Ask in the room if you'd like clarification on any pattern in this article.
The TD3 pattern is often used as an exhaustion pattern. You will see the PBs exceeding the TTO for 3 or more bars. When you see a reversal bar under this circumstance, you will often get a continuation bar going with the first RB. You can use this for money management. i.e. where you do not want to be holding. In fact, any of the patterns discussed in this article can be used for money management or for entries. Another place this can often happen is where the TTO has gone coast to coast (C2C) in one uninterrupted run. When you get this the probability for continuation in the direction of the reversal is fairly high. So you generally do not want to be against it. This pattern is called TTOC2C.
The OOBt (and R0OBt) patterns. When you see the TTO is outside the 80/20 bands, it is by definition OOB ("out of bounds"). When this pattern happens while the PB (pressure bars) are tiny or opposing the direction of the TTO, it forms a type of trap and continuation is expected. For this to occur, generally the difference between the PB and the TTO will be greater than 30%. If this also occurs on an RB, then it is a special form of the R0OB pattern discussed earlier and may have probability stacking associated with it.
The Wall Pattern. When you see a wall of PBs (PBs that are very strong) and you get a Reversal bar following, given that the price structure is not CD>AB or encompassing (though in many cases it will still go), you can expect at least a 5 tick retracement if not a complete RB. This pattern, therefore, attempts to predict an R0 pattern in price. This pattern may also be "Still in Effect" for re-signals in the same direction.
The basis of our method is that various patterns with good probabilities that each stand on their own, when occurring at the same time as other patterns, lead to probability stacking. There are many benefits to this kind of system design and in our experience, this approach is vastly superior to other methods of trading system design.
I have covered a large number of patterns in this article. Some may be more for your style and likes than others. Some may lead you to learning to see even other things. It is recommended not to take on a lot of patterns all at once. Keep it simple and let your arsenal of trading tools and patterns grow in time. One pattern at a time with mastery at each step.
Look over the charts in this article. Not all of the patterns are marked. Can you find more? What happens where you find them? What happens where you find them and they stacked and/or are in clean structure? What happens when they are "Still in Effect" and the market re-signals? Such exploration is strongly encouraged, but always be careful to test what you are trading and be extremely clear on what you are trading and be careful also not to get it mixed up in your mind as you add knowledge to your trading arsenal
If you need clarification, please ask in the room (if you are a member) for best benefit.
Recap of TTO Patterns (TTOA patterns are additional):
3D complex (3 patterns plus 3DB) 75% generic
SBEP (Adding)
TTOP (with T2-on Smom- T2 is generically 80%, with TTOP it becomes 84%.
TTO Pulling (Adding and also good if persisting with trend)
TTOBox and TTOLO (about 84% generic - trend /SPB can be adding).
MLH (adding- and especially where SPB and SMOM are the same color in the expected direction of range expansion.
DLB (adding or money management).
COD (adding)
CODX
(11 patterns total plus 3DB)
(plus the TTOAdvanced patterns covered above)
Beware of any TTO patterns that are occurring on multiple back to back reversal bars (aka railroad ties or railroad tracks) or in consolidative non cycling structures where they will often be less valid). Trading with the trend and with the most likely direction for range expansion is often your friend 🙂 In fact, any of the patterns in this article will generally be stacked with the addition of the Smart Price Band color Any of these patterns may be used for entry or for trade management.
I only marked a pattern or two per chart. Can you identify the patterns covered on the various charts where they were not marked? Notice what happens when you do, where it is, and especially where it is occurring with the principles given J
Did you enjoy the kind of thinking behind the patterns in this article? Want to learn more in an applied live environment? Join us in the Oil Trading Room to discover theses patterns and more, and where they are occurring in a stacked way for Super System win percentages! The Indicators and Tools discussed in this article are available from IndicatorSmart.com
Learn more about (and refine) these (and other) amazing patterns in the OilTradingRoom.com where these tools are already on the screen for your benefit. The Oil Trading Room is a community and open forum of trading ideas based around trading principles of the Smart Patterns Trading System tools (and beyond), and that apply in any market. The room is moderated by World Cup Champion Trader Rob Mitchell and is a also a forum where you have open access to Rob for a couple hours each day. Basically, it is like having a World Cup Champion mentor looking over your shoulder for less than $5 per hour (for a limited time). Don't risk not learning these patterns. Join, benefit, share and grow!
Rob is President of Axiom Research & Trading Inc. a market research and trader training and mentoring firm specializing in futures markets and the mother company to OilTradingRoom.com and IndicatorSmart.com. Rob has been a Commodity Trading Advisor and/or Registered Investment Advisor and has been the largest Emini S&P trader in the world. Rob has also won the prestigious Robbins World Cup Emini Trading Championship, has Developed numerous successful commercial trading systems since 1997, is an NLP Practitioner, NLP Coach, is Board Certified in Time Line Therapy® and Hypnotherapy. He has acted as a trading educator, coach and mentor helping others to achieve their dreams as traders.
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