Starting Trade Guidelines Using Master Trader Strategies – MTS

by | May 18, 2025 | Chart of the Week Past

In this Educational Chart of the Week Below,  

We Review: Starting Trading Guidelines Using MTS.

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The Master Trader top-down method of stock market analysis is a comprehensive approach that starts with a Techno-Fundamental perspective and narrows to individual stocks.

Master Trader uses a Top-Down method to educate students through courses and letter memberships

In each Master Trader live event, recordings are uploaded to MT Weekly Advantage. We cover MTS trading concepts and apply them to directional trend trades, countertrend trades, and non-directional trading strategies, allowing traders to trade the instrument itself or utilize options.

We emphasized that individual concepts alone are insufficient as trading strategies and demonstrated how to combine them to form a comprehensive trading plan that yields effective MTS trading strategies.

Starting Trade Guidelines Using Master Trader Strategies - MTS 

  1. Start with a Clear Technical Bias
  2. Confirm Support and Resistance
  3. Define Trend and its Analysis
  4. Analyze Candlestick Behavior and Momentum
  5. Filter Counter-Trend Setups Carefully

There are additional analyses covered in courses that can help you complete your trading plan; however, this is an excellent starting point for the thought process.

Multi-Time Frame Trading Guidelines

1. Time Frame Choices and Use

  • Weekly Chart: Defines the macro bias (swing trading), which is the directional alignment with the broader trend.
  • Daily Chart: Used for position management, money management, and identifying trade locations in line with the macro bias.
  • 65-Minute Chart: Provides refined entry signals when the daily is extended. Critical for precision entries and fine-tuning risk.
  • 65-Minute / 5-Minute Chart (Intraday): Used for intraday trading bias and real-time trade management. Ideally, the daily time frame is aligned, but it is not always needed.
    • Use the 5-minute to manage open trades.
    • Use the 2-minute for aggressive entries when the 5-minute is extended from support/resistance in a trend.
    • Trades should only be taken when relevant time frames are in agreement  - moving in the same direction. This alignment increases the probability of follow-through for entry patterns and reduces false signals.
    • For example, when the Macro is trending higher, take buy setups on the Micro. Do not take sell setups on the Micro when the Macro is trending higher.

    2. Support and Resistance Rules

    • First Support/Resistance:
      • A prior bar’s low (support) or high (resistance).
    • Second Support/Resistance (Pivot Levels):
      • Pivot Low: A bar with three higher lows to its left and right.
      • Pivot High: A bar with three lower highs to its left and right.
    • Overlapping Bars: Represent price acceptance—important intraday S/R zones.
    • Void: Absence of recent support/resistance (e.g., all-time highs/lows).
      • Creates high odds for momentum continuation toward the next visible level.

    3. Trend Analysis

    • Uptrend:
      • An uptrend is higher pivot highs and lows.
      • Minor Support: Last pivot high or consolidation area.
      • Major Support: Swing low before the last higher high.
      • If prices retrace deeply or close below this level, the trend is in question.
    • Downtrend:
      • Mirror the uptrend logic—pivot lows and consolidation become minor resistance.
      • Deep retracements into the prior swing high or a closing violation of lower highs (Major resistance) can weaken the downtrend.

    MTS Insight: Deep retracements to Major support/resistance are potential counter-trend opportunities only when a climactic move and a reversal pattern occur.

Dow Jones Industrials Daily Chart

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4. Candlestick and Momentum Insights

  • Narrow-Range Candles: Indicate slowing momentum—wait for expansion before initiating trades.
  • Wide-Range Bars (WRBs):
    • A WRB breaking out of consolidation confirms strength.
    • A WRB within trend = potential stall → tighten stops.
    • A WRB against trend near support/resistance can mark climactic exhaustion—watch for reversal setups.

5. Counter-Trend Trades

  • Only valid when:
    • A trend becomes climactic (e.g., WRB into resistance/support, price acceleration).
    • A reversal bar/pattern forms (e.g., topping/bottoming tail, engulfing).
    • Time frames align for reversal (e.g., 65-min forms reversal pattern, daily is extended).
    • These trades require tighter management, reduced size, and quicker profit targets.

This chart of the week serves as an excellent starting point for building your trading guidelines.

Our Mini Courses and MT Weekly Advantage are great ways to extend the learning.

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Happy trading!  If you have any questions or comments, please e-mail Greg Capra at Greg@mastertrader.com or Dan Gibby at Dan@mastertrader.com