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Anek's Holy Grail v 1.0 or AHG for short.

Good working strategy for Day trading, principles can be applied to most time periods and instruments.
This strategy works in most trending markets.
STEP 1 DETE!"#$E T%E T!E$D &'p, down, sideways( ))))))))))))...) pg *
STEP + ,$-E T!E$D DETE!"#$ED, %,. T, P/01 #T &entry( ))))))))))) pg *
Downtrend &The E2il Twin(
-hange ,f Trend
Trendlines 3 45 Trend lines
6ibonacci !etracement /ines
STEP * 8 #$D#-0T,!S ))))))))))))))))))))))))))))). pg 9
'PD0TE: ,fficial /ist of 0llowed #ndicators for 0%G &1;;<;=(
Tape reading
Time and Sales 8 6iltered
STEP 4 ",$E1 "0$0GE"E$T )))))))))))))))))))))))).. pg >
.inners and /osers.
STEP 5 8 D#S-#P/#$E )))))))))))))))))))))))))))))) pg >
STEP 9 -%0!T T1PES
%igher time frames 3 0nchor -harts
%eikin 0shi ?ars &from #n2estopedia(
-losing ?ars
Strong ?ars 3 .eak ?ars.
-hart 0nalysis
E$T!1 0$D E@#T S#G$0/S ))))))))))))))))))))))))).. pg 1+
Entry signals
Entry on retracement
EAit suggestions (not inclusive)
"echanics in a concise manner
Priority /ist
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P0TTE!$ T!0D#$G ))))))))))))))))))))))))))))). pg 19
Double Tops 3 Double ?ottoms
!ectangle3%oriBontal breakouts
6ailed head and shoulders
Dragon Pattern
" and . patterns
-onsolidation and -ongestion
P!#-E %ES#T0T#,$ ))))))))))))))))))))))))))))).. pg 1>
",$E1 "0$0GE"E$T 8 0d2anced )))))))))))))))))))))). pg 1>
Scaling out
02eraging up
Tips ))))))))))))))))))))))))))))))))))))) pg +*
6utures o2er e7uities
6rustration, !isk and the 0cceptance of Small /osses
Patience 'pdate &11+;;=(
The ?est Trades
-onclusion of 0%G Phase # Summary ))))))))))))))))))))))) pg +=
0ppendiA To 0%G Phase #
-harts D annotations ))))))))))))))))))))))) pg +<4*
#ndicators3Paint bars ))))))))))))))))))))))).. pg 445<
&$inEa Trader(
&CuoteTracker FCTG(
Profile 8 0nekdoten ))))))))))))))))))))))))). pg 5>
!ecommended !eading /ist
0dditional utilities
!ecommended ET "embers to !esearch
Cuestions on ad2anced techni7ue ))))))))))))))))))).... pg 91
0dditional Cuestions 8 "iscellaneous
#ndi2idual Study .ork assignment &111<;=(
.hat leads price to congestionH
Decisi2ely ?roken 0reas
Trend line Swings
The 6inal Iey to Success ))))))))))))))))))))))))))).). pg 9<
STE 1 ! "ETE#$%NE THE T#EN" ! &'() *o+n) si*e+ays,
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Determine if there is a "E0$#$G6'/ T!E$D present, &There are two types.(
o Positi2e 'ptrend J higher highs, higher lows
o Downtrend J lower highs, lower lows
The ones you should ignore &for now( because they re7uire greater skill to consistently profit from or
simply, the sideway ones:
o -ongestion3#ndecision J higher lows, lower highs &Symmetric Triangle formations(
o -onsolidation J horiBontal lows3highs
o (Further explanation in additional patterns section)
0s you gain more eAperience you can profit fromK
o -onsolidation by fading support3resistance
o Symmetric triangles &%/ /%( because they tend to gi2e birth to P,.E!6'/ new trends
o For now stick to the meaningful trends. (Uptrend and Downtrend)
Note- (HHs and LLs are defined by CLOS, not wick for trend determination)
STE . ! ONCE A T#EN" HAS BEEN "ETE#$%NE" HO/ TO LA0 %T &entry,
#f a "E0$#$G6'/ T!E$D &uptrend or downtrend( has been found we need a logical entry.
?'1 on a pullback and be nimble with your target.
Take ad2antage of minor .E0I$ESS in a ST!,$G T!E$D to get a good fill.
Target can be whate2er you feel comfortable with, it is entirely up to you and only in time will you
master this. 0 few eAamples as follows:
o 5;L 6ib retracement from the recent %igh to /ow swing
o few ticks below pre2ious resistance
o measured mo2e up
o 1ou could trail the stop to ride those breakouts, all 2ery discretionary.
(Stop? Whatever would make it a lower low aka a H!"#$ of trend)
'ptrend channel: Two higher lows, two higher highs
uptrend.trendline.Epg sample of using a trend line with an uptrend. They are ME!1 subEecti2e
"O/NT#EN" &the evil t+in,
SE// &Short( on a pop up and again be nimble with our target.
Take ad2antage of minor ST!E$T% in a .E0I T!E$D to get a good fill.
Target can be whate2er you feel comfortable with, it is entirely up to you and only in time will you
master this. 0 few eAamples as follows:
o 5;L 6ib retracement from the recent /ow to %igh swing
o few ticks below abo2e pre2ious support
o measured mo2e down
o 1ou could trail the stop to ride those breakdowns, all 2ery discretionary.
(Stop? Whatever would make it a hi%her hi%h aka a H!"#$ of trend&)
Downtrend channel: Two lower highs and two lower lows
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.hen looking for entry, say a long or e2en reentry, you want strength to return in the pullback and when
that happens make sure price did not 2iolate the current highs and lows.
$e2er go against the trend. .hen the trend is strong buy a pullback. .hen the trend is weak short a pop
up. The market can not be predicted consistently and consistency is what we want, so be smart about this.
$o eAceptionsNNN
#f ST,PPED ,'T, meaning, a -%0$GE of a trend, stay ,$ T%E S#DE/#$ES until a $E.
"E0$#$G6'/ T!E$D is defined and we take our stop like responsible traders.
!EME!S0/S are the enemy, they stop us out. /uckily, they are not 2ery common which is eAactly why
this strategy works. Some days will be filled with them and sadly # donOt know how to o2ercome this. ,n
days like this, you will lose money.
! lower low without a lower high is not the same as a lower low with a lower high.... and a higher low
without a higher high is not an uptrend.
Trend must go from a downtrend to an uptrend or 2ice 2ersa. &+ %%Os + %/Os or + //Os +/%Os(
The eAception is if one of the two swings is a double bottom or a double top but the neAt swing must
be a %%3%/ or //3/%.
#f nothing of that kind, then you stay out and let a clear trend de2elop.
Trend line breaks are usually more aggressi2e when the last high was not a higher high, especially if it
was a /,.E! high.
The steeper a trend line the higher chances of a T/ break, they simply ha2e much higher chances of
losing control of the trend
$e2er call a top, ne2er call a bottom, it is #"P,SS#?/E to predict accurately on a consistent basis
therefore the best approach is to eAamine what is happening $,., attempt to profit from possible
2olatility and situate yourself in a strategic place, with patience and con2iction.
0 bottom is ne2er confirmed until you see higher lows PandP higher highs, with a subse7uent low that
is also a higher low hinting towards yet another new, higher high.
The Tren* '(*ate &11!.0!01,
The statement eAists for a reason. Fthe trend is your friend'
"any of you seem to be playing G.#. Qoe with your own capital thinking that you ha2e predicti2e
abilities that will make a trend change on a consistently basis before it actually does. %ere is a tip,
1,' D, $,TN
%ere is a simple 0%G rule that is simple but it does not seem to be 2ery clear.
'nless a 2onfir3e* reversal for3ation has completed you do not trade against the trend, e2er. $ot
e2en as a fun scalp because the odds will be against you, you want odds in your fa2or.
# ne2er e2er do it unless # see multiple confirmations supporting the stunt and thatOs taking into
consideration that #Om fairly adept at reading the tape
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P"ou should make it a post it note and stick it in #our monitor$
0s many as you need to determine the current trend. &%and placed preferred(
45 R trend lines are eAtremely useful. #f you donOt ha2e complete pi2ots to guide you, you can
anticipate the second one by using a 45 R trend line.
o 1ou will be amaBed at the number of times price rebounds on them PifP there is a trend.
o .hen an engulfing signal forms around there an opportunity for low risk potential rewards
usually presents itself.
o ,nce the second pi2ot forms, you no longer need estimate readEust it.
0re both subEecti2e and obEecti2e, thatOs where skill and eAperience comes into place.
The pi2ots plotted by the software are 7uick areas of reference but not necessarily written in stone as
they ha2e fiAed parameters that might work for some scenarios and not for others.
'se fre7uency displacement or wa2e length to gauge one pi2ot from the other.
a. -onfluence in distance helps.
#f price is trading in a channel, for the sake of argument, letSs say a downtrend channelK eApect it to
bounce up and down with a bearish tendency. $ow, to ensure your stops are small, e2en in a downtrend
you want to short high, and in an uptrend you want to buy low, this is where the trend lines of the channel
help. This is not the same with formations, a solid confirmed re2ersal formation is 7uite alright for
entering at the lows but this is not the case of channels. %ence why # suggest the trend line channels usage
as guidance. The formations price will form at the eAtremes do tell good info, so make sure you pay
attention. #n yesterdayOs case the downtrend channel formed a bear flag as it broke the channel to the
downside, # was almost certain price was ready to fall, but it failed miserably. $aturally # took my small
stop and realiBed that price was not ready to go to lower lows because if a confirmed bear flag failed,
which is one of the most reliable formations for downside, the failure should be applied accordingly. The
subse7uent mo2e was higher lows from the bear flag pattern until it finally broke out of the channel.
%owe2er, that was predictable. 0s eAplained in the past, failures are sometimes as powerful as or e2en
more powerful than patterns themsel2es.
$otice that during rectangle consolidation, where price is bouncing off support and resistance there is no
predominant side to choose between the two, in this case, look at the whole day and choose the side that
has been winning all day long, if no clear definition, simply stay out and wait for better setups or wait for
a confirmed breakout that aligns with the predominant intraday trend.
Fi6ona22i #etra2e3ent Lines &0nekOs fa2orite(
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5;L from last swing low3high pro2ides an eAcellent entry point. Problem is sometimes the trend is so
strong it wonOt e2en gi2e you your wish and you miss the fill.
'sed to (re*i2t tar7ets not tren*s, for the trend you ha2e price.
STE 8 9 %N"%CATO#S
Only TA tools for re45ire* for tra*in7
Double Tops
Double ?ottoms
Time and Sales
Trend lines
There are so3e 5sef5l for stren7th : +eakness referen2es) entries an* e;its. E;a3(les as follo+s-
'"ATE- Offi2ial List of Allo+e* %n*i2ators for AHG &10!0<!01,
Support and !esistance 2isual aids &T!, indicators are eAcellent(
o tro dynamic sr.Bip chart.Epg
o dynamic s3r is not an indicator. Simply an application for marking the swing highs and lows.
Trend lines, better if hand placed.
%ighs and /ows 2isual aids
Molume based bars, tick based bars
Time and sales &tape reading(
Paint bars to accentuate price action
-andlesticks to find eAtra confirmations
"arket internals, optional &useless to me, maybe # donOt how to use them(
Tig Tag indicators to enhance patterns
6ibonacci !etracement percentages
o 5;L is the best kept secret in trading
%oriBontal /ines
0%G Emotion &Dynamic 6ib retracement( 8 see appendiA
(atalo% of &eld files and paint bar code to be found in appendi(
!n#thing else unless it%s a deri&ati&e to enhance an# of the a'o&e without
adding lag to it is pro'a'l# a waste of time.
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Ta(e #ea*in7
Tape reading takes time, more so than reading price action on the chart. &11+*;=(
6or some basic ideas filter your time and sales window to highlight market buying and selling &that means
0T "0!IET( mostly because this is a sign of re7uiring speed before precision. .hen price is at key
areas on the chart, say support, resistance, trendlines, wedges contracting, anything meaningful watch the
tape 2ery carefully.
#n fact today, when price broke out of the symmetric triangle all # did was read the tape, was not e2en
looking at the chart. # could tell most of the pressure was on buying, the anAiety to sell did not start until it
really fell, not e2en on the retracement. That was Eust free fills for the longs. 0ll 2ery 2ery telling. See
price can go down as the buying pressure increases, it is possible and thatOs how you use time and sales to
get killer entries.
E2entually you will start noticing when price is going down how it is bought on the way down and how
aggressi2ely or if the pressure continues, are the siBes increasing on the way down, is the market buying
outnumbering the market selling is it the selling. 0ll these details are 2ery telling but this is all happening
li2e and 2ery fast so will take lots of practice. #t does not matter if itSs buying or short co2ering, why
would a short co2erH ?ecause he thinks price is going higher now rightH
# canOt teach you tape reading, this one you must do on your own, it is without a doubt the most powerful
thing out there but your eyes will get 2ery tired until it starts making sense as it happens. $ot trying to
discourage you Eust warning you that this one takes an effort and a lot of screen time but itSs the absolute
trampoline to the neAt le2el.
6orget /e2el ## /e2el ### and /e2el #M. 'nless a trade happened the information can be decei2ing.
F,ut of bid3ask range large siBe transactionsG indicates that traders are getting stopped out or wanting
to get in or out in a hurry.
o /et me put it this way, on the tape, whoOs panickingH .hoOs desperate to get in or get outH The
trend of panic inside the tape is it balanced or is it fa2oring a specific side....
o !emember short co2ering is buying)
1ou must watch the tape at critical points not Eust when a sporadic below bid or abo2e ask shows up.
o %ighlight the following:
A6ove Ask
Belo+ Bi*
.hen looking for Ubelow bidU and Uabo2e askU at critical points keep in mind the cumulati2e numbers
between them.
o &as translated by ilu2+trade from 0nekSs email( &11+=;=(
o add the abo2e ask transactions &buys(
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o add the below bid transactions &sells(
o compare the numbers to see which side is winning...
note: useful at critical points, may be useful 3 may not be at others
Ti3e an* Sales ! Filtere*
.atching the tape for big orders, feel tape can be better read with less distraction when # only paying
attention to the big orders and eAclude the little people.
Sample of how clear price action was filtered on tape tape.Epg
To eliminate noise suggested settings
o $C V =5 &5;(
o E!+ V 5;
o ES V +5;
o 1" V 4;
lesser car siBes in the tape J noise
Avoi* the follo+in7 te2hni2al in*i2ators-
Any in*i2ator that is not 100= 6ase* on (ri2e a2tion.
Di2ergence ne2er found to be 2ery reliable so stopped looking for it.
STOCHAST%CS: (not recommended for !())
o 0 cross can be a powerful tool when you are looking for an entry in a strong trend. &5,*,*(
BOLL%NGE# BAN"S- (not recommended for !())
o ()olatility indicator only, everythin% else it*s not that hot)
o .ith +.5 Standard De2iation. &+.; gets hit far too often and distracts with noise(
o .hen price is continuously hitting a band, pay attention. #tOs trying to tell you which side is
stronger. #f you are ha2ing difficulty identifying the current trend or suspect a re2ersal, the
price hugging a particular band can pro2ide great info as to where momentum is headed,
$AC"- (*ot recommended for !())
o EAtremely slow, late entry by *4 bars, lea2ing profits behind on entries and eAits.
o #ts di2ergences signals are good approAimately 5;L of time, random, and useless.
o #t is nothing but the deri2ati2e of two /0GG#$G indicators &"o2ing 02erages(.
o ?etter off learning --#, in fact you are better off with price action alone, no stochastic either.
Te2hni2al in*i2ators are la77in7 in nat5re) as they only in*i2ate (ast (erfor3an2e.
Price action is all that is needed and when using tick3share charts, 2olume indicators are unnecessary.
Molume indicators pro2ide little information.
Time and Sales is in2aluable and pro2ides all the 2olume information needed. This is widely known as
reading the tape. &screen time(
DonOt complicate things, it all comes down to what is big 2olume doing, buying or selling.
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C!+,-!L +.S./!-,O* 8 %ighest priorityNNN
DO *O- !/.!) DO0* unless attempting to get fills for your intended car siBe, ne2er
surpassing it.
0d2anced money management techni7ue, an a2erage up approach is highly recommended.
o see ad&anced section11 until then1 use the same car si2e on e&er# pla#
/inners an* Losers.
o There are only fi2e possible outcomes in trading:
?ig /osses (Stay away from the first one and the rest will $+,-!$ you&)
Small losses
?ig .inners
Small .inners
?reak e2en
o 0%G attempts to accomplish
Small wins
Small losses
?reake2en trades
/etting winners run &big wins(
STE ? ! "%SC%L%NE
Trading is not for the irresponsible. ?reak the rules and you will e2entually lose big, period. Trading will
forgi2e you if you were wrong on a play e2en se2eral playsK it will not forgi2e or tolerate stupidity.
/ong bars are e2il, highly recommend tick3share charts, pro2ide ability to split the data and eAamine it
with care. 6or the 1" recommend =5 or <> tick charts. This differs greatly from one instrument to the
other, the greater the 2olume3acti2ity it has, the greater the ticks siBe you will need. 0dEust tick3share
2olume depending on how current day is de2eloping. #f low 2olume day, may e2en go down to 15;, 1;;.
etc) 0dEust for best 2iew and what you are most comfortable with.
Tick and 2olume bars, you need to be able to kill the possible long bars in time based charts that hide
what could be important to obser2eK at least as a scalper.
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Molume ?ars suggested settings: &adEust for low 2olume(
ES J +5;;35;;;
E!+J=5;31;;; 91; tick anchor
$ote: Tradestation does not display Molume bars correctly
0nek not concerned, been using TS for a while now. .ould rather use tick charts than learning a
whole new platform at this point
0nek does not like time based charts, other than for 0nchor reference
Hi7her ti3e fra3es 3 An2hor Charts
'se two charts, one for a clear understanding of the main trend, if any, and one for low risk good
reward entry.
%elp determine the big picture or maEor trend. 0lways trade in the direction of the big picture and to
be aware of possible of key le2els that can and will produce congestion.
%igher time frames also help alert if the breakout or breakdown was meaningful enough to merit
a2eraging up on retracement.
Dual confirmation
There is no correct chart frame, whate2er fits your risk3style3goals. 0nchor 4A base chart is good
EAample of what is referred to as a "ulti Day -hart.
o $otice current wick high on last bar, reason decided to take profits around that area.
o #t has UyetU to break out3down.
o #nteresting thing is that # think the key to the market &all eminis( lies on this chart right here.
o The ++;5 and +19; areas are eAtremely important in the neAt de2elopment phase.
o /earn to recogniBe the bearish hemisphere from the bullish one and whatOs the line in the sand.
o !emember, the $0SD0C is leading.
o #t is eAtremely important, always, at all times, be aware of the big picture, without it, you
would not know how far your good trades can go.
o higher time frame ne2ermind.Epg primary and anchor chart
# use two anchor charts, one regularly and one # eAamine late at night.
The regular one is 91; ticks, and the other +5;; ticks.
candlestick 7uick reference guide ;;1.pdf candlestick.pdf &reference(
Pro2ide one more confirmation, not a signal.
#mportant candlestick formations for 0%G:
o %ammers at the 2ery end of a downtrend with wicks piercing support
o Shooting stars at the 2ery top signaling that bulls got trapped.
o ?oth preferably with good 2olume.
0dditional attention gi2en to:
o DoEi, as they mark indecision, particularly at S3! areas
o Engulfing patterns.
o (.he rest not cared for)
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6or instance, say a bar pierces through trend line support and closes as a hammer. to see a tick below
the lowest area of the bar that closed before shorting is preferred.
Heikin Ashi Bars &fro3 %nvesto(e*ia,
U0 type of candlestick chart that shares many characteristics with standard candlestick charts, but differs
because of the 2alues used to create each bar. #nstead of using the openhighlowclose &,%/-( bars like
standard candlestick charts, the %eikin0shi techni7ue uses a modified formula:
Close J &,pen W %igh W /ow W -lose(34
O(en J X,pen &pre2ious bar( W -lose &pre2ious bar(Y3+
Hi7h J "aA &%igh, ,pen, -lose(
Lo+ J "in &/ow, ,pen, -lose(
The %eikin0shi techni7ue is used by technical traders to identify a gi2en trend more easily. %ollow
candles with no lower shadows are used to signal a strong uptrend, while filled candles with no higher
shadow are used to identify a strong downtrend.
Solid uptrend with superb momentum let the %eikin 0shi bars guide you &for runners not for entries(.
Then the eAit is second nature. #f you stick to that simple strategy you will obtain some monstrous
wins whene2er the opportunity presents itself if you happen to be in the trade or spot an entry.
DonOt use %eiken 0shi &%0( bars for entry, only for eAit. %0 bars for entries are counter producti2e.
&They go red when you should be going long(.
%0 bars help for the runners, the best trades always tend to work from the start causing 2ery little heat.
(-his techni3ue should 'e used in com'ination with standard candlestick charts or other indicators)
Closin7 Bars
-losing bars &not wicks( are used for confirmation when breaking support or resistance. closeisall.Epg
The close is important because not e2ery trader uses the same chart type
6or additional confirmation, the closing bar T1PE matters as well.
?reaking of support
o ?earish indicators: ?ig red body or gra2estone (not a hammer, lon% le%%ed do/i or dra%onfly)
?reaking of resistance
o ?ullish indicators: strong green body, nothing indecisi2e &short body, long wicks(
1ou can apply this to support, resistance, trend lines, symmetric triangles, etc.
To bring some clarity to price action discussions 0%G will refer to the following as:
o ?ars closing abo2e pre2ious bar high are referenced as Stron7 Bars
o ?ars closing below pre2ious bar low are referenced as /eak Bars.
#f in a downtrend, you want to find the weak bars in the pop ups.
#f in an uptrend, you want to find the strong bars in the retracement.
Strong and .eak bars used as entries for retracement and as alerts when scaling out or
getting back in.
o 0 strong bar or a weak bar is basically an UengulfingU signal.
The Close of the 6ar &a3en*3ent,
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Someone posted about why the close of a bar is of no importance when we all use different charts and
chart types during intraday trading so in theory it is only rele2ant to you and not to the neAt guy.
Discussion with another trader took this further with new concepts and philosophies.
o 6or instance if you ha2e a stop at say +1;; and price hits +1;;.+5 but closes at +1><.;; the
stop does not care where price closed, it got hit.
#n the end the highs and lows are the Iing and the Cueen.
There is a lot to be learned from this alone.
Chart Analysis
-harting annotation software http:33www.faststone.org36S-aptureDetail.htm
0%G official color code for chart notation3analysis
o !ed J Short
o Green J /ong
o .hite J EAit
o 1ellow J Point of interest
Entry si7nals
Tren* line 6reaks) a tick means nothing, a close below or abo2e the tick is what matters.
o Sample for an uptrend line in Eeopardy.
1. .as the last high a higher highH
+. .as the last high a double topH
*. .as the last high a lower highH
o ,n top of that you want bars closing below the trend line W 1 tick below the breakdownOs bar
low, this gi2e you the signal assuming + or *, definitely not 1.
o #f the case is 1, # would not short it, # will simply wait for the higher low to get back in,
regardless of the UT/ ?reakU which in this case itOs more like noise since T/Os are not
infallible. #f it does break, then so be it, but coming from a higher high you donOt want to short
that unless a swing low is created first.
.hen you see a bar closing abo2e or below Support or !esistance stay alert but the signal will come
when the barOs high or low is pushed by one tick. This is known as dual confirmation or as # like to
call it, the 3a7i2 ti2k
Strategic entries, 2ery important. This allows your stops to be smaller 0$D your targets wider.
'nfortunately, be prepared "E$T0//1 to miss eAtremely good trades that refuse to gi2e you a good
fill because well, they had no plans on stopping for youN
"ultiple confirmations on entries are the key to accuracy ne2ertheless this game is not about being
right but about making money.
Tren* line (ier2e* +ith a 6o*y that 2lose* &not a wick but body( and nothing but higher lows.
6alling kni2es rarely make higher lows, when they doK itOs most possibly a re2ersal.
Engulfing bars after close, good to go)
!eference 0%G setups 2er +.+.Epg and numerous 0nek charts posted on thread
o Misual reference: 0%G setup chart ahg setup 2er +.+.Epg &!n<9(
Entry on retra2e3ent
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.hen looking for a retracement in a clear uptrend you also want some sort of strength confirmation to
a2oid buying a falling knife or a retracement that is not yet complete. &,b2iously, re2erse for shorts(
#n order to facilitate this task, suggest waiting for a bar closing abo2e pre2ious bar high as a sign of
strength and a bar closing below pre2ious bar low as a sign of weakness. 0gain, e2erything with the trend.
#s there a trendH 8 F0esB
.hat is the trendH 8 F%t's lon7B
#s it retracingH 8 F0esB
%as it printed a bar closing abo2e pre2ious bar high &strength( after retracing considerably without
breaking maEor support or pi2ot swingH 8 F0esB
Stop placementH A fe+ ti2ks 6elo+ the stron7 6ar sho5l* *o
o (0ou can always re1enter in case of noise or fake&)
o (-emember2 small stops, as it is not about bein% ri%ht but about makin% money
Price action is used to increase the odds when looking for an entry during retracement.
"ote3 !nek does not use the 45+ for order entry (617819:)
Price action always dictates the stop goes, then compare to notes and decide if itOs something you
should take or not.
Stop needs to be strategic for whate2er reason but strategic, not some fiAed number.
Protect capital with small losses and break e2en trades while adEusting stops in your fa2or, ne2er
against it. (*e&er loosen a stop)
0ssuming long, when the price runs in your fa2or, consider placing stop below the low of last +*
bars, re2erse for short.
Placing at break e2en is Eust a common saying, using the lows of pre2ious bars is much more astute.
,nce trend line established, mo2e stop to protect capital, use the T/ for placement guidance.
#nitial stop placed at time of trade for security reasons. 0/.01S
0fter order fill, adEust stops strategically base on support3resistance and3or complacency le2els.
'se %eikin 0shi to adEust trailing stops3targets or otherwise known as riding the winners.
&#f using ,S, in Trade station, manually mo2e this in the "atriA as price mo2es in your fa2or.
o ?asically auto places stop&s(3target&s( based on predetermined fiAed 2alues.
o There is no 6etter trailin7 sto() this is 352h 3ore (re2ise than a fi;e* C sto( 6e2a5se it's
6ase* on re2ent lo+s or hi7hs.
#f you are ha2ing trouble with the runners3stops consider mo2ing stop to low or high of the last +* bars
&depending on 2olatility and3or how fast your chart of choice is( once price has left the initial S3! area,
which is usually where your initial stop should be. This will allow you to catch more runners than you can
imagine using a mechanical way and pre2ents your emotions from taking profits too soon. 0dEusting stops
is more desirable than simply selling or co2ering. The idea is to be in control of your emotions while
maintaining logic in check.
Sto(s &a**itional notes,
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Stops on intraday swings are usually initial stop and or break e2en then starts to scale out. 'nless
a2eraging up, then simply use pi2ot highs and lows for strategic points.
/ook out for pre2ious pi2ot high3low areas and place strategic stops and3or lookout for re2ersal
Small stops, unless playing a pattern, then thatOs a whole new set of rules because they are not scalps
and by definition the car siBe is ob2iously smaller at the beginning of the play.
Stops depend on the candle, the smaller the candle the bigger the stop. $ot sure if that makes sense
but some room must be gi2en.
#f trade re2erses you, take your small loss and mo2e on.
.hen your trade premise is correct your stop should be big enough to handle noise but not much else.
Molatility rules the market so some room must be gi2en to your stop.
o (However, if your e(amination is correct, no need to use volatility as insurance)
&.his stop mana%ement techni;ue lowers your accuracy rate, but increases profits&)
'se small stops and possible multiple entries &failures( in comparison to a bigger stop because a
second reentry encompasses multiple confirmations which leads to greater probability than risking it
all on Eust one confirmation and a big stop.
Bi7 Sto(s &#eason a7ainst for *ay tra*in7, &this applies to day trading not swing trading or in2esting(
0 big stop by definition indicates you are not sure of your entry signal
0 big stop promotes hoping and praying and not trading
0 big stop is gambling
0 big stop is for those refusing to take a loss, when losses are necessary in successful trading
0 big stop creates the illusion of higher accuracy but in the end it only results in a negati2e P3/
0 big stop pre2ents you from loading up because the drawdown can be monstrous
0 big stop is for those who fail to realiBe they can always get back in a trade
?ig stops are for the insecure, they make laBy traders o2ertrade
$$-ook a long time to learn this1 hope it takes #ou onl# a fraction$$
E;it s577estions (not inclusi&e)
Define profit targets, &8-1 risk vs. re+ar* ratio, minimum
o 6or training purposes suggest to trade with a 1:1 risk 2s. reward ratio to Force you to trade
well, then as you impro2e you can increase the rewardK
E2ery single play P"'STP ha2e a target greater than the risk but if price action says otherwise we
take what we can.
#f long before last known resist area
#f short before last known support area
#f scaling out and trade happens to break out in your fa2or then watch the neAt time it makes a %% or a
// depending if you are short or long.
%0 bars help determine M#S'0//1 in a 7uick manner if you should trail your stop because
momentum is there.
Page 14 of =; +49+5=*;9.doc+49+5=*;9.doc
/earn to read momentum. EAtremely powerful, when price is on fire and not looking back, there is no
reason to lea2e the roller coaster, ride it until you see hesitation. ,nce again, price action, price has
mood swings, beha2ior, and characteristics, learn to read them. #tOs 2ery 2aluable.
.hen price is close to %,D, look for a pullback to sell ",ST below the %,D and lea2e a bit on the
table for a possible run. .hen price is close to a /,D, look for a pop up, to short it back and co2er
around the /,D with again, a runner for home runs.
$e2hani2s in a 2on2ise 3anner
1. Study highs and lows
+. #f a trend forms, eAamine entry opportunities.
*. ,nce in a trade gauge S3! for stops3eAists
4. !ide the winners with the %0 bars if the trade gets solid momentum.
5. !inse and repeat. (<eep it simple be patient, wait for set1up&)
6ind one and only one tool to help you find optimal entries.
#t is #"PE!0T#ME that you keep it simple or you will lose focus.
.hen trend has been determined search for low risk opportunity to enter.
'se %eikin 0shi to adEust trailing stops3targets &otherwise known as riding the winners.(
'se trend lines to gauge the big picture and 6ibonacci for prediction.
(urrently, not much else recommended&)
.hen the system fails to produce profits it is probably because the market had no direction and nothing
but re2ersals. .hen this happens you .#// ha2e a losing day e2en if following the system, howe2er, it
will most likely fall in the small losses category and that is what it is all about.
#%O#%T0 list ! &%n or*er of i3(ortan2e,
1. "is2i(line &a6ove everythin7 else, #t makes no sense to de2elop a set of rules if you are not going
to follow them. $othing tops this.
+. Tren*:#eversal:Cho( #e2o7nition The substance of the system. "ust eAcel at trend3chop3re2ersal
recognition. #f you want to succeed with 0%G learn to a2oid calling absolute tops and bottoms.
Page 15 of =; +49+5=*;9.doc+49+5=*;9.doc
*. #isk 3ana7e3ent : r5*ent an* intelli7ent sto(s 8 Inow trade can be entered with absolute
certainty of success. 1ou are taking a trade that appears that it will work. .hen wrong, which is a
5;L probability, your stop should be prudent.
4. Entry refine3ent ! Strate7i2 entries ! 2ery important. 0llows stops to be smaller and targets wider.
'nfortunately, be prepared "E$T0//1 to miss eAtremely good trades that refuse to gi2e you a good
fill because well, they had no plans on stopping for youN
5. E;it refine3ent 8 Difference between good traders, great trader, and sometimes e2en master trader.
0ll of the abo2e are eAtremely important, once the basics mastered, concentrate on Z4 and Z5. Z5 makes
the difference between profitability and abundance but itOs last for a reason... (=8 bein% the most difficult)
The swing high3low method works, and it works in all markets, as price is always oscillating, and
therefore, is always trending.
The har*est (art of AHG is i*entifyin7 the 2ho( an* stayin7 on the si*elines) the rest is tra*in7 +ith
the tren* 5sin7 s3all sto(s an* lettin7 the +inners r5n (5rely on (ri2e a2tion.
attern tra*in7
.ith a solid understanding of price action Pattern Trading is an eAtremely powerful techni7ue.
/earn to spot the following important pattern formations before you place a trade:
Double tops
o &one of the most powerful, if played correctly are by far the most rewarding and safe patterns(
Double bottoms double.bottom.Epg
o &one of the most powerful, if played correctly are by far the most rewarding and safe patterns(
Symmetric Triangles symm.png
o &0 fa2orite trading pattern, and one of the most powerful, they gi2e birth to trends.(
o !e7uires two higher lows and two lower highs. &minimum(
o Price gets trapped, when it finds a direction and escapes, you ha2e a breakout and ride it.
o 0 breakout with the trend has greater chances of success than one against it.
o !ate of success is abo2e 5;L and their targets can be eAponentially bigger than the stops.
o "ost powerful when close to /,D or %,D areas.
o .hen price stalls, itOs a sign of loss of momentum which could mean a re2ersal or congestion.
&start looking for options(
Page 19 of =; +49+5=*;9.doc+49+5=*;9.doc
o The stop should be strategically placed below or abo2e resistance.
o #f using 5;L fib retracement area, watch the 91.<L area as stops, etc.
o .ait patiently for formation, two different time frames increase chances of them de2eloping.
o ,ne strategy play, place a buy stop and short stop outside of the triangle and wait for breakout.
le2el ; &?egin with recognition(
o -onsolidation &$o Trades in beginning, for ad2anced trading only(
$o + lower highs, no + lower lows, stay put.
$o + higher highs, no + higher lows, stay put
Sometimes the best trade is no trade
/e2el 1 &,nly on opportunity, no forcing no chasing(
o 'ptrendSs
o Downtrends
/e2el + &,nly with confirmation, no guessing, ride them aggressi2ely(
o Double tops
o Double bottoms
/e2el * &,nly with confirmation ride them aggressi2ely, target should be larger than your usual scalp(
o .edges
o Symmetric Triangles
Stay out of anything else for now
'se trend lines at all times.
S522essf5l (atternDs in or*er of (referen2e
Double Tops 3 Double ?ottoms
!ectangle3%oriBontal breakouts
6ailed head and shoulders failed.head.and.shoulders.Epg
o prefer break of right shoulder by a closing bar because they are more reliable.
o !arely take a head and shoulder neckline break unless it forms at the 2ery top of the chart as
they are only reliable in up trends.
o Those that do form at the bottom tend to fail and you may enter in a more aggressi2e matter in
comparison to a failure at the top.
o The same is true for #n2erse %ead and Shoulders in downtrends.
o ?e more enthusiastic about the failures than the pattern themsel2es, especially if they form at
the UwrongU places.
atien2e is re45ire*, wait for patterns to de2elop, wait for an opportunity, look around you &s3r( aim
&think of entry3stop3targets( then fire &eAecute(.
A**itional atterns- &Section incomplete(
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"ra7on attern 9 &a*van2e*,
dragon.played.Epg how played....
watch.out.if.short.Epg Possible dragon formation &1115;=(
http:33www.tradingnaked.com3QerrysDragonPattern.htm &Piscuy(
$ an* / (atterns for3 *5rin7 2on7estion) es(e2ially if s2attere* aro5n* the intra*ay.
The $!to( an* /!6otto3 are 2o33on &easy(. kindergarden.Epg
o Treat an "top or a .bottom as a re2ersal formation once the middle swing is taken by a
closing bar
o Mery similar to double tops and double bottoms but re7uire a bigger stop because the resistance
area is not as ob2ious and the stop actually goes at the other side of the pattern due to their
peaks not being identical, otherwise they would Eust be DTOs and D?Os.
o The 1st target is the first maEor point of S3 ! then price action based on trend lines, etc)
The $!6otto3 an* /!to( are e;tre3ely rare and also another re2ersal signal if found at the
eAtremes the.7uest.Epg
E$E For3ation at the 6otto3 &rare, m.bottom.Epg
o The " is completed after *swingsK the two outer swings are higher than the middle swing.
o 1ou know how a head and shoulder has the middle swing higher than the outer onesH .ell this
is eAactly the opposite.
E/E For3ation at the to(
o &sometimes known as the -rown pattern(
o The . in the middle of a chart is possibly a continuation of the pre2ious trend.
Anek's Sol5tion to the $!6otto3 an*!/ to( as (oste*-
o http:33www.elitetrader.com32b3showt...44;Zpost19*444; : &Thread cancelled(
4>*m sure most of you are aware of the +1top and W1bottom formations& .hey represent reversals with
small risk and decent rewards& Well, the fact that +1formations at the very bottom rarely form and W
formations at the very top rarely form sparked the followin% idea'
Search for the rarest patterns in tradin% and trade lo%ically a%ainst them efficiently eliminatin% one of the
?Why? ,ecause when we have half of an e(tremely rare pattern formed we have a pretty %ood idea of
where price will probably not %o first when it*s about to complete itself&'
Consoli*ation an* Con7estion
.hen price reaches the %,D or the /,D congestion, hesitation is to be eApectedK eAamine it from the
sidelines unless you are already in a trade and Eust managing your eAit. (@nfortunately, easier said
than done because there is massive uncertainty at those areas&)
-ongestion is when you see a %% and // or %/ and /%. i.e. -onsolidation, Symmetric Triangles, etc.
'ncertainty if you will.
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/earn to spot the chop, it will sa2e you 0$D make you money. -hop kills and re2erses us. $o one is
forcing you to trade as the market is always there.
Con7estion at E;tre3e Areas vs. #eversals
"ake an effort to notice the difference between one and the other.
'sually when price de2elops a 2ery strong mo2e once it becomes eAhausted, it must rest and consolidates.
"ostly because traders are hesitant to Eump in at such le2els, they are potentially painful le2els and no one
wants to get burned. This is precisely when amateurs start calling re2ersals or opening positions after the
fact, turning trading into hopes and fears. Please a2oid this. This is when patience will ser2e you well.
E2en though re2ersals are 2ery much possible and offer great risk 2s. reward this is eAactly why we use
and re7uire confirmations. .ithout the confirmation it is simply, a gamble and good traders are not
gamblers but predators.
DonSt fall preys to congestion, congestion offer no hint eAcept the fact that the pre2ious trend is the
strongest but it is also 2ery much tired, at least for now. 6rom a psychological perspecti2e since you
probably missed the whole initial mo2e you feel frustrated and probably want to ride it all back down &or
up( because the market mo2es in wa2es right H plus you probably feel frustrated that all this happened
right in your face. .ell, thatOs understandable but make sure an actual good potential setup is de2eloped
before stepping into a train.
This is the time when we eAamine the surrounding support and resistant areas to see where price might be
heading neAt after we get confirmation&s( so we can determine our logical targets and see if the risk
in2ol2ed in the trade merits opening a position when and if the time comes.
ri2e t5rns for *ifferent reasons an* not every reason is si7nifi2ant.
&+lease remem'er that)
"ifferen2e 6et+een retra2e3ent an* a (ossi6le reversal
The difference between a retracement and a possible re2ersal in theory is a UbetU, which is why itOs hard
for some people to trade this way, they see price going down, e2en if the support is not taken and they
shPP their pants, or worse they want to short a support that has yet to be broken.
,ne way to tell that helps is that retracement usually happen on lower 2olume where re2ersals usually
start on increasing 2olume. #f you using 2olume bars you will see them print 2ery rapidly in comparison
to when price action was calm.
ri2e Hesitation-
There are many areas that will cause price to hesitate.
GlobeA high
GlobeA low
Pre2ious close
Pre2ious high
Pre2ious low
Pre2ious open
Page 1> of =; +49+5=*;9.doc+49+5=*;9.doc
Pi2ot point
15 min opening range
*; min opening range
.eekly Pi2ot
can go on fore2er The 7uestion is, when do you stop cluttering your charts letOs stick to price
#f an area is important for whate2er reason you will see it as support as resistance in your chart, end of
GlobeA low and globeA high can be an area of congestion, support or resistance. 1et, how is this
different from any other congestion, support or resistance so treat it like any other. Pi2ots the same.
Price action skills will prepare you for this, whate2er it might be.
$ONE0 $ANAGE$ENT ! A*van2e*
"oney management is 2ery personal and many proper methods eAist. Search deep within yourself to
determine which style fits you best. Trading comfortably is important.
0%G: S2alin7 o5t and Avera7in7 5(
0%G: refer Avera7in7 5( $etho*
o (it is hard to beat once you %et %ood at readin% the market)
S2alin7 o5t
Primarily helps the psychological factor as it may releases the pressure of securing profits, especially
when trading multiple positions. 0et) a si3(le strate7i2 trailin7 sto( a22o3(lishes the sa3e.
#e3e36er) yo5 2an al+ays 7et 6a2k in a tra*e.
Primary problem with scaling out is when stopped out before reaching first targetK you lose on your full
lot. (However, if your first tar%et has a %ood ratio in comparison to your stop, then by all means, scale out
until your heart stops poundin%&)
.hen the play is going your way, scale out before clear Upre2iousU known resistance and support. #f there
is nothing remotely resembling that, donOt do it unless e2idence of a possible re2ersal formation, then
scale out and adEust stop accordingly.
-onfirm first target is 0T T%E ME!1 /E0ST as big as stop.
Then 7uickly mo2e stop to breake2en and let it ride as much as possible until price loses momentum.
Take profits ?E6,!E the neAt resistance &going long( and ?E6,!E the neAt support &going short.(
1ou may lea2e a small portion of the trade ride for the home run.
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Avera7in7 5(
.ith an a2eraging up approach one good day erases multiple losing days and then some.
02eraging up is only pertinent to those with good accuracy and a solid understanding of how the market
and day trading works. $ow, it is possibly the last step to good fortune as far as phases and stages.
The concept of only adding to a winning position is phenomenal because by definition it ensures that your
trades are only about small losses, break e2ens and small to gigantic wins. $otice this is eAactly how #
suggest your money management results should be so itOs highly compatible with 0%G.
$e2ertheless, you need to be able to handle, from a psychological perspecti2e, a streak of small losses and
break e2ens, in many cases watching small winners become small losses. This is the negati2e aspect of
a2eraging up. The positi2e aspect is the monumental winners it can and will pro2ide if you do it right.
.hen # a2erage up, add to a winning position on retracement only if the maEor trend is intact and healthy
always keeping a stop for 0// positions, this stop strategically placed at a definite change of a trend. 0s
the trade keeps going in my fa2or, # keep adding to the position and adEusting the stop, the stop is the
same for all brothers and sisters in the trade. 0s the trend de2elops the trend pi2otal point ob2iously
mo2es up as well.
.hen the trend ends, you take a small loss3break e2en on the last position ,$/1 or the last two
depending on how fleAible you were and all the initial addSs collect massi2e returns, especially the
original one.
#t is the holy grail of money management systems ?'T for seasoned traders not for someone who has Eust
starting to get his3her feet wet with a new system.
02eraging up is probably the most important reason as to why # was attracted to futureOs le2erage. #n fact,
#O2e reached +;A with this techni7ue and knowing # had secured profits on <5L of the adds felt like # was
the king of the world. #n the ES # usually trade between *1; cars depending on the stop risk of the trade. #
ha2e yet to a2erage up aggressi2ely on ES since #Om fairly new to the contract but when #Om comfortable
on a great run this number could go all the way up to 4;5;, without gi2ing too much info on my personal
total le2erage. .hen a2eraging up, at least on the 1", # ha2e used full le2erage on the account without a
single ounce of fear because of secured profits on most of the additions. .hen you get a nice run the
profits are nothing short of a monstrosity.
,b2iously, if the trade does not go in your fa2or you donOt e2en touch le2erage or add to your position.
(/er# powerful strateg# 'ut re3uires complete dominance of #our ps#cholog#.)
Avera7in7 5( 3etho*olo7y an* res5lts-
#nitial entry is minimal in siBe as no real e2idence eAists on how strong the new trend really is. $aturally
this assures that if mistaken in the analysis, losses are 2ery small.
,nce strength de2elops, use retracement to further increase position always using the same stop &a change
of a trend, a break of support3resistance( on e2ery single addition.
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0s the trend keeps running, and new areas of S3! are marked, the stop is continually mo2ed as the
additions start piling into the play.
.hen # get lucky to catch a beast of a trend # might go as far as to using full le2erage as # add positions on
retracement but always securing profits on the 2ast maEority of the additions. This gi2es me the freedom
to trade monstrous contracts responsibly without an ounce of fear.
They say trading should be about small losses, break e2ens and small to huge winners, this is eAactly what
a2eraging up promotes. $eedless to say on eAtremely choppy days you end up with multiple small losses.
#n the long run though, itOs an indisputable winner as far as money management goes.
F.hen its clear resistance has become support or support became resistance you may consider a2eraging
up. "omentum must be there, no eAception. 0pproAimately only 15L of trading days are hea2y trending
days so keep this into consideration, not e2ery day is optimal for a2eraging up unless a potent re2ersal
formation after massi2e eAhaustion was spawned.G
02eraging up eAample: for.bk.png
o Enormous gain on the first
o Gigantic gain on the second
o Great gain on the third.
o Small loss on the fourth.
02eraging up eAample: aup.Epg
o Cuestion: why not start with 1+ and mo2e your stop accordingly as higher highs and higher
lows are madeH
o 0nswer is naturally risk management. #f you were wrong from the start you take a full stop on
a full le2eraged position, not eAactly how we want to trade and protect our capital.
(Onl# recommended for experienced traders who dominate to perfection these teachings.)
Avera7in7 '( a((roa2h for reversal for3ation at the LO":HO". ("on e(clusive)
Study re2ersal formations 2ery carefully.
o Double Tops, Double ?ottoms, " tops, . bottoms, M bottoms, Triple and !ectangles.
'pon confirmation begin a2erage up approach with a minimal position.
0dd on e2ery possible pullback 6efore the neAt maEor support or resistance area as soon as a
strong3weak bar is e2ident once the retracement looks eAhausted.
Sell3-o2er it all around the neAt significant support or resistance point or partial.
#f resistance becomes support or support becomes resistance you can begin all o2er again with your
minimal position or can continue adding to what it is still in play pro2ided that you ha2e a change of a
trend trailing stop protecting e2ery add and of course, past profits.
-onfirmation is an insurance card, use it accordingly but make it a re7uirement for e2ery mo2e you
make, whether it is entry or eAit.
E2ery trade should be an educated prediction and e2ery addition should be an additional confirmation.
The more confirmations the more your car siBe should increase because at first we ne2er really know
where price will go but as we get additional data supporting our original trade theory, the story starts
re2ealing itself.
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0s you well know this method promotes small losses and all kinds of winners from miniature to
gigantic. #t is no coincidence that it is chop proof because if you get no additional confirmations you
stand on the sidelines with your small position. This method will also help you a2oid calling tops and
bottoms because in the back of your mind you donOt want it to end, this can be a 2ery powerful
psychological asset.
The absolute key to mega profitable consistent trading is ha2ing the skill to spot the birth of a new
trend correctly and playing it responsibly with solid money management.
&Note- not (art of AHG, when a2eraging up, use pyramid techni7ue 8 ne2er adding more than the
original car siBe. i.e. initial position *cars, +
position add +cars, *
position add 1car
&re2erse pyramid can lose all profits with a small loss.( 8 obtain 0nekOs comments accordingly
!isk management at all times.
6ind one and only one tool to help determine optimal entries. #t is #"PE!0T#ME that you keep it
simple or you will lose focus.
'se trend lines to gauge the big picture and 6ibonacci for prediction.
De2elop the skill in analyBing momentum and the S3! surroundings as price is going.
o .hen it stops, why did it stop, should # wait, if so how longH
o #f it retraces, your stop better be there to secure your profits, not too tight, gi2e it room, use
past bars to ha2e a logical eAit.
$e2er attempt to call bottoms or tops, Eust trade the trend.
?etter to miss a good entry than force a bad one
,rder EAecution, limit orders eAclusi2ely eAcept market orders for emergency stops.
"0SS#ME mo2es, uncertainty usually unfold. &powerful tip(
Statistically speaking, trend patterns outnumber re2ersals
"ornings are superior to the afternoons, and lunch can be a bit tricky.
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GlobeA low and globeA high can be an area of congestion, support or resistance. 1et, how is this
different from any other congestion, support or resistance so # treat it like any other. Pi2ots the same.
Screen time is at the thousands of hours.
Do not call tops because no one can do it consistently.
Do not call bottoms because no one can do it consistently.
Do not use big stops, if stopped out you ha2e the luAury of reentry assuming the trend is still intact
and you were stopped out due to noise.
#f the trend is up, buy low sell high, do not short if the trend is up.
#f the trend is down, short high co2er low, do not buy if the trend is down.
#f no ob2ious trend, sit on the sidelines, patience is rewarded in trading. #f price is chopping you will
only trade for your broker.
?ecome an eApert on price not on indicatorsK in fact donOt use any but bars, trend lines, support or
1ou will not beat this game unless you allow the runners to run, price has a much easier time going
through pre2iously known areas, new territories should be treated with respect and only for
Try to stay out of breakout areas, the in between is far easier to trade because price will either go to
support or resistance and in the middle they are clear and rarely unknown.
Protect your capital at all cost, protect your profits but be 2ery greedy when you are right.
$e2er mo2e your stops unless it is to secure profits.
Small losses are ine2itable and 2ery much re7uired to succeed, large ones your doom.
Go find your edge and do not fall prey to indicators price is and always will be king. #t speaks in highs
and lows, listen to him, he owns the market.
/earn about re2ersal patterns and look for them at maEor support and resistance areas.
%oly Grail J ,nly adding to .inning Positions W "astering a simple working strategy W solid
discipline &>1;;=(
The best trader has no ?ias, goes long or short without a single ounce of bias and his decision is 1;;L
based on price action not on fundamentals, economic news or what Qoe Guru @ said the night before
trader should trade both ways, long or short depending on whatOs the predominant trend,
,ne of the hardest but most important things to do in trading is sittin7 on yo5r han*s. .ork on that
patience. #f no play, no trade.
Ti(s 2ontin5e*
0lways assume that support or resistance will hold or reEect price, by *efinition.
Triangle breakouts aligned with the side of the pre2ious trend ha2e a higher chance of success.
#n bull markets .bottoms and Double topSs chance of success increase dramatically.
o #n contrast in bear markets their effecti2eness is reduced but not a great deal.
#n bear markets "tops and Double topSs chance of success increase dramatically.
o #n contrast in bull markets their effecti2eness is reduced a great deal.
0fter hours trading: limit orders on entry, in 0% this is a golden rule you donOt break
F5t5res over e45ities-
Traded e7uities for four years, they offer ME!1 little pros in comparison to futures
6rom e7uities slowly drifted into SP13CCC and then finally futures
Page +4 of =; +49+5=*;9.doc+49+5=*;9.doc
o Day trading 45 years to attain current le2el of proficiency
?etter li7uidity
/ess games &electronic(
"ore le2erage
0round the clock &kind of(
$o research in2ol2ed
/ess slippage
$o short up tick rule
-an day trade without +5k
Easier taAation
ES over S0 &ETF,-
The maEor difference between trading the ES and SP1 &ET6( is fleAibility,
#f swing trading and something catastrophic happens at *0" in the morning. 6utures gi2e you the
option to bail or solidify your position if you are on the right side. #n e7uities or ET6Os you would need
to wait until premarket opens to decide. They e2en gi2e you the option to hedge if you got
0s a 2ery aggressi2e a2eraging up trader when things go my way, and panic hits the market hard the
massi2e le2erage pro2ided by futures allows me to keep a2eraging up if the trend continues. #n SP1 #
would be limited to 4@, least last time # checked. That is priceless for my particular style of trading.
ES:NF:E#. &sto((e* tra*in7 0$ *5e to CBOT iss5es,
Molume bars: ESJ+5;;35;;; P NFJ1;;;315;; P E#.J5;;31;;; &91; tick(
Molume bars work well, adEust accordingly for low 2olume Fafter hoursG, etc...
#n terms of 2olume ESVNFVE#.V0$ &?esides no crappy -?,T and occasional li7uidity problems(
ES o2er NF, due to NFSs Fcommission premiumG
NF Benefits
NF is like 0$ with more 2olume &less slippage( and better mo2es for 0nekSs style.
NF is twice as li7uid as the 0$. #tOs no ES, but still the second most li7uid emini of the four,
including E#..
NF is Trendy and eAplosi2e &works well with trendlines( compatible with 0%G
NF is -"E &not -?,T crap(
NF Entry Charts
o 1;;; 2olume bars and3or +** ticks &base chart(
o 91; tick for massi2e pattern detection &anchor chart(
o +5;; tick for multiday appreciation of the main trendOs support3resistance areas.
Page +5 of =; +49+5=*;9.doc+49+5=*;9.doc
o NF G [+; point per contract
o ES G [5; point per contract
o E#+ J [1;; point per contract
o 0$ J [5 point per contract
The D0@ can and will lead the ES in the early mornings but remember that the chart at hand should
always be enough. Still an eAtra bonus always helps
Fr5stration) #isk an* the A22e(tan2e of S3all Losses
$othing works all the time, # think we can all agree with this. #f you donOt, time to adEust because nothing
.ith that in mind donOt bet the house on any setup because we ne2er know for sure if itOs going to work or
not. %owe2er, if your trading allows the runners to run, like 0%G suggests, then a loser here and there
should not frustrate you, not only should the loss be relati2ely small compared to the winners but as # said
numerous times they are necessary and ine2itable in profitable trading, notice what # said, profitable
/osing small is okK donOt be like the rookies who Eust hate to be wrong, the first sign of a real trader is
when you see him3her losing 7uite often, albeit losing small. .hyH ?ecause itOs not about being right but
about making money.
atien2e 'pdate &11+;;=(
0 good trade does not present itself e2ery three minutes. .hen taking this into consideration you
deduct that patience plays an eAtremely important role in trading.
$ot only is patience re7uired to be the predator trader that you should be but itOs also imperati2e for
letting those good trades do their own work. $ot e2erything works in 15 seconds e2en after it has
e2ery characteristic of looking great.
-ouple of things you can do to work on your patience.
o Stretch your legs
o 6ool around in ET forums
Page +9 of =; +49+5=*;9.doc+49+5=*;9.doc
o "usic, # personally ha2e digital music streaming at all times
o Get a snack
o Practice tape reading skills
o # seriously ad2ice against turning on ?loomberg or -$?-, this will gi2e you a bias and screw
with your trading. Those people there know nothing about trading.
The Best Tra*es
The best trades work from the start
The best trades got multiple signal confirmations
The best trades offer no heat
The best trades re7uire small stops
The best trades follow your trading plan
The best trades de2elop momentum and acceleration after your position is in, not before
The best trades are simply when you are 7uick enough to spot the birth of a ne+ trend without
actually being a contrarian
$ow, wouldnOt you like most of your trades to be like thatH
#f so, shoot for the best trades and skip the rest.
Con2l5sion of AHG hase %
1ou will find many pieces of the puBBle on this chart. phase.1.completion.Epg
Please note the following 0%G key elements at work:
The engulfing paint bars for entries and eAits when riding meaningful trends although plenty of
eAamples are scattered in the Eournal in this area
'nnecessary large stops, the option of reentering
Page += of =; +49+5=*;9.doc+49+5=*;9.doc
"eaningful Patterns
Pattern failures
!e2ersal Pattern confirmation
Trend lines at work to help you stay with the trend and knowing when it might be o2er
The magic UtickU confirmation after the breakout closing bar when a pattern forms
The powerful synergy between macro and micro charts, knowledge of key areas
The complete elimination of lagging indicators
-omparison of narrow range &yesterday( and wide &today(, more 2olatility is good for traders
"arket E"otion lines for measuring strength of the trend and possible targets plus areas of
congestion, highly powerful stuff. 0 Swiss army knife, learn this tool well.
Screen time and practice should be the priority now along with a2oiding the root of all e2il, the chop.
AHG (hase 1 2ontin5e* *5e to (o(5lar *e3an* &11!1!01,
!d&anced techni3ues and discussions located in rear of !ppendix
A((en*i; To AHG hase %
Charts H annotations &see attached file for downloaded documents, referenced 1.J 0%G chart;;1
1. &=1>;=( ;=.1>.;=.Epg Green 2ertical denotes a long signal. !ed short).
+. &=1>;=( ;=.1>.;=+.Epg main reasons as to why my signals switched from shorts to longs
*. &=+;;=( workspace.png /ork s(a2e
4. &=+;;=( ;=.+;.;=.Epg trades
5. &<+=;=( ready.for.monday.Epg /ork s(a2e
9. &>;>;=( n7.Epg /orks(a2e for NF
Page +< of =; +49+5=*;9.doc+49+5=*;9.doc
=. &=+;;=( price.action.gif Price 0ction &ghkramer possibly(
<. &=+*;=( ;=.+*.;=.png 8 green long, red short, white change of trend
>. &=+*;=( scalp.with.trend.png 0d2antage of scalping with the trend
1;. &=+*;=( new.chart.png took 2olume bars chart transition li2e.
o 0fter studying them for 5 months # think # will be able to read price action better this way
11. &=+*;=( countetrend.png Co5nter tren*in7 Tra*es) *efinitely not (art of the syste3.
o USupportU ga2e it away.
o notice how price rebounded off the pre2ious UmaEorU support on the pre2ious upwa2e. $ow
donOt use this info to counter trade Eust yet but as eAtra info for your stops3targets3trails etc.
1+. &=+4;=( ;=.+4.;=.png 8 trades of the day
1*. &=+4;=( cough.png congestion
14. &=+4;=( scalp.with.trend.png 0d2antage of scalping with the trend.
15. &=+5;=( ;=.+5.;=.png Tren* line 6reaks
o $ote1: .hen a trend line is broken and the last high is a lower high itOs safe to take a short on a
pop up. 'nfortunately, the pop up ne2er occurred and # could not get my fill, but # was
shooting for a good target there. .orked like a charm eAcept could not capitaliBe due to lack of
a pop up. The least you want to do when that happens is chase it.
o $ote+: -hange of a trend. 0t this point you should see why. # took a short there, lost and took a
full stop.
o $ote*: 0t the top see those higher high topsH .ell as priced tanked # took a long when price
stabiliBed and worked well. $ot sure if it was the most optimal play &high stochs and all( but
took my 7uick profits little bit below resistance and said to myself take your break, your day is
o 0s always, 2ertical red lines shorts, 2ertical green lines long, with the trend, on the
pullbacks3pop ups. Third short got stopped out. 6ifth short ?E trade. !est did well. /ongs did
o $ot so hard, Eust need to polish those skills of constantly eAamining the // %% /% %/.
o /ast but not least maAimum discipline at all times
19. &=+5;=( ;=.+5.;=+.png ,nce again, trend line break on lower highs.
1=. &=+5;=( ;=.+5.;=*.png and the conclusion.
o The higher lows hinted it and the higher high confirmed it. ,ptimal co2er point possibly the
higher low formation but as you eat lunch and take the rest of the day off itOs ok to say once in
a while, .T6 letOs see if it can make a new %%, and well it did.
1<. &=+9;=( ;=.+9.;=1.png ?earish trending day
1>. &=+9;=( ;=.+9.;=+.png %ighly more difficult session.
o #n many cases due to re2ersals and congestion # got chopped to death
+;. &=+=;=( ;=+=;=.Epg
o .ent back to T#-I charts for comparati2e reasons and cleaned some aspects of the chart.
'sing Pi2ot %igh3/ow indicator from Tradestation to compare with S3! dots, so far # like my
cleaner charts. &Sorry T!,(
+1. &=*;;=( ;=.*;.;=.png "ost of the winners were trailed for a splendid day
++. &=*;;=( symm.png sy33etri2 trian7le, /%Ss D %/Ss
o Price gets trapped, when it finds a direction and escapes, you got a breakout. Especially when
close to /,D or %,D areas. #n this case, it was below %,D and made a new one.
+*. &=*1;=( ;=.*1.;=.png 8 *o56le to(:*o56le 6otto3 area led to chop suey
Page +> of =; +49+5=*;9.doc+49+5=*;9.doc
o signal to stay on the sidelines.
+4. &<;1;=( ;<.;1.;=.png hints price gi2es us that might indicate a possible re2ersal or choppy mo2e
+5. &<;+;=( ;<.;+.;=.png -ircles identify chop e2idence.
+9. &<;*;=( ;<.;*.;=.Epg E2idence of congestion in circles on, some winners, losers and grand slams)
+=. &<;5;=( es.daily.Epg study of daily ES chart to familiariBe UnewU territory.
+<. &<;5;=( es.test.Epg %ypothetical chart, arrow J short3long, yellow cross J stopped out
+>. &<;9;=( ;<.;9.;=.png 2o3(lete transition fro3 0$ to ES
*;. &<;9;=( changes.png changes of trend, imperati2e to recogniBe this in real time
*1. &<;=;=( ;<.;=.;=.png on annotations on chart
*+. &<;<;=( ;<.;<.;=.png $ot my kind of day, did not see ideal retracement in many good trends
**. &<;<;=( comparison.png ES 4>>> share chart,
o pullback opportunities for a2erage up money management &2eteran traders only(
*4. &<;<;=( outcome of the system T"arket described yesterday
o .hite dot plots, if subse7uent bars are same color &%0( of the pi2ot direction, take the signal.
o $otice that the white dot ,$/1 plots after *4 bars ha2e been completed, sometimes more.
o Qust a one day test, no conclusions yet. %owe2er, compared to 0%G, pitiful so far. 'sing 5;;;
2olume bars # would ha2e killed that chart.
o "y only doubt is if the bar with the plot has to be of the desired color or only the following
ones. # assumed it had to be.
*5. &<;>;=( sweet.afterhours.png 5;; share charts due to lower 2olume, sweet downtrend
*9. &<;>;=( BBBBB.png stopped out on remaining half based on %%
o Profits secured on +.*
of remaining positions, last add small loss
*=. &<;>;=( ;<.;>.;=.png 5;;; shares chart for ES as suspected is my new girlfriend
*<. &<;>;=( spy.png Entry on SP1
*>. &<;>;=( entry.bonuses.png entry tips to determine optimal areas
4;. &<;>;=( no.reason.png /ast short still open. .hyH ?ecause there is still no reason to co2er
41. &<1;;=( ah.png
o 0fter massi2e consolidation around the /,.S in late night after hours, ES broke resistance
and mo2ed a few ticks up.
o EApecting some rally after that eAtended congestion period # ha2e elected to co2er shorts and
call it a day3night.
o 6orgot to mark the mini breakout out of consolidation at the end of the chart but should be
ob2ious to notice.
o Mery pleased with this trade, good demonstration that when taking a position whether long or
short there should be a reason for bailing. Since we donOt call tops and bottoms we canOt say U#
think it had enoughU because you ne2er know, let price action decide.
o This was a monster trade, approAimately 1*14 full points
o PS: $otice 2olume bar adEustment to make up for low 0% acti2ity.
4+. &<1;;=( ah+.png ES rallied to make %%Ss
o confirming that price action and the trend are your best odds in trading
4*. &<1;;=( es.Epg .oke up for a glass of water, saw a play and had to take it
44. &<1;;=( symm.Epg "r. Symm sends his regards.
45. &<11;=( aup.Epg Avera7in7 5( ill5stration
o 1ou may ask why not start with 1+ and mo2e stop accordingly as %%Ss D %/Ss are made.
Page *; of =; +49+5=*;9.doc+49+5=*;9.doc
o The answer is naturally risk management. #f you were wrong from the start you take a full stop
on a full le2eraged position, not eAactly how we want to trade and protect our capital.
o 02eraging up is great stuff.
49. &<1*;=( for.reference.Epg some 0% fun for further study
4=. &<1*;=(;.fibs.Epg ?0= fi6 retra2e3ent
o same consolidation from another angle. -anOt get a better entry on this uptrend
4<. &<1*;=( ;<.1*.;=.Epg some scalps today, mostly based on S3!, some worked well some did not
o once again symm triangles pro2e to be one of the best patterns in trading.
4>. &<1*;=( and.another.Epg
5;. &<14;=( ;<.14.;=.Epg .hat can # say. # lo2e my system, # lo2e to trade and # lo2e days like today.
o # wish anyone struggling will simply read this Eournal because the feeling is Eust splendid and
7uite lucrati2e
o Two symmetric triangles not annotated on chart played for additional gains, both worked great,
as usual
51. &<14;=( symm1.Epg %ere is the Lon7 Sy33, real easy to spot
5+. &<14;=( symm+.Epg %ere is the Short Sy33, slightly harder to spot due to tight congestion.
o To be honest #Om not sure if this e2en 7ualifies.
o 1ou can see how the /ong Symm was more ob2ious to detect.
o Thought it had been an additional play but itOs one of the shorts # took on the main chart was
this one as well, so that lea2es only the long symm as the eAtra play.
5*. &<14;=( eAample.Epg play # took months ago in the 1".
o #t worked out so well # took a screenshot and kept it for references.
o Glad # did cause now # can show you guys.
54. &<15;=( ;<.15.;=.Epg "o56le to( &short with a2erage up entries(
o picture is worth a thousand words
55. &<19;=( stopped out based on the after hour bullish formation
59. &<19;=( price.action.Epg 8 ri2e a2tion *oes not lie
o #tOs not 2oodoo, itOs logic, screen time and being prudent knowing that e2en though you are
probably right after reaching the so call U# got itU stage, there are ne2er guaranteesK so you
protect and preser2e capital at all times.
o Some patterns repeat o2er and o2er and o2er again, eAploit them, master them, it might seem
random, but itOs not.
5=. &<19;=( ;<.19.;=.morning.Epg chopped to death on the longs, kept buying the last wa2e
5<. &<19;=( ;<.19.;=.afternoon.Epg Total > .inners 4 /osers 1 ?reak E2en &1 grand slam(
5>. &<19;=( price.action.Epg Price 0ction of a Strong and calm 'ptrend.
o .hy would a trader e2er want to short something with such a formationH
9;. &<19;=( why.Epg 0 trader friend Eust asked me why # did not keep the longs today
91. &<19;=( hammer.Epg
o ,n the other hand, we got a possible hammer at the end of a downtrend on the daily chart.
o .ill be interesting to see how the +4; min downtrend channel reacts now. #f price breaks that
downtrend channel, along with the ES hammer, we could ha2e some serious upside mo2e, but
imho itOs too early to tell.
o PS: ?T., the %ammer is green but my %0 bars paint it red due to the downtrend.
9+. &<1=;=( ah.Epg chart of after hours up to *:*; 0" EST.
o Take a guess as to how difficult that is to trade with 0%G.
o $ow look where price rebounded, thatOs e2en harder.
Page *1 of =; +49+5=*;9.doc+49+5=*;9.doc
9*. &<1=;=( i.suck.Epg 0 day in the life.
o .....but # got the 6'$$#EST screenshot for you e2erN
94. &<1>;=(
o Qust now, once it bases, say 45 bars, when it breaks, tick tick tick co2er, funny stuff.
o #tOs important to wait for that base.
95. &<+;;=( now.Epg ES right now, if you catch it, enEoy
99. &<+1;=( session.Epg TodaySs session
o no matter how disciplined and focused you are itOs really hard to get good setups out of it
9=. &<++;=( ah.Epg -hoppy day Super trending after hours.
9<. &<++;=( lo2ely.afterhours.Epg Time to change sleeping schedule for lo2ely afterhours.
o .hat a treat. 6orming a wedge now.
9>. &<+*;=( daA.Epg Good stuff, # like it. &German DaA(
o $otice how >:;4 >:11 did not ha2e a red bar signaling weakness so no UfailedU short there.
=;. &<+*;=( es.morning.Epg $othing but blood, 2ery nice downtrend.
o To think afterhours were more bullish than !odeo tournaments.
=1. &<+*;=( kindergarden.Epg .elcome to Iin*er7ar*en....
o -o2ered the shorts on trend re2ersal, rode the change of a trend to around 149= while doing
se2eral a2eraging ups.
o Mery friendly day to trade. #f you understand 0%G and you lost money today then something
really disturbing is going on with your trading. -anOt get an easier day to trade.
=+. &<+4;=( afternoon.Epg "orning choppy but afternoon presented opportunities.
o Plenty of retracement in an uptrend and a symm.
=*. &<+4;=( afternoon+.Epg "y indicator going from neg3; to positi2e.
o Signaling the end of weakness, the return of strength, with of course, a minimal stop.
=4. &<+9;=( uptrend.trendline.Epg tren* line +ith an 5(tren*. They are ME!1 subEecti2e
=5. &<+9;=( price.action.Epg see how there are signs of less con2iction in making new highs
=9. &<+=;=( ready.for.monday.Epg /ork station
==. &<+=;=( daily.Epg #nteresting Daily ES -hart for Swing Traders.
o The bullish scenario is not complete but itOs halfway there.
o "o56le Botto3 8 -heck
o B5llish ha33er at the bottom 8 -heck
o Break of a "o+ntren* line "aybe, one body close abo2e it is too premature.
o $eeds a higher high with or without a higher low then things might get interesting.
o %as been a while since my indicator plotted two blues in a row, only one confirmed for now,
current bar still open of course. 0 solid red body has not been since in o2er a week, check the
micro price action, higher lows, higher lows.
o 14>+151; is an important area.
o $eedless to say #Sm not touching swing trading with a 1; foot pole
o Qust not for me, # lo2e my *1; tick stops Eust fine
=<. &<+=;=( ;<.+=.;=.Epg 0nekSs personal analysis for his records, posted in case itOs helpful.
=>. &<+=;=( ES "ulti Day analysis
o T/ Test coming from a /,.E! %#G% preceded by a double top.
<;. &<+<;=( Saw a high probability short in 0%....
<1. &<+<;=( time.for.bed.Epg 0nd the outcome
<+. &<+<;=( 2ery.tricky.Epg Mery tricky scenario that #Om posting for obser2ation.
Page *+ of =; +49+5=*;9.doc+49+5=*;9.doc
o !emember that to Eump long, and most important after massi2e downside, you need + %%Ss
and + %/Ss or a Double ? followed by a %% and %/.
o # think this situation is peculiar and merits discussion.
<*. &<+<;=( continuation.Epg
o $eedless to say, react to price when a "o56le B or a "o56le T fails. The action can be brutal,
as it was this afternoon.
o E2en if the re2ersal fake out took your small stop the market ga2e you an e2en better
opportunity after the scenario failed pro2iding massi2e gains with 2ery little effort.
o This system protects you from big losses and encourages big wins.
o Ieep studying and learning. DonOt let a small stop or a failed scenario get rid of your
concentration. .e are not shooting for accuracy but for disciplined reaction towards logical
price mo2ements.
o 0lways readEust, always. 6ollow price like if it was a girl with a great ass, up and down,
where2er UsheU goes. Sorry ladies, not sure how to apply to the female point of 2iew
<4. &<+<;=( failure.Epg #mportant lesson
o $e3oriJe this (atternK it will pay for a 2acation trip one of these days.
o There is nothing in trading like a maEor failure gi2ing birth to a new powerful trend or
<5. &<+<;=( ;<.+>.;=.Epg Prepare yourself psychologically for when a failure pattern, fails.
o .hen this happens you adapt 60ST and you do not let go. Small loss, adapt, ride the new
trend3winner to kingdom come
<9. &>;*;=( double.bottom.Epg "o56le Botto3s si3(le e;(lanation on ho+ % (lay the3
o #t is 2ery important that you understand this is not a scalp this is a massi2e re2ersal type of
intraday swing offering one of the best risk 2s. rewards in trading. .hen you play one, donOt
shoot for * ticks !e2erse for Double Tops
<=. &>;*;=( "B another e;a3(le +ith reverse
o C: 6ailed double top3bottom, how do you enter into re2erseH
o 0: 0s soon as that support is taken, on the first retracement &not too long( wait for a sign of
eAhaustion, this will help you a2oid some of the fake calls. Something like, breaks, pops, a
micro lower low &assuming double bottom failure( and off you go. 'se a trend line and
highs3lows to guide, once again, be greedy, failure or not, these are not scalp types.
o This can also be applied to failed head and shoulders and numerous other known patterns. Do
not be afraid of small losses.
<<. &>;4;=( dont.tell.Epg "o56le 6otto3 entry
o Enter when the middle swing is taken out by a close abo2e the high bar.
o %owe2er, these double bottoms are not at the /,D so itOs up to the trader to get a craBy good
entry at the support le2el and risk a few ticks or wait for confirmation of the breakout.
o ,n a Double ? that appears at the /,D # would definitely wait for confirmation as the trend is
2ery strong, if itOs at the /,D, you definitely want the %%3%/ as confirmation.
o #n todaySsO case, # would ha2e definitely risked some ticks for a massi2e risk 2s. reward play,
which is btw, the right mindset.
o 0s far as Eumping long into a strong trend with fears of buying the top, thatOs definitely more
logical than shorting it. $e2ertheless # see where you are coming from and # will show you a
small trick, Eust donOt tell anyone
Page ** of =; +49+5=*;9.doc+49+5=*;9.doc
<>. &>;5;=( samples.Epg %ll5strates ho+ "B's an* "Ts are s5((ose* to 6e (laye*.
o Dominant trend is down and see double top, "ay take an aggressi2e short with a minimal stop
as soon as it is around the resistance area.
o %owe2er, if the dominant trend is up, donOt play hero, wait for the swing low to be taken out by
a bar closing below that point.
0ggressi2e play: Stop is a few ticks abo2e it
-onser2ati2e play: Stop goes between resistance and entry
o !iding it merits a separate discussion all together but here are a few ideas:
Draw a conser2ati2e trend line, unless broken, stay in
Scale out at support areas and trail stop accordingly
0dd on retracement if the re2ersal de2elops into a strong trend
etc, this is an art actually.
#f it fails, consider possible formation of a triple top
>;. &>;<;=( naked.Epg letting those winners run
o Trading with a well formed trend will help your accuracy but it also allows you to catch some
good runners, if you donOt ride the runners you are missing out on half of the ad2antage of this
>1. &>;<;=( same.Epg part of my winning formula
o Qust got easier to spot 2isuals but at the end of the day price action howe2er sliced or
represented, is where the gold is.
>+. &>;<;=( holy.grail.gif Some of you need to memoriBe these two basic but imperati2e formations
>*. &>;>;=( n7.Epg Type charts to be used for NF &+orks(a2e,
>4. &>11;=( gimme.the.stout.Epg $C analysis
>5. &>11;=( stout.Epg
>9. &>11;=( ad2anced.scalping.Epg ad2anced scalping &not 0%G, this is pure scaling(
o M bottoms draw a down trend line, when broken, scalp the price action and stay on the same
side of momentum as long as momentum does not fade.
>=. &>11;=( useful.Epg -oded some paint bars to accentuate price action.
o 6airly simple stuff, ha2e not tested it li2e but should be semi useful
><. &>1+;=( kinder.Epg .ay too eAtended, minimal retracement, =1.5; was more in line.
o 1ou need to let bulls sell and bears co2er after such mo2es.
>>. &>1+;=( n7.Epg "orning was optimal
o no heat, no losses, nothing but a sweet uptrend with ob2ious entries.
o 0t this pace # donOt see myself returning to ES but too early to tell.
1;;. &>1+;=( n7.afternoon.Epg Symmetrical triangle with trend line break
1;1. &>14;=( fun.scalps.Epg 6un scalps on the $C based on price action during brutally low 2olume
o "omentum called targets
1;+. &>14;=( the.end.Epg -losed the last long...
1;*. &>15;=( price.action.sample.Epg Price action random $C day
o should help for stop placement logistics.
Page *4 of =; +49+5=*;9.doc+49+5=*;9.doc
1;4. &>15;=( homework.;>.15.;=.Epg Ho3e+ork) sto(s an* e;its.
o 0ttached please find a random $C chart.
o #t was fairly easy to mark the entries as it was a strong downtrend, so # took care of those. #n
my eAperience, when the indeAes are displaying a strong downtrend, amateur traders tend to
shy away and simply become paralyBed. # want to help you eAploit such wonderful days
instead of Eust standing still and looking in awe.
o The eAercise is to mark the stops and the eAits on all entries and gi2e lo7i2al eAplanations for
each, no eAception.
o 0ssume no intraday swings and no a2eraging ups, strictly in and out protecting capital and
milking the market.
o %$O#TANT NOTE- !emember that your fill is somewhere on the bar following the entry
as we 2alue close more than open3high or low, no cheating.
o Ans+ers to L!1?!01 Ho3e+ork answer can be found on EfaithE below.
o ,n a side note, the reason why # included it the long on U-onfidenceU is because there is a
strong possibility # might ha2e taken a 7uick long scalp there as a mistake.
o The reasoning behind it is that a small mistake canOt kill us, with discipline and confidence in
price action, we are untouchable.
o wins and the occasional monster play, your confidence will go from ; to 9; in + seconds.
o &>15;=( my\anek\chart\analysis.png &Techdoodle( Ans+er to ho3e+ork
the stops and eAits are redundant in style. # think thatOs a good thing because they
become well defined rules.
F0nek repliesG Perfect analysis, the part you do not understand is me referring to a
double bottom &against the trend( whose middle high swing was ne2er taken by a
closing bar.
1;5. &>15;=( price.action.pasta.Epg
o # took another random chart and produced a brain salad surgery on price action.
o #t has more info than you can possibly digest for a single chart but it would help if you make
an effort to follow the logic.
o 0%G at an eAtremely micro le2el.
o .hen # used to trade in public channels people used to ask me, how do you trade with such
small stops, how do you do it, well this is it, no magic.
o Small losses, small wins and the occasional monster play and your confidence goes from ; to
9; in + seconds
1;9. &>15;=( confidence.Epg Confi*en2e
o ?elie2ing is your system and methodology is eAtremely important in trading.
o %a2ing the discipline, to accept the fact, that when we are wrong the ,PT#"0/ scenario is the
7uick stop, no 7uestions asked.
o #n an effort to build your confidence here is a chart of nothing but losses.
1;=. &>15;=( faith.Epg Faith
o 1ou did not really think we could not profit from such a chart, rightH
o .inners make the losers look like ants
1;<. &>19;=( holy.grail.chair.Epg The infamous %oly Grail -hair).
1;>. &>1=;=( morning.scalps.Epg "orning scalps before coffee)
11;. &>1=;=( morning.analysis.Epg #ea*ers) (lease tell 3e +hat % see that yo5 75ys *on't.
Page *5 of =; +49+5=*;9.doc+49+5=*;9.doc
o The pre2ious mo2e had eAtended downside, when that happens it is prudent to wait for a pop
up then take the signal.
111. &>1>;=( a.possibility.Epg ossi6le AHG A**en*53
o ?ullish Scenario
o 'p swing &1%%, 1%/, re7uired(
o -onfirmation bar closing abo2e pre2ious bar high &bright green paint bar( after the retracement
while the most recent %/ remains intact.
o Areferably not hi%her than half the distance between the last HL and the last HH&
o Target based on price action and neAt resistance or the 2ery beginning of a conser2ati2e
a2eraging up play for the possible upcoming uptrend. #deally target 35st surpass the risk o2er
the long run, unless price action says otherwise.
o Stop below most recent %/.
o O(en for *is25ssion, needs further eAamination.
o 0 wise3eAperienced trader # know claims the best possible entries are found at the birth of new
trends with the 2ery first confirmation. Easier said than done, this could be a possibility.
o $ote: 0n uptrend re7uires +%%s and +%/s, this play anticipates it with minimal risk
o Geometrically similar to 1+* pattern, but the rules are a different story.
11+. &>1>;=( closeisall.Epg The importance of close and not a wick
11*. &>1>;=( /i2e play on the $C)
114. &>1>;=( free.Epg $C P0%GP 0nalysis
o They donOt teach you this in UTrading 0cademiesU
o Qust like a beautiful breeBe of fresh air, the good stuff comes from the heart, and itOs always
free. Pun 2ery much intended.
115. &>+;;=( ahg setup 2er +.+.Epg Mis5al referen2e AHG set!5( 2hart &!n<9(
119. &>+;;=( n7.;>.+;.;=.Epg 0%G 0nalysis for $C
o #t was a hard day to trade but as soon as the trend decided to show its face one trade made the
o Sitting on your hands and taking small losses was absolutely 7uintessential today.
o eAamine the Double ? failure and how the element of surprise rewards traders.
o Small losses
o ?reak e2ens
o Small wins
o Great wins
o ....only way to beat trading.
11=. &>+1;=( candy.Epg self eAplanatory
11<. &>++;=( unity.Epg 0ll in unity, all the pieces of the puBBles combined at last
11>. &>+4;=( too.easy.Epg self eAplanatory
1+;. &>+4;=( serious.Epg Glo2es are off, trading all indeAes at once.
o Double top, symmetric triangle break down. 0nother easy play
1+1. &>+5;=( increase.accuracy.Epg %n2rease A225ra2y
o ?y now you should know #Om a fan of closing bars to get some kind of confirmation when
breaking support or resistance.
o # will eAtend this a bit further, the closing bar T1PE matters.
o 1ou can apply this to support, resistance, trend lines, symmetric triangles, etc.
Page *9 of =; +49+5=*;9.doc+49+5=*;9.doc
1++. &>+5;=( fleAibility.Epg ?e fleAible and adapt.
1+*. &>+9;=( dragon.Epg "ra7on attern
1+4. &>+9;=( dragon.played.Epg Ho+ "ra7on attern (laye*
1+5. &>+=;=( scalping.Epg Ba* tra*in7 *ay
o Some patterns failed today, the day was 2ery brutal but thatOs 7uite alright because the stops are
nothing to cry home about. # think today was one of the ugliest trading days in a long time.
o %owe2er, there are always scalping opportunities.
o The paint bars # use are a close abo2e pre2ious high and a close below pre2ious low. .ell,
when you combine this with Trend line support or resistance you get a nice scalping system
because the stop is 2ery small and the reward is 7uite high.
o 0ttached please find some of the scalps # did today on the $C. "any worked great on E!+
and ES as well and at one point # had the same play on all three indeAes at the same time, felt
funny, but good stuff, minimal risk, great reward, Eust like # like it.
o # donOt think # had one fail today
1+9. &>+=;=( er+.scalps.Epg E!+ Scalps: 6ew, but real gems.
1+=. &>+=;=( es.scalps.Epg ES Scalps
1+<. &>+<;=( er+.short.Epg E!+ shorts
1+>. &1;;+;=( n7.1;.;+.;=.Epg and they say ET does not ha2e useful strategies pfttt)
o #f in a downtrend, you want to find the weak bars in the pop ups.
o #f in an uptrend, you want to find the strong bars in the retracement.
1*;. &1;;+;=( the.7uest.Epg $!6otto3 an* /!to(
1*1. &1;;*;=( m.bottom.Epg $!Botto3, rare as >; year old 2irgins
1*+. &1;;*;=( /!to(
1**. &1;;*;=( price.action.commentary.1;.;*.;=.Epg
o Strength 7uality of the swings, listen to price action
1*4. &1;;*;=( kindergarden.Epg /!6otto3s an* $!to(s, look how simple this was
1*5. &1;;4;=( es.morning.Epg ES morning
o price has a tendency to Eump from one key area to the neAt without much problem. The real
obser2ation should be done when it is actually PatP a key area.
o Some people use Pi2ots # like to be more precise and use support and resistance areas instead.
1*9. &1;;9;=( Tea2h 0o5rself AHG in .> ho5rs
1*=. &1;;=;=( 8 $a7i2 ti2k
o $otice how the double top had a close below the middle swing but not tick low after that.
o $ow, notice how the %ead and Shoulders had the close below neckline and then a tick on the
neAt bar below the closing breakdown bar.
o That tick increases accuracy.
o That one tip # owe to Suri Duddella.
1*<. &1;;=;=( alpha.performance.Epg .hy 0nek uses Fsilly indicatorsG &HL,
o The simple answer is, #O2e been trying for 7uite a while now to trap price action in some sort of
algorithmic way to mimic a fraction of my hand trading in automation so # can increase my
P3/ potential. Greed is good, rightH
o this has been an on going proEect for 7uite some time and it is still a work in progress. $ot
e2en in the alpha stages.
Page *= of =; +49+5=*;9.doc+49+5=*;9.doc
o %ere is a taste of the progress on the E!+ with 9 months past data, canOt go any further on TS
using tick charts, unless # buy eAtra data.
o -ommission and slippage is accounted for in the results. E2ery trade has three eAit points so
the car siBe is set as its minimum, *. # ha2e not implemented a2eraging up into it yet.
1*>. &1;;=;=( cur2e.Epg Posted as illustration of automation progress.
o $ot selling, not sharing Eust answering why toying with personal indicators all this time
14;. &1;;<;=( n7.1;.;<.;=.Epg Easiest chart #O2e seen in a 2ery, 2ery long time
o $ot a single losing trade, not one, nothing, nada, Bero.
o %ard rules on the chart implemented for your 2iewing pleasure.
o #Om sorry to say, if you are not killing it at this point on days like this, you are definitely not
getting it and # recommend ree2aluation of the concept.
141. &1;;<;=( http:33www.elitetrader.com32b3showt...44;Zpost19*444;
o Sol5tion to the $ 6otto3 an* / to( finally (oste* on this threa*-
14+. &1;;>;=( n7.1;.;>.;=.Epg -hart trades
14*. &1;;>;=( 1;.;>.;=.Epg &daily PD/(
144. &1;1;;=( failed.head.and.shoulders.Epg Ino+ yo5r (atterns
o AnekDs favorite (atterns to tra*e is not the Hea* an* Sho5l*er itself 65t a faile* one
145. &1;1*;=( triangle.Epg 65llish Trian7le 6reako5t
o dramatic eAample as this one makes a trend re2ersal. Price action also ga2e it away.
149. &1;1*;=( ym.triangle.Epg The mighty one)
14=. &1;1*;=( fib.illustration.1.Epg ?rain candy
14<. &1;1*;=( fib.illustration.+.Epg To some the 91.<;L is +*.9;L
o clarification Fbad habit of drawing them always in the same directionG
o Typo on chart, loss J lost
14>. &1;1*;=( fib.illustration.*.Epg The Fi6ona22i ill5stration for the 2on2l5sion of the analysis.
o # close the chapter with the elusi2e 7uestion one more time. Coin2i*en2e N
o "y personal humble opinion... $, .01 N &0nek(
15;. &1;15;=( destroyed.Epg !emember the mid line indicator proEect
o check the resistant points today
o +1=5 was the 5;L fibs +19= was the 91.<;L
o Price tried to re2erse hard in those areas but couldnSt take the mid point between /,D and the
daily mid point. -oincidence H
151. &1;15;=( retracement.gif %ere is why +1=5 and +19= were significant in the $C today
15+. &1;15;=( could.not.resist.Epg -ould not resist posting the 0% up tick mo2e
15*. &1;19;=( n7.long.swing.Epg if wrong, small loss, if on right side potentially monstrous play
154. &1;19;=( thoughts.Epg Please take a moment of your time to eAamine this chart.
o Slice and dice it anyway you like. Some might know what it is some might be surprised
o possible post your comments on the Eournal &1;19;= for reader posts(
o !e2ersal formation was the multi year low on the weekly chart years ago.
o -lear . formation whose mid swing was taken out by a closing bar at the absolute lows.
o $ow a maEor swing high has been accomplished, we need resistance to become support, this
has yet to happen.
o The near term signal will be a breakout to the upside outside the current triangle on the multi
day charts.
Page *< of =; +49+5=*;9.doc+49+5=*;9.doc
o # started way early based on an in2erse head and shoulder on the daily charts &sadly not as
early as that . shows( and ha2e been adding e2er since, kids future if you will &0nek(
o The point of the eAercise is that we must be aware of the big picture in the instrument we trade
and that does not Eust mean the daily chart
155. &1;19;=( $5lti "ay Chart e;a3(le
o $otice the current wick high on that last bar, reason # decided to take profits around that area.
o #t has UyetU to break out3down.
o #nteresting thing is that # think the key to the market &all eminis( lies on this chart right here.
o The ++;5 and +19; areas are eAtremely important in the neAt de2elopment phase.
o /earn to recogniBe the bearish hemisphere from the bullish one and whatOs the line in the sand.
o !emember, the $asda7 is leading.
o #t is eAtremely important, always, at all times, be aware of the big picture, without it, you
would not know how far your good trades can go.
159. &1;1=;=( ne2ermind.Epg %3(ortan2e of An2hor Charts
o ,n the multi day chart $C 5;;; share bars, 9;ish support trend line was holding.
o ,n the 1;;; a . formation right on that area at the /,D.
o . formation at maEor supportH .hat does that spell H Dual confirmation.
o Targets using the "arket Emotion line.
15=. &1;1=;=( phase.1.completion.Epg Con2l5sion of hase %
o 1ou will find many pieces of the puBBle on this chart.
15<. &11;1;=( n7.11.;1.;=.Epg $C 0nalysis
o -arnage day for the indeAes, particularly 1". $C was 2ery stubborn confirming once again
that tech is the strongest sector right now. Still, it felt the selling pressure and touched the
double bottom created on %alloween during fed day, a bottom # was eApecting as target with a
greedy smile when # saw that panic emerge during the afternoon.
o $C is the instrument #O2e been concentrating on lately, particularly because # feel eAtremely
comfortable with it so will limit me to $C analysis, for now.
o #"%, the indeAes, like in boAing, were sa2ed by the bell at 4P" because in the afternoon the
momentum was there. Surprisingly it did not continue in the afterhours of the night. Possibly
waiting for an 0sian response, most probable the Eob news of 6riday morning.
o Cuite an easy day to trade for the 0%G system. 0s always stops are small, usually based on
ticks abo2e3below entry bars with a possibility of reentry on a stop out assuming the trend is
intact to a2oid big losses.
o Bein7 a+are of the all 3eanin7f5l s5((ort an* resistan2e areas of the 6i77er (i2t5re
&6i77er 2hart, is not only a (l5s 65t a very stron7 ally in tra*in7) even *ay tra*in7. #t
allows you see how much you can press it, like today and that elusi2e ++1; at the end when
you were supposed to co2er.
Page *> of =; +49+5=*;9.doc+49+5=*;9.doc
o 0ttached please find positi2e opportunities that were found intraday.
Some potential entries that resulted on small losses were omitted for the sake of simplicity. 0s
you know by now, small losses are a necessity in trading and they should not scare you at all.
#ts big losses you want to shy away from. 0ccept them as a trading eApense, like commission,
will help you keep your peace of mind. $o one blew up from a day of multiple small losses.
$eedless to say, 0%G ga2e you the possibility of many, many winners today, including some
home runs, as it ga2e me and for that, #Om thankful.
15>. &11;1;=( tape.Epg Filtere* ti3e an* sales
o EAperimenting with only watching the tape for big orders, feel # can read the tape much better
and with less distraction when # only pay attention to the big orders and eAclude the little
people. 0fter all, the small car lots are Eust noise.
o %ere is a sample of how clear price action was on the filtered tape today.
19;. &11;+;=( n7.update.Epg conclusion to the o2ernight swing
191. &11;+;=( n7.w.from.hell.Epg small chart
19+. &11;+;=( n7.big.Epg big chart &reference with small chart
o 0bsolutely brutal, lo2ely, seAy, you name it dual confirmation from bigger chart which had the
2ery same formation so you could easily a2erage up on the eAtra subse7uent confirmations.
19*. &11;+;=( n7.11.;+.;=.Epg 8 $C analysis
o 0maBing day with only two losses, a minimal one in $C trying to catch the falling knife
without confirmation like a rookie and the same play on ES were # ga2e up + points for lack of
discipline and thinking # am omnipotent to call a bottom in a strong downtrend, a foolish thing
to do.
o The good news is the winners were in the double digits and one incredible home run that made
my day shine. -ouple of a2eraging up plays on retracement during strong trend that ele2ated
profits a bit.
o $eedless to say, # will try to learn from the two dumb mistakes so # can further impro2e my
trading. Trading is a learning process that ne2er ends.
o ,nce again, $C continues to reward me 2ery nicely and days like this confirm that #Om in the
right instrument doing the right things.
o $otice that after +* wa2es the odds of working will decrease eAponentially.
194. &11;+;=( n7.week.analysis.11.;+.;=.Epg
o "y study conclusion shows a bullish $asda7 despite weakness in the other indeAes.
o chart analysis of some recent swings or o2ernight plays taken and key areas identifying the
bull mo2e confirmation including subse7uent confirmations of neAt resistance barriers along
with support areas that could indicate upcoming consolidation or a change of a trend.
o There is something else important on that chart that # did not mention, waiting to see whoOs
first &readers posts 11;*;=(
o 0nswer: The possible in2erse h and s and the triangle at the edge were the missing patterns in
the chart.
o %owe2er, Eust like % and S work better at the 2ery tops, #n2erse % and S work better at
bottoms, so its position is not optimal. The rest is still 2alid.
195. &11;*;=( n7.chart.Epg ThatOs how # like them
199. &11;*;=( n7.in2erse.h.and.s.Epg from the daily chart.
o 0nek prefers the head of the in2erse head and shoulders to mark the absolute lowest point
19=. &11;*;=( both.good.Epg comparison of tick32olume charts look great for 0%G and $C.
19<. &11;*;=( n7.daily.Epg 8 $C daily
Page 4; of =; +49+5=*;9.doc+49+5=*;9.doc
19>. &11;*;=( es.daily.Epg 8 ES daily
1=;. &11;4;=( w.failure.Epg Nothin7 +orks all the ti3e art %
o . formation after 2olume eAhaustion with a magic tick that failed miserably. "y fa2orite
o Do not let it frustrate you, this stuff happens, you take your moderate stop and mo2e on as the
neAt great trade perhaps is Eust around the corner.
1=1. &11;4;=( w.success.Epg Nothin7 +orks all the ti3e art %%
o 1ep, literally around the corner
1=+. &11;4;=( es.+4;.min.Epg /ot of indecision in ES at the moment
o multi day +4; min chart with a 7uick analysis.
1=*. &11;5;=( good morning right off the bat)
1=4. &11;5;=( no.magic.tick.Epg No 3a7i2 ti2k
1=5. &11;5;=( n7.Boom.out.Epg A sy33etri2 trian7le $C &11;5;=(
o #f eAperienced, play the eAtremes accordingly, otherwise wait for official breakout which could
take a few days, not necessarily today
1=9. &11;5;=( n7.symm.Epg Sy33 A2tion as eApected by the eAtremes it is now at the low point.
o /ooking for re2ersal formations around here. No 65yin7 5nless one soli* one for3s an*
2onfir3s to (revent the (5r2hase of a fallin7 knife.
o The point is price is at support, the re2ersal formation is now missing.
o Targets can be 0PE@ and other eAtreme depending on greed and balls.
1==. &11;5;=( n7.11.;5.;=.Epg
o "ost of the trades were documented here before the chart so they should come at no surprise.
o The first . had support from the +5;; tick chart multi day trend line
o The short was coming off the symmetric triangle that, # think, is still 2alid on the +5;; tick
chart &multi day( and the plan was to short the resist area and go long on the support one.
o 6or some reason # did not think the market was ready to come out of the symm today and
looks like # got my wish on that.
o The short symm resistance was based on head and shoulders confirmation.
o The long symm support was based on . formation confirmation.
o $ot included because it ser2es no purpose a minor loss on 1st unit only that worked like crap
because once again # think #Om superman when #Om Eust a regular geek.
1=<. &11;9;=( short.possibility.Epg Short possibility of intraday swing.
1=>. &11;9;=( anchor.chart.Epg An2hor Chart
o 0s reference, notice how the T/ of the anchor chart was ne2er broken.
1<;. &11;9;=( bigger.chart.Epg ?igger -hart
1<1. &11;9;=( n7.91;.Epg 0nother easy day
o Easy short based on double top with complete confirmation.
o Easy long based on . formation with complete confirmation.
o The short # got good
o The long # missed due to dentist appointment and he kicked my butt.
o 0ttached 91; tick chart for ref but the long at Boom in le2el say +** had a . formation
1<+. &11;9;=( n7.11.;9.;=.Epg daily comments or the chart itself.
o Special $ote: ?etween 1+:55 and 14:;; you can see a 2ery eAtended upside mo2e. This is
probably why that middle swing got taken. #Om referring to the spook area. .orth noticing that
when the mo2e is o2er eAtended an out of the ordinary retracement is possible. $oticing this
after the fact.
Page 41 of =; +49+5=*;9.doc+49+5=*;9.doc
1<*. &11;=;=( tl.test.Epg $C /,D J "ulti Day T/ test ThatOs where the double bottom formed.
1<4. &11;=;=( tl.test+.Epg T/ Test Part ## /ittle different now.
o This is the multiple confirmations i speak of. # prefer confluence.
o Confl5en2e is when multiple charts agree, multi signals agree, and so forth. #tOs like e2erything
flowing together, this is what gi2es you accuracy.
1<5. &1114;=( chocolate.cake.Epg #ntraday Swing Sample
1<9. &1114;=( michell.ryan.Epg $i2helle #yan true holy grail.
1<=. &1115;=( n7.11.15.;=.Epg /et the market be, donOt push it.
1<<. &1115;=( watch.out.if.short.Epg potential massi2e Dragon formation $C multi day charts
o #f this monster roars it will create one of the greatest short s7ueeBes in the history of tech so
pay 2ery good attention to that trend line.
o !ead about the pattern and make sure you split entries on both confirmations should it e2er
o Should it confirm, be 2ery greedy.
o $ote: 0t this point it is incomplete
1<>. &111=;=( things.that.make.yuo.go.hmmmmm.Epg 8 (otential *ra7on
1>;. &111<;=( tl.swings.Epg screenshot included personal price action tool
o tool smoothes out the action so you can see how those highs and lows de2elop
o name of the game is not to catch it all but a good chunk with minimal risk3good reward.
1>1. &111<;=( Entries and eAits based on tool and trend lines
1>+. &111>;=( easy.after.breakfast.Epg "o56le 2onfir3ation.
o T/ test W strong bar J -ashing otherwise small loss.
o /earn this setup well.
1>*. &111>;=( before.lunch.Epg Double confirmation before lunch.
1>4. &111>;=( w.Epg . hatOs up
1>5. &111>;=( n7.11.1>.;=.Epg Channels
o .hen a channel forms you should only take trades with the direction on the channel.
o Preferably when you see double confirmation.
o #f a downtrend channel, bearish formations &weak bars( at the resistant downtrend line.
o #f an uptrend channel, bullish formations &strong bars( at the supporti2e uptrend line.
o 1ou will notice that if price wants to break out of the channel it will most probably wonOt form
the strong or weak bars that you need to enter the trade. This is a security measure, use it
o 1ou should not trade against the trend unless the opposite end of the channel confirms as a .
or " formation. These are low accuracy but 2ery good reward trades so completely optional.
o This is 2ery simple yet a money maker
o PS: DonOt forget to watch the filtered time and sales for e2en eAtra confirmations
1>9. &111>;=( will share when finished. Sneak pre2iew.
1>=. &111>;=( more.Epg bit more action with them attached. Still need to get rid of a few bugs.
1><. &11+;;=( chart.Epg
o 0fter the double top e2ery bearish engulfing bar at the downtrend resistance line is producing
1>>. &11+;;=( ahg.power.dots.Epg &locate: source code or eld if a2ailable(
o The %0 bars are good for those that ha2e problems letting the winners run. They are definitely
not for entries as they can be a little slow. This is why i suggested the combination.
Page 4+ of =; +49+5=*;9.doc+49+5=*;9.doc
o "y stuff is much faster for entries, in fact there is nothing faster as far as #Om concerned. Price
action is king, make no mistake about that.
o Part of a winning algorithm # use in auto trade is based on that.
o %ere is a sample of how powerful this stuff can be.
+;;. &11+;;=( goog.Epg 0nekSs Price action Power dots applied to Goog
+;1. &11++;=( ha.the.anek.way.Epg HA the Anek +ay
+;+. &11+*;=( black.friday.Epg 8 DT,P Fwho knew this crap day could be so gi2ingG
+;*. &11+*;=( ha2e.a.great.week.end.gif ha2e a great weekend all
+;4. &11+*;=( symm.Epg you must be aware of the high3low pi2ots, not Eust trust a T/ penetration
o especially with no trend because the real key are those pi2ots.
o Think about it, a T/ broke momentarily but what was the pre2ious trend that made such break
meaningful H There was no trendN
o 0 higher high or a lower low is what really counts with triangles because inside they are
structured as higher lows and lower highs.
o 0ll #Om saying is the triangle was composed of congestion, lower highs and higher lows when
something o5t of the or*inary for3e* like say a higher high or a lower low officially
confirming that the congestion is o2er, then you had the si7nal to look for an entry.
o There is more than meets the eye on the abo2e comment, gi2e it a good solid thought.
+;5. &11+*;=( %ere is what # consider a 2lassi2 is25y tra*e:set5(. &0nek(
+;9. &11+9;=( es.Epg .ell, hello hello, what do we ha2e here my friends....!oarN
o thatOs a double confirmation # see.
o .ould need a triple, anyone knows what the triple would be H
o "onday close abo2e the downtrend line
o Tuesday any tick abo2e "ondayOs %,D
o start looking for a long entry for a swing.
o E2en with the third confirmation, there is no guarantee that the market will re2erse, but the risk
2s. reward is worth taking it.
+;=. &11+9;=( muahahahah.Epg $ornin7 NF "ra7onN
+;<. &11+9;=( possible.Epg 8 multiday anchor
+;>. &11+9;=( scalping.Epg took one against the trend and $,T surprisingly it was my only failure.
+1;. &11+9;=( lunch.Epg 8 /unch. Trend changed, T/ ?roke, bla bla bla
o See how simple this can be if you Eust follow the simple rulesH
+11. &11+9;=( we going higher.Epg The ta(e sai* hi7her....
o !ed background in TDS J below the bid
o ?lue background in TDS J abo2e the bid
+1+. &11+9;=( we.going.lower.Epg The ta(e sai* lo+er...
+1*. &11+9;=( more.Epg 8 took a break...but the tape said, free money on the table, grab it.
+14. &11+9;=( for.santa.Epg Thank you, Santa needs it.
+15. &11+9;=( anchor.Epg #e3e36er the An2hor ChartN
o DonOt forget, T/ breaks coming off a lower high....bla bla
+19. &11+9;=( fre7uency.Epg Fre45en2y Sa3(le
+1=. &11+=;=( bug.Epg Possible bug &referring to ilu2Ss paintbar(
o was already green, only toggles if a weak bar appears &ilu2+trade response(
o if you set seeall J true, you can see all the Strongs3.eaks &ilu2+trade response(
+1<. &11+=;=( gi2eme,your.sister.Epg Tape said lower....
+1>. &11+=;=( sample.Epg 8 first signal
Page 4* of =; +49+5=*;9.doc+49+5=*;9.doc
++;. &11+=;=( sample.ii.Epg 8 second signal
++1. &11+=;=( /ast signal, . marking a possible end.
o #f you donOt get this, #Om not sure what to say, but at this point, itOs second nature to me
+++. &11+=;=( .hat can # say
++*. &11+=;=( \modhapb.Bip 8 $o*ifie* HA 6ars
++4. &11+=;=( sample.screenshot.Epg 'se on ,%/- ?ars not candles. Tips:
o ?lue body at the low of the bar, strong uptrend
o !ed body at the high of the bar, strong downtrend.
o Small body in the middle Ucolor not that importantU might signify trend fading, the smaller the
more indecision.
o 1ellow indicates a possible transition or pause. "ultiple yellows highly possible trend
o $otice how color rarely changes without a yellow in between.
o Piscuy is the resident eApert on these bars, he bled the market using them for a long time. 6or
more info, heOs the guy to go to.
++5. &11+=;=( ah.scalp.Epg a little 0% ES scalp.
++9. &11+=;=( another.ah.scalp.Epg 0nother ES 0% Scalp using is25y's s2al(in7 style.
++=. &11+=;=( n7.afternoon.Epg comments of $COs afternoon session.
o There was a particular mo2e that stunned me a bit
++<. &11+=;=( es.ah.Epg $ice little re2ersal on the ES30%....
o DonOt let 0% intimidate you, Eust lower the chart frame to accommodate the low 2olume and
remember that a chart is a chart.
o #f no real 0% eAp, watching is free, it can get slow as molasses.
++>. &11+=;=( ES has momentum, ,bligatory scale out at !esistance &now(
+*;. &11+<;=( n7.11.+<.;=.Epg Preser2ation of capital and testicles, more details on chart.
o ?ased on 0%G rules, the +nd D? leg blue bar would ha2e been the starting point but # froBe,
was not e2en going to trade today.
+*1. &11+<;=( 8 what a day. #tSs not about being rightNNN
Page 44 of =; +49+5=*;9.doc+49+5=*;9.doc
%n*i2ators:aint 6ars
"yna3i2 S5((ort an* #esistan2e &<15;=( &0nek(&T!,(
o tro dynamic sr.Bip
$arket E3otion in*i2ator
o marketemotion.Bip marketemotionsample.Epg &Eashanno( 8 &1;15;=(
o FDynamic 6ib retracementG %,D3/,D midpoint proEect
o #f the high is abo2e the high of the pre2ious day produces yellow line.
o #f the low of the day is below the low of the pre2ious day produces purple line.
o #f you change any of the 2ariables to inputs then the user can choose the color or style at will.
6or instance: #nput : %od-olor&DefaultMalue(K &0nek(
L#E 9 Linear re7ression envelo(e &code posted 11;+;=(
o lre.Bip lre.Epg
o 1ou can load multiple instances of the E/D at once with different lengths to obtain a /inear
!egression En2elope for the immediate trend and a medium one. &more than two is o2erkill(
ri2e A2tion %n*i2ator &>;5;=( &0nek(
o price.action.eld.Bip price.action.Epg
o %igher %ighs
o %igher /ows
o /ower %ighs
Page 45 of =; +49+5=*;9.doc+49+5=*;9.doc
o /ower /ows
o Double ?ottoms
o Double Tops
o Due to the TS way of doing things, the %/, etc. markers get attached to the first bar in the
minute in which the %/ occurs. So, on lower tic charts, the markets are charted way off the
actual bar which creates the marker. Sometimes increasing the left and right strength &1;+5(
helps to align the marks better.
AHG Bars ! ri2e a2tion (aint 6ars &11;*;=(
o in the early stages of de2elopment &0nek(
o ahg.bars.Epg -omparison between 0%G Paint bars &?eta( and %eikin 0shi bars.
AnekDs aint 6ars &>1+;=(
o anek.paintbars.eld.Bip #f a TS 'ser:
o "ake positi2e bars Dark Green
o "ake negati2e bars Dark !ed
o $eutral .hite
o 0dd my paint bars, make -/ bright red and -% bright green
o or your desired colors of course.
o Should help with price action.
Co5nt "o+n 5tility &reference >1=;= if difficulties(
o count.down.eld.Bip count.sample.Epg
o displays real time how many cars are left for the current bar to close right neAt to the acti2e bar
Heiken Ashi ha.bars.eld.Bip &=+5;=( 3 ha.Bip &<15;=(
$o*ifie* HA Bars 9 &11+=;=( &0nek(
o \modhapb.Bip sample.screenshot.Epg
o 'se on ,%/- ?ars not candles. Tips as follows:
o ?lue body at the low of the bar, strong uptrend
o !ed body at the high of the bar, strong downtrend.
o Small body in the middle Ucolor not that importantU might signify trend fading, the smaller the
more indecision.
o 1ellow indicates a possible transition or pause. "ultiple yellows highly possible trend
o $otice how color rarely changes without a yellow in between.
o Piscuy is the resident eApert on these bars, he bled the market using them for a long time. 6or
more info, heOs the guy to go to.
Three Bar #eversal aint6ar \*bar.re2ersal.paintbar.eld.Bip &11+4;=( &0nek(
o 'sing high or low not close
o Three ?ar !e2ersal Paintbar -ode:
Page 49 of =; +49+5=*;9.doc+49+5=*;9.doc
input : upcolor&green(, dncolor&red(K
2ar : threebarup&false(, threebardown&false(, okplot&false(, color&;(K
threebarup J falseK threebardown J falseK okplot J falseK
#f h V hX1Y and h V hX+Y and h V hX*Y then
threebarup J trueK
#f l ] lX1Y and l ] lX+Y and l ] lX*Y then
threebardown J trueK
if threebarup or threebardown then
okplot J trueK
#f ,kplot then
if threebarup then
color J upcolor
if threebardown then
color J dncolorK
PlotP? &high, low, UP?U, color(K
Three Bar #eversal aint6ar !\*bar.re2ersal.paintbar.use.close.eld.Bip &11+4;=( &0nek(
o using close not high or low *barpaintbars.Epg
Three Bar #eversal aint6ar 9 "odified &ilu2+trade(
*bar.anek.mod.Bip &ilu2+trade( &11+9;=(
o tried to get QDOs 2ersion E/D didnSt seem to work, signals not too great so # tweaked 0nekSs
*bar and added the option to Eust see re2ersals...
o aneks\re2ersals.png re2ersal signals, based on 0nekOs *bar paintbars... &11+9;=( &ilu2(
o see posts &11+9;=( &11+=;=( for code and instructions
o 1ou did a great Eob with the mod, good impro2ement to the original engulfing bars. F0nekG
Note- Anek only 5ses the $o*HA) the 8 6ar reversal he easily s(otDs vis5ally.
Aneks o+er "ots ! ahg.power.dots.Epg &locate: source code or eld if a2ailable( &11+;;=(
T$F &"oney 6low #ndicator( re3ove* fro3 AHG) $o ad2antage found &11+;;=(
A**itional Tra*e station in*i2ators- &T!, stuff is good( FThe !umpled ,neG 8 Trade station &.eld(
o http:33www.elitetrader.com32b3showt...J9DpagenumberJ5
Page 4= of =; +49+5=*;9.doc+49+5=*;9.doc
info.Bip info pic.Epg %nfor3ation in*i2ator &?ugsbunny( &1;19;=(
o Displays timer countdown, /,D, %,D, current and last bars %/ D close
o Determine when bars are finishing, need not click on the bar to determine %3/ etc..
s bars.Bip Stron7:/eak Bar in*i2ators &?boA trader( &1;1;;=(
both.indicators.Bip &tmarket( &<;=;=(
o Oohn Carter's s2al(er in*i2ator &checking for a trigger bar that makes a lower high, and
no more higher highs and closes below the trigger(
o 0nek has 2ery little eAperience with this system so canOt comment on the pros or cons
o F0nekG outcome of the system:
o .hite dot plots, if subse7uent bars are of the same color &%0( of the pi2ot direction, take
the signal.
o $otice that the white dot ,$/1 plots after *4 bars ha2e been completed, sometimes more.
o $o conclusions yet. %owe2er, compared to 0%G, pitiful so far. 'sing 5;;; 2olume bars #
would ha2e killed that chart.
o "y only doubt is if the bar with the plot has to be of the desired color or only the following
ones. # assumed it had to be.
Ethma.Bip H5ll $ovin7 Avera7e for TS, usually superior to S"03E"0 etc. 0nek &<;<;=(
o This one changes color too based on slope.
o # belie2e the Tero /ine #nput would be the displacement3offset input that 0lpine speaks of for
this techni7ue, one that #Om still unaware of
o This better be good as adding indicators to my trading sounds like a kick in the balls but if itSs
for the better, #Oll take the hit, ouchN
o This is only a test, not a modification.
smi.indicator.eld.Bip 8 Si3ilar to 7ohstra*er FT S$%:(aint 6ar &0nek( &1;1*;=(
o 0nek has had limited eAperience with S"# but recalls a time when his friend "Q% sent him
the function and E/D for e2aluation.
o This should help those wanting to automate the system described by gohstrader for
Tradestation and3or back test ideas to polish it.
o &6or those wanting code only(
o S"# 6unction
^Type : 6unction, $ame : S"#_
%% J %ighest&%,length1(K
// J /owest &/,length1(K
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S"# J 1;; P &@02erage&@02erage&-&;.5P&%%W//((,length+(,length*( 3
&;.5 P @02erage&@02erage&%%//,length+(,length*(((K
o S"# #ndicator once you got the function
'p-olor&green(, Dwn-olor&magenta(K
Malue1 J S"#&length1,length+,length*(K
plot1& Malue1, US"#U (K
plot+& 0lert/e2el, USell lineU (K
plot*&0lert/e2el, U?uy lineU (K
plot4&;, UTeroU(K
if plot1 crosses abo2e 0lert/e2el then
alert&US"# crosses abo2e buy lineU(K
if plot1 crosses below 0lert/e2el then
alert&US"# crosses below sell lineU(K
#f 2alue1V2alue1X1Y then begin
end else begin
&NinPa Tra*er,
$arket E3otion in*i2ator ! marketemotion.Bip &QtraderI<( &1;15;=(
AnekDs aint 6ars anekbarpaint.Bip &screenstruck( &>+=;=(
o %ere is an eAport you can import in.
o you can import it by 6ile V 'tilities V #mport $inEaScript to open the #mport $inEaScript
dialog window
o change the code bar colors to suit and recompile.
AnekDs aint 6ars &Co*e, anekpaintbars.png &screenstruck( &>+=;=(
o ,nce you ha2e created an empty indicator and make sure it calculates on bar close, Eust copy
and paste the following:
o protected o2erride 2oid ,n?ar'pdate&(
if&-urrent?ar ] +(
if &-loseX;Y JJ ,penX;Y(
?ar-olor J -olor.1ellowK
Page 4> of =; +49+5=*;9.doc+49+5=*;9.doc
else if &-loseX;Y V %ighX1Y(
?ar-olor J -olor.DarkSeaGreenK
else if &-loseX;Y ] /owX1Y(
?ar-olor J -olor.!edK
else if &-loseX;Y V ,penX;Y(
?ar-olor J -olor.DarkGreenK
else if &-loseX;Y ] ,penX;Y(
?ar-olor J -olor."aroonK
Three Bar #eversal *barre2ersal.Bip n7 1+;= 1;\5\+;;= &15;; 2olume(.Epg &screenstruck(
o &1;;5;=(
o for those who use stealth tra*ers 8 6ar reversal and use ninEa.
o "arks once the 4th or 5th bar is abo2e or below the *rd bar. ,b2iously there is some lag.
Three Bar #eversal aint6ar threebarre2ersalpaint2*.Bip &11+>;=( &foAthorn(
o &11+=;= D 11+<;= posted indicator superceded(
o * bar re2ersal paint bars &translated from code posted on page =+=(
o ,ption of turning on3off re2ersal painting and re2ert to 0nek style strong3weak bar painting.
o -an also select to show all re2ersals or Eust those following an opposite re2ersal.
o 0lso options for colors... the default colors are a bit craBy so adEust as you like.
Bar ti3e vol53e barrateindicator.Bip &notam( &1111;=(
o pro2ides a Utime 2olumeU in seconds for each bar in $inEaTrader.
o #t takes the current bar time minus the pre2ious bar time and con2erts it to seconds.
o So, slow bars are tall, fast bars are short.
$arket E3otion in*i2ator
o market\emotion\indicator\for\ensign.png market\e\motion\ind\pic.gif &opm<( &1;15;=(
o -hange colors as desired
1.8 ivot
o 271=;1>;;4.png 1+* pi2ot, blue J long, yellow J short. &QD-onner( &11+4;=(
o 271=;1>;;9.png &code( &11+5;=(
Three!6ar 6reak
o http:33www.ensignsupport.com3email31+>=.mhtml &opm<( &11+5;=(
o The 2ertical green line is the buy bar. The pink line is the sell bar.
o $ote that you donOt e2en ha2e to type it in as itOs a2ailable for download as U1+>=*?arsU in the
CD0 Template section of #nternet Ser2ices3Download tab.
o Dimitri working on updated 2ersion
Page 5; of =; +49+5=*;9.doc+49+5=*;9.doc
$arket E3otion in*i2ator &+5L, 5;L D =5L(
o marketemotionindicator.amibroker.Bip &swingnifty( &1;15;=(
1.8 ivot ! 1+* pi2ot.Bip eAplanation.png &11+5;=( &mark1(
o The same code as posted by QD -onner, translated for 0mibroker &see post for rules(
Anek Three Bar #eversal aint6ar &mark1( &11+5;=(
o bars re2ersal.Bip * bar re2ersal.png
o 1+* pi2ot.tAt 8 teAt
o my pi2ot1+* rules.tAt
Anek Three Bar #eversal aint6ar 2o*e as modified by ilu2+trade &mark1( &11+=;=(
o Set-hart,ptions&;,chartShow0rrows`chartShowDates(K \$&Title J Str6ormat&U^^$0"E__
^^#$TE!M0/__ ^^D0TE__ ,pen Lg, %i Lg, /o Lg, -lose Lg &L.1fLL( ^^M0/'ES__U,
,, %, /, -, SelectedMalue& !,-& -, 1 ( ( ((K re2ersal/J- V !ef&%,1(0$D&% V !ef&%,+( ,!
Page 51 of =; +49+5=*;9.doc+49+5=*;9.doc
% V !ef&-,+((0$D &% V !ef&%,*( ,! % V !ef&-,*((K re2ersal%J- ] !ef&/,1(0$D&/ ]
!ef&/,+( ,! / ] !ef&-,+(( 0$D &/ ] !ef&/,*( ,! / ] !ef&-,*((K re2ersal/ J
EA!em&re2ersal/,re2ersal%(K re2ersal% J EA!em&re2ersal%,re2ersal/(K 33'ncomment if you
want to plot the arrows 33PlotShapes& re2ersal%Pshape'p0rrow,color?lue(K
33PlotShapes& re2ersal/PshapeDown0rrow,color1ellow(K 33333333333333333333333333333333333333333333333333333
3333333333333333333333333333333333 33-omment if you donOt want to color the bars paint J ##f&-V,,
colorGreen, color!ed(K paint J ##f&re2ersal/, color?lue, paint(K paint J ##f&re2ersal%,
color1ellow, paint(K Plot&-, U-loseU, paint, style$oTitle ` GetPriceStyle&((K
o Same colors used in the pi2ot formula: blue candle signals up re2ersal, yellow candle signals
down re2ersal.
o The UcoloredU bar is the signal bar &you donOt need a confirmation from the following bar as in
ST 1+* pi2ot(, depending on how you want to use the signal, say you ha2e a colored re2ersal
long, you can enter at the close of the colored bar or you can wait and see if the neAt bar forms
a %igher %igh than the colored bar and enter 1 tick abo2e the high of the colored bar, say the
following bar doesnOt form a %igher %igh you might discard the signal.
Co*e for A3i6roker) Henkin Ashi (l5s 3ark's reversal (oints &nt+4( &11+>;=(
o -orrected copy
\SE-T#,$\?EG#$&U%E#I#$ 0S%#U(K
33 heikin ashi
%a-lose J &,W%W/W-(34K
%a,pen J 0"0& !ef& %a-lose, 1 (, ;.* (K
%a%igh J "aA& %, "aA& %a-lose, %a,pen ( (K
%a/ow J "in& /, "in& %a-lose, %a,pen ( (K
ADiff J &%a%igh %alow( P ##f&Str6ind&$ame&(,UQP1U(,1;;,1;;;;(K
barcolor J ##f&%a-lose VJ %a,pen,color?lue,color!ed(K
33 -ode from "ark1 starts here
re2ersal/J- V !ef&%,1(0$D&% V !ef&%,+( ,! % V !ef&-,+((0$D &% V !ef&%,*( ,! % V !ef&-,
re2ersal%J- ] !ef&/,1(0$D&/ ] !ef&/,+( ,! / ] !ef&-,+(( 0$D &/ ] !ef&/,*( ,! / ] !ef&-,*((K
re2ersal/ J EA!em&re2ersal/,re2ersal%(K
re2ersal% J EA!em&re2ersal%,re2ersal/(K
Page 5+ of =; +49+5=*;9.doc+49+5=*;9.doc
barcolor J ##f&re2ersal/, color.hite, barcolor(K
barcolor J ##f&re2ersal%, color1ellow, barcolor(K
33 -ode from "ark1 ends here
Plot,%/-& %a,pen, %a%igh, %a/ow, %a-lose, UU, barcolor, style-andle (K
&F5oteTra2ker FT,
Note- FT is 5na6le to (lot 5ser *efine* in*i2ators. Only alternatives are (aint 6ar st5*y to sho+ the
2olor of ran7e. Or e3ail s5((ort an* re45est the in*i2ator to 6e a**e*.
aintBars 9 &Co*e, &000*;( &>14;=(
-harts3Paint bar Editor3 0dd new
&rule 1(
if ?ar ,pen ] ?ar -lose set color to Green
&rule +(
if &?ar ,pen ] ?ar -lose( and &?ar -lose V ?ar %ighX1Y( set color to /ime
&rule *(
if ?ar ,pen V ?ar -lose set color to "aroon
&rule 4(
if &?ar ,pen V ?ar -lose( and &?ar -lose ] ?ar /owX1Y( set color to !ed
&rule 5(
Page 5* of =; +49+5=*;9.doc+49+5=*;9.doc
if ?ar ,penJ?ar -lose set color to .hite
sa2e and apply to chart with the paint bar indicator
PS. #f you use bright red and green for your standard bar colors rules + and 4 can be omitted.
'pdate: &>19;=( 6or the CT paint bar posted: !eaders may want to change the^if ?ar ,pen J ?ar -lose
set color to white._ rule to
if 0?S&?ar ,pen ?ar -lose( ]J ;.+5 set color to white. .here the ;.+5 is what would be a neutral body
siBe. The original rule will only show doEi.
?!neks comment3 .he neutral rule is inconse;uential for the purpose of hi%hs and lows but nevertheless
thank you for helpin% the B. users'
$arket E3otion in*i2ator 2an not 6e *is(laye* in FT
o 6ib retracement must be manually updated.
o eAample mnm pb.png 8 &000*;( &1;1=;=(
#nsert on chart + ea. %oriBontal line indicators, first %,D, second /,D &%.I(
connect %,D3/,D indicator lines with trend line
right click on trend line and add 6ib retracement to trend line
trend line end points must be manually adEusted to %,D and /,D
Desired fib retracement le2els set in preferences3charts36ibonacci
"arket Emotion eAample of what you could do in CT for a 2isual reference. Qust picked random
colors for the eAample. &000*;( eAample mnm pb.png
o These are the rules for the abo2e.
if &&&?ar -lose Day /ow(3&Day %igh Day /ow(( V ;.=5( and &&&?ar -lose Day /ow(3&Day
%igh Day /ow(( ] 1( set color to [;;+4;;
if &&&?ar -lose Day /ow(3&Day %igh Day /ow(( V ;.5( and &&&?ar -lose Day /ow(3&Day
Page 54 of =; +49+5=*;9.doc+49+5=*;9.doc
%igh Day /ow(( ] ;.=5( set color to [;;*=*=
if &&&?ar -lose Day /ow(3&Day %igh Day /ow(( V ;.+5( and &&&?ar -lose Day /ow(3&Day
%igh Day /ow(( ] ;.5( set color to [;;+540
if &&?ar -lose Day /ow(3&Day %igh Day /ow(( ] ;.+5 set color to ?lack
#t will not show the 2alues for targets, this would ha2e to be done manually with fib lines on your charts,
but it will gi2e you a 7uick reference on where you are in relation to the days range.
S$% 2rossover 2o*e an* (aint 6ars &see gohstrader post 1;1*;= for more information(
Page 55 of =; +49+5=*;9.doc+49+5=*;9.doc
The top paint bar is simply comparing itself the pre2ious bar close.
The bottom bar is a 1+3+53*3* S"# crosso2er.
The S"# &Stoch "omentum #ndicator( basically defines the short term trend while the top paint bar
gi2es u a precise entry.
This is used along with an automated buy3sell program with a fiAed3progressi2e tick stops and eAits. #f
you notice the chart using either ;.5 or 1.; range bars candlesticks.
S"# crosso2er code and the other code for the top pane
o Paint bar code top pane:
if ?ar ,penX1Y if ?ar ,penX1YV?ar -lose set color to [<;<;66
Paint bar code bottom pane &S"# -rosso2er(
if &Stochastic "omentum #ndeA&1+,+5,*,*(."ain ]
Stochastic "omentum #ndeA&1+,+5,*,*(.Signal( and
&Stochastic "omentum #ndeA&1+,+5,*,*(."ainX1Y ]
Stochastic "omentum #ndeA&1+,+5,*,*(.SignalX1Y( set color to [<;<;66
else if &Stochastic "omentum #ndeA&1+,+5,*,*(."ain V
Stochastic "omentum #ndeA&1+,+5,*,*(.Signal( and
&Stochastic "omentum #ndeA&+,+5,1+,5(."ainX1Y V
Stochastic "omentum #ndeA&+,+5,1+,5(.SignalX1Y(
set color to [<;66<;
#t should also look like this in CT:
Page 59 of =; +49+5=*;9.doc+49+5=*;9.doc
Please note that when you post the code into CT as a new paint bar for the S"# it will see the nati2e S"#
&lines that look like a fast stochastic( 1ou ha2e to open that indicator and make sure that the settings look
like this eAactly otherwise the S"# paint bar wonOt show up:
$ote: dll30P# for auto trading not a2ailable through gohstrader, 0nek posted .eld from &mEh(
#f recei2ing an error message when trying to sa2e the top pane indicator in CT paint bar editor
"ake sure that you make + separate lines for each function
Do this by copying the first line and sa2ing it and then click Uadd ruleU and then add the second line. 1ou
should ha2e this when youOre done
&Disregard the 1.; bar at the top as u can use any siBe bar you choose(
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The second line should look eAactly like this:
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aint 6ar 2o*e that (la2es a sha(e a6ove the 2an*le for a *oPi. &gohstrader( &111*;=(
o 'seful when a trend is in progress and it pauses before you reenter among other things.
if ABS&Bar Close!Bar O(en,Q0.001 set 2olor to 0ello+
Three Bar #eversal aint6ar eAample7tre2ersal bars.gif &000*;( &11+=;=(
Page 5> of =; +49+5=*;9.doc+49+5=*;9.doc
o 6irst attempt with this for CT paintbars and ha2e not tried it real time yet. %ope it works.
o rule one translated
if &?ar -lose V ?ar %ighX1Y( and &&?ar %igh V?ar %ighX+Y( or &?ar %igh V ?ar -loseX+Y(( and
&&?ar %igh V ?ar %ighX*Y( or & ?ar %igh V ?ar -loseX*Y(( set color to [6666<;
!ule two
if &?ar -lose ] ?ar /owX1Y( and &&?ar /ow ] ?ar /owX+Y( or &?ar /ow ] ?ar -loseX+Y(( and
&&?ar /ow ] ?ar /owX*Y( or & ?ar /ow ] ?ar -loseX*Y(( set color to 1ellow
Page 9; of =; +49+5=*;9.doc+49+5=*;9.doc
rofile 9 Anek
*;W years of age
"arried, two children with third child on the way, &Teen age and 9year old daughters( &1115;=(
o 1115;= announcement of good newsN .ife is with child
!esides in Punta del Este, 'ruguay, *blocks from beach beach.Epg
/i2ed many years in 'S, maintains a residence in 6lorida and the -aribbean
!ecently sold residence in /ondon
Summer time 2isits the lower 'S, Europe or the -aribbean
-osmopolitan lifestyle, has 2isited most e2ery country in the world
me.Epg 8 "usician Fin MegasG
anek.Epg 8 "usician FperformingG
stout.Epg 8 fa2orite be2erage
michell.ryan.Epg fa2orite fantasy
Trading %istory
o Started with e7uities &45 years(
o Transitioned to CCC 8 SP1 then to futures
o 1>+L profit 1TD +;;=
45 years daytrading to attain this le2el of proficiency
-onducted intensi2e studies and back testing on automation without success.
o $ot deterred until reaches his goal. Successful scalping automation is in a different league
1+th consecuti2e month of strictly emini trading &1", E!+ and ES( will be marked on 1+1;;=
o 'ndecided if transitioning to ES or $C
o Definitely not to E!+ with the upcoming transition from -"E to #-E.
&<;9;=( transitioned from 1" to ES
o 1" to ES transition was a stunning *+L increase performance margin
&>;<;=( Studied $C in great detail, $oticed itOs 7uite trending nature and eAplosi2e breakouts.
o -ons: bang for the buck in comparison to ES as far as commission
o Pros: Trendy breakouts3breakdowns
&>;>;=( anticipates commission premium to be compensated by the brutal breakouts3downs.
o $oticed a peculiarity of the $C that is 2ery compatible with 0%G and non 0%G setups
o Pre2iously traded the Cs on a daily basis a long time ago, should be familiar territory.
o Does not miss e7uities.
o To lea2e ES performance must increase by a minimum of +;L
o Transitioned to $C
Page 91 of =; +49+5=*;9.doc+49+5=*;9.doc
#e2o33en*e* #ea*in7 List ! &Anek,
Trading in the Tone by Douglas
Trading -hart Patterns by Suri Duddella
Tape !eading and "arket Tactics by .yckof
o ,nly book read on tape reading by 0nek
o ,I, nothing out of the ordinary.
o Tape reading is hard to teach, you donOt read a book, you Eust do it until it works.
!oss %ook
o!oss\%ook Tip of week <+*;=
o %ighly recommended and itOs nothing but Price 0ction.
o C: !oss %ook used as confirmation signal 0: 1es 0nek makes an effort to.
A**itional #e2o33en*e* #ea*in7 &H/I,
Trading 6or 0 /i2ing 8 Dr. 0leAander Elder
Technical 0nalysis of the 6inancial "arkets, Cohn C& +urphy
Encyclopedia of -hart Patterns, .homas +& ,ulkowski
Qapanese -andlestick -harting Techni7ues, Steve "ison
The -andlestick -ourse 8 Ste2e $ison
candlestick 7uick reference guide ;;1.pdf &1;;<;=( &%.I(
candlestick.pdf &1;;<;=( &%.I(
A**itional #ea*in7
day traders bible.pdf 8tape reading manual by !ichard .yckoff &cgar( &11+4;=(
linda bradford raschke tape reading.pdf article on tape reading &ilu2+trade( &11+4;=(
o /inda ?radford !aschke summariBes some of .yckoffSs work, including it....
A**itional 5tilities
charting annotation software http:33www.faststone.org36S-aptureDetail.htm
pattern recognition software &1;;+;=( &?boA trader(
-reate bold teAt in forum posts:
o Place teAt between ^b_ and ^3b_ but use the s7uare brackets, X Y
o 1ou can also change the siBe of teAt using siBeJ number tags &QaAon(
o 0%G additional notes ahgnotes.pdf &Swingnifty( &1;;<;=(
ET $e36ers to #esear2h
Stealth Trader <9;= three bar re2ersal &pg =(
6uturesTrader=1 ?elie2e recommended by 0nek
Piscuy 0nekSs trading partner 8 %ighly recommended by 0nek
Page 9+ of =; +49+5=*;9.doc+49+5=*;9.doc
o not so much of a trend follower, more a scalper who s7ueeBes e2ery possible drop out of those
bars with minimal risk.
o 0nything he says regarding price action, pay a great deal of attention.
o %e is a master at breaking the marketOs ass in a day to day basis yet ne2er seen him take a stop
bigger than 1.5 points.
F5estions on a*van2e* te2hni45e-
1. Say your small stop on a long entry &long based on perhaps + closes abo2e a resistance le2el( with the
stop at perhaps the low of the last + bars. .hen you reenter the long do you again wait for + more
closes abo2e the last highs, or Eust look for one moreH
+. Something that # think confuses many reading this thread is the 2arious application of stops. Some
support lea2ing a stop say a half point past the last swing until it gets mo2ed up to a new s3r le2el or
gets hit. ,thers suggest placing the initial stop halfway between entry and the last swing. 'sing Usmall
stopsU with the idea of a possible reentry sounds good until you wind up in a whipsaw. %ow do you
a2oid thatH # guess that is the real concern behind my first 7uestion. ?y the way, thanks again for
AnekDs .epl# -
#f # get stopped out on the first entry, as long as s5((ort is still s5((ortin7, # would be willing to reenter
on the first e2idence of strength returning to the play. "ost definitely, # will not let one 7uick stop kill my
concentration but limit my losses # must, a2eraging down # will not, e2er. 'sually the second attempt
works 2ery smoothly, no surprise there as they say the first wa2e is always for the newbieSs while the
smart money sits back waiting for some real confirmation. !emember, it's never a6o5t the 6est fill 65t
a6o5t the 6est feel. 0nd by feel # mean numerous confirmations, what you actually feel means nothing to
the market as you are an atom and the market is the uni2erse.
,b2iously you donOt go nuts and Eust buy the neAt drop because if itOs dropping its doing so for a reason. #t
is yo5r *5ty as a res(onsi6le tra*er to determine if the price drop is profit taking or a possible change of
direction, car siBe on time and sales is useful in this area.
The idea of an e2en Ubetter fillU is dangerous so make sure you are not fooled into such actions.
%owe2er, if a sign of stren7th ret5rnin7 is present thatOs another story. ,b2iously, if support is broken,
#tSs time to look at the big picture again and ree2aluate.... and by broken # assume by now you know #
mean a solid bar closing below it.
$otice, there is a huge difference between doing this and a2eraging down because as you ree2aluate the
scenario you ha2e already limited your losses. -ontrary to a2eraging down where you keep losing on
e2ery tick against you regardless if there is strength returning or not. 6rankly, a real dangerous way to
trade but since the accuracy is highK traders keep choosing this so called money management UtacticU. $o
offense but this is simply, stupidity.
The fact of the matter is that when you are 2orre2t in your e2aluation of price action, a great deal of the
plays will take almost no heat because you ha2e and must look at all angles before entering a play. 0fter
all, this is your hard earned money. # would rather waste it on stouts or my kids than some on some
random dude at the other side of my trade or worse, the broker. ThatOs what # look when entering a trade,
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2ery little heat, if any, and a pleasant ride to the neAt le2el. $aturally, # donOt always get this but this is
what # shoot for. The whipsaw you speak of is easy to a2oid because unless strength is found you stay on
the sidelines. 1ou do not go back in, P5st 6e2a5se it is) s5((ose*ly) a 6etter fill, you go back in when
price action gi2es you the green light.
#tOs hard to get multiple strength conditions without price actually following. #f the chop is present there
wont be much strength to notice right so donOt let this scare you. 6eel free to study the charts and confirm
my findings, in fact # encourage it.
.hen support is broken by wicks, that could possibly Eust be other traderOs stops hitting at market, donOt
let those wicks fool you, the close is e2erything, always. #n fact a 2lose R 1 ti2k at the e;tre3e of the
2losin7 6ar is even safer, thatOs a strong tip # Eust ga2e you, use it. .hy do you think hammers at support
with piercing wicks are so powerfulH -lear sign of eAhaustion. ,nce again, the hammer alone is not
enough, multiple confirmations at all times. .hyH ?ecause no one thing works by itself.
#f you wait for a retracement and then for strength to return if strength is really returning why on earth
would you need a big stop, itOs supposed to be strength at or near support right H
Some traders claim large stops are re7uired due to noise or 2olatility # say it is their ineptitude to read
price action correctly. $ot claiming supertrader here, took me a while to learn and accept this. #O2e said it
in the past and # will say it again and again, you beat this game with small losses and all kinds of winners.
Great accuracy is a bonus and something that comes much later, the real key here is riding those wild
runners remembering that price rarely goes up without retracing and that reentering a trade is not only an
option but a powerful one. An o(tion that 2an 6e a((lie* even +hen thin7s are 7oin7 +ell.
,ne more thing, if you do reenter a second time because the play is still 2ery much 2alid you better be
prepared to ride this one to a displacement bigger than the original one, assuming the fill was actually, a
UbetterU one. 0fterall, it is still the same swing.
/ot of opinions in this department, choose what you feel comfortable with but most important what works
best for your style and psychology. # can tell you what works for me but what works for you might be
something completely different.
1es, the siBe of the stop 2aries depending on how many ticks below pre2ious bar or bars # allow the stop
to take. 0nything remotely out of the ordinary and that would be something #Om not interested in taking
because # trade to win big and lose small as much as # can. #t sounds craBy but some of my best plays are
when % 65y ri7ht at s5((ort levels or short ri7ht at resistant areas) fort5nately they also re45ire the
s3allest sto(s) foo* for tho57ht. #n fact a dear friend and fellow trader only trades like that, is he
effecti2eH 1ou better belie2e it, is his accuracy rate high, absolutely not but he knows when itOs time to
pick support and when itOs time to pick resistance and his stops are based on confirmation not eAact
numbers, eAcept for his emergency stop of course. # like to do something similar but # always re7uire my
confirmation no matter how close to support or resistance the entry is. ,b2iously, today was not an
optimal day to be shorting resistance but thatOs easy to determine if you are a student of price action.
# might seem like a nice guy, and # think # am, but when #Om in the battlefield fighting other traders #Om the
meanest mofo you can imagine, # protect my capital like my children and when #Om right # want as much
as # can without neglecting any angles. # like to think #Om taking money from institutions and that no
institution is taking money from me.
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To conclude my friend, !isk "anagement is your best ally.
A**itional F5estions-
F5estion- %ow can you tell the difference from a retracement and a possible re2ersalH
Ans+er- #n theory itOs a UbetU, which is why itOs hard for some people to trade this way, they see price
going down, e2en if the support is not taken and they shPP their pants, or worse they want to short a
support that has yet to be broken.
,ne way to tell that helps is that retracement usually happen on lower 2olume where re2ersals usually
start on increasing 2olume. #f you using 2olume bars you will see them print 2ery rapidly in comparison
to when price action was calm.
F5estion- 0ssuming a strong trend and during the retracement #Od like to enter, what 2olume indicator
should # use to determine the trend will likely continueH
Trend lines, the more the better.
Support3!esistant Pi2ots
Time and sales
-ustom Price 0ction &learn to code Easy /anguage(, sometimes you must create these yourself.
E2erything else will place you at a disad2antage due to lag.
Do not gi2e up on price action, highs and lows is all you really need.
F5estion- .hat 2olume indicator to clarify where the retracement will lead toH
Ans+er- 'se the Uprinting speedU of the 2olume bars, also time and sales to see how hard those cars are
being sold3bought and last but not least consider a small *5 min chart, in a small corner, with a regular
2olume indicator. $othing too distracting but 2isible enough for confirmation. Study it before depending
on it, some cannot make sense out of 2olume and will claim it is useless when in reality itOs the trader
him3herself. # donOt depend much on it but on IE1 areas it can be 2ery re2ealing.
F5estion- Time and Sales info you are referring to is that on a D," &depth of market(H
Ans+er- 0ctually the TDS and the D," are separate data items &at least on TS, but some of the software
does integrate the two.(
F5estion- #s there anyway to take these bigger picture eAcellent D? setups with reduced risk &similar to
small risk in 1;;; 2olume chart(H &11;1;=(
Ans+er- There are different ways to play this.
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The bigger the chart, the bigger the stop but the bigger the target, so technically you play them the same
way, Eust adEusting car siBe to make up for the higher risk.
Typically when # see something interesting in the big charts # look for a harmonic entry on the smaller
chart to reduce risk e2en further.
!emember that re2ersal formations on meaningful support and resistance areas are eAtremely powerful
and this is eAactly where many pros milk it the most.
Good trader friend says the little people watch the small charts while the big boys the big charts. .e can
get an edge while watching both, at least # think so.
%owe2er, this re7uires the greatest patience as these special setups donOt come 2ery often.
F5estion- Scaling out of D?Ss &11;+;=(
Ans+er- #t all depends on what kind of D? we are talking about but # donOt like those close targets of
yours, # prefer price action to guide me as to when # eAit. There are many types:
"assi2e formation at the /,D after hea2y downside
0 little shit refusing to gi2e up on support
0 F.G in the middle of the trend signifying congestion of the current trend....etc.
0ssuming a massi2e one, then the answer is to be 2ery greedy because price is se2erely o2ersold &a term #
hate( and it has a 2ery good chance of being a trend re2ersal.
'se a 2ery fleAible trend line to guide you and watch how price makes higher swings, and ride it for as
much as you can. #deally # want my first target to be at the 2ery least as big as the re2ersal formation.
0fter that do not eAit until the trend line breaks and be aware of any upcoming maEor resistance points or
psychological areas &$COs ++5; comes to mind(.
#f it forms on a massi2e support area of the big charts, treat it like the Dragon Pattern once you see the
two legs at support and downtrend line break enter then add on the swing high confirmation a second unit.
This feels like DeEa Mu because it is eAactly how # played the Double ?ottom on 6,"- day at the ++1;
,nce again be 2ery aware as to where that D? formed and how significant the area is, this sentence alone
will make you a lot of money as you get more eAperienced.
F5estion- Trading the T/ breaks. ,ften you enter this trade after 1// and 1/% as opposed to + swings.
.hat criteria determine when to take this trade and when to a2oid itH &11;4;=(
Ans+er- Price tra2els through recently 2isited areas much more smoothly and swiftly &between support
and resistance( than when approaching new uncharted territories.
#t is only when it reaches a significant support or resistance area that it has important decisions to make.
'ntil that happens it can go anywhere because it knows the UneighborhoodU well. #t is familiar with its
Page 99 of =; +49+5=*;9.doc+49+5=*;9.doc
0s screen time and trading skill impro2es you will start noticing se2eral characteristics in price.
-haracteristics that will enhance your scalping skills and increase your targets.
6or instance e2en if price is falling hard there is a 2ery good chance the 2ery first test of support will hold
2ery well. 1et the second will probably ha2e less chance. #f the second holds as well as the first then a
potent pattern like a double bottom forms, and potent for a reason. $eedless to say the point is that certain
7uirks about price are picked up o2er time and when you know some of these you tend to create your own
intrepid plays and break a few rules.
0n up swing is Eust that one swing, an uptrend re7uires two.
Think of support and resistance as a barrier made of wood. The more times you push it the greater the
chance of breaking but Eust kissing it wonOt do it. Support by definition is meant to support, re2erse for
resistance and e2en though the trend is your friend you donOt actually know if the trend will be strong
enough to break the wood until it actually does.
#n my eAperience the stronger the support and the stronger the resistance the lesser the chances of
breaking in one test and the more times it will need to be hit to be broken.
#n fact, only consider support broken when that support becomes resistance or when that resistance
becomes support. /earn to identify the chop and noise, they drain our profits.
0nyway, # de2iated 7uite a bit from your original 7uestion but the fact is screen time allows you to cut
corners here and there and when you can finally form an edge from those 7uirks it is only logical to
eAploit it.
F5estion- !eason prefer tick32olume charts o2er time charts
Ans+er- "any things can happen in say a 1 minute bar, especially if the bar happens to be 2ery long.
.hen using tick or 2olume bars especially a small siBe you can dissect this info and draw patterns of
support and resistance compared to the long bar where # Eust ha2e open close high and low. That to me
is little info, # need more, # need to see what happened inside that bar. .hich were the points of
interest, the points of buying, selling, where the real pressure occurredH The more info the better.
#n the end, itOs a matter of choice. $e2ertheless, #Om a much better trader when using tick32olume
charts so if you cannot see the ad2antage # guess there really is no reason to switch. To me itOs the
difference between night and day.
F5estion- .hat factors do you take into considerations when anticipating . or "H
Ans+er- .ell first of all, the trend was down.
?efore that my . re2ersal long attempt had failed miserably and retraced 7uite abruptly, which is
unlikely for a good ..
"eans there are sellers on the look out.
,n top of that a bearish engulfing formed at the second top and if you notice, the mid swing was not a
higher low.
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/ast but not least big siBe market orders started flying on the tape 7uite rapidly and that Eust did it for
# use Time and Sales in $C with a filter to show 5;W siBe orders only &used to be =5( and pay 2ery
close attention to the rhythm of market orders. Mery powerful stuff, highly recommend it.
%n*ivi*5al St5*y
/hat lea*s (ri2e to 2on7estionN &1131<3;=( 8 .ork assignment
# could tell you my eAperience but donOt think it would do much good. This is something that you need
to see for yourself
0s an eAercise to impro2e your trading take a few hours to study the past few weeks in your
instrument of choice and try to notice any peculiarities that pre2ented price from forming a trend.
"ake sure the backtracking is done with an anchor chart.
# assure you, the effort will not go to waste as this is an area you do not want to trade. This patience,
this discipline is imperati2e for your trading.
#f you really want to take it to the neAt le2el, say by increasing car siBe, then you must impro2e your
accuracy and this is how you do it, by becoming an eApert at spotting the chop and e2en a greater
eApert by doing what needs to be done around that time. .hich is sitting on your hands, stretching
your legs anything but trading when there is a lack of a trendH
Polishing your skills in congestion3consolidation detection can make the difference between good and
greatness. ?etter yet, try to anticipate it. 0nticipation will gi2e you an edge.
Please post your conclusions in the Eournal so e2eryone can benefit from e2eryone.
"e2isively Broken Areas
Trading noise and 2olatility can make you see things that are not really happening.
6or instance, in order to determine when a point of interest is broken you need to ask yourself the
following 7uestions.
%ow meaningful is this pointH
o 1our anchor chart should be able to tell you. !emember your entry chart has many areas that
are unknown to the anchor chart. 1ou must learn what is meaningful and what it is not.
.hat kind of price action de2eloped after this e2entH
#Oll gi2e you two eAamples.
#f price has been bouncing off a downtrend resistance line in order to consider this area broken, price
at the 2ery least, must create an up swing 0?,ME the resistance area. 0nything else is suspicious.
Price simply passing through this is not enoughK this is stop hunting, nothing else, unless the abo2e
#f price has UbrokenU support a downswing below support must be created and that pre2ious support
must become resistance. 0nything else is suspicious as well. Price simply passing through this is not
enoughK this is stop hunting, nothing else, unless the abo2e forms.
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E2er heard traders say, U,"G the Dow lost 1*;;;HU This is newbie talkK nothing is lost until the
battlefield has blood scars on it. Qust because a scared bull ran away does not mean the bears won the
A 2o36ination of 6oth ans+ers sho5l* 6e yo5r 75i*an2e.
Tren* line S+in7s
tl.swings.Epg 6ollowing screenshots to aid in 111<;= work assignment:
Screenshot includes one of 0nekSs price action tools to smooth out the action so you can see how those
highs and lows de2elop. &This is Eust a representation to aid 0nek with the highs and lows 2isuals and
filter some of the noise so he doesnSt ha2e to calculate the micro le2el constantly.
#tOs not Eust buy the blue and sell the red. That is only done with the trend and confirming you ha2e the
correct trend line backing you up. #f those align, itOs a money machine but then again that is what 0%G
teaches here so no real big deal. Perhaps with the blue and red dots it becomes ob2ious to the naked eye,
but in the end 0%G is the engine pro2iding those profits.
Tool is used to pre2ent the constant measuring of highs and lows. 1ou canOt be faster than price but
whate2er you do with price you instructed the computer to do so because she can do it faster. Screenshot displays the entries and eAists based on the tools and the trend lines. 6i2e
winners &couple of home runs( and 1 small loss.
Oo5rnal #ea*ers 2on2l5sions- &%n2o3(lete,
er+anekcokescomments.Epg 8 cokes annotations which 0nek replied FPerfectG
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The Iey to S522ess
%s a**in7 to +innin7 (ositions) 3asterin7 a si3(le +orkin7 strate7y) soli* *is2i(line
an* of 2o5rseS
U#f you are right, take the humble side you will help the other fellow.
#f you are wrong, take the humble side and you will help yourself.U
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