How To Spot Trading Channels

How to Spot Trading Channels http://tradestix.com/resources/reports/how-to-spot-trading-ch...
How to Spot
Trading Channels
In This Report
How to Generate Consistent Income with Options
Geoffrey A. Smith, DTItrader.com
Using Keltner Channels to Find Low-Risk Options Setups
Chuck Hughes, ChuckHughes.com
How to Trade the Opening Range to Identify Breakouts
Geoff Bysshe, MarketGauge.com
The "Rabbit Trail" Channel Trading Strategy
Ben Lositer, TradingStrategyGuides.com
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How to Generate Consistent

Income with Options
Geoffrey A. Smith, DTItrader.com
There are many ways to trade options or use options in trading. Many people trade options for the sole reason that they are
much cheaper than trading stock. It is kind of interesting that it is rare to find an options trader that would ever buy a stock,
or a stock trader that would ever buy an option. I believe that both camps are wrong. You need to be able to trade both, or
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at least take advantage of both. The reason for this is that if you trade stock, you can minimize risk and maximize gain
using options. If you trade options, you do not get the full benefit of the stock’s move if you are right, and you “run the
risk” of being assigned the stock, which scares option traders, and it shouldn’t. I’m not going to get into the fundamentals
of options, but let’s digress for a paragraph or two to get some understanding before we talk about the strategy I want you to
learn.
Buying is the opposite of selling. Long is the opposite of short. Bull is the opposite of bear. There are only two things that
matter in options; if buying an option, it must go beyond strike (in the money) for you to be paid on expiration day, and if
selling an option short, you can end up long or short the underlying stock at the strike price. If you keep these to things in
perspective, your option trading will go a little smother.
If you buy a call option, you are buying a right, not an obligation, to purchase a stock at a specific price (the strike price) on
or before a specified date. When buying a call option, you want the stock to go higher. If you buy a put option, you are
buying the right, not the obligation, to sell a stock at a specified price on or before a specified date. When buying a put
option, you want the stock to move lower. Now the opposite side. If you sell a call option (going short the option) then you
are selling the right to buy to another party, and if they exercise their right to buy, you must sell to them (you are taking on
an obligation) and you could end up short the stock unless you already own at least 100 shares of it. Selling a call option
when you do not own the stock is called a naked call, but if you own the stock it is a covered call. If you sell a put option,
then you are selling the right to sell to another party, and if they exercise their right to sell, you must buy from then. If you
are short the stock, you will buy it back (this is a covered put), but if you are not short the stock, then you could end up long
the stock.
Now that we have that out of the way, let’s use these concepts to try and make a little money. Let’s make the assumption
that we want to buy a stock. Let’s pick an expensive stock to prove a point and then we will look at a “normal priced”
stock. Everyone has heard of Amazon, so we will start with it. Below is a daily chart of Amazon (AMZN). You can see
back in January when their earnings came out. Notice since then that Amazon moves up to the 860 area and then back
down to the 840 area. So let’s say we want to buy AMZN when gets back down to 840. Now we can put a buy limit in,
good till canceled,and wait for AMZN to sell back off and exercise our limit order. Then when it gets back up to 860, sell it
and make $2000 for every 100 shares we buy. If we buy the stock, we will need to put a protective stop below 830 (notice
that is when earnings came out), so we will risk about $1000 to make $2000. Nice trade, pat yourself on the back. Now
let’s do it using options.
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Daily AMZN Chart
Same trade with a twist. Instead of putting in a buy limit, let’s sell a 840 naked put option. Now this does two things; a) if
AMZN gets to 840 or lower at expiration, you will end up long the stock (that is what is desired in this case), and b) by
selling a put option, you will bring in money. In other words, the market is going to pay you to place a buy limit on a stock
(that is pretty cool). Below is an option chain for AMZN. Based off the chart, AMZN is trading at 848.96, so AMZN is
going to have to drop 9 points to exercise us. So it would probably be good to wait a while before selling the put to get
more premium, but since we cannot put extended time in an article, we will use what we have (the concept is the same).
Look at the Mar 31 ’17 options. The 840 put is selling for around 4.10 (Last Trade). So if we put an order to sell at 4.10
and are filled, we will bring in $410 of credit. If by Mar 31, AMZN does not get to 840, we keep the $410 just for trying.
Note: if AMZN drops to 848 from 840, the put option will increase in value and your account will show that you are losing
money on the option. This is not the case unless you buy it back at a loss. Remember the end game, you want to be long
the stock from 840. AMZN will have to be below 835.90 for you to start to lose money (840 – 4.10 (premium brought in
from the sold put) = 835.90). Let them exercise if they can, that is what we want.
If we get exercised, then we will put a stop below 830, around 829.89 (just below 830 by a little bit), Risking $1,011. We
will then sell a 860 covered call and probably get another 4.00 or so. So total premium brought in will be $810. If AMZN
drops and stops us out, we will need to buy back the covered call (that now has turned into a naked call), but since AMZN
has dropped, the call will decrease in value and we will probably be able to buy it back around 1.00 or so. So we get $700
in premium and lose $1,011 on the stock for a total of $311 loss. Now, if AMZN goes up, and we get called away at 860,
we get $2000 off the stock and $810 off the options for a total of $2810. So in this case, we are risking $311 to make
$2810. Which scenario do you like best, a 1:2 risk/reward or a 1:9 risk reward? This is the luxury of options.
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AMZN Option Chain
AMZN is a bit extreme since it is an expensive stock and is quite volatile. Let’s go to the blue chips and grab a stock like
Caterpillar (CAT). Below is a daily chart of CAT. Notice it has support around 92 and resistance around 95. Next support
is around 90.50, so we will use 90.19 for a stop if we get filled. Using the same technique let’s look at selling the 92 put. In
the option chain below, the 92 put is going for around 0.80. Again, if it does not get there we get to keep the $80 and try
again. If we get exercised, we place the protective stop at 90.19 and sell a Apr covered call at 95 for around 1.21. There are
weekly options on CAT, however, we want to be able to finance the protective stop the best we can. By going out to the
monthly option, we can get there. If we add the two options together (0 .80+1.21=2.01) we will bring in about 2.00. If we
are long from 92 and need to risk to 90.19, we risk 1.81 on the stock. The premium we bring in will cover the protective
stop. If we get stopped out, we buy back the short call and will probably lose around $25 or so depending on how much
time is left in the option. If CAT moves up and we get called away at 95, we pick up $300 from the stock and $221 from the
option premium for a total of $521. Again we can have the standard 1:2 ratio, but the 1:20 ratio of this trade seems much
better.
Daily CAT Chart
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CAT Option Chain
We do have to throw the glass half empty theory in here since there are those who are pessimists and will ask, “what if CAT
is at 85 when you get exercised, or what if AMZN is at 830 when you get exercised? What will you do then?” You’ve got
to love those people. First, panic never solved anything so please get that out of your mind. But think about it very
quickly. We did bring in premium when we sold the put, so we have reduced the risk somewhat. Next question is, if you
just put a buy limit in and is sold off to that level, what would you normally do? You could sell a covered call at entry (90
on CAT or 830 on AMZN) and if you get called away, then you will make nothing on the stock but get to keep the premium
from the options, still not losing anything. You could sell at the money calls and it will reduce your loss considerably,
especially on AMZN but not as much on CAT.
Another thing, what if you end up long the stock, it does not stop you out, but is not called away from you. Even better in
my opinion. You brought the money in from the naked put and the covered call, and now you get to sell another covered
call. Before selling the same strike price, however, look at higher strikes, you may be able to get the same premium as
before if the stock has moved higher.
There are many ways to scan for stocks. Many have their own favorite stocks that change over time. You will find some
stocks that do not have options. I do not like stocks that don’t have options for the simple reason that I cannot minimize my
risk and maximize my gain. The key is to trade stocks that have some volatility so that the option premium is higher. Coke
(KO) has options but since the stock does not move much the option premium is low and therefore you cannot finance the
protective stop. Below is a scan for stocks out of the DTI RoadMap™ software. It scans for optionable securities that are
between $50-$600, and are recommended buys/sells between Mar 23 and May 8 (it is sorted buy highest P&L).
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Starting in the middle to the end of April, stocks begin to move again after the “when in May go away” occurrence is over.
Look at the Standard Deviation (Std Dev) column. The higher the standard deviation, the more volatile the stock. So I will
look at these to see if they are trending with the overall markets, and if so then they are prospects for trading.
Market direction is also important. You can do this same strategy on the short side as well. When markets are bearish like
we saw back in 2008-2009, selling calls many times did not get exercised, however, if they did, then sell a covered put to
use the premium to finance the stock. But direction is important. First look at the year open, month open, and week open,
and compare it to the current price of the stock. If the stock is above all three it is strong, if below all three it is weak. If it
is between some of them then look at the indexes (S&P, Dow 30, NASDAQ) and see if they are doing the same. If they are,
then wait until a clearer picture can be seen. Below is a chart of the S&P and 3M. Notice on the left chart that the S&P is
above the year, but not the month and week open. However, 3M is above the year open, month and right at week open. If
the market rallies from here, 3M would be a good candidate to sell puts on and see it runs faster. But the S&P will need to
begin to rally and take out some resistance levels before doing that.
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S&P and 3M chart
The same can be done for futures contracts if you have experience with them. I like using options on bonds to help pay for
the utilities each month. Utilities, no one likes to pay for them, but they are necessary. To help pay for the utilities, trading
bond futures options seem to work well. Let’s discuss bond futures and their options a bit before we get to trading them.
Bond futures are a commodity that trades in 1/32 increments and are worth $1000 per point and $31.25 per tick (1000/32 =
31.25). It controls a $100,000, 30 year US treasury bond. It is traded by the bond price, not the interest rate of the bond,
though, it is interest rate sensitive. So if interest rates go higher, bond price goes lower, and if interest rates go lower, bond
prices go higher. Bonds open at 17:00 and close at 16:00 CT. The price is displayed in decimal form or with a dash; 147.23,
or 147-23, and sometimes 147’23. The 23 is in 32nd. So the price is 147 and 23/32. If you multiply that by 1000, the bond
is worth $147,718.75. Par value is $100,000, so in this case you would be paying a $47,718.75 premium. Economic new
will affect bonds, as they look for inflationary (rising interest rates) or deflationary (falling interest rates) indications.
Options on bond futures trade in 64th increments. They trade as long as the bond futures are open and trading, so you can
actually get out of your trade in the middle of the night, if need be. They are still $1000 per point but since they are half of a
bond future tick, then they trade $15.625 per tick. The option are no different than equity options except the price per
point/tick is different and you are only controlling one bond futures contract, as opposed to 100 shares of stock. You will
also notice that the strike prices are every point. This should give us enough back ground to discuss the Utility trade.
There are weekly options on the bonds. Some platforms only offer the monthly options, so beware of that. We are looking
for income, so we will be selling the options to bring in premium. We want the option to deteriorate over the time of the
option. So if we sell a bond option at 16 (16/64) we will bring in $250. If we buy back the option at 5 (5/64), we pay
$78.125 for it. The difference is the profit, 250-78.125 = $171.875. If we do this 2 to 3 times per month, this will generate
$400 - $500 per month, per contract, to help pay the utilities.
To set up the trade, first we don’t want to risk more than $300 per contract in any trade. So if we sell an option at 16, then if
it doubles or goes 19 ticks against us, then we will get out of the trade. If using weekly options, we will not be bringing in
much premium, so we will look for something between 10 and 20 ticks on the options ($150 - $300), and look to get out
between 0-5. Next we need to look at the trend of bonds. Here is a daily chart on the USM17 (June 2017, 30yr Treasury
bond future):
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Notice bonds are in a downtrend. So selling call options will be the safest play since bonds will have a tendency to go
down. We will try to sell options at the resistance point (R1 or R2). Of course, the closer it is to the resistance point the
more premium that will be brought in and the further away from that point brings the least premium unless we go out
further in time. If your platform only does monthly options, then I’d use resistance point further back, but if using weekly
options, use the closest. Another thing to keep in mind, find out when the big economic news is coming out since bonds
will react to it.
Look at the option chain below. Our R1 is around the 151-16 (151.50, since 16 is half of 32) strike. The Mar 31 call option
is trading at 63/64. The 152.50 is at 15/64. The 152.5 is between the R1 and R2 on the chart and a little less risky since
bonds have to rally another point to get to that strike. So you have to make a decision on which option to sell. Let’s be a
little more conservative and do the 152-50 strike. The current bid and offer are 14/64 – 16/64. If we put an order to sell at
15/64 and get filled, we will bring in about $234.38. If today is Mar 27 and bonds are trading at 150-27, we will have to
wait 5 days for the option to expire. As long as the bond futures stay below 152-16 then the option will lose value each
day. If there is a big economic news day this week, we will need to either get out and take the profit we have, or be ready to
exit if the bonds rally off the news.
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Doing this trade a couple of times a month can cushion the blow of the bills that come once a month. We can’t win them
all, but remember, we will not risk anymore than $300 per contract. So one loss will scratch one win and a half for the most
part. If you have never traded options on bonds, paper trade it for a couple of weeks to see how it goes. Once you get the
hang of it, start paying some bills.
We have walked through a couple of ways to bring in a little income and reduce the risk by financing the stops. Buying
equities is a good thing, but being able to gain more on the position from using options can help boost the account. If we
expand to trading options on futures, we can help pay those utilities a little and have more for the grandkids when they
come over. Remember that there is always risk in trading and we will not ever be 100%. But taking a little loss is not so
bad when the return is much greater.
Get DTI's Trade of the Day Video emailed to You FREE Daily!
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About Geoffrey A. Smith

Geoffrey Smith is DTI’s Chief Instructor. He teaches Level 1, 2, and 3 Core Curriculum Classes, he’s a regular educator and
instructor on the 24-hour Educational TradeRoom, he does GPS Coaching, and he’s one of Tom Busby’s first students.
An active trader and investor for 25+ years, Geof focuses in futures, equities and option trading including trading
commodity option futures. Geof took an instrumental role in developing the DTI Method. The Platinum Experience core
level classes took first place in SFO Magazine and Trader Planet’s STAR awards in the best trading courses category. Before
coming to DTI, Geof was a pipeline engineer working in Oklahoma and Texas.
Learn How to Trade with

Channels and find the
12 of 48 11/06/2018, 19:55
the best strategies suited to

your trading personality.
Practice the strategies with help from coaches and fellow traders.

Once you've got it down, we will pay you to trade with our money.
Click Here to find out how.

Back to Table of Contents
Using Keltner Channels to Find

Low-Risk Options Setups
Chuck Hughes, ChuckHughes.com
One of the simplest but most effective entry timing indicators are the Keltner Channels which can quickly and easily be
downloaded from investing websites such as www.StockCharts.com. Steps for down loading the Keltner Channels follow.
The Keltner Channels function as an overbought/oversold indicator that can help us select a buy point for stocks and call
options that are on a EMA System ‘buy’ signal. Overbought is a term used to describe a stock that has been increasing in
price over a period of weeks or months with very few price pullbacks. Oversold is a term used to describe a stock that has
been decreasing in price over a period of weeks or months with very few prices increases.
Stocks in a price up trend do not advance in a straight line. There are always price corrections or retrenchments along the
way. Like the tide there is an ebb and flow in the price movements in stocks. This is the natural order of the markets . . .
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stocks advance and then the price declines inevitably as profit taking occurs.
Stocks can remain in an overall price up trend as these price declines occur as long as the price decline is not severe enough
to cause the 50-Day EMA line to cross below the 100-Day EMA line which signals a trend reversal from a price up trend to
a price down trend. When this occurs a stock should be sold.
The Keltner Channels are a valuable timing tool as the channels can help us prevent buying stocks when they are in an
overbought condition. When stocks become overbought they are vulnerable to profit taking and minor price declines within
the context of remaining in a price up trend. The Keltner Channels can help us avoid buying stocks when they become
overbought and instead buy stocks and call options when they become oversold.
Let’s take a look at an example of the Keltner Channels and how they can help us select our entry point. The price chart
below displays the daily price movement for Apple stock along with the three Keltner Channels. There is an upper channel,
middle channel (which is the dotted line) and a lower channel.
When a stock trades near the upper channel it is an indication the stock is becoming overbought and will most likely
encounter selling pressure and then trade back down towards the middle or lower channel.
When a stock trades near the lower channel it is an indication the stock is becoming oversold and will most likely encounter
buying pressure and then trade back up towards the middle or upper channel.
If you are considering buying Apple stock or weekly call options, you don’t want to buy if the stock is trading near the
upper channel as there is a good chance the stock will encounter selling pressure near the upper channel and then decline in
price.
It is better to wait until the stock trades near the middle or lower channel before buying. This results in a better entry as the
stock most likely will trade back up towards the upper channel.
Note: Apple trade examples were taken prior to the Apple 7 for 1 stock split and prices are not split adjusted.
Circled below are examples of Apple stock trading above the upper channel. When a stock is trading above the upper
channel it is better to wait for the stock to decline towards the middle or lower channel before buying.
When a stock is trading near the middle or lower channel there is a good probability that it will rally back towards the upper
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channel.
In each of these examples, after the stock traded above the upper channel it declined back towards the middle or lower
channel within a week or two except for the example that occurred in mid-July. In this example the retracement took a little
longer as the stock traded near the upper channel in mid-July and did not retrace back to the middle channel until mid-
August. This happens occasionally in strong bull markets.
Currently Apple is trading above the upper channel and has stayed above the upper channel for several weeks not presenting
any buying opportunities. In our experience this is very rare. Currently Apple stock would have to decline to about 236
before it touches the middle channel.
Identifying the Keltner Channel Price Levels

Whenever you download a Keltner Channel price chart, the price chart will list the price levels for the Lower, Middle and
Upper Channel. Currently the Lower Channel price level is 229.39 (circled below). The Middle Channel price level is
236.01 and the Upper Channel price level is 242.64 (circled below).
Lower Channel Currently at 229.39 Price Level
Middle Channel Currently at 236.01 Price Level
Upper Channel Currently at 242.64 Price Level
If you are considering buying Apple stock or weekly call options, you would want to wait until the price of the stock
declines to the middle or lower channel price level which is the 236.01 to 229.39 price level in this example.
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Actual Trade Examples Using the Keltner Channels

Our brokerage account trade confirmations below list purchases we made for Apple stock. The confirmations list the date of
purchase and purchase price.
We used the Keltner Channels to help select our purchase entry point. We bought Apple stock and call options when the
stock was trading near the middle or lower channel which lowers my entry risk of buying stock when it is overbought and
due for a price correction. These actual entry points are circled below.
You can see from the price chart that Apple stock did not decline in price much below our entry points. Using the Keltner
Channels to help time our entry points reduced the risk of our stock purchase. With Apple stock trading near 249 we now
have a substantial profit for our stock purchases.
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Timing Our Stock and Call Option Purchases

We have found the Keltner Channels to be a valuable timing tool that helps us select a low risk entry point for our stock and
call option purchases. Buying a stock when it is trading near the lower or middle channel may help prevent buying stocks
when they are in an overbought condition and are vulnerable to price declines.
We like to buy a stock when the stock is trading near the middle or lower channel and is oversold. When a stock is oversold
there is a good probability that it will rally back towards the upper channel providing us with a lower risk buy point.
We avoid buying a stock when it is trading near or above the upper channel and is overbought. When stocks become
overbought they are vulnerable to profit taking and will most likely encounter selling pressure.
The price charts that follow show examples of entry points for call option purchases using the Keltner Channels. The stocks
in these examples were giving is an EMA ‘Buy’ signal and retraced near the Middle or Lower Keltner Channel.
Our brokerage account Transaction Reports show the date that we purchased a call option and that date is circled on the
price chart above.
Notice how the Keltner Channels allowed us to get low risk entry points for our call purchases as the price of the stock
rallied after our call option purchase.
AMZN Retraced Near Middle Keltner Channel
Which Enabled a Low Risk Entry Point
Stock Rallied After Entry
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Wells Fargo on EMA System ‘Buy’ Signal
Retraced Near Lower Keltner Channel
Which Enabled a Low Risk Entry Point
Stock Rallied After Entry
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Timing Bearish Entry Points

The Keltner Channels can also be used for timing bearish entry points. The Keltner Channels indicate an overbought
condition for a stock/ETF when the stock/ETF is trading near the mid to upper channel or above the upper channel.
Stocks in a price down trend do not decline in a straight line. There are always price rallies along the way. Stocks can
remain in an overall price down trend as these price counter trend rallies occur as long as the price rally is not strong enough
to cause the 50-Day EMA line to cross above the 100-Day EMA line which signals a trend reversal from a price down trend
to a price up trend. When this occurs short positions should be closed out.
The Keltner Channels are a valuable timing tool as the channels can help us prevent establishing short option positions
when the underlying stock/ETF is in an oversold condition. When stocks become oversold they are vulnerable to counter
trend rallies within the context of remaining in a price down trend. The Keltner Channels can help us avoid establishing
short positions when the underlying stock/ETF becomes oversold and instead establish short option positions when the
underlying stock/ETF becomes overbought.
The price charts that follow are examples of stocks/ETFs that are in confirmed price down trend but became temporarily
over bought when the stock/ETF price rallied back up to the middle or upper channel presenting numerous low risk entry
points for establishing short option positions.
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Yes, the Keltner Channels clear the clouds of confusion and pave the way to clear decision making. Once you understand
the channels of success it will become very clear when you should establish bullish and bearish option positions.
The Keltner Channels are a great tool that can help you establish low risk entry points for your option trades which in turn
can increase the profit potential and accuracy of your option trades!
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On the following page we will show you how to download the Keltner Channels and make them yours! For us, the Channels
are the end all. There is no better guide to help me push away confusion and doubt. Securing a low risk entry point in
trading is huge! This tool is invaluable! Learn it, embrace it, and use it!
In summary, we have experienced many years of success using the Prime Trade Select process to select option trades with
the best profit potential. I hope you learn and embrace this valuable trading tool.
Downloading the Keltner Channels
Click “Update” and the Apple price chart with the Keltner Channels will be displayed (see price chart on the following
page).
Special Offer
Get My Free eBook "Options Trading Made Easy" Here!
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About Chuck Hughes

Chuck Hughes has been trading stocks, options, currencies and commodities for 30 years. He is also a seven time World
Champion Trader, winning more awards than anyone else in World Trading Champion history.
In his first two years of trading, Chuck Hughes made over $460,000 in actual profits, using a simple trading system that he
himself developed. The most amazing thing about this is that Chuck Hughes started out with only a $4,600 trading account.
Chuck was an airline pilot when he first went into trading, wanting only financial security for his young children. In just a
few short years, he had achieved just that by basing all of his trading choices on his own easy trading system. All Chuck
Hughes wanted was safety in his investing, but he got much more than that. He was able to retire from his job as a pilot in
his 40s.
Learn How to Trade with
22 of 48 11/06/2018, 19:55
Channels and find

the best strategies suited to
your trading personality.
Practice the strategies with help from coaches and fellow traders.
Once you've got it down, we will pay you to trade with our money.
Click Here to find out how.

How to Trade the Opening Range to

Identify Breakout Opportunities
Geoff Bysshe, MarketGauge.com
Bigger Profits Are Easier When Your Trades Are Immediately Profitable
Welcome, if you’re a day trader, swing trader or options trader this article is for you because…
You’re about to discover a focused approach to anticipating the markets’ next move, along with trading tactics that lead to
immediate profits and trade entries you can be confident in trading whether you are a new trader or have years of
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experience.
Think about how you feel, and how you tend to trade, when a new trade is substantially profitable immediately after you
enter it.
Now contrast that feeling with how you feel, and tend to trade, when the market is about to close and you’ve been in a trade
for a few hours that is trading at a loss.
If you’re like most traders, the immediately profitable trade creates a desire to “trade this one right.” Your thoughts are on
how to make the most of the apparent opportunity. You’re also enjoying trading.
The losing trade scenario, on the other hand, is disappointing. You’re more likely to be thinking about how to change the
trade, rather than confidently sticking with your initial plan. This is common even among experienced and disciplined
traders who know that losses, when managed properly, are not a problem.
Regardless of our trading style or instrument (day trading, swing trading, investing, stocks, ETFs, options, forex, etc.) I
believe that we all enjoy trading more when our trades are immediately profitable.
More importantly, I also believe that immediate profitability makes it easier to be more disciplined, which in turn leads to
more trading success.
Immediate profits are only one important result of having great entry strategies and tactics.
Even more important than immediate profits is having enough confidence in your trade to ensure you trade with discipline.
When you have enough confidence in your trade, “immediate” profits becomes a relative term. This means that even if a
trade initially trades at an unrealized loss, you won’t have that feeling of disappointment.
How To Create The Confidence In Your Trade That Eliminates The Frustrating Feelings Of Unrealized
Losses And Reduces Real Losses!
Successful traders confidently believe they are doing the right thing when they take a loss.
Since beginning my trading career in 1990 on the floor of the New York commodities exchanges, and spending years in a
multi-billion dollar hedge fund, I’ve worked with hundreds of professional traders and thousands of active individual
investors. In this time I’ve found that confidently taking a loss is a common theme among successful traders at every level –
floor traders, fund managers, and active individual traders.
One goal of this book is to show you how you can have the confidence of a pro in determining and executing on your stop
losses, so you can improve your profitability. There are several ways to accomplish this level of confidence, but this book is
narrowly focused on a very specific way of identifying great trade entries with stops you can have confidence in.
A great trade entry is one that has a risk level (a stop loss)and three important qualities:
1. You believe that you should exit the trade when the stop level is hit. This leads to consistently executing your plan.
2. The potential loss is small relative to the expected return when profit targets are hit. This leads to more profitable
system.
3. The frequency of getting stopped out is in line with frequency and expected return when profit targets are hit. This leads
to a more predictable equity curve and more confidence in trade execution.
A simple starting point for selecting a stop level that can provide all three of these critical qualities of a
great trade entry is to have your stop loss be outside of the current day’s range.
The low or high of the day creates an emotionally powerful “line in the sand” that seems to naturally command the respect
of traders. Think about how you feel when markets make new highs or lows. Are you more inclined to pay attention and
respect the “trend of the day” at this point?
In my experience of working with successful traders, most traders are more likely to feel confident that their stop is safe
when it’s beyond the current day’s trading range. This alone can improve your trading because it leads to less second
guessing and moving stops prematurely.
Additionally, traders tend to feel more accepting of the fact that their trade is not working and exit the trade as they planned
when it corresponds with a break of the current day’s range. This leads to more disciplined trading and less second guessing
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your stops when they are hit.
However, better trading is not simply placing your stop below the low of the day if you’re long, or above the high of the day
if you’re short! You need more of an edge to determine when the high or the low of the day has been put in, and which days
you should use this tactic.
In other words, you must identify the RIGHT DAY and TIME to use the day’s range as your stop.
You’re about to discover a reliable way to determine the day’s high or low early in the day. This creates powerful
opportunities for all trading styles to use these levels for great stops that are quick and easy to identify and, as discussed
above… leads to less second guessing.
For example:
If you’re a day trader… when you are able to buy near the low of the day, you’ll find many opportunities for trades that
will have very profitable reward-to-risk ratios that don’t require the market to do much more than simply return to the high
of the day!
If you’re a swing trader… you’ll be able to pinpoint the exact days to take very low risk trades that are more likely to
enable you to avoid holding positions overnight that are not yet profitable. In addition to having more of your first days in
the trade be profitable, you’ll be able to identify trades that have multi-day or more trend potential, creating huge profits
relative to your initial stop level.
If you’re an option trader… you’ll be able to identify market turning points for precise timing of directional option
strategies, and enjoy the benefits just listed for the day traders and swing traders.
Use This Floor Trader’s Secret Charting Tactic To Anticipate The Market’s Highs, Lows, Trends &
Reversals
It may seem hard to believe, but this trading tactic can be so simple that I used it to “chart the market” without a computer! I
didn’t have a computer standing on the trading floor in the early 1990’s.
Despite its simplicity, the principle works because it is based on the driving force behind the most important price points of
any trading day. That force is human emotion – fear and greed.Remember your feeling of excitement when the market in
which you hold a position goes racing your way right as the market opens? How about the feeling when the market gaps
open in the direction of your position? Nice way to start the day.
And have you also had the frustrating experience of the excitement from a market open in your direction turn to
disappointment as the market suddenly reversed? If you’ve traded for any period of time then you’ve certainly felt the
anxiety of a profitable trade swinging into a losing position in the opening half hour of the trading day.
Fortunes and egos are inflated and burst during the opening several minutes in many markets all the time. Even if you have
or don’t have a position in the market, the opening minutes of the trading day can be an emotional roller coaster. This is
exactly why the first 30 minutes of the trading day turns out to be very statistically reliable in determining the day’s high or
low.
In fact, 50% of the time the S&P 500 will make its high or low of the day within the first 30 minutes of the trading
day.
I’m using the S&P 500 as the example, but you will find other markets (stocks, ETFs, and futures) to have a similar
statistical bias that you can profit from and here’s how…
Stop and think about some of the implications of this data.
● The first 30 minutes is only 8% of the trading day, yet 50% of the time it determines the day’s high or low. This makes it a
very significant time of the day for anticipating reversals and setting price levels that will likely remain as the high or
low for the entire day.
● If you are going to set your stop below the low of the day, you give yourself a big statistical edge by waiting for the first
30 minutes of trading to finish.
Plus, you can make this statistical edge even stronger by combining it with a few simple indicators.
We’ve found easy ways to identify market conditions that indicate with 83% accuracy that the high or low will be
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determined in the first 30 minutes of a particular day. Even more impressive is that when these same criteria are used, you
can determine that the low of the day has been set after the first 30 minutes 62% of the time. These are the best days to use
the low of the day in your stop.
The Opening Range Defined

From this point forward in this book I’ll refer to the high and low of the first 30 minutes of the trading day as the “Opening
Range” or the “O.R.” The Opening Range can be calculated using other time frames as well. Common time frames include
2, 5, and 15 minutes, and even the first hour.In our trading at MarketGauge we focus on the 2, 5 and 30-minute Opening
Ranges. They all serve specific purposes. For example, the 30-minute O.R. is the best place to start for buying against the
low of the day (or selling against the high) for day traders and swing traders.
Of course you’ll use charts on your computer to figure out the day’s Opening Range, but now you can see how floor traders
could use this tactic even without access to a computer. As illustrated in Chart 1, the OR high is simply the high for the day
after the first 30 minutes of trading, and the OR is the low of the day at that time.
Chart 1: O.R. Defined
How To Objectively Evaluate Any Trading Day To Anticipate the Day’s Trend
For Bigger Profits & Avoiding Losses
Every day in the market is different. It presents its own trend, opportunity and challenge depending on your perspective.
The direction and magnitude of the market’s moves from day to day can seem random to the untrained eye, but the market
does follow patterns and leave clues indicating its most likely direction.
The Opening Range is a trading tactic that pros have used for decades to read the market’s mood so they can anticipate and
profit from the market’s intra-day moves.
When you “chart the market” or look at it through the lens of the Opening Range, you’ll have an objective perspective on
whether the bulls or bears are in control on any given day. This perspective begins with a very powerful understanding
that the O.R. high and O.R. low levels will be critical support and resistance levels for the rest of the day.
With this understanding of market behavior you can anticipate that these levels will also represent levels where markets will
reverse or accelerate into big moves. If you look at the trading day with this process you will be on the right side of the
biggest market moves, and avoid getting hurt by them.
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How To Read The Market With The O.R.

To begin using the O.R. to anticipate the market’s next move follow these simple rules.
First, let the market establish its 30-minute O.R. high and low. Even after the Opening Range period, keep a neutral bias
while the market trades within its O.R.. As you learn more you’ll know if an O.R. has a bullish or bearish bias.
Don’t Miss, or Get Hurt By Trend Days

Next, wait for the market to attempt to trend by breaking the O.R. range. A successful breakout beyond the O.R. will
indicate a trend day is forming. For example, if the market breaks below its O.R. low, you should consider it a trend down
day unless and until it rallies back over its O.R. low level.
Too many traders lose money in big down days because they don’t have an objective method like the O.R. rules to
determine that the market is in a down trend which should not be bought, and in fact, it should be expected to continue
lower.
Chart 2: Downtrend Day
You will NEVER GET CAUGHT IN A MAJOR MARKET DECLINE if you only initiate your long trades above the
O.R. low and stop out if a new daily low is hit. Buying markets that are under the O.R. low is equivalent to trying to find a
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bottom when the bears are in control.
This is much riskier than finding a bottom when the market is in a neutral to bullish mode (i.e. over the O.R. low).
Additionally, any rally from below the O.R. low will have to get through the resistance of the O.R. low (see chart 2).
As you now know, the O.R. low is often significant support until it is broken, and becomes a significant area of resistance
once broken.
As a result, it is very common for rallies during a down trending day to roll over at the O.R. low, and resume the day’s down
trend.
Use Opening Range Reversals To Buy Near The Low, Or Short Near The High
When you combine Opening Range Reversal tactics with the emotional benefit, and statistical edge of placing your stops
outside the day’s range as discussed earlier…
You have a very effective approach to entering low risk trades that have a high probability of working consistently!
An Opening Range Reversal (ORR) describes a condition when the market has reversed against an O.R. high or low
sufficiently to anticipate that the low or high of the day has been set, and it can therefore be used effectively as a stop for
your trade. The basic ORR trade setup that I’ll cover here occurs when the O.R. low is touched or broken followed by a
rally back over the O.R. low. As you become more familiar with how markets trade near their O.R. lows you’ll discover
many profitable trading patterns, but to get started you only need to know one simple pattern.
A Simple Pattern That Puts Money In Your Trading Account Quickly Because It Pinpoints Reversals
Chart 3: Higher Candlestick Close
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Is America's 2nd Largest

Private Employer in Trouble?
Approximately 440,000 Americans work for this single company.
But recently, a pattern appeared on their stock - an "X" pattern that has shown up on every major bankruptcy of the last 15
29 of 48 11/06/2018, 19:55
years.
If you own a share in this company,

it's vital you hear this story.
This pattern is so effective at spotting intraday reversals that I use it for more than identifying O.R. Reversals, but right now
our objective is to understand when to buy markets near their low of the day using the ORR and this pattern.
I use 5-minute charts for this pattern.
At MarketGauge we call this pattern the Higher Candle Close (HCC). It occurs when a 5-minute bar closes over the high of
the prior bar.
Yes, the pattern is that simple, and it works extremely well. But the secret to why it works so well is that we’re using it
when it occurs near the O.R. low!
WARNING: Like most good trading tools, this pattern works well when used in the right market conditions. If you use this
pattern randomly it can be frustrating, and even be as annoying as turning on your car’s windshield wipers when the sun is
shining! You must combine it with the O.R. Reversal setup.
When I share this secret setup I’m often asked…
Does it work on 1-minute charts? (probably because traders are always looking to act quicker, and cut risk tighter).
Well, at MarketGauge we also trade with, and teach how to use 1-minute charts for more advanced O.R. patterns along with
price and time confirmation, but we DO NOT use this HCC pattern on 1-minute charts.
So, to get started all you need is a 5-minute bar chart or candlestick charts, which you can find on any charting platform, and
the next step - a simple way to identify the best Opening Range to trade with the HCC.
The Best Opening Range Conditions For Consistent Profits

When you’re looking at an O.R. for a potential trade think of it like finding a place to live. You’ll ask yourself 3 basic
questions.
1. What does it look like?
2. Where is it located?
3. What’s the price?
A “good looking” O.R. for an ORR trade has a well-defined O.R. low price level. Remember from earlier in this article, the
O.R. works best when the market is active and emotionally charged with either fear or greed.
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This is demonstrated in the charts by the existence of volatility and/or big volume. Therefore, a welldefined
O.R. low is one that has multiple 5-minute bar lows near it, or a big range bounce from it, or big volume near the O.R. low
level. All of these indicate that traders are reacting to the O.R. low, and imply that if the market breaks the O.R. low, and
then begins to rally (as defined by the HCC), it is time to trade! Chart 3 above is a good example of this.
“Good location” for an ORR has two considerations
1. The low of the day should be close to the O.R. low. The reason you want the low of the day to be relatively close to the
O.R. low is because a good ORR trade defines its risk with a stop under the low of the day, and its entry over the O.R.
low. In an ideal situation the distance from the entry point to the low of the day should be a fraction of the market’s
average daily range.
2. The O.R. low and/or the low of the day should be in a good location relative to important daily chart key reference points.
This is very easy criteria to use to filter out the best ORR trades, and one of the most powerful determinants of the
predictable profit potential.
Simply put… The best ORR trades occur in the direction of the daily trend and at support and resistance levels that can be
identified on the daily charts.
Chart 4: AMZN’s location lined up with support from the prior day and the important key reference point of the
Floor Trader Pivot (not visible on this chart).
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“The price” is your entry price and your risk! It doesn’t take long to become good at quickly
identifying good looking Opening Ranges in good locations.
This is a skill and tactic you can apply to almost any market and easily adopt into your existing trading rules, or simply
trade it as described here, which is to apply the HCC pattern to determine the trade entry.
The Simple Entry Trigger That’s Been “Hidden” in Your Charts All Along
As you start looking at the markets using the O.R. along with the HCC pattern in the way I’ve described in this book, you’ll
find that some trades are such obviously great opportunities that you’ll want to be more aggressive, and get into the trade as
quickly as possible.
You’ll also find trades that look great, but you’d like to have a little more confirmation before entering (i.e. general market
conditions may be bearish).
Now that you know what the HCC pattern is, and where to best apply it, we can focus on the actual “entry price” trigger
point for what I’ll describe as the HCC-ORR trade.
There are actually 3 potential trigger points for an entry. They are all slight variations of the same basic pattern of trading
over the prior bar’s high, but they give you the ability to be more aggressive vs. waiting for more confirmation that the
market has turned up.
IMPORTANT: For the purposes of this lesson, it is assumed that any entry trigger point described here is also above the
O.R. low.
Maximum Confirmation
The entry trigger with most confirmation, and the one I’d start with, is to wait for the 5-minute bar to close over the prior
bar’s high, AND then enter when the market trades over the HCC high. This means your entry trigger is actually a trade
over the high of the HCC bar.
I will almost always use this trigger if the close of the HCC is not convincingly above the prior bar high, or if the high of the
HCC bar is very close to the closing price. In these cases you’re not increasing your risk by very much, yet you’re getting
some extra confirmation the price is moving your way.
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Chart 5 below shows an example of a big range HCC reversal with confirmation.
Chart 5: A good wide range HCC with confirmation
No Confirmation
There are times where you will not want to wait for maximum confirmation described above. In this case the trigger is
simply the close over the prior bar high and the entry is on the open of the following bar.
This is can be used for situations where the HCC bar’s close is significantly above the prior bar’s high, and it may even have
good volume. In other words, the market has clearly demonstrated a reversal.
In fact, sometimes you will get this pattern, and have the opportunity to wait for a pullback in price to the high of the prior
bar to be able to enter a lower price.
However, if you do not have a good demonstration of range expansions and or volume this can be risky. Chart 6 above is an
example of a HCC at the ORR that did not confirm and continued lower.
“Jumping The Gun”

As the subtitle “jumping the gun” suggests, this is getting in before the HCC is complete. With some experience in trading
ORR patterns you’ll be able to get away with this, and get in early on some trades, but be careful. I would prefer to have
unusual volume in situations where I use this approach.
The trigger when you jump the gun is to enter when the market trades over the prior bar high. So you’re not waiting for the
close in what you expect to be a HCC bar.
6 Steps To Identifying and Executing Low Risk, High Profit Potential ORR Trades With Confidence
It’s time to pull everything together, summarize the key steps to initiating an Opening Range Reversal trade.
1. Let the 30-minute O.R. form.
2. Focus first on the Opening Ranges that are in a good location relative to the daily chart’s trend and support levels.
3. Identify the Opening Ranges in a good location that also look good for an ORR trade. This means they have well-defined
support at the O.R. low.
4. Use the HCC as your entry trigger.
5. Define your risk as being under the low of the day. Give the market room to break the low of the day by a small margin
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and reverse without stopping you out!
6. Set your initial profit targets. If you are a day trader, take at least partial profits near the high of the day, and move your
stop to no loss after the market moves in your favor. If you’re a swing trader, you’re initial target may be higher (and
your stop may be lower).
Identifying Trade Opportunities In Seconds With This Simple Chart Display

In my charting platform I have a window that shows both the daily chart and a 5-minute candle chart with volume. As you
know the candles on the 5-minute chart are not required, but they make it easier to see where a bar closes relative to the
prior bar high.
With these two charts in plain view it only takes a few seconds to spot when the O.R. low lines up with key daily levels, and
when a HCC forms.
Don’t Sabotage Yourself By Setting Your Trades Up To Fail

You can evaluate every day’s price action with the perspective of the O.R. to anticipate the market’s next move, but the key
to profiting from it is knowing how to spot high probability setups like the one I’ve revealed in this article.
Remember my analogy from earlier – You don’t use your windshield wipers on a sunny day!
The ORR combined with the HCC entry is an incredibly powerful pattern, but every O.R. low will not reverse. However,
you now know how to select good looking ORR patterns. And you know that the location of the O.R., in the context of a
bullish daily chart, is the easiest way to identify the most reliable and highest potential ORR trades for both the day trader
and swing trader.
Be selective! If all the trade ingredients are not there, wait for the next one.
Chart 7: With a daily chart display next to the 5-minute you can see “good location” easily.
SPECIAL OFFER: LEARN AND EARN MORE!

If you’d like to learn more about trading reversals and trend day patterns that leverage the power of the Opening Range,
visit MarketGauge at the special link provided below.
MarketGauge provides free webinars, and more advanced O.R. training that will show you:
✓ How to determine volatility based stops that help to avoid frustrating stop losses
✓ How to profit from big trend day breakouts, and avoid false breakouts
✓ Which indicators dramatically increase the statistical edge of the O.R.
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✓ Rules for more precise reversal patterns for quicker entries
✓ Time and price confirmation rules to minimize failed trades
✓ How to trade quicker O.R. time frames to profit from gaps and moves within the first 30-minutes of the day
✓ And more!
For a limited time, you will find more training and a special offer here:
Get Your Free Report and Webinar Replay Here!
About Geoff Bysshe

Geoff Bysshe, co-founder of MarketGauge, began trading in 1990 on the floor of the NY commodities exchanges. He spent
several years as an independent floor trader.
He left the floor to trade and develop quantitatively based strategies for equities at Millennium Partners, a multi-billion
dollar hedge fund in NY. In 1997 he co-founded MarketGauge.com to provide market analysis and trading tools to
professional traders.
MarketGauge has since expanded into providing individual active traders and investors with trading systems, tools,
education and actionable market analysis.
The "Rabbit Trail" Channel Trading Strategy
Ben Lositer, TradingStrategiesGuides.com
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This is the complete Rabbit Trail Channel Trading Strategy GUIDE.
This guide will give you in depth details and plenty of examples to help you learn this strategy and implement it into your
trading arsenal.
My goal is to get you understand how important channels are in trading, and why this strategy will make you some great
returns once you perfect it.
I also want you to enjoy your time reading this guide so I will try not to go on too many rabbit trails while I teach you this
great strategy.
Let me give you a little background as to how I have developed this strategy..
I learned very quickly that what happens in the past on charts, means a lot as to what will happen in the future.
Just check out the chart below.
Its an obvious uptrend but something it happening along the way..
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You saw the price levels were hitting certain points and bouncing straight back up ↑ or straight back down↓ during this
uptrend.
And would you look at that..
Line #1 and Line #2 are Parallel to each other. The price would hit a line and then either go straight back down or up into
what is called the channel.
And what happens when the price movement breaks this channel is huge!!
Which is why I took the time to developed this simple trading strategy for you..
And I am now going to share this with you because I want you learn this strategy and implement it into your trading system!
So let’s get down to the basics of this strategy..
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And learn why I called this the: The Rabbit Trail Trading Strategy.
What is a Channel and why is it important for this strategy?

A channel is simply a price movement that uses support and resistance in the past to validate what it will do in the future.
The price movement will hit these points (resistance or support) and “bounce” back into the channel.
Kind of like this...
These skid marks go back and forth on this highway but never veer off of the road. Remember this visual when you are
looking for channels on your charts.
Now since you know a little bit about a channel and what it is, let’s take a look at the different types of channels that form
on charts.
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Is America's 2nd Largest

Private Employer in Trouble?
Approximately 440,000 Americans work for this single company.
But recently, a pattern appeared on their stock - an "X" pattern that has shown up on every major bankruptcy of the last 15
years.
If you own a share in this company,

it's vital you hear this story.
There are three different types of channels:
Ascending Channel
Descending Channel
39 of 48 11/06/2018, 19:55
Horizontal Channel
There needs to be at least two support and resistance levels to validate a channel!

The support and resistance points are marked on the pictures above.
You can see in the three examples above that they all have at least 2 levels of each of these .
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This is a diagram of what support and resistance looks like.
When the market moves up and then pulls back, the highest point reached before it pulled back is now resistance. The same
concept can be applied for support but only the opposite.
When constructing these channels, ALWAYS remember that both lines need to be parallel to each other. Do not force trend
lines to look like a channel. If they aren’t parallel then it is clearly not a channel that formed.
Helpful information: If you are completely new to this type of trading dive into some charts and do some channel work.
Simply go back in time on the charts and draw yourself some channels. If they match what you see above, perfect! Keep
doing them! Once you did about 100 of these it should be fresh on your mind and you will be ready to master a trading
strategy that mainly focuses on these channels.
So now since you are the master of channels let’s look at what this strategy is all about..
Rule #1: Draw a channel on a 4 hour or 1 hour chart.

The first thing you need to do to get this strategy started off is you need to find a channel on a four hour or one hour chart.
Remember there must be two resistance and support points to validate a channel.
This strategy can use many currency pairs. Make sure you search through all of them. Many say that they “only trade
EURUSD.” There is no reason for that..
Get in the charts and see for yourself! There are channels everywhere. This strategy will work with any currency pair. The
opportunities are endless..
Sorry for that rabbit trail, let’s get back to this strategy!
So below is a prime example of a horizontal channel. This is a AUDNZD chart taken on a 60 minute time frame.
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Not too bad. So basically all you are doing here is drawing parallel lines on the tops and bottoms of the price movement.
This example hit a quite a few resistance and support levels which means that when it breaks this channel it has the potential
to make a huge move!
I added the color where the channel is highlighted. You need to make sure that both of your lines are parallel to each other.
Rule #2 Identify If there is a Breakout on a 1 hour chart.

The way you find the trade is to find a breakout of the channel that you drew on your chart..
In a perfect world the support and resistance levels will hold on forever..
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But the world isn’t perfect..
So that’s why we have what is called a breakout.
Below the breakout candle is marked. This was taken on a one hour chart. In this strategy the one hour chart is what we use
to find a breakout.
This breakout happened on the top of the channel. So that means you will BUY.
If the breakout happens on the bottom of the channel then you will SELL.
Great! We have breakout candle let’s get in the trade and follow the rabbit trail to pip glory!
Not so fast..
Rule #3 Wait for a Pull Back on a 15 minute Chart.

Why wait? Because the market is money grabbing machine, and they want your hard earned cash!
You wait because sometimes the market does a “head fake” and turns against you.
Look at the example below for proof of this.
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So if you would have got in this trade right when it broke out of the channel you would soon have got stopped out.
That is why it is so important to Wait for it to pull back.
So back to our original example, you see below the pullback we are talking about.
This is where many people struggle. They see that it broke out so they want to click BUY or SELL right now!!!
Think about the sayings you have heard since you were a child, “Patience is a Virtue,” Or “Good things in life take Time”
Just be patient and wait…
This trade would not have burned you, but countless other trades would have!
Think about the pull back as the candle that closes towards the channel. So if the pull back is above the channel you are
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looking for a bearish (red) candle. If the pull back is below the channel you are looking for a bullish (green) candle.
*We only need one of these pull back candles on a 15 minute chart. Once this happens move on to the next step.
Rule #4 After Pull Back, Make Entry.

We are getting so close to getting on our rabbit trail to make some serious pips!
Our lines are drawn, we identified the breakout, and waited for the pull back. It is now time to make our trade.
The criteria to make an entry after a pull back on a 15 minute chart to enter a trade is that there must be two 15-minute
candles that support our trade.
If it is a BUY trade we want to see TWO bullish (up) candles after the pull back.
If it is a SELL trade we want to see TWO bearish (down) candles after the pull back.
In our example we are using we would need to see two green bullish candles after a pull back to enter a trade.
Below is where we would enter.
Enter after the two bullish 15 minute candlesticks close.
So again, we WAIT for a pullback candle to close and then we need two BULLISH (green) candles to close to many an
entry.
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The chart above clearly shows you that there was not a clear
two consecutive bullish candles until it came back down and then made its aggressive move upward which resulted in 4
consecutive bullish candles.
REMEMBER this is a 15 minute time frame chart.
*If you plan to use this strategy as is and not choose to tweak it then save this chart above as a guide for your entry
criteria!
I recommend you use the color candles for this strategy that way you can easily see which candles close bullish or bearish.
Trust me it will help you a lot when you are looking for your entry point.
So now since we have our entry point down let’s find the stop loss placement.
Rule #5 Stop Loss Placement

This is probably one of the most important rules of the strategy.
You always need to place a stop loss somewhere for a reason. If you are throwing in stop losses 5 to 10 pips from your entry
order just because someone you read that somewhere, then you are without a doubt treading some dangerous waters.
In a Buy The stop loss will be placed in the channel below the last support point.
In a SELL The stop loss will be placed in the channel above the last resistance point.
In our example you can see where the stop loss was placed.
46 of 48 11/06/2018, 19:55
That way if it does come back in the Channel it will hit the support level and end up going back up in a bullish movement.
Rule #6 Ride The Rabbit Trail to 50 pips!

The last thing you need to do is know when to exit the trade.
This strategy goes for a 50 pip target.
So when you make your entry, you calculate 50 pips take profit mark and place it.
The price movement to your target is now called the rabbit trail.
The rabbit trail may be 2 hours, or could take as long as two days. You have your target so really you have nothing else to
do but sit back and watch your trade make you some money!
47 of 48 11/06/2018, 19:55
Stay in the trade and remember your rules. You are going for a 50 pip breakout trade!
So to recap, here is what needs to happen in order for you to enter a trade with the Rabbit Trail Trading Strategy:
If you need to, Copy these rules down in front of you when you are using this strategy. It really makes it easy once you get
this system perfected.
Rule #1: Draw a channel on a 1 hour chart.
Rule #2 Identify If there is a Breakout on 4 hour or 1 hour chart.
Rule #3 Wait for a Pull Back on a 15 minute Chart.
Rule #4 After Pull Back, Make Entry.
Rule #5 Find a Stop Loss Placement.
Rule #6 Ride The Rabbit Trail to 50 pips!
I Hope you find great success with this strategy and always remember to only be risking no more than 2% of your account
at a time per trade.
To help you understand this strategy, I am going to show three trading examples that followed this strategy.
Each trade would have landed you +50 pips each!
THE SPECIAL OFFER
Get the Complete Rabbit Trail Strategy Guide Here!
About TradingStrategiesGuides.com
We want to help traders and investors of all levels, all walks of life, all types of goals and motivations, anywhere in the
world.
It is our personal mission to help you be successful in trading, by finding a trading strategy that we have developed, that best
fits your personality. We want you to be successful because we care about other people and their goals.
The strategies that we have developed will not only help you be successful, but also they will give you detailed plan in
every trade that you make.
Please feel free to give us feedback on our strategies, and tell us what worked best for you.
48 of 48 11/06/2018, 19:55

How To Spot Trading Channels

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How To Spot Trading Channels

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How to Spot Trading Channels http://tradestix.com/resources/reports/how-to-spot-trading-ch...

Geoffrey A. Smith, DTItrader.com

Using Keltner Channels to Find Low-Risk Options Setups

Chuck Hughes, ChuckHughes.com

How to Trade the Opening Range to Identify Breakouts

Geoff Bysshe, MarketGauge.com

The "Rabbit Trail" Channel Trading Strategy

Ben Lositer, TradingStrategyGuides.com

How to Generate Consistent

Geoffrey A. Smith, DTItrader.com

Daily AMZN Chart

AMZN Option Chain

Daily CAT Chart

CAT Option Chain

S&P and 3M chart

About Geoffrey A. Smith

Learn How to Trade with

the best strategies suited to

Practice the strategies with help from coaches and fellow traders.

Click Here to find out how.

Using Keltner Channels to Find

Chuck Hughes, ChuckHughes.com

Identifying the Keltner Channel Price Levels

Lower Channel Currently at 229.39 Price Level

Middle Channel Currently at 236.01 Price Level

Upper Channel Currently at 242.64 Price Level

Actual Trade Examples Using the Keltner Channels

Timing Our Stock and Call Option Purchases

AMZN Retraced Near Middle Keltner Channel

Which Enabled a Low Risk Entry Point

Stock Rallied After Entry

Wells Fargo on EMA System ‘Buy’ Signal

Retraced Near Lower Keltner Channel

Which Enabled a Low Risk Entry Point

Stock Rallied After Entry

Timing Bearish Entry Points

Downloading the Keltner Channels

Get My Free eBook "Options Trading Made Easy" Here!

About Chuck Hughes

Learn How to Trade with

Channels and find

Click Here to find out how.

How to Trade the Opening Range to

Geoff Bysshe, MarketGauge.com

your stops when they are hit.

Stop and think about some of the implications of this data.

The Opening Range Defined

Chart 1: O.R. Defined

How To Read The Market With The O.R.

Don’t Miss, or Get Hurt By Trend Days

Chart 2: Downtrend Day

bottom when the bears are in control.

Is America's 2nd Largest

If you own a share in this company,

I use 5-minute charts for this pattern.

When I share this secret setup I’m often asked…

The Best Opening Range Conditions For Consistent Profits

1. What does it look like?

3. What’s the price?

“Good location” for an ORR has two considerations

Chart 5: A good wide range HCC with confirmation

“Jumping The Gun”

1. Let the 30-minute O.R. form.