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THE OFFICIAL MAGAZINE OF TECHNICAL ANALYSIS

TRADERSWORLD
GEODETICS, again! Feb/Mar/Apr 2019 Issue #72

Pullback Pattern Study

Harmonics and
Periodicity

Time's Up

Market Barometer

Robert Pardo Legendary


Trader and Algorithmic
Software Pioneer Risk and Fall of a Crypto Star:
How Cycles Predicted the Crash of Nvidia
Key Principles of Trading
and Investing The Transneptunian Paradox and
Precision Timing in the Markets
Interview with Alon
Avramson Review of Rob Hoffman’s Pro Trader Pack

Managing Risk Like a Did W.D. Gann use Planetary Hours as


Professional Trader Short Term Cycles?
Avoid Blowing Up
Your Trading Account Strategic Investment Mixology
Introduction to Hidden Geometry

WWW.TRADERSWORLD.COM February/March/April 2019 1


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Editor-in-Chief
Larry Jacobs - Winner of the World Cup Trading
Championship for stocks in 2001. BS, MS in Business and
author of 6 trading books.
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Contents
Traders
Traders World
World

ONLINE EXPO
Feb/Mar/Apr 2019 Issue #72
GEODETICS, again!

Pullback Pattern Study by Daniele Prandelli 14


Online Expo
Harmonics and Periodicity by Eric Penicka 19

Time’s Up by Rick Versteeg 29

Market Barometer by George Krum 39

Robert Pardo Legendary Trader and Algorithmic


Software Pioneer 45 The Traders World Online Expo is now continu-
ous. Instead of having a large group of speakers
Key Principles of Trading and Investing by Thomas
Barmann 50 at one time, we will now space it out and have
only one speaker give a presentation at a time.
Interview with Alon Avramson 62
We felt that bunching a large number of speakers
Managing Risk Like a Professional Trader to Avoid together created information overload and was
Blowing Up Your Trading Account by Dr. Barry confusing and was not to the benefit to you the
Burns 66
trader.
Risk and Fall of a Crypto Star: how Cycles Predicted
the Crash of Nvidia by Lars von Thienen 73 From the presentations we are planning you’ll
The Transneptunian Paradox and precision Timing in learn from different knowledgeable top traders.
the Markets by Tim Bost 79

Review of Rob Hoffman’s Pro Trader Pack Elite for Trading Methods, Ideas & Strategies for:
MetaStock by Larry Jacobs 87 - Stocks
- Futures
Did W.D. Gann use Planetary Hours as Short Term - Options
Cycles? by D.K. Burton 92
- Currencies
Strategic Investment Mixology - Developing the - Precious Metals
Holy Grain Portfolio by Steve Selengut 96

Introduction to Hidden Geometry by Ron Jaenisch We are using brand new video technology that
70 will broadcast live video to Facebook, YouTube &
Instagram Live at the same time.
Another Look at Finding Money to Save by Jacob
Singer 78

Elliott Wave Analysis & Price Forecasts 2018’s


Please register FREE at our site
Decline a Correction Within Secular-Bull Uptrend by TradersWorldOnlineExpo.com
Peter Goodburn 117

Mindfulness in Trading: Building the Emotional Self We can then email you the “Pre-Scheduled Links”
Control to Achieve Your Potential by Rande Howell and the following:
123

How to Test Your Strategy on Any Market and Put Speakers Name
the Probabilities on Your Favor by Steve Wheeler
129 Topic
Description
The Foundation For the Study of Cycles by Andrew
Pancholi 136
Date and Time
The Cosmic Setup: modern Day Astrology Look at
2019 by Ray Merriman 145

WWW.TRADERSWORLD.COM February/March/April 2019 6


10 www.tradersworld.com Jan/Feb/Mar 2013
WWW.TRADERSWORLD.COM February/March/April 2019 7
THE TEXTBOOK OF GANN ANALYSIS...
The Path of Least Resistance
THE UNDERLYING WISDOM & PHILOSOPHY OF W. D.
GANN ELEGANTLY ENCODED IN THE MASTER CHARTS
BY DANIEL T. FERRERA
MOST DETAILED COURSE ON GANN’S MATHEMATICAL & GEOMETRICAL TOOLS!
“We use the square of odd and even numbers to Intent of This Gann Course
get not only the proof of market movements,
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 How to square the natural whole numbers (odd and powerful technical trading tools. It presents all of Gann’s
even), along with their midpoints. foundational mathematical and geometrical techniques
 How to define prices scales by "The Basis of Money” expressed in his master calculators, angles, trend channels,
 How to set the proper scale, and use the 1x1 angle to squaring processes, pattern formations, spiral charts and much
square or balance price with time. more, leading to the clear identification of profitable Trade
Setups, important trend indications, and critical price/time
 How the natural squares (even & odd) sub-cycle
culminations.
would not be possible without understanding the
The material further elaborates a number of Gann’s
Spiral chart (Square of 9).... expressing the square
most advanced geometrical tools and applications, such as the
root as an "inner square" time period. natural squares (even & odd) sub-cycle and the square root as
 How to assimilate all of these elements together as a an "inner square" time period, . It provides both practical and
sequential methodology once the "basis of Gann's actionable trading signals and a valuable structural perspective
forecasting method" has been worked out. to any market on any time frame.
 How Gann’s price squaring techniques and master With 300 pages of detailed text, over 150 charts and
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W. D. GANN’S SYSTEM OF CHART READING & PATTERN TRADING
Dan Ferrera’s new trading course, The Art of the Trade, provides thorough instruction in W.D. Gann’s key
trading methodology, Pattern Trading. It teaches “Chart Reading” the way Gann himself did it, demonstrating how
to trade the fundamental market patterns identified by Gann. This strategic approach to trading provides advantages
that allow the trader to react to the markets in real-time, without indicator lag. Pattern Trading eliminates lagging
mechanical indicators, which are always based on what the market did in the past and not the present. This style of
“Form-Reading,” as Gann called it, allows one to make decisions in real time, as the opportunities develop on the chart.
The course provides a clear set of rules for reading these market patterns to determine entry, exit, risk
management, and trade management as determined by the recognition of a set of fundamental market patterns identified
by Gann. This approach differs from Gann’s mechanical swing indicators and from his long-pull position trading,
providing a different perspective and alternative trading style, that most often used by Gann himself. The technique is
equally effective on any time frame, so is as valuable for day-traders as it is for daily traders. It also generates a larger
number of trades than his other trading methods.

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WWW.TRADERSWORLD.COM February/March/April 2019 8


GEODETICS, again!
Last year a discussion of the trials and tribulations of Facebook and the other social media
companies was undertaken using Geodetics as it pertained to the natal chart. Within that article
it was noted that in January 2019, the companies would experience even greater troubles than
they were in 2018. It was also noted that the government could begin the process of tighter
regulations on the social media companies.

Those outlooks have held true and are even now playing out. The troubles experienced in 2018
have morphed from data sharing/selling to claims of bias and restriction of free speech. Further,
there are claims of irregular application of the “terms of service”. This weekend has seen a
bubbling to the surface of those claims as events in Washington DC brought to light the differing
standards being applied.

In a July post on Facebook, the Declaration of Independence was deemed violent and abusive
but on January 21 and 22 calls for violence against teenagers were considered within the terms
of service. This epitomizes the bias and the conflicts that were expected to playout this January.
Over the next month there will be some resolution of the events, but they are not yet done and
on January 28th more events could begin to play out. Why? The geodetics are not yet in the
social media’s favor and the planets are still pushing the events into play.

Currently the Solar and Lunar eclipse in January of 2019 are directly pressuring the US. There are
also two other events between Jupiter/Saturn and Mars/Uranus. These two events are interacting as
well but not as powerfully as possible, so the events tied to them appear to be independent of
each other. The Jupiter/Saturn event is the pair pressuring the social media giant Facebook and
indirectly the others. Here is the Geodetics Map of the above 4 gravitational events which notes
the location each event is pressuring according the geodetics and tectonic plate theory.

WWW.TRADERSWORLD.COM February/March/April 2019 9


Using the above geodetic map observing the January 22, 2019 earthquake map shows the
strong correlations between the above geodetics map and the location of current earthquakes.

Comparison of the two maps reveals those points where the astronomical events are already
playing out and those areas where no activity has yet occurred. Not every line in a geodetics
chart will become active every time but there are usually one or two events at each line.

WWW.TRADERSWORLD.COM February/March/April 2019 10


The lack of activity in the Arabic plate should be watched closely and would warrant additional
study for location and exact timing of events would be wise as an event occurring there could
be significant, as the lack of movement suggest a “stuck plate,” which when it releases could
release with significant force whereas the others are already releasing the tension created by the
astronomical events since January 6th.

Reference to the USGS website1 provides the actual earthquake data in table form to allow
more study and evaluation. The table below list the dates, time, latitude, longitude, magnitude
and location name for the earthquakes over the past 24 hours that rate over a 2.5 magnitude.
The last column notes the astronomical event that is tied to that location and likely causing
the earthquakes. Note that of the 46 earthquakes, 42 are directly tied by longitude to the
astronomical events as noted in the geodetic map above. Latitude correlations have not been
considered.

time latitude longitude depth mag place


2019-01-22T13:14:02.330Z -24.0703 -179.69 505.75 4.6 South of the Fiji Islands 180.3101
2019-01-22T15:02:25.010Z -20.3161 -175.869 205.08 4.9 114km NW of Nuku`alofa, Tonga 184.1313
2019-01-22T13:20:20.690Z -15.1293 -173.142 27.4 4.8 111km NE of Hihifo, Tonga 186.8582
2019-01-22T04:43:19.055Z 58.3209 -155.356 127.8 5.2 86km ESE of King Salmon, Alaska 204.6437 Mars/Uran
2019-01-22T00:45:32.743Z 59.7681 -153.206 103.2 3 77km W of Anchor Point, Alaska 206.7939
2019-01-22T07:02:23.324Z 59.7299 -153.203 105.6 2.5 77km W of Anchor Point, Alaska 206.7968
2019-01-22T00:39:52.210Z 59.4107 -152.849 70.8 2.6 70km SW of Anchor Point, Alaska 207.1513
2019-01-22T00:11:15.370Z 60.0006 -152.813 98.4 2.6 54km S of Redoubt Volcano, Alaska 207.1874
2019-01-21T16:36:39.535Z 57.6383 -152.511 36.2 2.5 15km SSE of Kodiak Station, Alaska 207.4888
2019-01-21T23:00:51.670Z 60.2911 -151.901 75.6 2.5 37km WSW of Cohoe, Alaska 208.0992
2019-01-22T14:45:54.889Z 61.2989 -151.425 62.3 2.7 68km N of Nikiski, Alaska 208.5747
2019-01-22T16:14:46.851Z 61.468 -150.017 19.9 2.8 6km SSW of Big Lake, Alaska 209.9834
2019-01-22T02:25:15.388Z 69.6131 -144.266 0 3.2 62km SSW of Kaktovik, Alaska 215.7345
2019-01-22T09:33:31.200Z 38.77133 -122.722 1.02 2.47 3km W of Anderson Springs, CA 237.2782 1/21/2019 LE
2019-01-22T11:39:50.870Z 36.6325 -121.249 4.04 2.47 15km NW of Pinnacles, CA 238.7512
2019-01-21T18:22:36.240Z 37.63983 -118.814 2.11 3.04 15km E of Mammoth Lakes, CA 241.1863
2019-01-22T12:39:19.390Z 32.9505 -115.526 7.87 2.54 3km S of Brawley, CA 244.4743
2019-01-22T08:24:46.940Z 32.95233 -115.524 1.35 3.41 3km SSE of Brawley, CA 244.4765
2019-01-22T01:50:34.100Z 32.94533 -115.519 9.7 3.1 4km SSE of Brawley, CA 244.4807
2019-01-22T08:24:44.440Z 32.94733 -115.515 15.43 3.58 4km SSE of Brawley, CA 244.4852
2019-01-21T21:01:26.430Z 37.88483 -113.66 3.57 2.57 34km N of Enterprise, Utah 246.3402
2019-01-22T11:32:05.260Z 1.6786 -90.4597 10 4.7 267km N of Puerto Ayora, Ecuador 269.5403
2019-01-21T19:08:38.580Z -31.7883 -72.2515 4.16 4.7 104km W of Illapel, Chile 287.7485 1/6 SE & Sat-Jup
2019-01-22T13:44:47.420Z -30.2225 -71.6123 45.01 4.8 39km SW of Coquimbo, Chile 288.3877
2019-01-22T00:41:20.700Z -30.1016 -71.4838 50.95 4.6 21km SW of Coquimbo, Chile 288.5162
2019-01-21T20:27:34.990Z -33.9078 -70.3391 103.91 4.8 39km SE of Puente Alto, Chile 289.6609
2019-01-22T04:48:13.600Z 19.7163 -68.8183 24 2.81 78km NE of Santa Barbara de Samana, Dominican
291.1817
Republic
2019-01-22T03:14:11.040Z 18.4633 -67.5026 17 2.73 29km WNW of Rincon, Puerto Rico 292.4974 LE 1/21
2019-01-22T14:02:48.120Z 18.1778 -66.8655 16 2.54 7km WNW of Adjuntas, Puerto Rico 293.1345
2019-01-21T23:08:52.130Z 19.3021 -66.4696 51 2.79 93km N of Tierras Nuevas Poniente, Puerto Rico
293.5304
2019-01-22T07:50:45.290Z 19.048 -65.8138 42 2.57 68km N of Vieques, Puerto Rico 294.1862
2019-01-22T08:29:51.170Z 19.0485 -65.771 41 2.73 68km N of Suarez, Puerto Rico 294.229
2019-01-22T10:37:50.600Z 18.9921 -65.542 43 3.02 69km NNE of Vieques, Puerto Rico 294.458
2019-01-22T10:14:20.760Z 18.977 -65.4478 60 2.68 72km NNE of Luquillo, Puerto Rico 294.5522
2019-01-22T00:04:51.100Z 18.8193 -64.7083 41 3.28 45km NNW of Road Town, British Virgin Islands
295.2917
2019-01-21T19:26:35.740Z 18.6333 -64.6716 38 2.92 24km NNW of Road Town, British Virgin Islands
295.3284
2019-01-22T06:41:09.120Z 41.4297 -29.245 10 4.9 271km NE of Santa Cruz das Flores, Portugal 330.755
2019-01-22T00:56:54.540Z -10.319 118.8937 10 4.5 72km SSW of Kahale, Indonesia 118.8937 LE 1/21
2019-01-22T05:10:03.670Z -10.4663 119.0309 27.01 6.4 85km SSW of Bogorawatu, Indonesia 119.0309
2019-01-22T01:57:00.430Z -10.4432 119.0651 33.3 4.8 81km SSW of Bogorawatu, Indonesia 119.0651
2019-01-22T00:08:31.870Z -10.3703 119.1148 10 4.9 72km SSW of Bogorawatu, Indonesia 119.1148
2019-01-21T23:59:22.600Z -10.3113 119.1472 16.77 6 65km SSW of Bogorawatu, Indonesia 119.1472
2019-01-22T03:19:28.870Z 22.209 121.4315 35.26 4.9 67km SSE of Taitung City, Taiwan 121.4315
2019-01-21T16:47:48.310Z 4.5172 126.9002 11.26 5 187km ESE of Sarangani, Philippines 126.9002
2019-01-22T12:52:28.200Z -8.3026 128.7052 62.72 4.7 290km W of Saumlaki, Indonesia 128.7052
2019-01-22T12:11:37.300Z -8.343 128.7177 34.98 4.6 289km W of Saumlaki, Indonesia 128.7177

WWW.TRADERSWORLD.COM February/March/April 2019 11


Examination of the data table above shows that there are 5 foci of the gravitational energy
from the three current events and the one upcoming event being revealed. By following the
earthquake locations over the next month, the increase or decrease in activity correlating to the
interaction of the gravitational fields and the earths plates could help to warn about points of
activity that could result in significant natural events.

How does this correlate to the markets? The markets are tied to the vibrational or
gravitational energy that plays out on the earths crust. Using a type of “Seasonal” forecast that
has been developed from the tectonic plate theory, major and minor turns in the markets can
be anticipated. Does every event create market activity? No, but one should know when the
earth is reacting to an astronomical event as it does increase the likelihood of a market event
occurring as well.

For instance, in the table above, the geodetic position of 155W in the Alaska region is active.
This correlates to an astronomical configuration that is beginning to occur between Mars and
Uranus in the sign of Aries. The event will occur between February 9 and 13, 2019. The degree
of the event is 28 Aries which correlates to the New York Stock Exchange (NYSE) natal position
of Saturn and is in opposition to natal Neptune.

Uranus has been holding a general position over these points since before the 2016 election
hence the erratic, revolutionary, reactionary type of chart patterns and moves being observed.
As it moves out of the end of Aries in March of 2019, there might be some relief to the type of
whipsawing action being experienced, but that also could be the final trigger for a major move to
the downside as the “energy” leaves the Saturn and Neptune natal points.

What about other US Natural events? The January 6th Solar Eclipse and the recent Jupiter/
Saturn events are pressuring some US locations, and earthquakes in areas that are not usually
active could be seen along the east coast, like the Maryland Jan 15, 2019 6:30 pm earthquake.

There has also been an increase in Yellowstone National Park geyser activity which ties to the
Jupiter/Saturn event due to the geodetic correlation there. Study of the configuration suggest
a possible “burp” from Yellowstone over the next month as the gravitational energy finishes
playing out. The Steamboat Geyser began blowing again after nearly 50 years of silence right
on time in 2018 as the Jupiter/Saturn aspect began to activate. It is finally passed in February
for a bit and things should begin to calm in the region but likely not before increased activity is
again noted. Could Yellowstone erupt with this aspect? Not likely…

In the early 1900, Alaska experienced the birth of a new volcano, Novarupta2, from an
astronomical gravitation event which would be considered significantly greater in magnitude that
the current event. So, other than a bit of burping, not much more is expected from this event.
There is also some concern about the Alaska coast and upper Pacific Northwest coast, as there
is a possibility that the North American plate could experience a slight rotation which would
play out on those areas where the North American Plate meets its surrounding plates. The
Caribbean, eastern regions of the Great Plains and Alaska, and the Pacific Northwest are at the
greatest risk along with the western coast of Southern Mexico and South America.

For more information about my work and my 4 Volumes Series on the Law of Vibration, please
see the following link:
http://www.sacredscience.com/BENNETT/Law-of-Vibration-Series-Introduction.htm
You can also email institute@cosmoeconomics.com or call 800-756-6641 or 951-659-8181 for more
information.

WWW.TRADERSWORLD.COM February/March/April 2019 12


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WWW.TRADERSWORLD.COM February/March/April 2019 13


Pullback Pattern Study
By Daniele Prandelli

One year ago, right here in Trader’s World, I showed a study that I simply called “pullback
pattern study”.

You can read this study right here: https://iaminwallstreet.com/sp500-how-it-repeats-itself/


(because it is a bit long to repeat the same article here and you need to read it completely to
see how the study worked). Here, I want to update the same study, and see how it could have
been very useful in recent months.

We saw how the most important pullbacks of the last 9 years were about the same magnitude.
Hence, we were able to forecast the support area of the February 2018 Low, seeing in advance a
strong buying opportunity.

We sent out this chart while the Market was dropping, on February 5, 2018. We were off only
12 points in forecasting the Low in February 2018. We all know that from that Low, the S&P500
went strongly up.

The January-February 2018 drop was a movement that started at 2872.87 points and finished on
February 9 at 2532.69 points. The magnitude of this movement is exactly -340.18 points. Well,
8 months later, the S&P500 made a High at 2940.91 on September 21, 2019. A new descent
began, and we knew in advance that we had to monitor the level of the previous pullbacks. We
calculate 2940.91 minus the last magnitude, which was 340.18.

WWW.TRADERSWORLD.COM February/March/April 2019 14


2940.91 – 340.18 = 2600.73

The result of this level provided our next potential support, or the “make or break” level we have
to monitor to see something important to happen.
The drop began on September 21. The Low of October was 2603.54, on the 29th of the month.
From this Low, the S&P500 bounced to a High in November at 2815.15 points, a bounce of 212
points!

Hence, we have clearly seen, here again, a very important technique to determine future
support, and we could take advantage of it with very high precision using a study that I showed
you before it happened. Here we are using the same study to reveal how it worked well again.

However… In December, something I did not expect to see happened! We saw a spike under the
level 2600, and a few days later, a new breakout under that level, which was the real beginning
of a new, strong, fast downward acceleration.

WWW.TRADERSWORLD.COM February/March/April 2019 15


That breakout was the right trigger for a strong downward acceleration! This study gave you the
right level you had to look at to ride (or avoid) the huge crash, when the S&P500 lost 250 points
in just 6 days.

Now the S&P500 is again above the level 2600. What does it mean? This is something I cannot
share here, in respect of people who pay to receive our analysis and strategy, but I can say one
simple thing: everything plays around two very important price levels, and that is just what you
need: the level 2598 and the level 2528.

Adding a forecast to this kind of study can provide a confirmation as to the right trend to follow,
and more important, we have an important and reliable reference point to understand
whether we are right or wrong. This is something that people keep underestimating, in my
opinion; when we take a position, and the forecast is right, usually there is not so much to worry
about, we just let the position to run, in profit.

However, when we open a position, but the market moves against us, how do we know that
we are wrong? Where to place a reliable stop-loss? These studies give us the right point of
reference, the “make or break” level, to define where we should place a stop-loss order.

This last year, I produced several forecasts, the best of which was Cotton, though it seem there
is not so much interest around it (I only had 3 subscribers to the Cotton 2018 Forecast Bulletin):

WWW.TRADERSWORLD.COM February/March/April 2019 16


We provided this forecast in December 2017, with an impressive result. When the forecast
works like that, obviously we do not care so much about the price strategy. Unfortunately, we
are not always that “lucky” to work with a forecast like this, and it may happen we take a wrong
position, it is normal, it happens to everyone, of course. In that case, the study of price is
fundamental. I see that many people are only paying attention to the timing and the get crazy
when they are wrong. Price studies will often help solve this problem

We provide Daily and Weekly Reports (to a limited number of subscribers) covering several
Futures Markets: S&P500, 30Y T-Bonds, Crude Oil, Soybeans, Corn, Wheat, Live Cattle, Gold and
Silver. We also provide Annual Bulletins for S&P500, Corn & Soybeans, Live Cattle and Cotton,
and have 2 trading courses, one which deals with determining critical price levels, and the other
generates yearly cyclical models like the Cotton forecast shown above…

If you would like to learn more, please visit: https://www.iaminwallstreet.com

WWW.TRADERSWORLD.COM February/March/April 2019 17


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WWW.TRADERSWORLD.COM February/March/April 2019 18


Harmonics and Periodicity
(Part 1 of a 2 part series)
By Eric Penicka

In order to understand harmonics and periodicity and how they may apply to the
market, we must define them. Definitions of Harmonic: Physics . of, relating to,
or noting a series of oscillations in which each oscillation has a frequency that is
an integral multiple of the same basic frequency.

Music - overtone. 6. Physics. a single oscillation whose frequency is an integral multiple of the
fundamental frequency. Physics, music- a component of a periodic quantity, such as a musical
tone, with a frequency that is an integral multiple of the fundamental frequency. he first
harmonic is the fundamental, the second harmonic (twice the fundamental frequency) is the first
overtone , the third harmonic (three times the fundamental frequency) is the second overtone,
etc…

Periodicity: Word forms: plural? periodicities 1. the tendency, quality, or fact of recurring at reg-
ular intervals. With these two key words defined, we may move to understand how they impact
a price/time chart. In the book, Gann Science, the term harmonic has been used as a funda-
mental or root tone of price, or time, or vector unit.

For this article, examples will be made using Tesla stock, since it was discussed in my article
in the last issue using pi as an analysis factor. Tesla operates in a field of vibration and has a
master number set like all stocks and commodities do. Gann would say that these groups of
similar stocks operate in the “same field” of vibration.

Tesla first trade date is 6-29-2010. One of the key numbers in Tesla is 27. This is a master
number or harmonic for Tesla stock that is active for the life of the stock. The following chart
shows the harmonics of 27 measured from the first trading day of the stock.

WWW.TRADERSWORLD.COM February/March/April 2019 19


This very simple 27 calendar day count gives some pretty good trend change hits. Weekend
dates are shifted to the Friday or Monday bar. These counts can be started from first trade date,
date of incorporation, and any highs or lows or even gaps or accelerations.

WWW.TRADERSWORLD.COM February/March/April 2019 20


The following chart shows a count started from a gap day. These are harmonics or overtones of
the fundamental frequency of 27.

The gap day shows a 27 count to a high pivot, the next harmonic triggers an up gap, which
most traders would like to know when that had the potential to come. The next hit is a
significant pivot high, followed by a consolidation breakout, and then the last hit triggers a sharp
down move.

WWW.TRADERSWORLD.COM February/March/April 2019 21


Harmonics in the Bible
Harmonics are discussed indirectly in the Bible. As most readers here will know, W.D. Gann was
a great believer in the Bible in that it held many secrets and the answers to everything. He has
said it was the greatest book ever written.

The great skill of Gann was his ability to translate information from one field such as science,
math, or astrology, and create an application in the market with his translation.

With this same line of thinking we can read the Bible with the idea of translation in mind. A very
interesting Biblical section is given by Matthew in 1:1-17. In this set of verses, he is telling us
the genealogy of Abraham to Jesus.

Matthew 1:1-17 New International Version (NIV)

The Genealogy of Jesus the Messiah

1 This is the genealogy[a] of Jesus the Messiah[b] the son of David, the son of Abraham:
2
Abraham was the father of Isaac,
Isaac the father of Jacob,
Jacob the father of Judah and his brothers,
3
Judah the father of Perez and Zerah, whose mother was Tamar,
Perez the father of Hezron,
Hezron the father of Ram,
4
Ram the father of Amminadab,
Amminadab the father of Nahshon,
Nahshon the father of Salmon,
5
Salmon the father of Boaz, whose mother was Rahab,
Boaz the father of Obed, whose mother was Ruth,
Obed the father of Jesse,
6
and Jesse the father of King David.
David was the father of Solomon, whose mother had been Uriah’s wife,
7
Solomon the father of Rehoboam,
Rehoboam the father of Abijah,
Abijah the father of Asa,
8
Asa the father of Jehoshaphat,
Jehoshaphat the father of Jehoram,
Jehoram the father of Uzziah,
9
Uzziah the father of Jotham,
Jotham the father of Ahaz,
Ahaz the father of Hezekiah,
10
Hezekiah the father of Manasseh,
Manasseh the father of Amon,
WWW.TRADERSWORLD.COM February/March/April 2019 22
Amon the father of Josiah,
11
and Josiah the father of Jeconiah[c] and his brothers at the time of the exile to Babylon.
12
After the exile to Babylon:
Jeconiah was the father of Shealtiel,
Shealtiel the father of Zerubbabel,
13
Zerubbabel the father of Abihud,
Abihud the father of Eliakim,
Eliakim the father of Azor,
14
Azor the father of Zadok,
Zadok the father of Akim,
Akim the father of Elihud,
15
Elihud the father of Eleazar,
Eleazar the father of Matthan,
Matthan the father of Jacob,
16
and Jacob the father of Joseph, the husband of Mary, and Mary was the mother of Jesus
who is called the Messiah.
17
Thus there were fourteen generations in all from Abraham to David, fourteen from David
to the exile to Babylon, and fourteen from the exile to the Messiah.

The genealogy from Abraham to Jesus is taught here by Matthew.

The part of primary importance to us as traders is the last paragraph.

The translation lesson here is to define the word “generation” as “harmonic.”

Considering that 14 generations or harmonics may be an important factor for


trading, consider the 27 number of Tesla to be a “generation.”

If 27 is a “generation” then 27 times 14 generations yields a


time count of 378. 378 counts are shown on the following chart.

WWW.TRADERSWORLD.COM February/March/April 2019 23


Mathew specifically states the complete lineage as 3 segments of 14 generations.
Abraham to David, David to the Babylonian exile, and 14 generations from the exile to
Jesus.

The fundamental tone or generation has been developed out into 14 harmonics of the
fundamentals and 3 periods of the 14 harmonics. This is a very important concept.

14 periods of 27 is 378 and 3 times 378 is 1134. This count is added with the red bar
counter to the same chart section as the prior example. This is an example of a periodic
recurrence of a fundamental tone.

WWW.TRADERSWORLD.COM February/March/April 2019 24


The curious mind may want to know what a “generation” is in the Bible? Or how many
“years” is 14 generations. The answer has been given by Daniel in the following manner
by linking what Matthew said in the New Testament to the Old Testament.

The numbers may be linked to Daniel 9:24-27, which states that seventy weeks of seven
years, or 490 years, would pass between the restoration of Jerusalem and the coming
of the messiah. Daniel equates the 490 years to the lineage described by Matthew.

Daniel’s 70 times 7 weeks of years, or 490 years is equal to the 14 generations as


described by Matthew. 490 divided by 14 leaves us with a generation equal to 35 years.
This 490 number was given a serious go over by Gann in Tunnel Through the Air, so it
is deemed a very important counter.

Generations in the Bible have also been mentioned to be 40 and 70 years. 70 is a direct
harmonic of 35, and 35, 40, and 70 are all harmonically convergent at a point which
would be defined as a periodic recurrence of cycles.
WWW.TRADERSWORLD.COM February/March/April 2019 25
In the translation here, 27 was inserted as
a generational harmonic for Tesla. There
is no reason not to explore the natural
TradersWorld Magazine
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described a different lineage than Matthew.
There are varying reasons for this which
can be explored by interested readers.

The point is that Gann researchers are


looking for the cyclic implications of the
teachings and not the specific surface
story teachings. A good example of this
is the time of Abraham to Jesus has been
shown to be 14 generations or 490 years
times 3 which equals 1470 years, if taken
literally. Scholars argue that the real time
QUARTERLY MAGAZINE SUBSCRIPTION
of Abraham to Jesus is around 2000 years.
Read articles explaining classical trading
techniques, such as W.D. Gann, Elliott Wave,
There is no reason for debating this.
astro-trading as well as modern technical
It is more of an issue of what a Gann
analysis explaining indicators in eSignal,
researcher would believe about the authors
NinjaTraders, MetaStock & Market Analyst.
of the Bible. Are they writing a history
book concerned with archiving exact times COMPLETE BACK ISSUES OF TRADERS
of events, or are they writing in an esoteric WORLD Magazine (ISSUES 1-64)
manner to teach the finer points of natural You also get our complete archive of 60 back
cyclic law? issues from 1986 to present. This, contains
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Many of these type of translation technique examples, how-to-trade articles and much
are taught in my boo, GANN SCIENCE
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Vibration. Please see the following link, In every issue, you get the information
which provides more details and contents you need to trade the markets better with
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WWW.TRADERSWORLD.COM February/March/April 2019 26


GANN SCIENCE
The Periodic Table & The Law of Vibration
THE SOLUTION TO GANN’S LAW OF VIBRATION
AS PRESENTED IN THE TICKER INTERVIEW
By Eric Penicka
ATOMIC ELEMENTS DEFINE MATHEMATICAL STRUCTURE OF MARKETS
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This course provides the solution to the Law of Vibration, as Gann originally presented it
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day to demonstrate what Gann meant when he said, “stocks are like atoms”. He develops a
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WWW.TRADERSWORLD.COM February/March/April 2019 28


Time’s up
by Rick Versteeg

CRASHING MARKETS Last quarter of 2018 crisis was predicted in advance


There is a hidden order and rhythm using the DeLorean indicator. A larger correction was
in the markets that is revealed by overdue for a long time and time was running out. So
DeLorean, our time cycles model inevitably at some point there would be a breaking point
using fractals. RED periods, where our indicators turn RED. Finally we have witnessed
indicator below zero, forecasts down again extreme turbulence in the stock markets which
trends, GREEN, indicator above has upset the financial world. Investors and traders were
zero up trends. not accustomed anymore to wild markets, not counting
Extensive research of historic the February 2018 flash crash, nor a bear market. A
crash and volatility events showed decline in the SPX index (as well as many other indices)
specific short term time patterns in of 20% was indicated by the time patterns and triggers of
our model coinciding with financial DeLorean, before it happened.
panics. These panic patterns Ofcourse it was accompanied by bad news and
occurred in February 2018 and expectations which did not hurt during periods where
were forecasted again for the end of DeLorean indicators were green. Rising interest rates,
November 2018. Brexit, government shut down, risk of recession, all
surfaced in the last quarter of 2018.

In August we published the following DAX chart (the same for SPX) for customers, which are
typically investment / hedge funds looking at the medium term:

above the indicator is shown with the Dax index.The black line is the summation of red(negative<0) and
green(positive>0) forces. Easy does it. The indicator is generally the same for other indices apart from
being adjusted for time zones. Because of very high correlation of major markets the indicator forecasts
them all.

WWW.TRADERSWORLD.COM February/March/April 2019 29


This medium term indicator of DeLorean shows the larger moves in the indices of stock
markets. Please note how well it predicts the big moves in 2017 as well as 2018. Imagine you
would have seen the indicator in August predicting a decline until december and then a strong
recovery. We have had no loss in these declining markets in spite of volatility. This is an
exceptional tool for investment funds to adapt exposure in the markets before markets get wild.

So funds who received our predictions and followed up did not have a loss in the last quarter,
other funds who did not have available our indicator, lost up to 15% in December.
In between the indicated (arrows) larger swings, the smaller moves in the indicator also show
smaller up trends and down trends. For example from april till June 2018 where our DeLorean
indicator on a smaller swing or fractal was up (green) and from end of May turned down (red)

Since our indicator basically is of fractal nature where smaller time patterns build larger ones, we
can zoom in and display the hidden smaller patterns.

Since end of June 2018 we have forecasted negative markets for the week of November
25th 2018 (see previous 2 articles in Tradersworld), which we picked because it was the
epicentre of the coming financial earthquake. Also we had discovered trigger time patterns
active during that period which we discovered in researching history, especially crashes or high
volatility markets. Because the indicator was very negative since the end of September, the
outlook was bearish.

Back to the future


New research
Take a seat in DeLorean and we will travel to
Every time we come across very interesting,
the future. Every day and week there will be
expected and sometimes unexpected
trends up and down, small and large. Below we
list some trends, around the following dates in fluctuations in the indices we predict and
2019: research, we grab our magnifying glass to
look for explanations.
Up: 23-24 February, 13 May, 19-20 August, 7-8
sept (!vola) Consequently we will need to research our
fractal time waves, cycles and time patterns
Down: 29 March, 10-18 April, 9 July, 24 July
to determine if history can shed light upon up
and down trends in the markets, especially
What next ? Research
Research is an activity that never stops and when it comes as a surprise. In order to
is fun to do., especially when important new gain more knowledge we therefore search
information is found time and time again. So our database to develop and show better
the next stp will be to complete Research of information in our indicators.
100 years of Dow data (1900-2000) to inspect
time patterns and its fractals in depth. Also
checking combinations of patterns and how these
work. Last but not least development of trading
systems.

WWW.TRADERSWORLD.COM February/March/April 2019 30


DeLorean OPEN- day to day cyles for opening trends.

The short term time cycles of our DeLorean indicator are used for predicting trends at opening
(DeLorean OPEN), which has excellent results. Here the smallest up and down forces are
calculated to determine if SPX, DAX or HSI will be stronger or weaker at their opening in the
near future.

Here we investigate our DeLorean indicator’s reading at the opening of different markets exactly.
In the morning CET (European time) DeLorean indicator could still be red, so DAX index would
be down if additionally validated. Thereafter DeLorean indicator could turn up and become green
before SPX opens at 15:30 CET-

See an update of performance using DeLorean OPEN on the next page.

Performance of DeLorean OPEN is strong: SPX and HSI only witnessed 1 month of loss, Dax 2.
While HSI is the most volatile with some times a loss intramonth of around 300 points, SPX is
the best and is getting better all the time with a record win the last quarter and January 2019.

Below we will give you some examples how our DeLorean indicator for opening trends works.

WWW.TRADERSWORLD.COM February/March/April 2019 31


First of all look at the trend date. First signal November 6th DOWN (column DeLorean trend). In
order to profit from the expected DOWN in red you will have to SELL(entry date) November 5th
and BUY back November 6th (trend date). Total profit for the month was around 97 points using
ES future.

First trade had a small loss. Trade for trend date November 7th (UP trend) had a profit of 21
points. (zoom in on chart below)

wwww.aquilaesignal.com, mail: info@aquilaesignal.com, Subscribe to our Newsletter


DeLorean for extra information: http://www.aquilaesignal.com/free-newsletter/,Facebook:
Aquilaesignal
Special offers! write us an email to get a special Tradersworld offer, 3 months DeLorean OPEN
for $299, 3 months DeLorean Monthly for $ 450, 6 Months DeLorean medium Term for $595

WWW.TRADERSWORLD.COM February/March/April 2019 32


Of course the indicator is already visible 1 month before prices of SPX catch up. So everything
you se in the chart with regard to indicator is known the 1st of November! The DeLorean
indicator above is also used for DeLorean Monthly predictions (see below)

You see that SPX is green at the opening of the 7th, therefore trend is UP and you are signaled
to buy the 6th.

In general this is how it works. The indicator should be green, at a top or rising and minimally
above zero.

12 th November was down but skipped because of risk over weekend. 13th DOWN, small profit,
14th UP because of rising indicator from lows (+16). 15th DOWN because of indicator red,
declining and below zero (+ 33).

In general that is how it is done! However we also inspect specific time patterns (how strong
these patterns are and how reliable) that build DeLoren indicator which could skip the trade. In
addition a shorter term cycle is used as well.

DeLorean Monthly indicator-predicting reversals for 1-3 days


DeLorean Monthly is mostly used by day traders as well as position traders. Using DeLorean
indicator you will have a high probability of knowing the upcoming trend in the markets for the
next month ahead. This is the most rewarding indicator for traders, because you can see all 1-3
day cycles coming up . It can be used for option trading as well as future trading, trading delta.
It looks the same as the medium term indicator, but cycles are much shorter thus providing
many more entries and high probability trades.

DeLorean Monthly indicator is the basis of DeLorean time cycles on stock indices, more
specifically the SPX, the HSI and the DAX or Eurostoxx50.

If the indicator goes up from a low to the next high, prices will go up around the reversal in the
indicator. Therefore this is generally the time to buy (using a simple confirmation) stock, futures
or call options or write put options. When the indicator is reaching its high it is time to sell the
index, selling stocks / futures, writing calls or buying puts.
Below we show yo an actual example of our indicator.

WWW.TRADERSWORLD.COM February/March/April 2019 33


Here you can see how November 25th is in the middle of the decline with a deep red score. The
period in the beginning of December at first sight looks more positive (green) but looking at the
indicator beneath it, which shows the strongest patterns only, it is clear that RED is dominant
still. This is the case until the beginning of February 2019, in both indicators. Writing this article
the last week of January the crisis -Brexit, shutdown- had not ended yet. In the not too distant
future (within 2 months) indicators will become more positive.

Trading system using options.


We have developed a directional trading system for options using DeLorean Monthly as shown
before. Directional ofcourse means that we follow the DeLorean indicator by writing / short calls
or puts. If the indicator reverses from a top to the next bottom, we write calls. If it reverses
from bottom to the next top, we sell puts.

Contrary to the popular “strangle “ systems where traders have no clue of the next direction of
the index price and consequently write calls and puts at the same time, we write either calls or
puts.

The problem with a strangle is that by definition either the call or put looses money. When the
price stays in the bandwidth there is no problem, but a big problem when it crashes out of the
bandwith or a strong trend continues.

The latest quarter caused heavy losses for the stranglers but delivered a very good profit for
DeLorean Option trading.

Additionally mention that we use SPX options because of liquidity, diversification, pricing and
excercise almost every 2 days. Short term options are most advantageous.
Below we let you see when and how it trades (zoom in to see more detail):

WWW.TRADERSWORLD.COM February/March/April 2019 34


Trading is based upon the swings in the

Traders
Traders World
World
indicator from top to bottom and vice versa.

ONLINE EXPO
So a short trade (red arrow)-writing calls- will
appear when the indicator starts to decline. A
long trade (green arrow)-writing puts- when
Online Expo
indicator goes up again from a bottom. The
strike price is 1% above the SPX price when
writing calls and 1% below the market price
when writing puts. This way a trade will still
have full profit as long as it stays within this
bandwith. If not the trade is stopped out.
The Traders World Online Expo is now continu-
ous. Instead of having a large group of speakers
Starting 26th of October, trading only 1 option at one time, we will now space it out and have
with on average premium of $4 with maximum only one speaker give a presentation at a time.
2 days expiration date brings 29 trades and We felt that bunching a large number of speakers
$6000,-+ profits in 3 months. Hitratio is very together created information overload and was
high above 90%. Normally this period would confusing and was not to the benefit to you the
be devastating to option writers! Margin is 22k
trader.
and exposure initially only around 35k because
From the presentations we are planning you’ll
of low delta, so with 40k a healthy profit of 5%
learn from different knowledgeable top traders.
per month.
Trading Methods, Ideas & Strategies for:
wwww.aquilaesignal.com, mail: info@ - Stocks
aquilaesignal.com, Subscribe to our - Futures
Newsletter DeLorean for extra information: - Options
- Currencies
http://www.aquilaesignal.com/free- - Precious Metals
newsletter/,Facebook: Aquilaesignal
Special offers! write us an email to get a special We are using brand new video technology that
Tradersworld offer, 3 months DeLorean OPEN will broadcast live video to Facebook, YouTube &
for $299, 3 months DeLorean Monthly for $ Instagram Live at the same time.
450, 6 Months DeLorean medium Term for
$595 Please register FREE at our site
TradersWorldOnlineExpo.com
We can then email you the “Pre-Scheduled Links”
and the following:

Speakers Name
Topic
Description
Date and Time

WWW.TRADERSWORLD.COM February/March/April 2019 35


smaLL sUPPLy smaLL sUPPLy
LarGe DemanD: LarGe DemanD:
rIsIn G P rIces rIsIn G P rIces

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on on
stocKs, cotton, GraIn marKet conDItIons

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B o x o, P o m e r o y , Wa
July 2018
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WWW.TRADERSWORLD.COM February/March/April 2019 36
About Our Service
Specialised in forecasting the exact day of trend, months and years in advance . If you trade in s&p and you
are willing to know how s&p is going to unfold in rest of year 2018 , we give you the exact daywise trend
forecast of s&p of next 6 months with amazing accuracy. Astrological forecast never change as all future
astrological events are fixed. In Sunday’s weekly newsletter, we provide day-wise trend forecast of 40 major
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trend forecast we send live updates from Monday to Friday in what’s app subscribers group . In live updates
we provide price & time targets based on trend forecast given in weekly newsletter . For mid term and long
term traders along with daywise trend forecast of entire year , we also provide top bottom analysis of entire
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WWW.TRADERSWORLD.COM February/March/April 2019 37


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WWW.TRADERSWORLD.COM February/March/April 2019 38


MARKET BAROMETER
By George Krum

“A rising tide lifts all boats”

Probably everybody has heard this saying about the stock market, and has figured out what it
means. But the important question is how do we measure and quantify the market’s tide and
how useful and necessary is that measure for our trading success?

In previous articles we have touched upon the notion of market breadth, and here we will delve
deeper into the subject. Market breadth uses market data about advancing and declining issues,
up and down volume, new highs and new lows, etc. It is the part of technical analysis that
deals with the broader market in general and not with individual issues. As such, it provides
information about the general state/health of the market and, as stated by Greg Morris, “it is the
footprint of the market and the best measure of the market’s liquidity”. To that we can add that
whether the market moves up, down or sideways, it always goes through overbought/oversold
cycles. Because of indexing and passive fund management, individual stock moves are strongly
correlated with the broader indices. Therefore, being able to determine whether the broader
market is overbought or oversold, i.e. whether the tide is about to rise or fall, will help you time
your trades.

During the last 20 years we have developed a whole range of breadth indicators which add new
ways to measure market breadth and liquidity. Some of them have been discussed before, and
can be accessed here, but today’s focus will be on the group of three market breadth indicators
recently released as an add-on for TradingView under the title CIT Market Barometer.
We’ll begin by discussing the CIT Market Breadth Indicator (CIT MBI), and to demonstrate
its value added, we’ll compare it to the McClellan oscillator, one of the more popular breadth
indicators today. Developed by Sherman and Marian McClellan in 1969, it uses the number of
advancing and declining issues. By contrast, CIT MBI uses both advance/decline and up/down
volume data for a more comprehensive and objective data analysis. Second, unlike the McClellan
Oscillator which does not have precise boundaries, the CIT MBI is range bound from 0 to 100,
allowing for easy interpretation. And third, CIT MBI avoids the drawbacks associated with MACD
types of indicators. In addition, CIT MBI can be displayed in different ways, even on the chart
itself along with an individual stock, index or ETF, which makes it even more versatile, useful and
effective.

Below we will discuss a few examples using the most current market data (as of January ‘19).
First, we’ll start with the cumulative view of CIT MBI, which captures the net difference between
consecutive data points in the chosen time frame. For ease of interpretation (Chart 1, bottom
panel), the indicator changes from green (periods with positive market breadth) to red (periods
with negative market breadth).

WWW.TRADERSWORLD.COM February/March/April 2019 39


Chart 1
The first thing to notice is how closely the turns of the broader market (represented by SPY)
match those of the CIT Market Breadth Indicator (CIT MBI). Second, the CIT MBI shows some
important divergences which leave valuable clues about the future direction of the market
in general. For example, in April ’17 the CIT MBI already had exceeded its March readings,
suggesting that there was strong accumulation below the surface. The market made new highs
four months later in July.

By comparison, the current readings show that price and CIT MBI are advancing in tandem
(chart 2). Note that in the chart below the CIT MBI is displayed along with SPY (the MBI line is
not to scale).

Chart 2
A useful way of displaying the CIT MBI is by showing the daily readings below price (Chart 3).
This makes it easy to gauge which way the broader market is headed in the immediate future.

WWW.TRADERSWORLD.COM February/March/April 2019 40


Chart 3
When breadth readings are above .7 or below .3, expect strong, directional moves, when the
daily range may reach and exceed R3/S3 pivot lines. When the readings are between .3 and .7
expect choppy, range bound trading, when the daily range usually remains confined within R1/
S1 pivot lines.

A third way of displaying CIT MBI is by highlighting the duration of days with positive or negative
market breadth and comparing it to the average and maximum readings.

For example (Chart 4), during the December ’18 sell-off, the SPX equaled the longest streak
of consecutive negative market breadth days (8). By the way, the number is different for
consecutive up days. As a rule of thumb, in an uptrend the length of consecutive positive market
breadth days should exceed the number of consecutive negative market breadth days and vice
versa.

WWW.TRADERSWORLD.COM February/March/April 2019 41


Chart 4
More importantly, the cumulative down thrust number on December 24th by far exceeded the
highest negative thrust readings for the last 50 years. Such large negative thrust numbers
have been associated with significant low turning points in the past. The importance of the
market turn at the end of December was further highlighted by the large up thrust MBI numbers
on January 2nd and 11th, which normally appear at the beginning or in the middle of strong
upswings. In summary, CIT MBI is a versatile, multifunctional indicator which can speed your
market breadth analysis and give you confidence in your market interpretation and forecasting
skills.

In addition, we have also added a NYSE and NASDAQ New High/ New Low indicator for
TradingView (Chart 5), which can also be very useful for market timing and in market trend
analysis. For example, both the NYSE and NASDAQ New High/Low indicators peaked a week
before the October ’18 market decline started, and then remained immune to the brief bear
market rallies in November and December:

WWW.TRADERSWORLD.COM February/March/April 2019 42


Chart 5
And to complete the list of market breadth indicators, we have also developed the LiquidoMeter
(Chart 6, bottom panel) which measures the level of liquidity in the system. This indicator is
useful as it has a tendency to peak before significant market turns, as it did in 2009, 2014 and
2018. In 2007 the LiquidoMeter’s peak coincided with the market top. The troughs tend to be
coincidental:

WWW.TRADERSWORLD.COM February/March/April 2019 43


Chart 6
In summary, market breadth indicators are an important tool in the arsenal of every serious
trader, analyst and investor. They provide a clear and unambiguous picture of the state of the
broader market, and shouldn’t be ignored when making investing decisions. The CIT collection of
market breadth indicators makes it possible for everybody to measure the pulse of the market in
real time.

WWW.TRADERSWORLD.COM February/March/April 2019 44


Robert Pardo Legendary
Trader and Algorithmic
Software Pioneer
Robert Pardo was a pioneer of algorithmic trading software and trading in the futures industry.
He in fact wrote several articles for Traders World magazine in the 70s. He was very instrumental
in laying down the foundations of what is known as algorithmic trading software which is how
systematic trading is now done today.

Bob has done several things in his career. He was a technical analysis software pioneer with the
Pardo Corporation. He wrote the book The Evaluation and Optimization of Trading Strategies. He
is the creator of the ground-breaking strategy optimization and validation methodology known
as Walk-Forward AnalysisTM. He also was a consultant to Goldman Sachs and Daiwa Securities
of America with Pardo Group Limited and trader with Pardo Capital Limited.

He recently developed a very sophisticated trading strategy program called Pardo Ranger. It is
capable of creating a very large family of uncorrelated unique trading strategies. This empowers
the algorithmic trader to create a deep portfolio of uncorrelated trading strategies for a single
market, a sector or a class of markets. Pardo’s research demonstrates that diversification by
market and uncorrelated trading strategies is an effective approach to reduce drawdowns and
volatility and thereby increase risk-adjusted trading profits.

Ranger begins in its most basic form as a “standard” range breakout strategy of the “Donchian
variety.” That is the only place that Ranger can be said to be “standard.” Beyond that, Ranger

WWW.TRADERSWORLD.COM February/March/April 2019 45


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WWW.TRADERSWORLD.COM February/March/April 2019 46
Pardo Ranger
Hello Fellow Traders,

We are currently developing trading models for various trading programs with our new product Ranger and
noticed something rather fascinating. By the way, we use the same version of Ranger that we license to our
clients.

Our development process starts with the most simple strategy variant and then progresses adding various
layers of complexity.

At its most basic, Ranger can be configured as a basic range breakout strategy. Consider the following results.
We tested a range breakout variant with our proprietary walk-forward analysis (WFA) matrix on NASDAQ
futures from 1-1-2007 through 12-31-2017. The performance for the Walk-Forward Analyses produced the
following results – the total for all WFAs was a loss of $385,410 with an average WFA loss of $35,037. Not
terribly inspiring to say the least.

However, having confidence in our trading technology and research methods we “slogged on.”

Next step. Consider, then, the same strategy and variable range with the application of one of
our proprietary filters. That same WFA matrix produced a profit of $629,850 and an average gain of $57,259.

What a difference a filter can make! That particular filter is our proprietary Trend Indicator. This indicator can
tell us, among other things, when a market is quiet. The results above are the difference between an unfiltered
range breakout and a range breakout from a quiet state.

Ranger is an EasyLanguage program which runs in TradeStation. Locked it is $2,500 and unlocked $5,000.
Trend Indicator is one of three proprietary indicators which are included with the unprotected version.

Ranger is a serious tool for the serious trader. If you would like to put Ranger to work for your own trading
email me at bob.pardo@pardocapital.com for further information. The included Tutorial will have you up and
producing trading strategies immediately. Ranger also includes six finished and tradable stock index strategies
which can get you started. By the way, they are actually quite good and more than just “starters!”

Wishing you a prosperous and fulfilling 2019!

Warm Regards,

Bob Pardo

Affiliate Disclosure - this ad contains links which are a means for this magazine to earn money.

WWW.TRADERSWORLD.COM February/March/April 2019 47


“I've known Marie Schoeppel for most of the past decade and have great respect for her work. Her new
book The Dragon's Debt encompasses the history of financial panics and restructurings from 1284
through the 20th century and the culminating crisis period for China from 2019 to 2022. One could
make a great deal of money following her roadmap of the Chinese crisis over the next few years.”
MICHAEL S. JENKINS, Professional Trader and Publisher of the Stock Cycles Forecast newsletter

The Dragon’s Debt


by Marie Schoeppel
AN INVESTOR'S TIMELINE
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WWW.TRADERSWORLD.COM February/March/April 2019 48
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WWW.TRADERSWORLD.COM February/March/April 2019 49


Key Principles of Trading
and Investing
By Thomas Barmann of NeverLossTrading

We are 10 years in the trading- and investing education business and with this article, I
would like to help you establishing key principles for long-term trading and investing success;
preventing the risk of suffering through long periods where it is challenging to produce returns
from the financial markets.

Let us list some motivations for improving your trading and investing knowledge and skills:

Graphic-1 Motivations for Bettering Your Trading and Investing Skills

• Building a Self-Directed Retirement Account

• Income Substitution

• Play Money Trading

• Wealth Building

• Short-Term Investments Prior to Spending

Regardless of the motivation: Capital preservation and continuous returns from your investment
are the keys to success. Considering the stock market slump of December 2018: Did you have
a pre-warning system in place, telling you to better get out of long positions and rather stay on
the sidelines or better, short the market?

Let us take a look on such a system (NeverLossTrading Top-Line and Trend Catching):

Graphic-2: S&P 500 Index Development based on SPY (ETF) Dec. 12 – 24, 2018

Graphic-2 is showing you multiple clearly


defined sell signals, indicating a strong
short-environment for the index.
Each of those sell signals had a defined
short-term target (dot on the chart) and a
stop (red horizontal bar).
The red framed price environment
indicates a strong down momentum and
the red line of the red frame functions as
a trailing stop.
WWW.TRADERSWORLD.COM February/March/April 2019 50
SPY, the key ETF, is replicating the S&P 500 Index performance: On a daily chart, you see selling
indications and we all know how things panned out. With this system, you trade when the
spelled out price thresholds are surpassed in the candle that follows: which was the fact.
Let us take another example, considering weekly candles, looking at an ETF for the US-Energy
sector:

Graphic-3: US-Energy Sector Development based on XLE (ETF) Oct. – Dec., 2018

The chart is showing multiple, clearly


defined and confirmed sell signals, starting
in the first week of October 2018. Based
on those, your long positions should have
gone off; meaning, your energy related
IRA or 401(k), ETF, or other long positions
either needed to be taken off or were
supposed to be protected through a hedge
trade.
Do or did you have such protective actions
in place?

You might ask: Does such a pre-warning system only work on daily and weekly perspectives?
The answer is no: Successful behavior of trading and investing is bi-directional and the same, it
only differs in the planned period of time you want to hold an investment.

Graphic-4: Trading and Investing Style and Time

Trading and Trading and Investing Times


Investing Style
Day Trading Opening and closing positions the same day
Swing Trading Opening and closing positions in one to 10
days
Longer-Term Investing Opening and closing positions in weeks or
months
Long-Term Investing Opening and closing positions in months or
years

As a consequence: Whatever your motivation and holding period for trading or investing is
geared towards, you need to establish five key decisive elements in your trading plan:

1) What is the basis of your decision making?


2) Do you operate with high predictability?
3) What is your risk tolerance per trade?
4) How fast can you make meaningful decisions?
5) Do you have the ability to counteract when things go wrong?

WWW.TRADERSWORLD.COM February/March/April 2019 51


We are 10-years in the trading and investing education business with focus on one-on-one
learning and like to share our findings; helping you to not getting unprepared in a market where
the other side of your trade is ready and prepared to take your money.

1. What is the Basis of Your Decision Making?

Recommendation: Follow a system or systematic on which you can repetitively and mechanically
base your decisions on.

Important-1: Your system or systematic needs to replicate the natural conditions of the markets:

The vast majority: 85% of the financial markets are institutional decision driven. Institutions
always try to hide their footsteps; however, by the sheer size, their action is identifiable and the
private investor/trader can spot and trade along with it.

Important-2: Your system or systematic needs to leave little to no room for interpretation:

Successful traders and investors follow a mechanical system of identifying a signal, predicting its
reach, appraising the risk to allow and act on it repetitively.

In Summary:

Successful trading is based on finding and following repetitive supply- and demand patterns:
Price change is a result, not a variable and what we want to demonstrate to you, is how you can
find and participate in directional price changes right when they happen.
Prediction connects the subjective and the objective reality.

This means, you can test what we show you here in the real world, where you can compare
how well you are currently and can potentially predict trade entries and exits. Let us go through
some examples:

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Graphic-5: AAPL based on a 20-Minute Chart on December 27, 2018

December 27 was started with a sell signal:


Sell < $154.30.

In this case, you operated with a sell-stop


order and followed through to target-2.

In the afternoon of the same day, a buy


signal: Buy > $152.41 allowed for a buy
stop order with a pre-defined exit at
target-2.

As mechanical as possible!

Graphic-6: Swing-Trading Perspective based on a 4-hour Chart for /ES, Day Session
Only

December 20th started with a confirmed sell


signal: Sell < $2,453.3

In this case, you operated with a sell-


stop order and you exited at the target
dot, which was expected to be reached in
3-bars.

Then you see another sell signal that came


to target and a buy signal that was fulfilled.
Each, reaching their targets.

Mechanical as possible!

When you go through the price move indications on our charts, you recognize clear cut buy and
sell signals; all containing a systematic stop and positive exit price level (dot), helping you to
trade and invest as mechanical as possible, leaving little to no room for interpretation.

Key with such a system and systematic is to follow same setups regardless of the time frame
you want to base your decisions on, always comparing reward and risk of a trade to decide if a
specific situation is worth to risk your money at and or how much risk you can accept.

2. Do You Operate with High Predictability?

What is high predictability?

We define high probability trading or high predictability when you operate with ≥ 65% likelihood
to predict the future price move of assets on multiple time frames and will mathematically proof
to you that you are in need of such a system!

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Commonly available trading systems are usually based on moving averages, MACD, RSI,
Ichimoku (Japanese word for average), and others; those will not give you such predictability
and we encourage you to test your current system based on mechanical entries, exits, and
stops. Pick and analyze 20 trades: If you do not win 13 or more trades, applying mechanical
decisions, your system will most likely not give you a long-term ability to produce returns.
Shocking but true!

Let us repeat an easy mathematical experiment, where we draw marbles from a bag and put
them back after each draw, repeating this for 10-rounds based on a 55%- and 65% systematic.

Graphic-7: The Experiment

65% Probability Trading System 55% Probability Trading System

To calculate the statistical outcome, we use a binominal distribution or Bernoulli experiment and
calculate the predictability of six and more winners after 10 draws:

Graphic-8: Result of ≥ 6 Winners at 10 Draws

The result shows: A 55% system (which you are most likely using) only produces a random
result for six or more winners: 50.4% probability; however, the system with a high predictability
(65%-system) produces ≥ 75% likelihood to win six or more times out of 10 draws.

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We hope you now see, why operating with a high probability trading system is a key prerequisite
of systematic, long-term trading and investing success; however, most of our today’s readers are
not yet up for a change and this is not surprising:

By our human nature, if we once commit to a certain behavior or systematic, we like to hold on
to it (check on the term: cognitive dissonances): Behavior-change is hard for us and some of our
long-term traders joke that it needs somebody to take the other side of our trades; however, we
rather want an institution to render the money to you by following better principles.

3. What is Your Risk Tolerance per Trade?

We postulated capital preservation as a key factor for success: Imagine a trader who loses 50%
of the base capital; thus, 100% return is needed to breakeven again. To prevent drawdowns, we
encourage you to quantify a meaningful and maximum risk per trade or investment.

Whatever your decision making base for trading or investing is, you are making a prediction
for the future price development of assets, which has a probability and might not hold true;
however, what you control is the risk you take in each of those trading or investing undertakings.

As a consequence, we recommend quantifying the risk of a trade or investment and combining it


with the probability of the trade setup to decide on your position size.

Let us give you an example that helps to decide the investment size based on the probability of
the chosen setup, the reward/risk relation, and the applied trading strategy.

Graphic-9: Risk Appraisal Components and Percentage Investments

When you are looking at situation-4, you immediately see: If the setup is not right, do not take
the investment or trade:

• Never trade to trade; only risk your money when the odds are in your favor.
• When probabilities of the setups you find and reward/risk are in your favor, you can increase
your risk appetite; when they are not, you decrease it.

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Fact: You need a system to tell you how much risk tolerance to allow for the price
development to reach the desires target. With the NeverLossTrading systems, you get
this multifold:

A) Clearly spelled initial entry and exit signals on the dashboard.

B) NLT Double Decker study: The red line of the NLT-Double Decker study functions as a trailing
stop-line. You are following the red line until prices reverse.

C) The SPU measure: SPU or Speed-Unit is a volatility-based measure for the expected price
expansion after a confirmed signal is triggered. This measure helps you to define either a 1-SPU
or 2-SPU target price to exit the trade. Based on our data, there is an 85% likelihood that prices
halter, retrace, or reverse after a 2-SPU price move; hence, we rather take a positive exit than
waiting for the price to revers to the stop-line.

Graphic-10: Initial- and Trailing Stop Levels on the NLT Chart

Starting with the first signal on the chart:


Sell $2,637.3, the dashboard was telling us,
we have a favorable reward/risk; meaning,
for a dollar of risk, we can expect $1.5 of
reward. The initial stop was at: $2,672 with
a target of 2,584.75. If you trailed the stop
by the red NLT Double Decker line, you
were able to follow the price move, all the
way to $2,408: 230-points.

The NLT Double-Decker study frames the price move, giving you an indication for the needed
volatility-based price expansion room to consider for not getting stopped when trailing along
with a strong price move.

If you violate volatility-based price move requirements, it usually has the following effects:

• You risk too much per trade and your losing trades are higher than your winners.
• You risk very little per trade and you get constantly stopped even so prices move in your
desired direction.
• You have a very low participation rate or amount of trades by constantly waiting for the
perfect setup and you are producing little returns.

Thus, consider or learn how to systematically appraise the needed risk tolerance trade by trade,
time-frame by time-frame. We offer multiple systems, helping you to make that prediction…
click.

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4. How Fast Can You Make Meaningful Decisions?

Preparation is the basis for meaningful trading and investing decisions. Preparation sure takes
time and we want to help you, cutting down time by establishing a systematic. Trading has a
certain amount of complexity and preparation to consider. Let us show you a systematic of how
to handle this by establishing a routine in deciding if you want to participate in a trade or not:

• Trade Finder: helping you to trade where prices move… check our offering.
• Chart appraisal to decide for the probability of the trade based on your rules.
• Quantification of your investment based on the applied strategy.
• Journal your trades and strive for continuous improvement.

A) Trade Finder

Establish a systematic to focus to invest/trade into assets where prices move, rather than
favoring a basket of assets you like: Find a systematic that produces a list of investments that
are favored by institutional investments.

With our systems, you have multiple ways for finding those assets:

- NLT Alerts (daily alerts for trading assets on multiple time-frames).


- NLT Scanners (you run your own scans for assets with price moves).
- NLT Watch List Indicators (filter through your lists of preferred assets and see what is on a pre-
stage of a price move).

Graphic-11: Example for the NLT Stock Alert for December 24, 2018

The actual alert contains further details and appraisals.

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B) Chart Validation

Graphic-12: BX Trading Example from the NLT Stock Alert for December 24, 2018

The BX daily chart had


an orange signal, which
stands for a reversal
potential. On this signal,
we use a prior NLT Box
Line as target and expect
the price to move there
in a maximum time of 10
bars. In our example, it
took four bars. The signal
assumes a slight reversal
and offered a favorable
buy point at $28.44 with a
very favorable reward/risk
setup.

C) Investment Appraisal

Recommendation: Establish odds-based decision making, which relates strength of the setup with the
expected reward and risk of the observed situation. We want to give you a short cut in the following table
where you see our way of appraising situations system-based. The example is based on the BX setup you
saw on the alert and chart, considering an average investment of $10,000 with a 2% portfolio risk, either
through buying the stock or participating in the expected up move through buying call options.

Graphic-13: NeverLossTrading Position Sizing Model for Stocks and Options

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The table favors the investment in the stock over the investment into options; however, both
alternatives are appraised positively. On the stock trade, an investment in 400 shares on a 2:1
reward to risk was calculated. On the option trade, buying six contracts with a reward/risk of 0.9
was calculated (still in spec. but not as positive as the stock trade).

D) Journal Your Trades


We understand that administrative work is the least favored; however, we still recommend for
you to journal your trades by photo-capturing entries and exits, expected and realized returns
and a log for documenting your adjustments to trades to see the return on your activities.

Graphic-13: Trade Journal Example

Capture Entries and Exits Document Returns Trade Adjustment Log


Exit Date Stock Nov-18
11/27/2018 UPS $ 2,500
11/28/2018 JPM $ 2,316
11/28/2018 MA $ 1,134
Total $ 5,950

Exit Date Stock Dec-18


12/3/18 BBY $ 1,800
12/4/18 NKE $ 2,880
12/4/18 DIS $ 1,090
$ 5,770

Capturing and re-appraising situations allows you to produce a roadmap, telling you which
situations worked in your favor, with the intention to constantly better your trading: repeating
what worked and staying out of trade situations that were not successful for you. The trade
adjustment log combines the assumed with the realized reality, giving you a calculation scheme
for knowing the results when you added to your trade. In the next chapter, we briefly explain
why you might want to do this.

5. Do You Have the Ability to Counter Act, when Things go wrong?

With the current stock market development, we hope you had the ability to either trade with the newly taken
direction, if not, we want to share some keys of hedging and repairing trades.

Portfolio Hedging

If you hold a portfolio of stocks either in your IRA, 401(k), or personal account that replicates one of the key
indices, Futures contracts offer the ability to hedge your holdings. Futures represent stock and you can equate
a value each contract represents:

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Putting a Hedging Case together:

On the basis of a hedge, you can continue holding your assets and counteract the negative price development
of the market, balancing the effect or even turning it into a positive one for you.

• Let us assume, you held a portfolio $100,000 of S&P 500 related stocks
• On December 13th, 2018, your system triggered the need for a hedge (see Chart-2).
• At this instance you had to sell one /ES contract with a 20 point stop and open target.
Considering the CME maintenance margin: $7,700 of capital is needed to do this trade (at
some brokers only $500).

Let us now calculate the impact of this hedge on your total account balance:

• Your $100,000 stock holdings lost 8.7% in value or $8,700.


• A 230 point down-move on the /ES: S&P E-Mini Futures Index gave you a gain of $11,500.
With the hedge in place, you were producing a net positive result of $2,800 or 2.8%, even so
the market went against you. Sure, such a hedge has to be system-based and we teach how
to establish and follow such principles in our mentorships.

Our name derives from us teaching to not take a stop-loss; instead, repair the trade
(NeverStopLossTrading was a bit lengthy). Had you done that aside from hedging your portfolio,
it would give you the ability to greatly reduce your average expected losses and leverage your
returns: Comparing 100 trades at 65% predictability gives the following overview:

Graphic-14: Calculations of the Effect of Trade Protections on the Overall Returns

100 Trades at 65% 100 Trades at 65%

65 Dollar Gain 65 Dollar Gain

35 Dollar Risk 35 x 0.4 = 14 Dollar Risk

30 Dollar Balance 51 Dollar Balance

70% Higher Return

The calculated results clearly show the positive effect of applying trade repairs. Explaining the
action steps to do so goes further than we can explain here; however, we are teaching how you
can do this during our mentorships…check out our offering.

6. Summary
Successful trading and investing has prerequisites every trader and investor needs to establish,
else results are rather random or do not exist.
The question is, if you want to and are able to establish all what is shared here on your own, or

WWW.TRADERSWORLD.COM February/March/April 2019 60


if you like to trust into a proven system and
education program that helps you to develop TradersWorld Magazine
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Interview with
Alon Avramson

Larry: What is your background? (how long have you been trading, how did you get into this
forecasting, how did you start what did you initially use to trade with and what are you using
now?)

Alon: Born in 1965, I have a BsC in computers and electronics from 1988 and an MBA from
2000. I’v been working in hitech for the last 30 years in defining, developing and marketing
software applications and I still do.

I am also an Astrology fan. I Started to be interested in astrology at the early years of my 20s
and still learning since. I am making astrology charts and counseling to friends.
After the 2008 stock market crash, I become interested in the linkage between the stock market
and astrology. I soon realized that human feelings are important part of the decisions on buying
and selling stocks. I know astrology is a good way to predict changes of feelings in human. From
that moment, the direction was clear, I had to find the link between astrology and the stock
markets. I started to check every method of astrology I knew till then. Those methods include
traditional astrology rules typically used for human such as creating an astrology natal chart
for a stock based on the IPO day and hour. Unfortunately I could not find the correlation with
these methods. I then ran onto a special research platform developed by Sergey Tarasov called
Timing-Solution (http://www.timingsolution.com/) . This platform is rich in research options and was
just the frame I was looking for. I invested a lot of research and in the process I developed a
new method of financial astrology which does not rely on traditional astrology rules but instead
analyze each and every astrology composition on each day and the affect this composition has
on the daily price bar. The analysis is done on a long price history and uses an advanced analytic
engine call Neural-Networks, which is a member method in the Artificial-Intelligence arsenal. I
found the correlation I was looking for and developed new prediction models. I am using these
models to trade. I began to trade a few years ago, and now I am mostly trading based on
forecast models. This is a Neural-Network financial astrology.

I then decided to share my results with the public, offering my services of stock market forecasts
through my website: https://www.cycles-trader.com/

Larry: Can you explain your 5-layer model?

Alon: The 5-Layer model is one of the metods I developed. It consists of 5 different models:

The 5-Layer model provides price directions probabilities in 5 different resolutions:


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Yearly model, (Dark Blue), corresponds to a ~250 MA
Quarterly model, (Light Blue), corresponds to a ~100 MA
Monthly model, (Green), corresponds to a ~50 MA
Weekly model, (Orange), corresponds to a ~20 MA
Daily model, (Velvet), corresponds to a ~10 MA

Using the models above, an investor would look into the Yearly model to see the general stock
trend and will use one of the other models to decide on the actual timing for entry and exit.

Here is an example of using 2 layers out of the 5-Layer model on German DAX.

The left blue side is the price history provided to the Neural-Network Model, The right pink side
is the resulting projection lines, the trend prediction. The black line indicates the real price. In
this example I used 2 out of the 5-Layer model. the Yearly model (dark blue) and the Weekly
model (orange). An investor looking to invest in DAX at January 2018, with the projection lines
from the 5-Layer model, will look for a short either on January 2018 or on June 2018. For the
exact timing to enter the market or to exit the market, the investor will use the Weekly model
and the points of change of directions (marked in red).

Here is another example on GOLD forecast for the whole year 2018. Here I used all the 5 layers
to show the possibilities of the forecast model. Black line is the actual price. Colored lines are
parts of the 5-Layer model.

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Yearly model, (Dark Blue), Main trend line
Quarterly model, (Light Blue), Large swings around the yearly
Monthly model, (Green), Medium swings around the yearly
Weekly model, (Orange), Small swings around the yearly
Daily model, (Velvet), Daily changes around the yearly

In addition to the 5-Layer model I am now offering forecast models for short periods of 2-6
weeks, based on 60-minutes bars. These models are targeted to the swing traders.
Here is an example for EURUSD 60 minutes forecast for 6 weeks, from Dec 1 2-18.

Here I used an additional model, customized for 60 minutes bars. The blue line is the forecast
model, the red marks indicate the change of direction. This model can be of great assistance
to the swing trader looking to see when the next change of trend is expected, as an additional
decision supporting tool in his arsenal.

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Additional examples can be found on the website: https://www.cycles-trader.com/examples
The models can be used with currencies, stocks, commodities, indices.

Larry: What program do you use to do your forecasting with?

Alon: I am using my forecast models with the TimingSolution platform.

Larry: What is the basis for using astrology?

Alon: The stock market works in non-linear cycles. Astrology also works in non-linear cycles.
Astrology is known to be a dynamic sensor of feelings when planets are transiting around the
natal chart and activating pressure points. On the other hand, buy/sell decisions are based on
feelings such as greed, fear, and hope. In Cycles-Trader we analyze the effect of past astrology
events on thousands of historic price bars and understand how they can affect the price in the
future.

Larry: Do you use any computer oscillators and do you believe in them?

Alon: If the term “computer oscillators” refers to technical indicators such as RSI then the
answer is yes. I do use them often to track the market and use them in my own trading technics
on top of the 5-Layer model.

If the term “computer oscillators” refers to “spectrum analyzer” implemented in software in


order to analyze and find cycles in a price instrument then the answer is also yes. Timing-
Solution platform also has a built in option to run spectrum analysis on price instruments. This
is a powerful tool. However, the cycles in the stock market are not stable or linear, they come
and go. So even if we find a strong cycle active today using the spectrum analysis, it may lose
strength or even disappear sooner or later.

Larry: Do you use any Gann, Elliott Wave etc?

Alon: I am not using Gann or Elliot Wave in my analysis today only because I do not have
enough experience with them.

In addition, nor me or www.cycles-trader.com provide any trading advice.

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MANAGING RISK LIKE A
PROFESSIONAL TRADER TO AVOID
“BLOWING UP” YOUR TRADING
ACCOUNT
By Dr. Barry Burns, Owner of Top Dog Trading
Copyright 2019 Top Dog Trading

There are many risk management techniques in trading. Some use complicated mathematical
models. Others use a combination of art and science.

There’s no one answer to the question of how to manage your risk, other than to use principles
that allow you to CONSISTENTLY keep your losses small and catch big winners when they occur.
Amateurs are always looking for successful trades. Their expectation is that each trade they
place is going to be a big winner. If you ask them this, they of course say “no.” But when you
watch their behavior, the answer is clearly “yes.”

How does this manifest itself?

When a trader takes multiple trades over time, but none of their trades turn into large winners,
they get tired, get distracted and take a break, skip some trades, and miss the big winner.
Beyond simple fatigue, this happens in part because of the trader’s belief that most of their
trades should be large winners if the trading method is valid.

Another phenomena that occurs is that after so many small wins, small losses and break even
trades, the trader get enamored with a small or medium size profit, so locks that in before the
market has finished its move. Then the market goes into a mega-trend without him/her.

The truth is that most trades taken by successful traders are small wins and small losses. A good
day trader may find that 1-3 of their trades for an entire week account for 80% of their profits
for that week. That means 2-4 days with no significant winning trades.

There’s simply no way to know when the market is going to have a major follow-though, so you
have to take every setup in your methodology without getting tired. Knowing this before you
begin gives you the proper mindset to be consistent, not miss trades, and not be concerned
when most trades don’t follow through very much.

It also encourages you to look for those opportunities to hang on to winners when they do occur,
because you know that’s where your entire weekly income will be found.

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Most traders are aware of the need to trade with a good risk/reward ratio. However the truth
is there’s no way to assure that on any one trade. Your risk/reward ratio is established over a
history of trading.

You can’t control when or whether the market makes a big move, so you must focus on keeping
your risk consistently small.

Again, many traders don’t keep their original risk consistent. This is absolutely crucial, otherwise
some losses will be large and others will be small when your protective stop is triggered. This is
a recipe for disaster.

When I refer to your protective stops being consistent, there are often 2 misunderstandings that
arise:

1. You’re supposed to trade the same number of shares/contracts every time.

2. You’re supposed to trade the same amount of money each time.

Let’s look at #1 first: You’re supposed to trade the same number of shares/contracts every time.
If you trade 100 shares on every stock, then on a $10 stock you’re investing (putting at risk)
$1,000, and on a $100 stock you’re putting at risk $10,000. These are not equal risks. Therefore
you’re giving one trade much more weight in your portfolio than the other. This is terrible risk
management. 75% of your trades could be winners, but if all your winners are with $10 stocks
and all your losers are with $100 stocks, you’re still likely to lose money.

Now let’s look at #2: You’re supposed to trade the same amount of money each time.
You may think to solve this problem you’ll simply invest the same amount of money in each
stock. So if you decide you’re going to invest $1,000 in each stock, you would buy 100 shares of
a $10 stock, but you would buy 10 shares of a $100 stock.

This certainly is a reasonable approach in that you’re risking the same amount of money on
every trade.

But there is one shortcoming to that approach. It assumes that your risk is the ENTIRE position.
It’s true that when you put that money out there, the entire position IS indeed at risk. No
question about that. However, what is the probability that your stock will go all the way down to
ZERO overnight?

If you’re trading stocks that have decent volume and price (avoiding penny stocks and lightly
traded stocks), then that risk is minimal (though we acknowledge that it’s there).
Here’s the problem:

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Your actual risk on 99% of your trades should be only the distance between your entry and your
protective stop. But that distance will often vary by as much as 50%. That means your risk on
the vast majority of your trades will vary by as much as 50%.

This is the more typical scenario.

Therefore the approach that will level the risk on all your trades is to take the amount you’re
willing to risk on a trade and divide that by the distance from your entry to your protective stop.
EXAMPLE:

You’re willing to risk $300 on a trade.

If the distance from your entry to your protective stop is $1, then you could buy 300 shares. If
the distance from your entry to your protective stop is 50 cents, then you could buy 600 shares.
It also helps to look at your “budget” and set a maximum amount you will risk if the stock does
go to zero. This means keeping the stocks you buy in a certain price range and not risking more
than a set percentage of your total trading account (usually 2% or less) in total investment
on any given trade. This helps to buffer you from the occasional stock that gaps through your
stop or goes out of business. And, of course, solid diversification principles and hedging with
options are also critically important.

If you’re not already familiar with these principles, I encourage you to get a book on risk
management since the topic is beyond the scope of this article.

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Another key aspect of managing risk is what I call “adjusting your cost position” in the trade as
soon as possible. In addition to keeping your protective stops, this is a way of keeping all of your
losses small.

I’ll demonstrate this with an example of day trading the e-mini, but it also applies to stocks,
Forex, and commodities, as well as swing trading and investing.

In the example below we’re going SHORT below the low of the setup bar (highlighted) and
putting our stop above the setup bar. The exact reason for entering the trade isn’t important,
we’re just using this to illustrate money management.

We’re risking 6 ticks and trading 4 contracts, so our total risk in the trade would be $300 if the
trade completely fails and we get stopped out.

We could use the last swing low as our first target. That would be 1422.00 and would give us
more than a 1:1 risk/reward on the first exit, which would be great … if we reached it.

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The trade didn’t work, so we lose $300. Don’t you hate when that happens?

If we simply used a strict 1:1 risk/reward for our first exit, that wouldn’t have worked either
since price just tickled 1422.75, which was 1.5 points from our entry and exactly a 1:1 risk/
reward, but the odds of getting filled were small.

We risked 6 ticks, but instead of insisting on a 1:1 risk/reward, what if we took off ½ of our
position earlier, at only a 4 tick gain? Now let’s see how that would change things.

First, the closer you make your first target and the quicker you take profits, the greater your
odds that you’ll hit your first target. The risk/reward isn’t as good, but the win/loss on the first
exit will be much greater. Getting a 1:1 risk/reward is much harder than most people realize
until they try getting it. The odds are generally lower than 50/50!

So if we put our first target at just 4 ticks, then we have a bad risk/reward, but a much better
win/loss. Remember, this is only the target for part of our position … say the first 2 contracts.

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Now let’s look at the math on the last trade:

We reached our first puny 4 tick target, so we made $50 on 2 contracts, which is $100.
We lost 6 ticks on our last 2 contracts, so we lost $75 on 2 contracts, which is $150.
So our total loss is now $50 instead of $300!

The difference in your losses is HUGE!

Here’s the rub:

How many $300 losses can you take in a day before you have to quit trading?
What does it do to you psychologically to take one or two $300 losses, and how does that
compare to your mental state when you take $50 losses?

The FIRST RULE OF TRADING is “keep your losses small.” And this is one way to do it.
The primary objection to this approach is:

This reduces your risk/reward ratio because you’re removing fully ½ of your contracts with such
a puny profit.

That is absolutely true. If you have a solid trading methodology AND you have the psychological
makeup to take many more losses than wins, BUT you also have the psychological makeup to
hold on to your winners for the big payoff, then go for it!

But most people can’t handle the large draw down periods of such an approach, so whether it
“works” or not isn’t helpful, because most traders can’t “work” it.

However you need to understand the point of this technique. Those first 2 contracts are there
for the exclusive purpose of reducing the size of your losses. They are purely defensive.
Therefore even taking a 1 or 2 tick profit on them will help reduce your loss.

They are only used to “adjust your cost position” in the trade. They are there to acknowledge
that many trades do not succeed, so we simply want to minimize the damage of the losing
trades.

They are your defensive players whose job it is to simply hold the other team from scoring too
many points against you until your offense can come back on the field and score some points for
your team.

And it works for one very good reason: The probability of the market moving 2-4 ticks in your
direction are much higher than it moving 4-8 ticks in your direction.

WWW.TRADERSWORLD.COM February/March/April 2019 71


Then you still have 2 contracts left in case the
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Mature and successful traders tend to be


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tend to emphasize defense more than offense.
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optimistic about trading in general, and so tend QUARTERLY MAGAZINE SUBSCRIPTION
Read articles explaining classical trading
to emphasize offense more than defense.
techniques, such as W.D. Gann, Elliott Wave,
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Dr. Barry Burns is the owner of https://www. analysis explaining indicators in eSignal,
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WWW.TRADERSWORLD.COM February/March/April 2019 72


Rise and Fall of a Crypto Star: How
Cycles Predicted the Crash of Nvidia

by Lars von Thienen, www.whentotrade.com

Cycles are important not only in physics, but also in behavioural economics. The impact of
psychological, social, cognitive and emotional factors on the economic decisions of individuals and
institutions does not lead to market prices moving abruptly but in cyclical waves.

Understanding behavioural cycles is critical to achieving returns in the current market


environment. According to many behavioural economics studies, mood can strongly influence
individual behaviour and decision making. Mood predisposes people for certain decision-making
processes, and the mood in the crowd can lead to trends occurring. The ability to find and
quantify the underlying mood cycles can enable the informed trader to predict the likelihood of a
trading direction.

Normally the mood in the form of dynamic cycles in markets driven by a certain primary level of
greed and fear increases and decreases positively and negatively. A current market driven mainly
by fear and greed is the crypto currency market. So far, most crypto assets have no real basis for
fundamental analysis. In a market like crypto, where emotions drive price movements, cycles can
often be identified and used to analyze market movements.
Sentiment cycles can even play a more important role in market analysis if both more traditional
assets (e.g. stocks) and novel assets (e.g. crypto currencies) have significant correlations. The
ability to find these types of situations, referred to as ‘cycles within cycles’, can lead to highly
profitable trading set-ups.

This type of setup has been easy to see over the past 24 months. The emotional behavior of
crypto currency values was obvious with a lot of publicity. The rise of the new crypto-assets drove
demand for the underlying technologies. Nvidia’s GPUs were in high demand in crypto-currency
mining and Nvidia was described as the “hottest stock” and top performer in the entire S&P 500
due to its high correlation to crypto mining.
Therefore, it makes more sense not only to perform technical analyses of Nvidia’s market prices,
but also to analyze the underlying dominant cycles and the correlation of Nvidia’s to crypto
market cycles.

In this report, we emphasize the importance of identifying cycles in emotional markets to


identify turning points in correlated traditional financial assets. In this case we analyze the
driving cycles of Nvidia and correlate them with the crypto-cycles. Recognizing cycles within
cycles is susceptible to trading set-ups with high profitability. The following case study illustrates
the importance of cycle analysis and predictive power of ‘Dynamic Cycle Explorer’ (DCE). The

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Dynamic Cycle Explorer algorithm has been made available in a public available book “Decoding
The Hidden Market Rhythm”.

Let’s start with the market situation in July 2018. Nvidia’s share price moved sideways over the
course of the year. This movement took place in line with the perceived dominant downward
cycle since February with a cycle length of 147 days. (Chart 1) In strong uptrends, downward
dominant cycles cause the larger trend to pause and prices to stagnate rather than fall. In
this case, we could see that Nvidia was moving sideways until June 2018. This shows that
the dominant cycle is in place and that the uptrend since February has been suspended for
a moment as expected. The dominant cycle is now turning upwards in June according to the
recognized cycle and a further revival of the Nvidia stock price can be expected until mid-
September. The next downward cycle is expected to begin at the end of September.

Figure 1: Nvidia price chart and dominant cycle in July 2018

An isolated, individually identified cycle should never be the sole basis for trading decisions.
Since we are confident that there is a strong correlation between Nvidia and the crypto markets
in this case, we also need to review the current dominant cycles in the crypto market. For this
purpose we use the Bitcoin/USD rate as proxy for the underlying crypto cycle. The following
chart 2 shows the Bitcoin price and the dominant cycle with a length of 157 days detected in
July 2018 via the ‘Dynamic Cycle Explorer’ algorithm.

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Figure 2: Bitcoin/USD price chart and dominant cycle in July 2018

This analysis also forecasts the next expected cycle high for early October.

Conclusion: July:
In July 2018, we had a cycle-in-cycle lock-in situation between two independent markets:
- the crypto markets with a dominant cycle duration of 157 days point to the next cycle high in
early October, and
- the Nvidia share price with a dominant cycle duration of 148 days is forecasting a price high
around the mid-September date.
This suggests that we can expect a rising Nvida price by the end of September followed by
a subsequent change in trend. It should be noted that this analysis, which is derived based
on cycles, cannot be interpreted statically and must therefore be checked daily for changing
influences.

The next chart shows the development of the Nvidia share price at the beginning of October, the
forecasted next important turning point.

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Figure 3: Nvidia’s share price rose as expected and reached the forecasted cycle high for late
September.

In the forecast period between July and October, Nvidia prices rose by +15% from USD 244 to
USD 279 within 4 months, according to our dominant cycle analysis. Since the expected turning
point was reached in October according to the forecast time and the daily review of the cycles
still confirms the forecast, we must be on our guard against an imminent dominant cycle top.
It needs to be examined whether the same dominant cycle is still active on the crypto markets.
This is shown in Figure 4.

Figure 4: Dominant cycle in Bitcoin mid-October - confirmation of forecasted cycle Top from July
The crypto-cycle analysis confirms the dominant cycles. A turnaround in Nvidia stock prices is

WWW.TRADERSWORLD.COM February/March/April 2019 76


therefore expected for October 2018, as the underlying dominant cycle of both the stock and the
crypto market is now expected to turn.

Conclusion October:
Two possible scenarios can be derived from this situation:

- The strong base uptrend will be stopped again when the next downward dominant cycles occur
in October. Which is consistent with a sideways movement of the share.

- The uptrend is stopped and transformed into a stronger downtrend of Nvidia as we see a cycle-
in-cycle situation in two independent markets.

Correlating cycles within independent markets with the same forecast often do more than just
“stopping” an existing trend. Either way, a trader would now close existing long positions to be
on the safe side. If he trades more aggressively, additionally open a short position with low risk.
With an exit setting at the current level of around USD 279 according to the cycle peak observed
for the Nvidia share at the beginning of October (chart 3).

The next chart shows the price development according to this forecast of the expected cycle high
in October.

Figure 5: As expected, the Nvidia price is falling strongly, in line with the perceived downward

WWW.TRADERSWORLD.COM February/March/April 2019 77


dominant cycles

This is the perfect result of synchronous cycles in independent markets. The share price lost
50% after our expected dominant cycles peaked. This is the result of a cycle analysis in an
emotionally driven market (crypto) with highly correlated traditional assets (stocks).

The cycle detections used and shown in this example were detected fully automatically and
without manual settings by a programmed cycle indicator. Our publicly published ‘Dynamic Cycle
Explorer’ algorithm discovered the highlighted dominant cycles and their derived predictions
about the timing of the coming highs and lows.

The Dynamic Cycle Explorer works on the assumption that cycles are not static over time.
Dominant cycles morph over time because of the inherent nature of the parameters of length
and phase. Typically, one dominant cycle will remain active for a longer period and vary around
the core parameters compared to other cycles. Every time a new bar appears on the chart, the
Dynamic Cycle Explorer reassesses the state of the current dominant cycle in terms of length,
strength, and phasing. Subsequently, it updates this cycle by plotting it onto future projections.
As we move forward in time, every bar signifies an update of the expected turning point by
a reassessment of the current state of the dominant cycle length and phase. This dynamic
forecast based on the actual state of the dominant cycle provides information about the time
and direction of the next turning point. We obtain real-time information about when to expect
the next major turning point in the market as we continuously reassess the parameters of the
dominant carrier wave. This information is updated every time a new bar appears.

This technique was used in this market report. You can find more information in the publicly
available WhenToTrade website or in our book providing the DCE algorithm available at Amazon.
Lars von Thienen

www.whentotrade.com

WWW.TRADERSWORLD.COM February/March/April 2019 78


The Transneptunian Paradox and
Precision Timing In The Markets
by Tim Bost

While planetary dynamics can be used to time market positions profitably in swing trading
situations, and while they can also be used predictively to inform longer-term investment
strategies, they can do much more than that.

If we really want to get the greatest advantage from applying astrology to the markets, we
shouldn’t overlook the effectiveness of planetary cycles in short-term or intraday trading as well.

As we examine possible applications of planetary cycles in the markets, one of our main
considerations is to match the specific planetary energies we are examining to the appropriate
corresponding time frames for trading. Different planets have different speeds and different
orbital periods, giving us clues about the best corresponding trading strategies and time frames.

If we are interested in longer-term investment potential, then it makes sense to consider outer
planet harmonics, since the outer planets move much more slowly as seen from the Earth’s
perspective. But if we’re looking at trading opportunities with a more immediate time frame, we
can expect inner-planet dynamics to describe the market potential more accurately.

With our current approach to astro-trading, however, we have discovered that we can also
include the so-called transneptunian factors in our calculations, even though they move
extremely slowly. The transneptunian factors were first postulated by the German astrologer
Alfred Witte (1878 – 1941) in the early years of the 20th century, based on his observations of
combat phenomena in the midst of his personal exposure to trench warfare during World War I.

Witte paid attention to the transiting astrological configurations that were dominant during
particular stages of the ongoing combat. In many cases, there were clear correlations with major
events in the war and classical configurations from the astrological tradition. But Witte also
observed battlefield events with timing that did not seem to coincide with known astrological
factors. As he continued his observations, he concluded that there must in fact be additional
planetary influences as causative forces for the events he was witnessing in the trenches.

Those unknown physical planets had not yet been observed by astronomers, of course, but even
so Witte, who had extraordinary mathematical and engineering talents, calculated precise orbits
for these hypothetical bodies and added them to his astrological considerations and forecasting
methodology. The result was a mature and evolving understanding of harmonic and symmetrical
planetary alignments, along with a greater level of predictive precision in anticipating upcoming

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events.

For many decades following Alfred Witte’s pioneering but somewhat eccentric astrological work,
his notion of hypothetical planets was greeted with considerable skepticism by the international
astrological community. After all, there were no telescopic observations of any additional solar
system objects that corresponded with Witte’s hypothetical bodies, so the idea of including
these unknown factors in astrological calculations seemed questionable at best. And since Witte
had postulated orbits for his objects that went far beyond the bounds of Pluto’s 248-year cycle
around the Sun, it seemed quite unlikely that his presumed planets would ever actually be
observed.

All that skepticism began to shift with the advent of high-powered deep-space telescopes sent
into the outer reaches of the solar system. The breakthrough came with the discovery in 1992
of the Kuiper Belt, a cloud of innumerable objects surrounding the solar system far outside the
orbit of Pluto. To date more than 10,000 individual Kuiper Belt objects have been cataloged, and
it seems likely that there are well over 100,000 objects at least 1 km in diameter in that zone
outside our solar system.

As astronomers continued to study Kuiper Belt objects, it soon became apparent that this
populous zone of minor orbiting objects coincided quite nicely with the proposed orbital range
that Alfred Witte had calculated for his transneptunian factors many decades earlier. While we
have yet to determine precise correspondences between all of Witte’s transneptunian factors
and specific Kuiper Belt objects, it is nevertheless clear that there is indeed some observable
physical basis for Witte’s hypothetical planets.

But how do the eight transneptunian factors (Cupido, Hades, Zeus, Kronos, Apollon, Admetos,
Vulcanus and Poseidon) postulated by Witte and his students impact our ability to forecast
market actions, and what’s the best way for us to consider them in our approach to trading?

In answering those questions we face some interesting challenges. After all, the transneptunian
factors have orbital periods measuring from 262 years to 740 years, so it seems logical that,
like the outer planets of our solar system, they should only be studied in relation to long-term
market and economic cycles.

To a certain extent, that has proven to be a valuable premise. For example, in the 1930s
there was a long lasting conjunction of the transneptunian factors Hades and Admetos. As the
name implies, Hades is associated with high levels of degradation and decay, while Admetos
is connected with fundamental limits and severe inhibitions, as well as with raw materials and
primal substances. The conjunction of these two transneptunian factors coincided with the
time of the Great Depression on a global scale, and the symbolic connotations of this particular
combination – mixing deprivation with degradation – certainly matches the grim social and
economic circumstances during that era.

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But in our more recent research, we have found that long-cycle transneptunian factors can
paradoxically also function quite well as significant guideposts for short-term trading decisions.
In fact, they can even assist us in determining high-probability inflection points in the markets
on an intraday basis. In doing so, they help provide what is essentially a static field against
which faster-moving transiting dynamics can be contrasted to give us useful information about
market timing.

The key to using this approach is to begin with a base horoscope – the inception chart for
an exchange or a market index, or the First-Trade horoscope for an individual stock whose
shares are publicly traded. We use the degree positions of key planets in that horoscope as
fixed indicators, and then apply rapidly-moving dynamics in the current trading time frame to
determine the highest-probability inflection points in the market environment.

By setting our current horoscope for the location of the trading exchange we are using, and then
by tracking the ongoing positions of the current Midheaven on that chart throughout the hours of
a trading day, we can derive a sequence of events in which the First-Trade planets are activated
in the eighth harmonic by the transiting Midheaven. (The eighth-harmonic activations are angles
of arc opening between positions or planets of 0°, 45°, 90°, 135°, or 180°.)

[Figure 1 – PCG First-Trade Horoscope]

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As an example, we can use the horoscope for PG&E Corporation, which trades on the New York
Stock Exchange under the symbol PCG. Historical records show that PCG first began trading
on June 1, 1972; the trading day then began at 10:00 a.m., so we calculate our chart for that
moment in time at the opening bell.

While it can be useful and informative to do an in-depth examination and analysis of this
horoscope diagram, we are primarily interested in the key planets and transneptunian factors
that have the greatest probability of being associated with turning points in the trading action:
the planets Saturn, Neptune, and Pluto and the transneptunians Hades and Admetos, which
tend to activate trading tops and bring prices lower; the planets Venus and Jupiter and the
transneptunians Cupido, Kronos, and Apollon, which can identify trading bottoms and launch
higher price action; and the planets Mars and Uranus plus the transneptunians Zeus and
Vulcanus, which provide an acceleration or intensification of market activity within the context
of prevailing trends. In each case, we are more concerned with identifying potential inflection
points than with pre-determining the direction of an intraday trend.

Note that in this list, we have added traditional inner planets like Venus and Mars, as well as
outer planets like Uranus and Neptune. But we have also included some of the slow-moving
transneptunian factors, not because of their long-duration orbits, but because they offer us
remarkably powerful resonant points in the chart which can respond to speedier transiting
dynamics in ways that help us understand the potential for future market movements. If we
leave out the transneptunian factors, we miss out on an important part of the overall picture.
Based on those parameters, we can calculate the impact of the transiting Midheaven throughout
the course of a single trading day – in this case, Friday, January 18, 2019. We have chosen the
Midheaven as a transiting factor because of its extreme speed; it moves through one degree of
arc opening in just one minute of clock time throughout the trading day.

Eighth-Harmonic Alignments:
Transiting Midheaven to Key First-Trade Points

PG&E Corporation (NYSE – PCG) – 10:00 a.m. EDT, June 1, 1972


Transiting Triggers During Market Hours in EST, January 18, 2019

A - Jan 18 2019 10:02 Midheaven 90° First-Trade Pluto


B - Jan 18 2019 10:16 Midheaven 90° First-Trade Apollon
C - Jan 18 2019 10:23 Midheaven 180° First-Trade Venus
D - Jan 18 2019 10:26 Midheaven 180° First-Trade Vulcanus
E - Jan 18 2019 10:31 Midheaven 135° First-Trade Hades
F - Jan 18 2019 10:32 Midheaven 0° First-Trade Jupiter

G - Jan 18 2019 11:00 Midheaven 180° First-Trade Mars


H - Jan 18 2019 11:07 Midheaven 90° First-Trade Uranus

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I - Jan 18 2019 11:25 Midheaven 45° First-Trade Neptune
J - Jan 18 2019 11:47 Midheaven 135° First-Trade Kronos
J - Jan 18 2019 11:47 Midheaven 90° First-Trade Cupido
K - Jan 18 2019 11:53 Midheaven 135° First-Trade Saturn
L - Jan 18 2019 11:58 Midheaven 135° First-Trade Zeus

M - Jan 18 2019 12:30 Midheaven 90° First-Trade Admetos

N - Jan 18 2019 13:11 Midheaven 135° First-Trade Pluto


O - Jan 18 2019 13:24 Midheaven 135° First-Trade Apollon
P - Jan 18 2019 13:30 Midheaven 135° First-Trade Venus
Q - Jan 18 2019 13:34 Midheaven 135° First-Trade Vulcanus
R - Jan 18 2019 13:38 Midheaven 90° First-Trade Hades
R - Jan 18 2019 13:38 Midheaven 45° First-Trade Jupiter

S - Jan 18 2019 14:04 Midheaven 135° First-Trade Mars


T - Jan 18 2019 14:10 Midheaven 135° First-Trade Uranus
U - Jan 18 2019 14:26 Midheaven 90° First-Trade Neptune
V - Jan 18 2019 14:45 Midheaven 90° First-Trade Kronos
V - Jan 18 2019 14:45 Midheaven 135° First-Trade Cupido
W - Jan 18 2019 14:50 Midheaven 90° First-Trade Saturn
X - Jan 18 2019 14:55 Midheaven 180° First-Trade Zeus

Y - Jan 18 2019 15:24 Midheaven 45° First-Trade Admetos

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[Figure 2 – PCG Trading on January 18, 2019]
Note that in this particular case there are 28 Midheaven activations during the course of the
trading day. Exactly half of them involve alignments with transneptunian factors. On the intraday
chart for PCG above, we’ve flagged the points at which these alignments occurred. (Note that at
11:47, 13:38 and 14:45 we’ve assigned a single letter code to two different events, since they
took place at the same time.) While not all of these Midheaven triggers corresponded with major
shifts in the price trend, the overall picture gives us a detailed sense of the prevailing market
action throughout the trading day.

[Figure 3 – AAPL on January 18, 2019]

As another example, we can take a look at the trading chart for Apple (NASDAQ – AAPL) for the
same trading day, January 18, 2019.

In this case we’ve added a trend line to the chart, showing the upward trend in the stock’s price
action throughout most of the trading day. But at 14:08 that afternoon, when the transiting
Midheaven formed a 90-degree square to the position of First-Trade Hades (indicating lower
prices ahead), the stock broke through support and then traded lower for the remainder of the
market session.

This technique can also be applied to market indices as well as to individual equity trades.
When it is used to examine the trading action in an index, the transneptunian factors are often
associated with key intraday trend reversals.

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[Figure 4 – S&P on January 18, 2019]

For example, the chart for the S&P 500 Index on January 18, 2019 shows a trading day
characterized by fairly range-bound market action throughout most of the afternoon. In this
case, we have applied the activating force of the transiting Midheaven to the key planetary and
transneptunian points in the original horoscope for the New York Stock Exchange, from May 17,
1792.

Even after two centuries, the positions of the transneptunian factors in that horoscope chart
are still active. On the trading day that we examined, the transiting Midheaven was in a precise
conjunction with the NYSE inception Kronos when the S&P Index hit its intraday high at 12:27
p.m. EST.

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[Figure 5 – NASDAQ on January 18, 2019]

As a final example, we’ve taken a look at the intraday trading action for the NASDAQ Composite
Index on the same trading day that we have used in our previous examples, January 18, 2019.
Once again we’ve applied the action of the transiting Midheaven to our list of key planets and
transneptunian factors in the NASDAQ horoscope.

There were four key activations that occurred during that trading day: a square to Pluto at
10:02; an opposition to Vulcanus at 10:22; a square to Hades at 13:27; and a square to Kronos
at 14:38. In each case, these timings proved to be significant in the course of that day’s trading
action.

While this technique of applying the transiting Midheaven to key horoscope points is certainly not
infallible as a forecasting tool, it nevertheless offers us some important insights that can prove
useful as we plan for short-term trading strategies. And while it may seem paradoxical to include
the slow-moving transneptunian factors in our calculations, our experience has shown just how
vital they can be in giving us a more complete picture of the astrological trading potential hidden
in any given day in the markets.

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Review of Rob Hoffman’s
Pro Trader Pack Elite for
MetaStock.
Review by Larry Jacobs

The software of Rob Hoffman’s Pro Trader Pack Elite includes:


1) Hoffman Core Trigger
2) Hoffman Fast Trigger
3) Hoffman MSR Daily
4) Hoffman MSR Intraday
5) Hoffman Oscillators

The Explorations also include


1) Hoffman Inventory Retracement Signals
2) Hoffman Momentum Signals
Templates included
1) Hoffman Full
2) Hoffman One Chart

Hoffman Core Trigger


It will display in four different colors; blue,
magenta, red, and green. Here are the indicator states:
• Blue: Momentum is bullish and increasing in bullishness
• Magenta: Momentum is bullish and decreasing in bullishness
• Red: Momentum is bearish and increasing in bearishness
• Green: Momentum is bearish and decreasing in bearishness
Ideally, for long trades you want the Hoffman Fast Trigger to be Blue, the Hoffman Core Trigger
to be Blue, and the Momentum ribbon to be Blue. Conversely, with short trades you would like
the same indicators to be Red.

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Hoffman Fast Trigger
Combines Rob’s tools to measure market momentum. The indicator will display in four different
colors, blue, magenta, red, and green. Here are the indicator states:
• Blue: Momentum is bullish and increasing in bullishness
• Magenta: Momentum is bullish and decreasing in bullishness
• Red: Momentum is bearish and increasing in bearishness
• Green: Momentum is bearish and decreasing in bearishness

Hoffman MSR
There are two MSR indicators:
• Hoffman MSR Daily
• Hoffman MSR Intraday
The Hoffman MSR is a combination of moving averages. They are used for Trend Identification
and as entries in Robs Trading setups.

Hoffman Oscillators
The Hoffman Oscillators are designed to measure OverBought/OverSold readings in the security.
They should be combined with the Hoffman MSR, Momentum, Fast and Core Trigger. A reading
above 80 during a downtrend indicates a resumption of the downtrend is likely. Alternatively a
reading below 20 during an uptrend indicates a likely resumption of the uptrend.

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Hoffman Full Template
The full template opens 5 charts. From left to right they are Daily, hourly, 15 minute, 5 minute,
and 2 minute. Each chart is formatted identically with the following elements:

• Hoffman MSR
• Prices in candlestick format
• Hoffman Pro Trader Pack Elite expert adviser
• Hoffman Fast Trigger
• Hoffman Core Trigger
• Hoffman Oscillators

It is good to see all these charts when you are analyzing the market. You should view at least 20
or more candles in each chart.

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Hoffman One Chart
This is the same as the daily chart from the Hoffman Full template. This is for those traders who
want to focus on just one chart at a time.

Using Expert Advisors


You can attach Experts to your charts. The following explorations are included in Rob Hoffman’s
Pro Trader Pack Elite.
• Hoffman Inventory Retracement Signals
• Hoffman Momentum Signals

This report displays all results generated during the scan. You can open the chart in MetaStock
by clicking the name of the stock. It will open the Hoffman Full or One Chart.

WWW.TRADERSWORLD.COM February/March/April 2019 90


Rob Hoffman is the developer of these indicators and is considered one of the top traders and
among the most respected to learn from in the world. He has won more real money, on-site,
domestic and international trading competitions than any other trader anywhere. Mr. Hoffman
offers his students a very unique live trading experience where students are able to look over
his shoulder and ask questions as he trades live, in real-time. I would recommend that you
follow him see how he trades using this software. He mentors traders on how to use the same
techniques he uses during all of the top trading competitions and does this right on the screen in
front of them in his real live trading account, something very few traders are willing to do.
For more information go to www.Metastock.com

WWW.TRADERSWORLD.COM February/March/April 2019 91


DID W.D.GANN USE PLANETARY
HOURS AS SHORT TERM CYCLES?
By D.K.Burton

There are a lot of astrological systems but they all seem to have the “Keys” missing. Its not
that they don’t work, they just don’t work without the “Key” that make them work correctly It’s
like a locked door to a house, the door works, but cant be unlock with out the key. It seems
to me Gann understood or knew the keys to make these ancient systems work but clearly
never explained or sold them to anyone, which is what he indicated. It’s like his 1941 to 1950
Ephemeris that Lambert-Gann sells, where he counts the bible number 1335 from certain new
moons. The same goes with his planets averages they start at certain astrological combinations
not always at highs and lows of the stock or commodity markets.

The planetary hours are based on the days of the weeks of the seven ancient planets. Most
astrology system counts the day of planetary hours from sunrise. In Sepharial book “The Kabala
of Numbers” part two he explains that you count from Noon. The question is, does he leave a
“Key” out in his writings? Because he says that in the example that Tuesday the September 1913
at 5 to 6 pm has the value of 8. This means he’s using the Georgian calendar, which started in
1583. Since this method is ancient it would have to be used well before 1583, so what was the
calendar that was used before then? Noon is not 12 pm, it when the Sun is directly above for a
start.

The Hebrew is most likely where the calendar started when the world was created on Saturday
night, October 6, 3761 BCE. Is the 6th October a key Gann has given in TTTTA of Marie Stanton’s
birthday of 6th October 1908? If you take the Sun location on both dates using sidereal astrology
they are 51 degrees apart which is a 7th of circle the same as the 7 days of the week and the
seven planetary hours. Also it is 5670 years between the two dates which when divided by 7 is
810 times (81 square of 9).

The 6th October was a new moon in 3761 BC. When you do a solar return for this date in 1908
it gives you the 25th November instead of the 6th October. The interesting part is that Jupiter is
at 20 degrees Leo, which is close to 19:40 Leo, Leo is for the Sun and the planetary days and
hours start on Sunday. The Magic square of Sun is 6; Magic square of Jupiter is 4 (36 + 16 =
52) back to 7 (5 + 2 = 7).

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Since the days of the weeks are presentive of the planets i.e.: -

Sun = Sunday, numbers 1 and 4


Moon = Monday, numbers 2 and 7
Mars = Tuesday, number 9
Wednesday = Mercury, number 5
Thursday = Jupiter, number 3
Friday = Venus, number 6
Saturday = Saturn, number 8

The day order is 3 x 51.42 as the chart shows a movement of 154 degrees to go from Sunday to Monday etc.

The main question for study is what Calendar are you going to use, for me it way before 1583. Then it’s a
question where do you start the New Year from, the Hebrew New Year, Hindu or current one? Do you count
planetary hours from sunrise or noon? This all the sorts of things Gann would have studied.
This mostly like where his horse racing and lottery system came from. I have done some work on the horse
racing with some good results but it needs more time on it.

So if you use the New Moon it’s also going to change degrees and not get back to the same degree for 19
year (not exact). When TTTTA was written it was 19 years from 1908. Gann is dropping hints in the book. I
have shown you in previous articles that the cover was coded to the square of Gann’s over lay of 144, which I
discovered about 20 years ago. 144 months is 12 years, close to the Jupiter cycle of 11.86 years, Sun/Jupiter
cycle is 361 days the square of 19, the same as the Metonic cycle of 19 years. From the year 1908 minus
576 (square of 24) years is 1332. 1332 divided by 2 is 666, the number for the Sun, not the beast or
Saturn. Add all the numbers in the magic square of the Sun (6) they add up to 666. 1908 + 12 year is 1920
(commodity boom), 1932 (depression), 1944 close to end of World War 2), 1956, 1968 (low in commodities),

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1980 (boom in commodities), 1992 (low in commodities), 2004 (low in commodities) and 2016 (low in
commodities). From 1932 to 2016 is 84 years or 7 x 12. This is the start of a major down turn in most things,
but each market has its own cycle.

Because the planetary tables are mostly based on the Sun and Moon as the Sun (Earth) rotates 15 degrees
ever hour, moves 15 degrees every 15 days. The moon moves 15 degrees in 28 hours and half a degree every
hour.

The planetary hours and minutes tables are below. The planetary hours follow the Chaldean order, Saturn,
Jupiter, Mars, Sun, Venus, Mercury and moon. Therefore Sunday at Noon starts with first hour Sun, then
Venus, and Mercury etc.

The Annual rulers

The annual rulers run in 252 years, 1/10th of the great year of 2,520. As I have written in
previous articles this number is the lowest whole number that can be divided by 1 to 10 with no
fractions left over. In Sepharials “Hebrew Astrology” he explains Mars is in Gemini for 432 years
(3 x 144) from 1657 to 2089, these are 12 x 36 sub periods. The current 36-year period started
in 2017 with Saturn ruling the next 36 years to 2052. The smaller sub periods with in this 36-
year period are: -

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2017 Saturn in Aries
2018 Jupiter in Taurus
2019 Mars in Gemini
2020 Sun in Cancer
2021 Venus in Leo
2022 Mercury in Virgo
2023 Moon in Libra
2024 Saturn in Scorpio, etc

To study Gann you would need to have at least all Sepharials books plus everything on Gann’s
reading list.

There are other ideas that need to be studied like when the Moon enters its own sign of Cancer
in the planetary hours of the other 6 planets? The same as the Sun enters the 12 signs? But
differently the “Keys” are missing to Gann’s secrets, which he said would never teach or sell.

Bio

David has been using and studying the methods of W.D.Gann since 1983. Also studying
weather cycles and sunspot cycles of Inigo Jones for the last 20 years. Currently getting
developed a W.D.Gann trader program that’s pure Gann, which should have stage one ready
by end of February 2018. It has taken 36 years of study to understand how this program
should be developed. It won’t be expensive like all the others. Watch my face books for
update.

W.D.Gann trader https://www.facebook.com/WDGann360/


Inigo Jones long-term weather forecaster https://www.facebook.com/inigo360/
Commodity hedging company https://www.facebook.com/hedge360/

GANN SOFTWARE IS READY.


WDGann Trader software is ready now. The purest and cheapest Gann software in the world
at $180 US a year. More is to be added to stage one, then another 3 or 4 stages, but most will
never have to go past stage one as it covers all you need. Then next year develop Gann horse
racing and weather software.
Website : www.wdganntrader.com

Facebook
www.facebook.com/wdgann360/
www.facebook.com/inigo360/
www.facebook/hedge360/

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Strategic Investment Mixology -
Developing The "Holy Grail" Portfolio
By Steve Selengut

So what do you or your investment manager have in common with your favorite neighborhood
bartender, other than the probability that you spend more time with the latter during market
corrections?

Antoine Tedesco, in his "The History of Cocktails", lists three things that mixologists consider
important to understand when making a cocktail: the base spirit, which gives the drink its main
flavor; the mixer or modifier, which blends well with the main spirit without overpowering it; and
the flavoring, which brings it all together.

Similarly, your personal investment strategy needs to help you:

• Put together a portfolio that is based on your financial situation, goals, and plans, providing
both a sense of direction and a framework for decision making;
• Use a well defined and consistent investment methodology that fits well with the plan without
leading it in tangential directions;
• Exercise goal directed judgment in the day-to-day decision making that brings the whole
thing together and makes it productive.

Tedesco goes on to explain that new cocktails are the result of experimentation and curiosity.
They reflect the moods of modern day society, and change rapidly as both bartenders and their
customers seek out and popularize new and different concoctions.

The popularity of most newbies is generally fleeting while the reign of the old stalwarts is
history... with the exception, perhaps, of "Goat's Delight" and "Hoptoad". But, rest assured,
Manhattans, Martinis, and all y'all's Mint Juleps are here to stay.

It's likely that many of the products, derivatives, funds, and fairy tales now popular on Wall
Street were thrown together after "ti many martunies" at Bobby Van's or Cipriani's. And just like
alcohol, addictive products created in lower Manhattan have led many an optimistic speculator
down the Holland tubes.

The most popular of today's financial products are, themselves, Wall Street's creative response
to the speculative mood of an impatient (and, perhaps, effort averse) society. The "wizards"
experiment tirelessly; their customers' search for the Holy Grail portfolio cocktail is endless; the
basic (perhaps boring) fundamental principles of investing are roundly ignored... they're just not
that tasty anymore.

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Investment portfolio mixology doesn't take place in the smiley faced environment that brought
us the Cosmo and the Kamikaze, but putting an investment portfolio cocktail together without
the risk of addictive speculations, or a bad aftertaste, is surely a talent worth developing.

A trip to your local "portfolio tending" school would introduce you to an interesting, action based,
curriculum in the "investment mixology" discipline. Some brief course description teasers follow
this sidebar.

• Passive investing is popular because mutual fund "managers" don't consistently "beat" either
market or sector indices. But why is this so? Mutual funds are really "managed" by their own
mob of unit holders. If the fearful mob wants out of the market, the order taker must sell
securities. When greed rules, the order taker must buy securities. This is hardly portfolio
management... and ETF prices? Dictated by the very same mob.

IM 101: Understanding Investment Securities

Investment securities can be divided into two major classes, making the planning exercise called
asset allocation relatively straightforward. The purpose of the equity class is to generate growth
in the form of (realized) capital gains. Income securities are expected to produce a predictable
and stable cash flow in the form of dividends, interest, etc.

Lesson One is the importance of having an appropriate mix of growth purpose and
income purpose securities. In my practice, for example, I refuse to manage a 100% equity
(growth purpose) portfolio. I insist upon having at least 30% (preferably 40%) of capital working
to produce income... because my experience has taught me just how reluctant people are to add
to portfolios during the correction phase of the market cycle.

IM 202: Minimizing "Financial" Risk

All investment securities involve both financial and market risk, in addition to several others.
Financial risk (the ability of the companies, or governments whose securities you own, to meet
their commitments) is clearly the most important. But Wall Street, the media, your golf, buddies,
spouses, etc, are much more concerned with "market" risk.. which is really not a risk at all.

It's not "risk" because it is the basic spirit of investing... all security market values fluctuate.
There's no stopping it, so the investment process must be designed to deal with it. And that will
be much more difficult if it doesn't address "financial risk" effectively from the get go.

Lesson Two, without going into nearly enough detail, teaches the use of "four
essential risk minimizing" ingredients... no, not just the one or two with the familiar
flavor. All four are necessary or your cocktail will fail to produce the desired euphoric
impact... eventually.

• apply classical diversification rules to position size, security type, sector representation, and
global participation, among others.

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• only select securities offered by high in fundamental quality, profitable companies and/or
actually managed portfolios with five or more year successful track records
• own no equity security that does not pay dividends; own no income purpose security that is
illiquid, and the final one, that each of you reading this is guilty of ignoring much more often
than not, particularly during rallies...
• let no reasonable profit go unrealized

If you have minimized the financial risk, market value fluctuation will become an expected and
welcomed feature of all your securities... it is semi-predictable, cyclical, manageable, and easy
to take advantage of.

IM 303: Day To Day Management Decision Making

There are three basic decision processes that require guideline development and procedural
disciplines:

• What to buy and when,


• What to sell, and why
• What to hold on to so long as it is doing its job.

Books have been written on each of these processes, mine includes a chapter on each... but
creating the necessary buying, selling, and holding guidelines is only half as important as having
the discipline to implement them... all the time, without looking back.

• There's absolutely no room for hindsight in investment portfolio management

Lesson Three involves "information filtering", or applying the K.I.S.S. principle to protect your
process. It's important to limit information inputs, and to develop filters and synthesizers
that simplify decision-making. What to listen to, and what to allow into the decision making
process is part of the experienced manager's skill set... kind of like knowing when the additional
flavoring or modifier will overpower the main spirit of the cocktail.

Wall Street mixologists promote cocktails that have broad popular appeal but which typically
create unpleasant aftertastes... like bursting bubbles, market crashes, and shareholder lawsuits.

IM404: The Indispensable "Spirit" of All Portfolio Cocktails

• Grow the "base income" every month, every quarter, every year and you will approach
retirement with the ability to say, unequivocally: "neither a market correction nor rising
interest rates will have a negative impact on my retirement income. In fact, the impact
may well be positive." (Base income is the total of dividends and interest produced by the
portfolio.)

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IM505: Final Exam Prep

Five conceptual ingredients that you need to blend into your “holy grail” investment
cocktail.

• Using indices and averages as benchmarks for evaluating your performance ignores your
asset allocation and the differing purposes of the securities you own.
• Using calendar months, quarters and years as measuring devices reduces the investment
process to short-term speculation, ignores market and interest rate cycles, increases fear of
market volatility, and guarantees disappointment with whatever strategy or methodology you
employ ... most of the time.
• Buying any type or class of security, commodity, index, or contract at historically high prices
and selling high quality companies or debt obligations for losses during cyclical corrections
eventually dilutes the strength of your cocktail.
• Technical analysis contains excellent tools for developing an understanding of the past...
nothing can predict the future.
• Growth in market value fuels the ego; growth in realized income fuels the yacht.

Cheers!

Please join my private article mailing list

Please join my Linked In network

Steve Selengut
Author of: "The Brainwashing of the American Investor"
http://retirementreadyincomeprograms.com

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Introduction to Hidden Geometry
By Ron Jaenisch

Can you recall a time when you learned something that left you feeling compelled to know a lot
more, because you knew that it will get you to where you want to go? As you read this article,
you will most likely have that feeling again. If you could easily forecast that a stock or index
would make a powerful move in a specific direction during the next ten or so candles would that
be useful to you? Would you be able to make money with that? If you could forecast the next
five or ten candles would you be more successful with technical analysis?

If you answered yes to any of the above questions then read on.

Let’s start with the easy stuff. To draw the Andrews Pitchfork you select three consecutive pivot
points.

Price will make it to the middle line, most of the time.

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When price movement is strong it will close beyond the middle / median line.

After price goes up through the median line it pulls back and then goes further in the original
direction.

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After price goes down through the median line is goes back to it and then goes further in the
original direction.

The zoom/close through the Median Line forecasts the next up and down move.

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A zoom failure occurs when price fails to make new highs as expected.

Zoom failures do not go past the next median line.

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During a zoom failure pattern there may be a zoom in the opposite direction.

Failure of price to hit the Median Line indicates a longer move in the next direction.

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Sometimes a zoom is in a counter trend Median Line and then a further move (down) often
occurs.

Zoom plus Median Line not made precedes long/strong moves.

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After a zoom up and price failure to make the median line, a strong move is normal.

After a zoom a counter move may fail to make it to the Median Line and the strong move
continues.

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Here is an example in Gold.

This can also be applied to soybeans prices.


This can be combined with other hidden geometry methods. Over time you will develop
a strong feeling for more insights, the most complete resource is https://www.youtube.com/
watch?v=qbGbS49bn08
It is a limited edition and almost sold out.
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ANOTHER LOOK AT
FINDING MONEY TO SAVE.
By Jacob Singer

NEEDS ANALYSIS

Look to Spreadsheet 1 and Spreadsheet 2, the Needs Analysis and Insurance spreadsheets. Use
the example shown to determine your own insurance needs.

I have given example on the life of two fictitious people, Gary and Diane. Simply copy the
example to a spreadsheet and change the names to your own and that of your spouse, then fill
in the figures. The final answer, Total Additional Capital Needed, is the amount of insurance you
need.

Do not forget that insurance for your house, if it is mortgage insurance via a bank, I believe is
not a good thing, simply because the bank can cancel it at any time. Rather take out additional
term insurance to cover the mortgage, reducing it as the mortgage reduces. In the needs
analysis this figure is included in the total insurance required.

All the assets and liabilities shown in Spreadsheet 1 and Spreadsheet 2 are purely for illustration
purposes. If you have additional assets, not shown on the analysis, do add them.

By carefully determining the amount of insurance you and your spouse may need, you should be
able to save $20 per month. This does not sound like very much, but if you already own a term
policy, you may be able to reduce the premium.

As I wrote earlier, whatever you do, NEVER put your family at risk. Use the analysis to carefully
check whether or not you are over insured.

Pension Plan

If you are fortunate enough to belong to a pension plan at your place of employment, make a
point of finding out whether your plan includes life insurance, medical insurance and any other
benefit. Familiarize yourself with your pension plan so that you do not duplicate any benefits
outside of the plan. Do discuss your pension plan with your financial planner.

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TAX DEFERRAL STRATEGIES

Tax deferral strategies are a way of investing part of your income so that you will only pay tax
at a later date, when you are at the lower marginal tax rate sometime in the future, like when
you retire and are no longer earning. With a tax deferral strategy you are also paying taxes with
discounted dollars, that is where inflation reduces the buying value of the dollar.

Tax deferral strategies allow you to accumulate wealth using GROSS income, that is, before net
income (income after tax). You will therefore have more capital to work with. This should be
viewed as an interest free loan from your Government. If interest IS charged, it is usually very
low.

I will not discuss in any depth the several physical assets which are not only taxed
advantageously, but also, over the long term, tend to be hedges against inflation. They are listed
below so that you may discuss them with your financial planner.

Principal residence. Real estate is generally a good hedge against inflation over the long term.
Furthermore, any capital gains made on the sale of a principal residence are tax free in many
countries.

Many countries also offer a deferral on Property Taxes when you are above a certain age. Take
advantage of what is offered, because in the majority of instances, your property will increase
in value greater than the interest charged on the deferred Property Tax. Never forget, it is your
heirs that gain from the rise in the value of the property should you live in your home forever.
If you decide to move to an old age home as you age, the sale of your house should cover all
the expenses that you have to meet. Do not worry about your heirs. You do not want to die the
richest person in the cemetery.

Listed personal property refers to such things as art, jewellery, rare books, antiques and stamp
and coin collections. Tax payers are exempt from capital gains tax on disposal of the property
if the amount is below a certain value, an amount which should be confirmed by your financial
planner.

Retirement savings plan. Many countries do have a plan where investors can invest money tax
free until a retirement age.

Various other tax deferral strategies, such as income splitting; paying a salary to family
members; living trusts; small business corporations and many other tax savings schemes may
be available in the country you live in. If you are self employed, or operating a small business
on the side, there are many more tax planning opportunities available to you. As an example,
you can deduct home office expenses. All, these tax deferral strategies should be discussed with
your financial planner or tax consultant. Tax planning is a science in itself, one of the reasons the

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wealthy usually have a low tax rate.

REDUCING DAILY EXPENSES

Reducing your daily expenses is probably one of the most difficulty things to do and is primary
in preparing a budget, the reason why the rest of this book will be devoted to ways to reduce
expenses.

Last Expenses

These include medical bills, funeral and burial costs; current household expenses; bank and
outstanding loans; unpaid property taxes; probate costs; legal and executor fees; unpaid income
tax and capital gains tax generated by deemed disposition at death.
Education Fund.

Education Fund

You should budget for $10,000 per child which, if invested strategically, will give each child
sufficient capital when they reach 18 years of age, to pay for a University education.
Emergency Fund.

Calculate three months of total family income in your budget. This is to provide funds should an
emergency arise.

Other Expenses.

With Other Expenses, I am estimating care and replacement costs of equipment, like a washing
machine, dishwasher etc. The figure shown is based on present needs.
Discount Rate variable.

The expected rate of return, adjusted by the inflation rate, which is the real rate of return.

SHOULD YOU BUY OR RENT A HOME?

The first decision most families make is whether to buy or rent a home. This is always a difficult
decision to make because it becomes an emotional one. Everyone believes that owning a house
is an advantage over renting. This is not necessarily so, but let’s face it, owning your own home
and living in it for the rest of your life, is a great financial asset.

The second decision you have to make is what type of accommodation you should invest in.
Do you need a house, a town-house or a condominium? Generally this will be dictated by
affordability considerations, although a great deal of emotion will also affect your decision. You

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should always list the advantages and disadvantages of owning a house or a condominium. For
example, a condominium will depreciate in value faster than a house or townhouse because the
value of a house is in the value of the property. With a condominium, the property component
is small and will have a small property value. Furthermore, in a group ownership or strata
situation, one is subject to group decisions, and therefore one has less control. The only benefit
group ownership has, is the spread of costs among owners.

Owning a house is an emotional decision. If you intend to start a family, a yard and ‘play-space’
for children is a must. Never forget that the price of a home is the price of the property which
appreciates in value over time. The house itself is a depreciating asset.

(Do be careful where you buy your home. Make sure that the neighbourhood you buy in, is one
that is growing in value.)

Do not forget in your calculations, to consider where you need to live, such as the proximity
to your employment, school and shopping centre, as well as the price and affordability of your
intended purchase.

PAY YOUR MORTGAGE ASAP

Paying down the mortgage bond on your home is one of the most effective ways of
accumulating wealth. The growth factor is the reason for this. When you borrow money on a
mortgage bond, you are actually borrowing expensive money. The rate per annum is usually
compounded monthly.

By paying down your bond, you are guaranteed the interest rate you would pay… a tax free
return which is difficult to beat.

The company that grants you a mortgage calculates interest on a monthly basis, adding the
amount to the outstanding balance every month. When you pay your instalment, the payment
is deducted from the total outstanding.

On the other hand, when you save money, you will receive only the smallest interest rate
possible, and then only if you have a certain minimum balance in your account. Moreover, the
government does tax you on the interest received as income.

What then is the better course to follow? Pay off your mortgage or save your cash? We all know
the answer to this question. PAY OFF YOUR MORTGAGE.

Arguments against paying off a mortgage early

A mortgage bond paid today is paid with ‘good money,’ that is at today’s values. However, the

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bond paid in the future is paid in devalued money – money made cheaper by inflation. This
argument can be negated by the fact that after a bond has been paid, moneys that would have
been used to pay that bond can now be invested in growth equity. Investing in growth does carry
a higher risk, but a careful and diversified investing strategy can result in a successful growth
portfolio. History has shown that growth, over a period of time, has always bettered inflation.
With inflation at low rates, growth is very much an advantage.

Paying off the mortgage also allows the residence to be used as collateral for further borrowing
which can be invested. Yes, the risk does increase and such a strategy should only be taken in
special low risk investments.

Do remember that the advantage of borrowing money is a tax saving, because the interest paid
is tax deductible. Also, if invested wisely, there is growth in the investment, growth made with
borrowed money. Just make sure that the capital gains, or interest received is greater that what
you are paying on the loan by at least 50%.

Another argument against a quick repayment of your mortgage is that your liquidity is reduced.
However, the purpose is long-term saving, and you cannot combine a long-term investment
with liquidity and still expect a high rate of return. The amount of liquidity required will be
determined by the variance of your income. For example, if you are a self employed commission
agent, the variation in your income will be far greater than for example, a unionized employee,
who receives a fixed monthly amount plus a pension. You will therefore have to carry a higher
liquidity to cover the income risk.

Most family financial structures suggest a degree of liquidity in planning a financial structure. If
you have paid excesses on a mortgage, simply stopping payments gives you the liquidity needed
in case of an emergency.

Renting has the advantage of allowing more flexibility, because it does result in costs other than
moving expenses, when changing a residence. Because of realtor, transfer and other costs,
buying a home should be for the long term. Costs involved can be amortized over time. However,
there are times when selling a principal residence is an advantage, such as when the price of
a house has risen sharply. Should that occur, it is worth investigating whether you can find
a suitable house in another neighbourhood and so realize the capital the sale of the property
provides. This can occur when your children leave home and the house is now too large for just
two people. By relocating to a condominium, cheaper in price but as comfortable as your house,
you can invest the capital released and receive an interest income.

Look into splitting your mortgage loan. By this I mean taking a line of credit (overdraft). Often
the interest paid on that line of credit, could be cheaper, because by depositing your monthly
salary and drawing cash as needed to pay expenses, you are reducing the amount owed, and in
this way the interest charged. You can also pay off your line of credit as and when it suits you.

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TO SUM UP

Security is the main concern of every family. It is commonly thought that the security of
owning a home is a major need, but is this correct? Renting a home is not always a bad thing;
sometimes it is better than buying a home. Keep in mind that it is always better to rent for
a longer period of time, this way you can make a greater down payment when a house is
eventually purchased.

The decision to buy a house rather than a condominium definitely has its advantages, especially
if there are children. The only advice I can give you, is that the purchase of a house that you
intend to live in, should be considered a long term investment and not an investment for a short
term capital gain. Of course the seller may have erred in their price or market prices may have
dipped alarmingly for the short term, but that seldom happens. In most cases, you will overpay
when you buy a home to live in. However you should not be concerned, for in the long run prices
do rise and should you decide to sell, you will get your money back, plus.

Do not, under any circumstances be sucked into buying a property where a bank offers you
100% mortgage. Always make sure that you make, at the very least, a down payment of 20%
- 25%, the greater the better. The recent mortgage backed crises in the USA, where many lost
their homes because they had been suckered into a 100% mortgage, with no deposit, is a lesson
that can be learned. As interest rates rose home owners could no longer afford to pay their
monthly payment and so lost their house and whatever monies they had paid to the bank.
Another caution is that you should not over capitalise on repairs and maintenance. When you
buy a house, let your agent give you a list of faults that need to be repaired. Ask a number of
repairmen for a quote and always choose the cheapest. Negotiate, negotiate and negotiate.

THE DECISION WHETHER TO BUY A CAR OR NOT

Most families need a motorcar so that they may enjoy their free time exploring the countryside.
Yes… in a city, municipal transportation is in many instances, excellent, but there are occasions
when municipal transportation simply cannot help, an example being collecting a child after a
birthday party at 10:30 pm. The budget therefore includes the need for a family to buy one car,
outlining the costs involved.

When you buy a car, try and pay cash if at all possible, because, as you drive that car out of the
dealer you purchased it from, its price drops by approximately 20%. It is also better to buy a
used car instead of a new car, because the value of a used car depreciates less.

The first few years of owning a new car, also sees a large depreciation in value. For this reason,
you should drive the new car for at least ten years. The car should also be regularly serviced
because, not servicing a car will cost you in the long term.

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Do note, locally manufactured cars represent better value than imported cars, simply because
they are cheaper to service and maintain. Do your homework, and if possible buy privately – you
will then save salesman commission and any sales tax.

If you intend to buy a second car, evaluate the cost of vehicle insurance, repair and fuel costs
against the reason for the purchase of the car. It is not clever to pay approximately $200
odd per month (estimated cost) if you are able to catch municipal transport to your place of
employment. To own a second car solely to give you the freedom to play golf whenever or
wherever is a no-no. If a second car is needed for business, and you are able to write off all
expenses against income, then a budget should be carefully prepared to determine the feasibility
of owning or even leasing the car.

Leasing a car has become popular because of the low interest rates presently offered by dealers.
A monthly payment over five years, with the option to trade in the car after two years, sounds
very tempting and attractive. However, unless you can write off the lease payments against
business income, it should not be considered.

One further word of advice, do be practical when buying a car. If you are planning a family, a
two door sports car will end up costing money in the long run, because at some stage, a trade in
for a larger car will be necessary. Never forget that a car depreciates yearly.

Finally, when buying a car, try to pay cash. Borrowing money from a bank on a line of credit may
be the way to go, but do check the interest charged on that line of credit and compare it to the
interest charged on a lease. Include a clause in the contract that either fixes the interest charged
or allows you to buy out the loan, should interest rates increase.

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WWW.TRADERSWORLD.COM February/March/April 2019 116
Elliott Wave Analysis & Price Forecasts
2018’s DECLINE A CORRECTION
WITHIN SECULAR-BULL UPTREND
by Peter Goodburn

It looks like 2018 set quite a few records! The exponential advance that carried over from
December 2017 into January ’18 finally reached a terminal peak on January 31st at 26616.70,
Dow Jones (DJIA) and 2872.87, the S&P 500 – both then staged an inverted ‘V’-shaped reversal
decline that initially shaved -4.6% off values. CNN reported it was the ‘scariest day on Wall
Street in years…the biggest decline since August ’11…the Dow plunged almost 1,600 points -
easily the biggest point decline in history during a trading day’. That was only the beginning
though! Declines continued through February until it formed a low 2-weeks later - but by that
time, indices were down by -11.8% per cent.

Volatility continued afterwards – it only took another 2-weeks for the S&P 500 to trade up
by +10% per cent – which was just prior to a downswing into the early-April lows, a decline
of -8.8% per cent! By that time, sentiment turned really bearish - Investors Intelligence
reported that ‘Bulls’ declined from 47.6 to 42.2 which was the lowest bullish reading since right
before the US presidential election of November 2016. The number of ‘Bears’ rose marginally
but remained at a low historical figure of 18.6.

What did the markets do next? – they ran higher albeit at a more modest pace but
advancing by +15.0% per cent until it reached the late-September/early-October highs – then
bam! The Dow and S&P collapsed lower.

USA Today reported ‘the U.S. stock market suffered its biggest October decline since the
2008 financial crisis, prompting shaken investors to reassess the staying power of a bull run that
began more than nine years ago’. Following rallies into November, markets declined
again in early-December. London’s Financial Times reported ‘Volatility leaves Wall Street set
for worst December since Great Depression’. Christmas Eve’s (December 24th’s) decline was
particularly severe as the Dow (DJIA) gapped lower by 667 points delivering a -19.8% per cent
psychological punch from October’s high. The S&P 500 registered a decline of -20.2% per cent,
the threshold that many economists define as a ‘bear market downtrend’.

But it’s not just economists that have turned bearish since the markets declined to that 20% per
cent threshold – mainstream Elliott Wave practitioners have also sounded the alarmbells
too, forewarning of a secular-bear downtrend underway! But if we pick through the
evidence, and remain objective with it, then a very different, more bullish outlook for
Wall Street and global indices emerges.

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Review - 2018

With such volatile price-swings over the last year, you might think they’re impossible to
predict, but in actual fact, the opposite is true! – THEY ARE PREDICTABLE!

Just after the late-January ’18 downswing, our analysis identified the February low in the S&P
500 at 2529.00 (futures) was not the beginning of a secular-bear downtrend but part of a 4th
wave correction within the continuation of the existing secular-bull uptrend – see fig #1.

This idea was being corroborated by the fact that the following rally from the Feb.’18 low of
2532.69 (cash) had unfolded into a five wave impulse pattern to 2789.15 which conferred
upside continuity, as a zig zag, labelled (a)-(b)-(c). A correction followed in the form of an
expanding flat for wave (b), but then the rally continued from the April low of 2553.80 – see
fig #2.
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In this update, a more complex correction for the larger 4th wave was depicted as a declining zig
zag, [a]-b]-[c] where wave [b] would trade back towards the Jan’18 high. Wave [c] would then
collapse lower towards 2458.50+/-. This was later modified to an expanding flat but
importantly, it maintained the Feb. ’18 to Sep.’18 upswing, from 2532.69 to an eventual high of
2490.91 as completing into a zig zag – see fig #3.

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Validating the Feb-Sep.’18 upswing as a zig zag ensured the following decline would
simply be the third and final sequence of the complex 4th wave corrective pattern
forecast back in February ’18. Logically, through dedication, that itself went a long way
in confirming the continuation of the secular-bull uptrend.

But it’s dangerous to rely on the analysis of just one index, like the S&P 500. In our annual
2019 STOCK INDEX VIDEO REPORT PART I, we’ve cross-referenced the S&P’s corrective
pattern with over 30 other indices and economic indicators, including an Elliott Wave overlay/
wave count of the U.S. Consumer Sentiment index, Consumer Confidence, Price-to-Book and
Price-to-Sales ratios, even Robert Shiller’s P/E CAPE ratio – all point towards the concept of
prolonging the secular-bull uptrend.

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What Next? Preview for 2019 – U.S. Benchmark Indices

There’s a lot of competing aspects to consider this year and to gain a realistic glimpse of what’s
to come, we’re going to have to separate the proverbial wheat from the chaff. That means being
unbiased and relying on the facts.

The dominant Elliott Wave theme is that September/October’s highs ended a five wave impulse
uptrend that began from the financial-crisis lows of Oct.’08/March ’09 - but is this correct? If the
S&P 500 and Dow Jones indices are analysed in isolation, then there’s a reasonable chance this
ended a five wave ‘structure’. But when examining the same pattern in log-scale and
overlaying Fibonacci-Price-Ratio analysis to verify, the pattern begins to degrade – no
confirmation is forthcoming.

Furthermore, back in year-2000 at the height of the dot.com boom and several years later at
the highs of October 2007, developed market indices formed corresponding terminal highs with
Emerging Markets and Commodities – positive corrections combined with terminal Elliott Wave
uptrends formed at the same time. They declined together in corrective synchronisation in the
sell-offs that followed. But synchronised EW-pattern highs never happened in 2018. In
fact, Emerging Markets and Commodities are still engaged in five wave uptrends that resumed
in early 2016 and are far from completed. Yes, they began corrective downswings in 2018 but
that’s all. But that means the secular-bull uptrend for U.S. and other global indices is still in
upside progress!

Consider this – the Nasdaq 100 advance from its Oct.’02 low of 795.25 – has that ended an
adequate five wave impulse uptrend into the 2018 high? – see fig #4. That’s highly improbable
because even a cursory glance at the pattern doesn’t conjure any 4th wave correction, nor a 5th
wave advance to follow. Only THREE WAVES are visible into the 2018 highs. Just look at how
the 3rd wave, labelled intermediate wave (3) is contained into a tight parallel channel – 4th
waves commonly break below before resuming higher. This confirms waves (4) and (5) are still
in progress, again, confirming the prolongation of the secular-bull uptrend.

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Closing Remarks

This Nasdaq 100 chart does not attempt to predict the short-term movements – our bi-weekly
reports do that job – but as a closing remark, we’ve identified several peripheral U.S. and
European indices that have already unfolded higher from the late-December ’18 lows into FIVE
WAVE IMPULSE PATTERNS. That alone confirms some indices formed MAJOR LOWS LAST
DECEMBER and are now trending higher. That doesn’t exclude some deep retracements though,
sometime in February, and perhaps modest lower-lows for those indices which unfolded higher
through January into three wave corrective patterns.

Peter Goodburn is the senior Elliott Wave analyst at WaveTrack International and is the author
of the monthly institutional Elliott Wave-Navigator report and the bi-weekly individual investor
Elliott Wave-Compass report - $39.00 pm. For information to subscribe to the annual 2019
STOCK INDEX VIDEO REPORT PART I – please click this link http://blog.wavetrack.com/
stock-index-video-2019/ alternatively, details at www.wavetrack.com

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Mindfulness in Trading:
Building the Emotional
Self Control to Achieve
Your Potential
By Rande Howell

Getting Blindsided by Implicit Emotional Brain Beliefs

Trading success seems so simple in principle, then the reality of trading blindsides traders.
Without having a clue about what they are getting themselves into, traders walk into an
emotional minefield for which they are completely unprepared and end up paying the price
of emotionally undisciplined trading. The thinking, logical left brain simply gets blown out
of the water consistently by primitive emotional responses to the stress of trading. Yet few
acknowledge the power that emotion and trading psychology have on achieving their potential
in trading. It is almost like there is a conspiracy in the deep state of trading to keep this
knowledge out of sight and out of mind.

With all their training, traders are taught to think naively and to believe they are ready to
manage the uncertainty and risk of trading – and they do so until they actually experience
uncertainty and risk which triggers their survival instincts. Yet as hard as they strive for success
by developing their knowledge and gaining experience, traders walk through a door into a world
which is alien to them. Emotional cascades of fear, aggression, and over-confidence erupt and
spiral their trading minds out of control, blowing up their capacity to get to the next level in their
trading. Then, out of dogged-determination to win by perseverance, they do it again and again.
The pattern does not make sense until they learn how to look at it with new eyes. Let’s take a
more common example of an instance where the brain supplies a performance mind that is blind
to the dangers of a new reality.

It is not just in trading that this phenomenon happens. I live in a rural area of the Piedmont of
North Carolina where we just experienced a powerful and freakish snowstorm. In this area of
the country, with its lack of knowledge of how to manage snow, everything stopped because the
roads were frozen in deep ice and snow. People were told to stay home and off the roads. And
the remote road I live on is one of the last roads to be salted and plowed in the area. It is

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curvy, goes up and down hills, crosses creeks, and has lots of shadowy areas where the sun
does not melt the ice on the road.

Remember, these are curvy, up and down roads covered by ice and snow – that’s important to
remember. (Think of this as the unpredictability of the markets.) That’s the emotional minefield
that many drivers, for some unexplained reason, have to travel on even though the authorities
give explicit instructions for people to stay off the roads (particularly the back roads like mine).
In trading, I would call this mindlessness.

So what do you think (mostly men) people do? (Remember to compare this to trading.) They
get in their muscular pick-ups and SUVs with 4-wheel drive and decide that they have to go
somewhere – just like traders believing they have to be trading to be trading. They have to
prove themselves (that’s the alpha trader). Revving up their engines and sensing that power,
the drivers feel safe and confident in their testosterone laden trucks (like their sure fire trading
methodologies and platforms), and that 4 wheel drive of theirs which gives them power to
control outcome. They are large and in-charge. This is the perception of reality in which they
live.

And, in their mindlessness, they do not recognize that a frozen road is still frozen, and their
heavy duty, 4 wheel drive trucks still slip and slide every time they hit a patch of ice in a
turn. They are blind to that reality as they enter the minefield with the utmost confidence in
themselves and their machines. This is the illusion of control that breeds overconfidence and
blindness of the reality into which they have just jumped, due to their mindlessness. It is the
mindset of the alpha that pushes to make things happen, to win, to not take “no” for an answer,
and they enjoy putting themselves to the test. Fear based drivers and traders act from a
different set of beliefs about managing their reality.

You know what happens when they engage a reality beyond their understanding – they
deceive themselves until they get whacked, just like traders. They hit the black ice as they are
entering turns or as they start descending a particularly steep hill leading to a bridge over the
creek. Four or five trucks end up skidding off the road because they are going too fast (in their
overconfidence) around iced roads. Or their trucks go sideways on them as they start braking
while going down the steep hill – and discover that in the reality of the snow storm they have
no traction, despite their belief of being in control. They are confronted with a reality for which
they are unprepared. You would think that they would learn, but they just get bigger trucks –
believing they will have control then. (As for traders, they just keep looking for the Holy Grail.)

The very same thing happens in trading every day. But before trading, you lived in a reality
outside of trading that has a set of rules with which you learned to operate successfully. In this
world:

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- You learn that hard work pays off.
- You learn that you can make things happen rather than just sitting around waiting
- You learn to have a winning attitude.
- You learn to not think like a loser – nobody who seeks success wants to lose.
- You learn to act confidently.
- And especially you learn to be right (and not wrong). These success rules seem to work
in most endeavors in life.

So why would they not work in trading? The winning mindset becomes the biases, assumptions,
and beliefs that you bring to trading. The problem is that the reality of trading operates from a
completely different set of rules than your brain initially normalized. The old rules brought
survival and success, so they have been wired into automatic responses (limbic learnings) that
trigger without the participation of the thinking brain. They operate outside of working
awareness using a language that the thinking brain does not even recognize – emotional
learning.

The thinking brain, using its logic and reason as the ground of understanding reality, does not
perceive the emotional learnings that dominate more than 90% of how the brain
operates. Translated – the vast majority of trading decisions you make are made at the
unconscious emotional level and the thinking brain never knows about the decision until after
the fact. The thinking brain is blind to the presence of emotions, even while they are hijacking
rational thought. They are just like the truck drivers who are dangerously clueless about
managing their trucks on ice and snow. Until you make the implicit emotional brain a partner
with the conscious thinking brain, you will never be able to change the way you act under the
stress of risking capital in an uncertain world.

Everyday Reality vs. Trading Reality

Much like the drivers of 4 wheel drive pick-ups and SUVs, who know the reality of what their
machines can do on a road but are clueless to the reality of snowstorm driving, traders bring a
mindset to trading that does not match up with the realities of successfully managing the
uncertainty inherent in trading.

The reality that has to be faced is that the markets are random, to a large degree. And traders
are looking for set-ups that represent a probability of a pattern showing up in that randomness.
Sometimes the set up pattern does form and does follow the pattern of the prediction. And
often it does not. This is the randomness or the uncertainty that drives the primitive emotional
brain of a trader nuts. Your brain evolved to seek certainty and control over outcome – even if it
had to lie to itself. How many times as a trader have you decided that you are right and pushed
your agenda onto the markets in your decision making? That need to be right (and not wrong)
is a deeply wired survival trait that operates implicitly (out of conscious awareness) from its
home in the emotional brain. Then the thinking brain makes up a narrative to support what the

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emotional brain has already decided. This is all happening outside of conscious awareness.

Logic and reason does not run the show. You simply rationalize the deeply held beliefs that drive
your emotional brain’s perception of dangers and opportunities in the world. Your brain also
cannot tell the difference between a real biological threat to life and the psychological discomfort
of making a decision based on ambiguity. Your brain makes decisions about survival in the short
term, based on the level of threat perceived. The closer the cause and effect (loss or win) is,
the more powerful the emotional brain is triggered to respond on a level of instinct (outside of
conscious awareness). This is what gets the trader in trouble. This is a very different reality
than the rules that governed success or failure before trading. Now the trader is like the guy
who drives his big hulking pick-up or SUV onto the icy roads without understanding what he is
getting into. Before the snow storm, he felt he was in control behind the wheel of his powerful
machine. The snow storm brought new rules that he is mindless to. Cause and effect catches
up with his faulty thinking.

Trading requires that you give up the illusion of control – which goes against 6.5 million years of
successful survival adaptation through evolution. The brain you brought to trading loathes the
uncertainty and randomness of the markets and it triggers you, the trader, to fight/flight
instinctual responses in your encounters with uncertainty. Your brain also wants to be right.
And in trading you discover that you can do everything right and still be wrong due to the
randomness of the trading reality. Your brain is simply going to need to be retrained for the
reality of trading. To change the brain and mind, you are going to have to become a community
activist. That’s the way your brain and mind operate.

Learning to Be Aware of the Community of the Self

Beyond learning how to regulate your emotional nature, there is also the need to become much
more aware of what actually is going on in your mind. As you learn to become mindful, you
discover the mind is actually more like a community of voices, rather than speaking with a single
voice. This is the link between brain and mind. What you are experiencing are emotional
programs that have been adapted by experience and are given voice as your thoughts. They
become locked into place on a synaptic level in neural networks by limbic learning and are
typically in conflict with one another. You experience this situation when you are “of two (or
more) minds” about something or when you cannot make up your mind among various options.
By learning how to observe the mind as you trade, you will start noticing how unruly and noisy it
can be, and how it needs to be reshaped for probability management rather than the certainty
focus from which your brain currently acts.

Have you ever really tuned in to the internal conversation that is going on in your head when
you are making a decision under stress? Let’s say you are experiencing self-doubt as you are
approaching an entry decision. At first there are no set-ups on the horizon and you are just
watching the markets. Notice, even here, if there is anxiety about potentially entering a trade.

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You may experience tension in your jaw, your chest, your neck, and/or shoulders, while at the
same time you catch yourself breathing shallowly. You are actually experiencing the arousal of
the emotion of anxiety (worrying and anticipating what could go wrong or that you could lose).
The anxiety has a biological, an emotional, and a cognitive component.

The biology of the emotion is the muscle tension and shallow breathing that is preparing you for
the instinctual fight/flight response of the sympathetic nervous system. Then you feel anxious.
That’s the feeling element of anxiety. Then the self-doubt kicks in – that’s the cognitive
component of your anxiety. Then you get your first confirmation of the set up. Yes, it’s a
potential actionable trade in the making. Notice what happens now. The emotion builds and you
start having an internal conversation where you notice the self-doubt. You doubt yourself as a
trader. You doubt this trade. And as the negative conversations in the community of the mind
keep the pressure up, you begin to feel scared. Then comes another confirmation. It is a valid
set up. And if you get one more confirmation, you will need to find the entry point and get in the
trade.

“But, what if you lose?” You doubt yourself even more. A critical voice inside your mind screams
about your incompetence and a small child-like voice in your mind agrees with the internal critic.
The moment arrives. It’s decision time. But your fingers are frozen on the mouse. You, in fear,
cannot pull the trigger. An epic battle ensues. “Pull the damn trigger!” “You’re going to miss
the trade!” – a familiar angry and condescending voice barks. A dense black pit gnaws at your
stomach. “Why can’t I pull the trigger? Pull it! Pull it!” You rationalize getting in the trade and,
simultaneously, rationalize staying out of the trade. You are not being rational – you are
rationalizing. This is internal struggle.

You want to but you can’t. The moment passes. You feel a sense of relief from the struggle.
But then you watch the trade take off and make a run to your original target. Now you feel like
a fool. Inside your head, you are being ridiculed. And you feel ashamed – “you’ll never make it
as a trader”. But next time, you decide – “I will jump into that trade.” You won’t let your
demons win again. You’ll show them. Now you are setting yourself up for impulsive trading to
get past your fear of entry. The battle in the community of the mind rages.

This is the internal struggle that goes on when an undisciplined trading mind engages
uncertainty and then feels vulnerability. The default programming from adaptation in your limbic
brain leads to the fight/flight response of your survival instincts. Most traders attempt to ignore
or push aside this internal struggle going on among factions of your community of the mind.
This may be a useful strategy outside of trading. But moving these successful old strategies
from another time and place into trading produces the blocking of your potential as a trader. In
trading, you have to acknowledge and reorganize the community of the mind. Originally the
community of the mind was organized by your survival instincts for short term success. This is
what I call the certainty based mind (insuring survival in the short term). The trading mind has
to be built for probability management (which is alien and dangerous to the emotional brain). To

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How to Test Your Strategy on Any
Market and Put the Probabilities in
Your Favor
By Steve Wheeler
Founder and CEO of NaviTrader.com (www.navitrader.com)
Professional Trader and System Designer/Developer
www.navitrader.com

Introduction

Let me start by introducing myself. I am a full time trader, trainer and software developer in
the futures markets. I run a real time trading room two hours each trading day. I have traded
for over 20 years, and concentrate primarily on the currency (FOREX), crude oil, gold, and stock
index futures markets, such as the S & P E-mini. In a previous career, I was a practicing C.P.A.
in the state of Florida.

I have developed a full suite of charts and indicators known as the Trendicators™ and a market
analyzer known as the TradeFinder™, as well as a number of automated trading systems and
automated buy, sell, and trade management systems.

What follows are the fundamental elements you need to be consistently profitable in the futures
markets. I have also included information below that is crucial to your overall success and in
managing your risk.

Preparation for trading profitably consists of market observation over a period of time so that
the trader can build confidence in knowing what usually happens in the market and how to profit
from the recurring market behavior that repeats itself every day. To take advantage of cycles in
the markets, observe the typical move that a market moves after it moves up or down out of a
range contraction pattern.

The real objective is to build knowledge of probabilities of market behavior so as to take


consistent profits out of specific trading instruments. The following are observations of market
behavior that will help to put the probabilities in your favor.

How to Test Your Strategy on Any Market

To put the probabilities in your favor, you must have an objective method or system for your
trading. Patterns repeat themselves over and over in all markets, so knowing these patterns can

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help to put the probabilities in your favor. The more you can automate your trading signals, the
more objective you will be in your trade selection. You need to determine a set of technical
conditions for which you would take a long or short position in any market. You can use
technical indicators that are widely available, or you can develop your own indicators. Once
you have chosen the indicators you want to use, test them for validity in your trading. As in
any testing, you need to test a statistically significant amount of data to have a high degree of
probability in terms of observing the test results.

Below is an example of a chart where we have developed indicators to determine price direction
and specific buy and sell indicators based on price direction and trend. The following chart
is a NaviRenko chart of the crude oil futures featuring our Trendicator charts along with the
NaviRenko buy and sell indicators based on objective algorithms.

Making money in the market is a matter of being on the right side of the market. Specific to
the futures markets, there are both up and down moves each day that provide many trading
opportunities. One approach to the markets is to look for evidence of major support and
resistance levels based on chart history. Many people ask me which time frame that I look
at for my trading, and my best answer is that I look at all of them. A good analogy would
be that if you were going to buy or short a stock, you would most likely start by looking at a
yearly, weekly or daily chart. Why would you approach the futures markets any differently? To
put the odds in your favor, you must find things that occur over and over and trade with this
information.

Below you will see an example of a Renko based chart of the Dow Futures chart. This chart
has buy and sell signals. The buy signals are the Green arrows pointing up and the sell signals

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are represented by magenta arrows pointing down.

The above chart and the system displayed by the chart are an example of a signal that will
enable you to objectively test a signal on any chart time frame or data series that you would
like to test. Other examples would be, using indicators such as moving averages for buy and sell
signals One method of testing is to use a trade simulator that allows you to replay the market
data. You can download market replay data and test based on historical data taking trades
based on your entry and exit criteria. You will be able to test various stop and profit target levels
over a series of trades. I would suggest that you test during the time periods in which you plan
to trade. An example would be to test the S & P futures from 9:45 AM Eastern time through
11:00 AM Eastern time, if that is the part of the day that you intend to trade. You could test
using the minute based charts along with volume charts by requiring that the signals on both the
minute based chart and the volume based chart are both in agreement on direction.

How To Develop a System with a Positive Expectancy using The Highest Probability
Setups

Through trade experience and testing our charts for over 10 years, along with testing under real
time conditions, I have observed that the highest probability trades consist of using a system to
determine points where two or more correlated markets such as the Dow, S &P and the Nasdaq
futures are moving in the same direction as in the example below.

WWW.TRADERSWORLD.COM February/March/April 2019 131


The top chart is the E-mini and the bottom chart is the Nasdaq 100 futures. The magenta arrow
on both charts represents a sell signal on both markets at the same time.

An automated approach to strategy testing is to use an automated system that will analyze the
trades. To do this, you will either need to develop your own coded system or use a system that
has been developed for automated. I recommend that you use an automated system to test
your strategies because it will tend to be more objective and you will be able to test over a much
larger sample of data giving you a higher degree of probability that your results have statistical
significance.

WWW.TRADERSWORLD.COM February/March/April 2019 132


Risk Management

A primary downfall of beginning traders lies in not knowing how to manage risk. The use of
protective stop losses (known as stops); is one important tool in trading futures. An even more
important tool is known as position sizing. Position sizing answers the question of how many
contracts you should trade in the futures markets, and how many shares you should buy or short
in the stock market.

We know that trading is all about how to react to your successes as well as trades that
don’t go your way. No discussion of trading would be complete without a discussion of risk
management. For futures trading, risk management is established with a combination of the
use of stop orders combined with position sizing. You need to pair a proven strategy along
with risk management. Risk management is accomplished, in general, by never taking a “big”
loss on any one trade. I suggest that you start by making sure that on any one trade, you do
not risk any more than one percent of your trading account. You will need to calculate before
you enter a trade whether you would be risking more than one percent of your trading account.

To calculate position size you need to know some basic information such as the following:
Account Size
• Risk Percentage that you are assuming
• Tick value of contract you are trading
• Number of ticks of your initial stop loss order

A Risk Management calculation example for the e-mini would be as follows:

a. Entry price = 1438.25


b. nitial Stop level = 1436.25 = 8 ticks on the S & P E-mini
c. 8 ticks x tick value of $12.50 = $100 $100 x 1 contract = $100 risk on this trade.
d. Account Size = $10,000

In this example, you would be able to trade 1 contract $10,000 x 1% = $100 maximum risk

Like any profession, you need to be prepared to take on the markets in a structured and
methodical manner. If you study the above principles, you will better understand overall market
behavior and you will be equipped to begin to consistently benefit from the great opportunities
that exist each day in the markets.

Platform

As you develop your trading skills, I suggest that you use a professional trading platform that
will allow you to trade directly from the charts and will allow you to trade in simulation mode
as well as to execute trades in your live futures account. As with any skill, the more that you

WWW.TRADERSWORLD.COM February/March/April 2019 133


practice, the better you get at it. It is important to develop your skills regarding the proper use
of your trading platform while in simulation mode so as to minimize trading errors after you are
trading your actual trading account.

Trading in simulation mode will help you to develop your confidence and an overall methodology
that fits your personality.

Developing a Belief in Your Approach and Overcoming Fear

Most traders will develop fear as they trade due to a history of losses. Like any fear, the way to
overcome it is to face fear head on and continue to do what you fear the most. An advantage
of having a trading platform that provides for simulation is that you will be able to trade in
simulation mode, as in our example above to build a plan with a positive expectancy and thereby
develop greater confidence in your approach to trading. As you trade in simulation mode,
develop a set of notes that will act as the beginning of your trading plan. Trade in simulation
mode until you have mastered the use of the trading platform you have chosen. As you trade
in simulation mode, practice developing the discipline needed to execute your trading plan.
Through repetition, you will begin to develop into a polished and profitable trader.

Please let us know if you need any help in developing your approach to profitable trading.
Send an e-mail to support@navitrader.com with any questions and visit our website at www.
navitrader.com

If you have any questions on the material in this publication, please send an e-mail to
support@navitrader.com www.navitrader.com

Contact Information: Steve Wheeler navitrader.com 800-987-6269

WWW.TRADERSWORLD.COM February/March/April 2019 134


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The Foundation For The Study Of Cycles
By Andrew Pancholi

At The Market Timing Report we have had considerable success in forecasting market turning
points which have included the October 2018 high in the S&P500.

Part of this success is due to our extensive study of cycles which includes the work of Edward
Dewey. Dewey was Chief Economist to the American government. Back in 1941 President
Hoover set up a governmental agency to see if the great depression of the 1930 could have been
forecast. Edward Dewey headed what was to become The Foundation For The Study Of Cycles.
His work with the FSC and his publications are mandatory reading for any serious student who
wishes to learn to forecast.

Over the last decade or so the Foundation went down a different path. We are now in the
process of returning it to its non profit status for the greater good.

You will also be able to access much detailed research on cycles from markets to nature to world
events.

Why am I writing about this. Quite simply because I am passionate about this work and want to
see it evolved further. I am delighted to be on the Board under the chairmanship of Dr Richard
Smith. Rather than me rewriting the story, Dr Richard Smith and created this message which
explains what has happened and where the Foundation is now heading.

Dear Friends of the Foundation for the Study of Cycles,

I am writing to you today as the new Chairman of the Board of the Foundation for the Study of
Cycles (FSC).

This is an important letter. It is not a solicitation for funds or donations. It is an update on


what has happened in the past couple of months and it is an invitation for your ideas and
collaboration. I hope that everyone who has an affection for the FSC will take the time to read
this letter carefully and then share your thoughts and hopes about the future of the FSC.

Today I am excited and deeply gratified to be able to report that the FSC is back!

We have a new Board of Directors, including leading cycles researchers Jake Bernstein, Larry
Williams and Andrew Pancholi and pioneering technical analyst Tom Demark. We have the
support of other pillars of the cycles community as well, including Sherman McClellan, Bill
Sarubbi and others.

We are rebuilding the FSC from the ground up. It will be a slow and steady process but the
process is solidly underway and I hope that you will be inspired to join us in our efforts.

WWW.TRADERSWORLD.COM February/March/April 2019 136


For too long now, and in spite of all the good intentions, the FSC has been effectively run
as a sole proprietorship. That is not what the FSC was meant to be. It was meant to be a
community of cycles enthusiasts who are working together to discover the truth about cycles,
apply our research and contribute to the healing of our fractured and out-of-balance world.

A lot has happened in the past couple of months following the passing of the former Chairman
David Perales. I would like to take some time now to bring everyone up to speed on what has
happened and where we are now headed.

Upon learning of David’s death, I immediately began to take steps to see what could be done
to protect and preserve the assets and heritage of the FSC. I did so because I care about
both the heritage and the future of the FSC and I want to see the FSC restored to what we all
know it could and should be. I also did so because I cared about David and wanted to see him
respectfully laid to rest.

I had a lot of help from other concerned members of our community including Nathaniel Hansen,
Radu Lupea, the staff in Romania, and Board members James Walker, Tim Donlea and Dan
Wichhart. We all owe a debt of gratitude to them and I hope you will join me in extending our
appreciation.

We laid David to rest in his adopted home of Bucharest. We gathered the accounts, archives and
digital assets of the FSC. We resolved urgent debts. We paid the Romanian staff back wages.
We engaged legal counsel to advise us on resolving all past liabilities and to position the new
FSC on solid ground going forward.

With all that work behind us we are ready to turn over a new leaf, and start a new cycle, in the
ongoing evolution of the FSC.

Since the passing of Dewey in 1978, the FSC has unfortunately had a number of problems. For
the past couple of decades in particular, the FSC has been dominated by individual personalities
who, while full of good intentions, primarily used the FSC to further their own personal agendas.

That will not be the case under our new leadership.

This letter along with the dedicated work of our new Board, and hopefully your support, mark
the beginning of a new growth cycle for FSC!

As your new Chairman and as the spokesperson for the new Board of Directors, I assure you
that the new FSC will be committed to the original vision of its founders – Edward Dewey and W.
Clement Stone in particular.

We are working diligently to re-establish the FSC as a true foundation – dedicated to the
interdisciplinary advancement of the study of cycles for the broad benefit of humanity. The new
FSC will once again be a not-for-profit and non-stock corporation that is focused on research and

WWW.TRADERSWORLD.COM February/March/April 2019 137


education.

Of course, the FSC will always be of interest to those of us who are focused on the forecasting
power of cycles in business, trading, investing and economics. That is what piqued my own
interest in the study of cycles. Edward Dewey himself started out in business with Chapin
Hoskins, the managing editor of Forbes.

There is a wonderful practicality to the worlds of business and speculation that makes people in
these endeavors more receptive to areas of research like time-cycles. We are OK with knowing
how cycles can be useful without necessarily needing to know why they occur.

The FSC will continue to publish groundbreaking research and conduct workshops on how cycles
can be used to predict economic events. All of the current board members are deeply engaged
in this endeavor already. We expect to continue to deliver even greater value to members in this
important area of our research.

But it is clear that Dewey did not intend for the FSC to be primarily a for-profit business selling
signals to financial speculators. His vision was considerably larger, both pragmatically and
academically.

Early on in his most well-known book “Cycles: The Mysterious Forces That Trigger Events” Dewey
describes his vision for the Foundation as he saw it in 1941. I’ve excerpted the highlights here.
The Foundation for the Study of Cycles believes it is building a cathedral – several of them in
fact.

Cathedral Number One – The Advancement of Human Knowledge


We are doing our part toward learning how the universe functions, for we are discovering
evidence of hitherto unsuspected forces. […]

Cathedral Number Two – The Elimination of War


There is little hope of eliminating war for yourself, your children, or your grandchildren. But,
hopefully, you will have great-grandchildren. It is for them we are building. […]

Cathedral Number Three – the Elimination of Depressions


Only by understanding the forces that caused depressions can we ever learn to control them.
There is a growing mass of evidence that depressions recur at rhythmic time intervals. […]

Cathedral Number Four – the Elimination of Disease


As yet only a small amount of cycle research has been done in this area, so the importance of
cycle knowledge in the elimination of disease has not been determined. […]

Cathedral Number Five – Accurate Weather Forecasting a Year or More in Advance


How wonderful it would be if farmers could know in advance when to expect droughts, late
frosts, or rainy harvests. […]

WWW.TRADERSWORLD.COM February/March/April 2019 138


From our present vantage point nearly 50 years after Dewey outlined the above mission for the
FSC, his aspirations may seem a bit quaint – like something from a bygone era.

And yet, Dewey’s mission is not easily dismissed. These are the words of Dewey himself after
all, and frankly, our cynical and mechanism-fascinated age could use a little unadulterated
idealism.

We believe that these are worthwhile and timeless pursuits and we seek to rededicate the
Foundation of the Study of Cycles to an updated and contemporary version Dewey’s original
vision which we will work to refine and communicate in the coming months.

As the sciences of human behavior, economics, biology and artificial intelligence continue their
geometric growth it becomes more evident that cycles in their various forms can be found in
every area of human endeavor.

Computers and new technology are now able to achieve results that early manual operations
could not produce or foresee. The case for cycles has been made!

Restoring the FSC to Dewey’s original vision is not going to be an easy task. It will take hard
work, money, and dedication. We hope to still be advancing Dewey’s vision when the FSC
celebrates its 100th anniversary in 2041.

We will have more to say in the near future about next steps for the new FSC but in the
meantime, I would like to give a report on the current state of affairs of the FSC and the steps
the board has taken to secure its future.

It grieves me to report that the condition of the FSC upon the death of David was very dire and I
suspect that many recent members of the FSC who worked with David may find the next section
of this letter disconcerting.

While David was very passionate and dedicated and made many contributions to the FSC, his
organizational skills were lacking. David was running the FSC as a sole-proprietorship out of his
own personal PayPal account. There were few records at David’s death and no money.

As of David’s death, the FSC was essentially bankrupt.

There was literally no money in the bank to continue operations, so all operations and services
were suspended. Sadly, all services that were being fulfilled by the FSC under David are no
longer able to be fulfilled.

David had also taken several questionable legal steps such as attempting to transfer the
Intellectual Property of the Foundation into his name personally in exchange for shares in a new
Illinois L3C company. Shares in the Illinois L3C were never issued to the FSC and the attempted
transfer of the IP of the FSC was invalid at best and fraudulent at worst.

WWW.TRADERSWORLD.COM February/March/April 2019 139


David sold shares in the Illinois L3C via a crowdfunding initiative. That L3C is no longer in
existence for failure to file and it did not own any assets. It is also bankrupt.

That’s the bad news, and I recognize that it may be a hard pill to swallow for those who believed
that the FSC was in a better position and possibly poised for transformative success. That simply
was not the case.

Because of the difficulty of knowing what liabilities David may have incurred under the banner
of the FSC, the board has taken the significant step of dissolving the original Connecticut non-
stock corporation and establishing a new Delaware non-stock corporation. The assets of the
Connecticut entity have been transferred to the new Delaware entity.

The Board has been closely and well advised in these efforts by the new legal counsel of the new
FSC, Adam Zylstra of Hoogendoorn & Talbot LLP in Chicago.

Taking these steps will allow us to move forward as expeditiously as possible, to limit liability
and to immediately start the process of restoring the tax deductible 501(c)(3) status of the
Foundation.

In fact, I can tell you that as of today, donations made to the FSC are once again tax-deductible
in the United States!

That’s all the bad news and the legal necessities. Now I’m excited to share with you some of the
positive highlights of our work over these past couple of months.

One of the things that I am personally most excited about is that we have secured all of the
physical assets of the FSC that David had in storage in Palm Springs. Here is a picture of what
we found in the Palm Springs storage unit when we first arrived.

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It wasn’t exactly the ideal conditions that we had hoped to find for the FSC’s valuable archives.

After nearly two weeks of tireless work by Nathaniel Hansen, I am very pleased to report that
these archives are in much better conditions today. Take a look:

In addition, I am thrilled to report that we have begun to expand the Board of Directors of the
FSC by bringing on several luminaries in the world of cycles – Jake Bernstein, Larry Williams and
Andrew Pancholi – and leading technical analyst Tom DeMark.

Jake, Larry, Andy and Tom are exactly the kind of important members of the cycles community
who had become estranged from the FSC. We are excited and proud to welcome them back and
we look forward to announcing more new noteworthy Board members soon.

We want to continue to expand the Board as well. We welcome all recommendations – both
financial and non-financial.

For those in the cycles community that may not know me well, I’d like to share a little bit about
myself and a few thoughts on why it is I find myself in this unexpected position of shepherding
the FSC into its next cycle.

My undergraduate training is as a mathematician at U.C. Berkeley. I then went on to get my


PhD in the interdisciplinary field of systems science under the late professor George Klir. My
dissertation was on new mathematical methods for helping scientists and researchers be more
honest about and aware of the uncertainties in their own models and forecasts.

WWW.TRADERSWORLD.COM February/March/April 2019 141


For the past 15 years I’ve been building software tools and developing algorithms to help
investors build more profitable and lower risk portfolios.

About 10 years ago, David asked me to look into the software published by the FSC and to look
into the original papers published by Dewey, Shirk, Vaux and others which described the cycle
detection algorithms being used by the FSC.

My team and I spent nearly two years on this project, pro bono, which resulted in new and
improved algorithms and new editions of the software published by the FSC.

Upon David’s death, I was asked by the Board to assume the role of interim Chairman and
CEO. In that capacity I spent my own personal funds (over $100,000 to date) to lay David to
rest, gather assets from Bucharest and Palm Springs, clean up the legal status of the FSC and
establish basic operations sufficient to give the FSC the opportunity to come back to life.

As I stated earlier, I am not interested in becoming a new dominant personality for the FSC. I
want the FSC to shine with its own light. But I do believe that there are some important reasons
that I will make a good Chairman for the FSC at this time in its history.

• I care deeply about the history of the FSC and long to see it restored to respectability and
recognition and I believe that it is an important time in history for a revitalized FSC to clarify
and broadcast its message.
• I will not run the FSC as a sole-proprietorship. I will work to build a robust Board of Directors
that can collectively support the future of the FSC.
• I use time-cycles actively in my own work and have continued to evolve my own computer
programs and algorithms in the field.
• My experience in the interdisciplinary field of systems science makes me uniquely positioned
to help develop a truly interdisciplinary FSC.
• My background in enterprise grade financial software for retail investors will serve the FSC’s
own aspirations for developing and publishing its own data, algorithms and software.

In closing, I am proud of the work we have done to give the FSC this opportunity to once again
be recognized as the transformational institution that it truly is. The Board and I have brought it
this far, but we need your help to continue marching forward.

I recognize that many of us have given repeatedly to the FSC over the years and not always
received the value that we expected in return. This is, in fact, the very reason that the old FSC
was bankrupt.

That will not be the case with the new FSC. Your new Board is committed to delivering value to
the cycles community and doing so with clarity, transparency and civility.

Here are some of the steps that your new Board is already taking to make good on that promise:

WWW.TRADERSWORLD.COM February/March/April 2019 142


• Securing and protecting FSC digital and physical assets.
• Taking legal steps to limit liabilities and preserve assets.
• Applying for 501(c)(3) status for the new FSC so that donations will be tax deductible.
• Developing a business plan for the new FSC.
• Recruiting new Directors to the Board from multiple disciplines.
• Removing marketing heavy materials (and extraneous websites) from the FSC web presence.
• Organizing and digitizing FSC archives and making them available online to members.
• Arranging free webinars for members from new Board members and cycles luminaries Jake
Bernstein and Larry Williams.
• Preparing a big online webinar in 1Q 2019 to bring together the work of many leading cycles
theorists.

We are doing all this currently without any operating funds or employees. Of course, we want
to move as fast as possible, but we believe that building a Foundation the right way is more
important than doing it quickly.

In addition to these recent improvements we are currently working hard on several fronts
including:

As the new FSC finds its footing and its new supports, here are some of the projects we would
like to see initiated.

• Re-publishing of a quarterly online version of Cycles magazine.


• Securing of the cycles.com domain as the new online home of the FSC.
• Funding of a full-time operations officer to manage the day to day affairs of the FSC and the
needs of members.
• Building an online data warehouse and cloud-based version of the core cycles-detection
algorithms.
• Creating a physical location for scholars of cycles and cycles enthusiasts to browse FSC
archives and publications
• Fomenting the growth of Cycles chapters globally, wherein cycles enthusiasts and scholars
may interact
• Affiliating the FSC with an academic institution that wants to support cycles related research;
and, of course,
• Raising a new endowment and operating funds.

We welcome all the help we can get in these important areas!

One last point … It is important to note that the new FSC is exclusively focused at this time on
our not-for-profit scientific research and educational mission. We envision a time in the future
where the FSC will create a wholly-owned for-profit subsidiary to commercialize FSC technology
– much like universities do – but we are not yet there today.

For now, we will not be selling software or conducting paid workshops.

WWW.TRADERSWORLD.COM February/March/April 2019 143


Of course, supporting and funding the FSC has always been a challenge. The challenge goes all
the way back to the very first days of the FSC back in 1941. It is no different today.

Great opportunities lie in front of us and our ambitions for the FSC are as expansive as ever, but
we can’t do it without you. If you are inspired by this new opportunity to rebuild the FSC, your
Board sincerely hopes that you will contact the FSC and see how you can help.

The easiest way to let us know that you want to help is to simply reply to this email. You are
also welcome to directly contact any of the current Directors or Officers. A list of all current
Directors and Officers and contact email addresses is below.

Please let us hear from you!

Thank you again for taking the time to read this letter. After such a tumultuous transition and
a long period of silence, I felt that it was proper and necessary to explain in detail the recent
events and the new direction.

With high hopes for a bright future for the FSC,

Richard.

Richard M. Smith, PhD


Chairman and CEO, Foundation for the Study of Cycles

P.S. The new FSC will not be concerned with any past disagreements between members of
the cycles community. We welcome all members of the community that wish to constructively
contribute to the benefit of the FSC going forward.

P.P.S. Keep an eye out for exciting announcements about FREE online cycles workshops from
Jake Bernstein, Larry Williams and others.

Both myself and The Market Timing Report (www.markettimingreport.com) will


be supporting The Foundation For The Study Of Cycles. Please do sign up at www.
foundationforthestudyofcycles.org so that we can keep you informed of developments.

You will also be able to access much detailed research on cycles from markets.

This is a true return to unearthing the key cycles that drive market and other events.

WWW.TRADERSWORLD.COM February/March/April 2019 144


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THE COSMIC SETUP:
MODERN DAY ASTROLOGY LOOKS AT 2019
Revised from Forecast 2019 Book
Raymond Merriman ©

Setup: 1. The way in which something is organized, planned, or arranged. 2. A scheme, or a


trick, intended to incriminate or deceive someone. - Dictionary, google.com.

“What you are getting is a stimulus at the very wrong moment. The economy is already at
full employment. (The stimulus) is going to hit the economy in a big way this year and next
year, and then in 2020 Wile E. Coyote is going to go off the cliff,” – Ben Bernanke at a policy
discussion at the American Enterprise Institute, written by Craig Torres, “Bernanke Says U.S.
Economy Faces a Wile E. Coyote Moment in 2020,” Bloomberg News, June 7, 2018.

It’s the cosmic set up of a decade. And it may take a modern-day Financial and/or Mundane
Astrologer to figure out what it means before it unfolds. Yet, almost anyone with a working
knowledge of astrology is aware that the alignment of planets approaching in 2020 is quite a
unique and powerful set up: a stellium of Jupiter, Saturn, and Pluto in late Capricorn through 0°
Aquarius. It is symbolic of a huge shift for humankind. And 2019 is the setup for this shift.

But what kind of setup is it?

According to the Google dictionary, a “setup” can have multiple meanings, and take several
forms. There is the physical setup, the way in which something is organized, or arranged. The
arrangement of the planets in the solar system, in relationship to planet earth, exemplifies
this type of setup. We see this in the chart of the year 2020. The chart, or horoscope, which
is a representation of the heavens, is in a sense, a physical, astronomical, or cosmological
arrangement, or setup. It reflects the manner in which the planets are “set up” in the chart of
the times. That is, the cosmic setup of 2019 is leading humanity into the Jupiter, Saturn, and
Pluto stellium that will take place when all three will move through the sign of Capricorn in 2020.
In other words, the year 2020 will be another “Capricorn Climax,” along the lines of the last one
which lasted five years, from 1988 through 1993. But to understand and prepare adequately for
the 2020 version of a “Capricorn Climax,” we need to first of all understand the cosmic setup
leading into it from 2019.

There is another kind of “setup” defined in Google’s dictionary. This one is defined as, “A
scheme, or a trick, intended to incriminate or deceive someone.” This could be pertinent to
understanding the times we are living in as well, for just prior to the Jupiter, Saturn, and Pluto
moving together through Capricorn, December 2019 through December 2020, one of these

WWW.TRADERSWORLD.COM February/March/April 2019 146


planets – Jupiter – will form a three-passage square aspect to a fourth outer planet – Neptune
– in 2019. This particular aspect occurs every 13-14 years. But this one is not just an ordinary
13-14 year planetary pair cycle between these two planets. This particular square is unusual
because both planets will be in their ruling signs. That is, Jupiter will be in its home sign of
Sagittarius, while Neptune will be in its home sign of Pisces. On top of that, Jupiter also co-rules
Pisces. Two outer planets, each in the sign that they rule (plus co-rule), and in a hard, waning
square (270° distance from one another), aspect. That doesn’t happen all that often. In fact, it
only happens about every 166-167 years. The last time it occurred was in late 1852.

Let’s briefly look at what happened in 1852, the last time these two planets were in their
respective ruling signs and square to one another, and see if we can identify some similarities to
today’s stock market.

This chart comes from the Foundation for the Study of Cycles (https://timingandtrading.com/).
As one can see, 1852 was 10 years after the end of a major depression in both the economy and
the stock market. After achieving an all-time high in 1835, President Andrew Jackson set out to
eliminate the central bank of the United States. The reaction was catastrophic for stock prices,
which began an 8-year meltdown in which the indices lost approximately 80% of their value by
the time they bottomed in 1842. However, stock prices then rallied smartly into an 18-year cycle
crest in 1852 (the highest price between the two troughs that defined the 18-year cycle from
1842-1857). Note that 18-year cycles have an orb of 3 years, so the time band extends from
15 to 21 years. This one, 1842-1857, lasted 15 years, with the crest unfolding in the 10th year
– and almost the 11th year – in December 1852. Once the crest was achieved, the stock market
then declined approximately 60% into the secondary low (and 18-year cycle trough) in 1857, as
shown in the closeup in the figure below.

WWW.TRADERSWORLD.COM February/March/April 2019 147


The actual date of the 1852 waning square aspect between Jupiter and Neptune occurred on
December 18, 1852. The actual crest of the stock market took place in a triple top, distribution-
chart pattern, between October 1852 and January 1853.

The interesting correspondence to the Jupiter in Sagittarius, square Neptune in Pisces in 2019
is that there was also a Great Recession and stock market low approximately 10 years. That is,
there was also a deep financial crisis in 2008, and stocks indices in the USA bottomed in March
2009, ten years before the 2019 aspect of Jupiter square Neptune in their ruling signs. As of
this writing, the all-time high in the USA stock market occurred on October 3, 2018, just three
months before the first of three passages of this aspect in 2019. The important question for now
is whether that high will hold, or if there will be a higher high forming in 2019? And, in either
case, will a similar fate as witnessed from 1852 to 1857 follow this high related to Jupiter square
Neptune, with each in its own ruling sign? In other words, will the pattern of 1842-1857 be
similar to a stock pattern unfolding from 2008-2023, in which a high during this time frame will
be followed by a very steep 3-6 year decline and a secondary low to the low of March 2009? It is
possible. A crest forming nearby to the Jupiter/Neptune square in 2019 (or even that of October
2018) will be the first part of that set up.

As indicated so far, the year 2019 will highlight one major aspect formation between the outer
planets. That major aspect will be the three-passage series of Jupiter in its ruling sign of
Sagittarius, forming a waning square aspect (270° separation) to Neptune, in its ruling sign
of Pisces. Due to an astronomic factor known as retrogradation, this aspect will unfold in a
three-passage series. The first has already occurred on January 13, and will be followed by
two more passages on June 16, and September 21, 2019. The entire period is known as the
central time band for this aspect. In December 1852, there was only one passage. In either
case, the effective orb of influence can be up to four months either side of a single passage, or
the beginning and end in the central time band of a multiple passage. Thus, the entire period
from September 2018 through January 2020 is highlighted as a possible Jupiter/Neptune square
crest. Therefore, the year 2019 is the astrological setup. It is a setup for the very powerful

WWW.TRADERSWORLD.COM February/March/April 2019 148


collective transformation that is likely to follow in 2020-2022, and beyond.

There is another geocosmic factor to consider, which dovetails with this outlook. This is the
transit of Jupiter through its own ruling sign of Sagittarius, which lasts from November 8, 2018
through December 2, 2019. This planet/sign combination occurs approximately every 12 years.
In fact, every 12 years Jupiter makes a complete orbit around the Sun, and spends about
one year in each sign of the zodiac. The year it transits through Sagittarius has a historical
correspondence to rallies and the completion of long-term cycle crests in stock indices. For
instance, the last time Jupiter was in Sagittarius was 2007. You may remember the all-time high
in the Dow Jones Industrial Average, preceding the greatest stock market decline since the Great
Depression, was completed on October 11, 2007. Jupiter was right in the middle of Sagittarius at
that time. After that high, the stock market began a huge sell off that didn’t end until March 6-9,
2009, at which time Jupiter had moved through Capricorn and into the middle of Aquarius.

The historical relationship between Jupiter-in-Sagittarius and the U.S. stock market can be seen
in the filtered graph enclosed here covering over 11 Jupiter cycles since 1885. This filtered graph
comes from the programming of Sergey Tarassov and Alphee Lavoie at www.timingsolutions.
com and https://www.alphee.com. In this graph, you will note that the transit of Jupiter in Leo
corresponds to a low, and from there, stock prices generally go higher into the period when
Jupiter is in Sagittarius, four years later. Jupiter was in Leo when the DJIA made its 4- and 6.5-
year cycle troughs in August 2015 (the two cycles converged then).

According to this graph, another cyclical crest is due while Jupiter is in Sagittarius (November
2018-December 2019), and usually before the end of that period. The high to date has been in
October 2018, one month before Jupiter entered its 13-month trek through Sagittarius. That
may be close enough to correlate with the crest. However, it also suggests another crest could
yet happen during this period, prior to December 2019. It may be a re-test of the October 2018
high (i.e. double top) or it may be even higher. However, note what this correlation suggests
afterwards. Namely, that stock prices tend to fall for 1-3 years – and probably fall hard – until
Jupiter is in Aquarius or Pisces, which will equate to 2021-2022.

This is important because in 2021, another significant long-term geocosmic signature unfolds
that also has a high correspondence to “shocks” to the financial system: Saturn square Uranus.
This will be a subject for a future article.

WWW.TRADERSWORLD.COM February/March/April 2019 149


Filtered wave of Jupiter transiting through the 12 signs, per software programs of
Sergey Tarassov and Alphee Lavoie at www.timingsolutions.com and https://www.
alphee.com.

Raymond A. Merriman is the President of The Merriman Market Analyst, Inc. and founder of
the Merriman Market Timing Academy. He is a Commodities Trading Advisor (CTA), financial
market analyst, and editor of the MMA Cycles Report, a monthly market advisory newsletter that
specializes in stocks indices, interest rates, currencies, precious metals, crude oil and soybeans
since 1982. He also writes a daily and weekly report for more active traders. Merriman is the
author of several books on Financial Market Timing, including the series on The Ultimate Book
on Stock Market Timing, Volumes 1, 2, 3, 4 and 5 (1997-2017); The Gold Book: Geocosmic
Correlations to Gold Price Cycles (1982); The Sun, Moon, and Silver Market (2006); Solar/
Lunar Correlations to Gold Price Reversals: Secrets of a Gold Trader (2015); and the annual
Forecast Book (since 1976), which outlines his projections a year ahead of time for financial
markets, the world economy, and political trends.

In early 2013, Merriman was awarded the Gold Star by Market Timing Digest of Amsterdam,
Netherlands as the “Best Market Timer of 2013.” He was the only contestant (of twelve who
were followed) to successfully identify all 15 major turning points in the U.S. stock market by
their criteria. The second place finisher successfully identified 12. In 2014, Merriman received
the Gold Star award again as “Best Market Timer of the Year” from Market Timing Digest, this
time correctly identifying 20 of 21 reversal dates in the U.S. stock market well ahead of time.
Merriman currently resides in Cave Creek, Arizona He can be reached at ray@mmacycles.com,
or via the MMA website at https://mmacycles.com.

WWW.TRADERSWORLD.COM February/March/April 2019 150


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Amazon Kindle Books
Gann Masters Course by Larry Jacobs $9.95
As you know, W.D. Gann was a legendary trader. Some say he amassed a
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A Unique Approach to Forecasting by Ivan Sargent $32.95


This book is possibly one of most advanced books in technical analysis you will
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Patterns and Ellipses by Larry Jacobs $9.99


This book concerns itself with a highly technical subject, the subject of
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Gann’s Master Charts Unveiled by Larry Jacobs $9.99


We know that Gann used the Pythagorean Square because he was found
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the palm of his hand. How did he use this square? Why did he not discuss the
use of this square in his courses? There is only one page covering the Square
of Nine in all of his books and courses. Was this square his most valuable tool?
These and all the other squares Gann used will be discussed in detail in this book with many
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Gann Trade Real Time by Larry Jacobs $9.99


When you opened this book you took the one step that will help you learn how
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term. You need to know and fully understand the markets and develop successful trading

WWW.TRADERSWORLD.COM February/March/April 2019 154


strategies to become successful at this endeavor.

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This is one of the most fascinating books that was ever written about trading
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Traders World Online Expo #14 in video presentations and in this book.

What sets these traders apart from other traders? Many think that beating the markets has
something to do with discovering and using some secret formula. The traders in this book
have the right attitude and many employ a combination of fundamental analysis, technical
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Trading is one of the best ways to make a lot of money in the world if one does it right. One
needs to find successful trading strategies and implement them in their own trading method.
The purpose of this book is to present to you the best trading strategies of these traders so
that you might be able to select those that fit you best and then implement them into your
own trading.

I wish to express my appreciation to all the writers in this book who made the book possible.
They have spent many hours of their time and hard work in writing their section of the book
and the putting together their video presentation for the online expo.

Finding Your Trading Method $3.99


Finding your trading method is the main problem you need to solve if you
want to become a successful trader. You may be asking yourself, can I find
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positions for weeks and even months? Every trader is different. You need to
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Finding out your trading method is extremely important to produce a profitable benchmark
that can be replicated in your live account. Perhaps the best way to find a successful
trading method is to listen to many expert traders to understand what they have done
to be successful. The best way to do that is to listen to the Traders World Online Expos
presentations. This book duplicates what these experts have said in their presentations,
WWW.TRADERSWORLD.COM February/March/April 2019 155
which explains what they have done to find their own trading method.

If you have a trading method that gives you a predictable profit, then that type of objectivity
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comfortable with, you must have the following:

An overall plan to:


1) Set your rule set and plan and then stick with it in all of your trading.
2) To give you a trading plan for every day.

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1) Have an exact entry price
2) Have a stop price
3) Have a way to add positions
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Reading this book and by seeing the actual recorded presentations on the Traders World
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It took many of these expert traders in this book 15 – 30 years to finally come up and find
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detect and trade the hidden market cycles, short term trading by taking
the money and running, develop your mind for trading, overcoming Fear in
WWW.TRADERSWORLD.COM February/March/April 2019 156
Trading, trade with the smart money following volume, understand and use the Ultimate
Oscillator, use high power trading with geometry, get better entries, understand the three
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Written by Many Expert Traders

The book was written by a large group of 35 expert traders, with high qualifications, most
of who trade professionally and/or offer trading services and expensive courses to their
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Trade the Markets with and Edge $3.99

This is an important book discussing the use of different strategies methods


about trading.

It was written by over 30 expert traders. The book was designed to help you
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actually lose in the markets and the main reason is simply that they don’t have an edge.

All of the writers in this book are very experienced and knowledgeable of different ways. Each
of them has their own expertise in trading the markets. What sets these traders apart from
other traders? Many think that beating the markets has something to do with discovering and
using some secret formula.

The traders in this book have the right attitude and many employ a combination of fundamental
analysis, technical analysis principles and formulas in their best trading strategies. This gives

WWW.TRADERSWORLD.COM February/March/April 2019 157


them a trading edge over other traders. If you want to be successful at trading, you too must
have your edge. One needs to find successful trading strategies and implement them in their
own trading method.

The purpose of this book is to present to you the best trading strategies of these traders so
that you might be able to select those that fit you best and then implement them into your
own trading style. I wish to express my appreciation to all the writers in this book who made
the book possible. They have spent many hours of their time and hard work in writing their
section of the book and the putting together their video presentation for the online expo.

Guide to Successful Online Trading - Secrets from the Pros


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This is one of the finest trading books you’ll ever see about trading. The
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Trading as you know is extremely difficult. It is estimated that 90% of


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The traders in this book have through experience the right attitude and employ a combination
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From this book you will get all the strategies, Indicators and trading methods that you need
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This book gives you:


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WWW.TRADERSWORLD.COM February/March/April 2019 158


CRAIG TRADING: Craig Haugaard made 300.9% in his World
Cup Trading Championships® Account in 2014 - Want to
Know How? $3.99
This book contains an interview that I made with Craig Haugaard, third-place
finisher in the 2014 World Cup Championship of Futures Trading® with a
300.9% net profit. I asked him many questions on exactly how he did it.
In the rest of the book I explain to you how to use the indicators that Craig
used to make his 300.9% return.
Here are the indicators that he used:

• Seasonality
• MACD
• Stochastics
• Moving Averages
• Trailing Stops
• Fibonacci Retracements & Extensions

All of the charts in this book are produced using my favorite charting software Market-Analyst®.
I have also arranged for you to get a FREE trial so that you might have the chance to actually
work with these indicators with a real charting platform.
You will also be able to view the video presentations that I personally created so you can
see how these indicators can be setup and followed with clear and concise step-by-step
instructions. After you understand how these indicators work, I would then recommend that
you go to WorldCupAdvisor.com and consider following Craig Haugaard’s real-time trades.

This one-of-a-kind book teaches you how to identify the direction of the markets and trade
the markets by using popular trading indicators. This is done by concise instructions backed
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trades of a master trader.

Mastering Your Trading: Learn from Expert Trading Advisors


“Mastering Your Trading” is the perfect source for learning
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$3.99

This book focuses on various methods of trading developed by many top


trading advisors. There are 17 well written articles and it is packed by insight
that can benefit the beginning to the expert trader. This is a must read. The
trading methods and strategies presented in this book can help to succeed
in today’s volatile market environment. From preparing your psychology to the demands of
timing the market and managing the risk, this book tells it all.
The book provides you the tools that are necessary for making the right trades and when to
get in and out of the market. The book covers:

WWW.TRADERSWORLD.COM February/March/April 2019 159


• Price and Volume the only True Indicators
• Uncovering Market Secrets
• How to handle capital exposure
• Secrets of Safe Profitable Day Trading
• Using Social Media Sentiment Cycles
• How to Dramatically Improve Your Trading Psychology
• How to Handle Trading Losses
• Using a Market Scanner to Save Time
• How to Stop Guessing
• How to Get the Right Trading Computer
• Simple and Practical Trading Tips
• And much more…

This book is an enhanced Edition which means that the articles are backed with audio visual
presentation links. Most of the presentations are in HD quality and are put together by the
writers of the articles in the book and really help the learning process.

Successful trading is based on knowledge and having the right psychology to trade the markets.
This book will lift your trading to a much higher level and will save you an enormous amount
to time.

WWW.TRADERSWORLD.COM February/March/April 2019 160


Trading with Success $4.99
This book contains an interview in Chapter 1 with Rob Mitchell, who
finished in 2nd place in the 2014 World Cup Championship® of CME
E-mini Trading with a 57% net profit.

Rob Mitchell is the president of Axiom Research & Trading, Inc. and has
been a trading system developer for over 20 years and has developed a
number of commercially successful trading systems. He has at various
times been the largest eMini S&P trader in the world. Rob has also acted
as a Commodity Trading Adviser, has traded for hedge funds and has won
the Robbins World Cup eMini trading championship in the past. Rob is
a trading teacher and mentor and is the founder and head trader of Oil
Trading Room which is devoted to providing advanced educational resources to traders at all
levels.

In the rest of the book I will explain to you some of the trading ideas of Rob that he uses in
both his Oil Trading Room and in his World Cup Advisor Account. You can then actually see and
understand how some of his ideas work.

I am not going to tell you exactly how Rob used the ideas to make his return of 57% on a
$10,000 investment. That information is not public and belongs only to Rob.

I will tell you some of the trading ideas he uses and help you understand how these ideas work.
I would then recommend that you go to World Cup Advisor and consider following Rob’s trades.
You will be able to automatically mirror Rob’s trades in your own brokerage account with World
Cup Leader-Follower AutoTrade™ service. You will also be able to see what his trades look like
on your own charts and better understand why he made the trades.

Takumaru Forex Trading $4.99


This book contains an interview in Chapter 1 with Takumaru Sakakibara,
who finished in 2nd place in the 2014 World Cup Championship of Forex
Trading® with a 122.6% net profit. “Takumaru’s largest drawdown
(cumulative peak-to-valley percentage decline in month-end net equity
during the life of the account) was -21.5% from 6-30-15 to 10-31-15.”

“Please remember that past performance is not necessarily indicative


of future results.”

“Please remember that Forex trading involves substantial risk of loss,


and past performance is not necessarily indicative of future results.”

In the rest of the book I will explain to you some of the trading ideas Takumaru said he used

WWW.TRADERSWORLD.COM February/March/April 2019 161


in the championship. You can then actually see and understand how his ideas work.

I am not going to tell you exactly how Takumaru used the ideas to make his return of 122.6%
on a $10,000 investment. That information is not public and belongs only to Takumaru.

I will tell you which indicators he used and help you understand how these indicators work.

Michael Trading: Learn about some of the trading tools he used $4.99
Michael Cook, was the first-place finisher in the 2014 WORLD CUP
Championship of Futures Trading® with a 366% net profit. In this
book there is a detailed interview with Michael with questions and
answers of exactly what he used to win the championship. In this
book I will explain to you the indicators that he said he used in the
interview. You can then actually see and understand how they work.
Here are some the indicators and methods that he said he used: 1)
Moving Averages 2) Seasonality 3) Cycles 4) Seasonality 5) Price
Patterns 6) William’s %R 7) Long with Stops 8) Commitment of
Traders Report You will also be able to download a video presentation
that I personally created so you can see how these indicators can be
setup and followed in a step-by-step manner. After you understand
how these indicators work, I would then recommend that you go to WorldCupAdvisor.com and
consider following Michael Cook’s trades.

WWW.TRADERSWORLD.COM February/March/April 2019 162

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