TRADING METHOD SUMMARY (Scalping Style)

1. SETUP: 50 MA angling up/down, reached %K <20/>80 at some point and is angling in direction of the
trade at the point of entry. Also %D is <45 or >55 on setup chart and on the setup bar. Enter in direction
of trend on retrace 1 (best) and/or 2. Enter reversals on Waves 7 and 9 only (lower probability). (setup)

2. REASONS TO STAY OUT on setup chart (filters)

rd
 3 trend retracement in trend or extended move
 A wide-range vertical impulse move in direction of trend before the retrace
 A wide-range vertical retracement: take the second trigger
 Right before economic news.
 The 50 MA is flat.
 Do not enter right into support/resistance.

3. CONFIRMATION on LT chart (this chart should be 3X the interval of the ST chart) (confirmation)
 There are 4 things to consider on the confirmation chart (the more of these that are on your side,
the better – I look for 2 of these to be in my direction at the very least).
o Direction of MOM - you MUST have this!
o Direction of %K
o Direction of %D
o Where in the range of the stochastic indicator %K and %D are – For longs, the lower in
the range (closer to 0) the better. For shorts, the higher in the range (closer to 100) the
better.
 What we DON’T care about on the LT chart:
o What the DAD indicator is doing.
o Whether MOM is above or below the 0 line.
o What the trend is (angle of the 50 MA).

4. ENTER on the ST chart: (triggers)

 Second Chance pattern on %K and a hook on %K in direction of the trade. Enter one tick (the
minimum movement of your market) above/below the bar that created the hook on %K (for
Forex you enter 1 pip plus the bid/ask spread between the pair above/below the high/low of
the bar that created the hook). .

5. EXIT (money management):

 Exit 1 = Near the first S/R at cycle high/low (close to 1:1 risk/reward)
 Exit 2 = Near next S/R level (beyond the first) on ST chart (close to 2:1 risk/reward).
 Exit 3 = Trail on other side of last swing H/L until LT chart's Cycle Indicator (%D hook, or %K
reversing pattern) begins to reverse. Then exit on a reversal of the ST chart’s Cycle Indicator
(1 tick beyond the bar that creates the hook). Other trailing stop options are on video.

EXTRA SIGNALS THAT PROVIDE EVEN GREATER PROBABILITY THAT

YOU’VE ACTUALLY FOUND A CYCLE HIGH/LOW:

1. “Second Chance” pattern on %K on confirmation chart (mini divergence, etc.).

2. MOM on setup chart hooks in direction of trade at same time as %K.
3. %D angles in direction of trade on setup chart at time of entry.
4. There is a cycle high/low on the longer-term term and short-term chart at the same time.
Trading is extremely risky and there are no guarantees of success. Before attempting to
trade this method you must read http://www.topdogtrading.com/EarningsDisclaimer.html
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