Bryce Gilmore - Trading To Win Course

w
Course
One Doy of o Time
By
BryceGilmore
lcl2004
A completeguideto S&P500FuturesTradingIntra-day
All RightsReserued:
BryceGilmore& Associates
PtyLtd.
Queensland. Australia.
I Trading to WIN Course - One day at a time [c] Bryce Gilmore2004
t
The Author:
I
I havebeena successfultraderin oneform or anotherfor mostof my adult
I for myselffor the past32 years.
life.I haveworkedindependently
In 1981whileI was in Londona traderfriendof minetook me into his

I broker'sofficefor lunch.This is whereI sawfor the first time a completely
differenttradingworld,the futuresmarkets!
I WhenI returnedto AustraliaI openeda commodity

bought2 contractsof ComexSilverandproceeded
futurestradingaccount,
to try my handat trading
I paper.MyfirsttrademademeUS$11,500 in twoweeksandI washooked.
It wasn'talwayseasygoingbut overthe next few yearsI was completely
t absorbedwiththe mechanics
ownsofturare
of the futuresmarketsandbeganto developmy
to explorethe methodologiesof ElliottandGann.
I
t
1
t BryceGilmore
I
By 1989I had gaineda reputationas an authorityon Time and PriceAnalysis
I and becamewell knownto serioustechnicalanalystsfrom aroundthe world.
It has beena pastimeof mineto teachpeopleto trade from my earlydaysin

I In recentyearswith the adventof electronic
this business. tradingand cheap
commissionrates the growth in day trading volume has openednew doors
andthat is whatthis courseis about- takingadvantageof the opportunity.
I I believewith the helpof this TTW courseand also my Dynamicnme & Price
I Analysisbook (2002), anyonewho is willing to put in the hard work will

definitelybe ableto makean excellentlivingas a professional
futurestrader.
I Formoreinformation on my profileyou shouldvisit my web site:

http: / /www. bryce-gilmore.com/
I
I
Tradingto WIN Course- One day at a time [c] BryceGilmore2004 I
Contents: I
Subject Page
I
Introduction
I
Tradingto WINTools
Section1: Practical I
9
1
2
CloseStops
Market Mechanics- howfuturesmarketsoperate 15

I
Suppoft - Resistance& TREND
3
4 Three Bar Swing chafts - buyingandsellingbias
23
25 I
5 Old Highsand Lows- areasof support/resistance 28
6
7
The 50o/oBalancePoint Rule
The 1:1 OverbalancingRule
29
32 I
8 The 2 day correctionrule 3B
9 Shoft Term Trend Indicators 39

t
10 ReversalBarc - Reversal
Gravestone -
Doji Hammers.
Bars- OutsideReversalBars 43 I
Patterns - Numerous examplesof Intra-day 47
11
t2
Revercal
Reversal -
Patterns 3 drivesto a top.
ContinuationPatterns - Rectangles - Breakouts- Old 53
I
Support= NewResistance.
I
13 GeneralPatternTools- Linesin the Sand- Higher 5B
-
HighsHigherLows- Lowerhighslowerlows- Trendlines
Triangles. I
T4 DailyRange.
Days,TheAverage
Gaps,GapReversal 63 I
15 OpenInterest in futures markets. 7B
16 NewsEvents/ Repofts/ EconomicIndicators. 87

I
t7 Fail SafeTRADEENTRYtechniquesand exit rules.
There are others but I will introduce these later in the course as they require
96 t
extra knowledge to implement correctly.
1B Daily RangePatterns 106

I
19 Section1: Summary LL4 I
I
Contents
)
t Trading to WIN Course - One day at a time [c] BryceGilmore2004
I Section2: Dynamic - tradingtools

PriceGeometry
you needto understand
to WIN.
I
Ratios
SacredGeometryandthe Cardinal 1
I Ratiosin MarketCorrections
Geometric 10
t BearMarketTrends
BullMarket
Trends
24
33
I Alternate Waves& RetracementLevels

The ReverseCross
50
52
Inside, Outside& DoubleCrossLevels 56
I B Approach
My X-ABCDPriceGeometry 5B
t 9
10
Pastexamplesof X-ABCD
OddBallRetracement
reversals
Levels& Targets
73
B2
11 Bread& ButterTradingSet-ups B5
I t2 MarketLogic 96
I
I
Section3: Dayto DayandWeekto Week
I Daily Check List
MOB(Makeor Break)Levels
I 1: 1 Overbalancing
- -
levels
61.8 50 38.2levels
I 3 day Swing
AverageDailyRange
DailyTrendIndicators
I MarketReports
Weekly Check List t4

I Timing
GannLevels
ElliottLevels
I MarketMood
Contract Rollover - 1"t Month 26

I Thingsto considerin the rolloverperiod.
I
I
Section
4: Summaries I
The PsychologicalAspectsof Tradingto Win I
in the S&P500
A day by day accountof my experiences
fromthe endof July2003to midSeptember2003. I
My thoughts on how to beat the market 42 I
A look at the S&Pmarket prior to publication 46 I
Esignal- APPENDIX s4-Bs I
Information on my internet Tradingto Win Group:
This group is a selectclub of traders,and is steadily
I
growing.Detailsfor entryare on the bulletinboardof my
website. I
http: / / bryce-qilmore.com
/ bulletin.htm
I
Testimonialsfor studentsand professionaltraders:
Theseareon mywebsite: I
http://www.bryce-g
iImore. Iletin.htm
com/bu
t
Steve Rifl<in'spersonalS&Pmentoring program
Information for traderswho needhandson helpto grasp
t
Youwill find linK to
of my methods.
the correctapplication
thisinformation on mywebsite. I
http://bryce-gil
more.com/bulleti
n.htm
I
INFORMATION ON MY XABCD INTRA.DAY
SOFTWARE
pricegeometry
Foranalysing eitherintra-dayor daily,
I
http://www.bryce-g qe.htmI
iImore.comDGBCDpa I
I
I
Contents
)
t Tradingto WIN Cowse- One day at a time [c] BryceGilmore2004
I
Introduction:
I Oneof the failuresof mosttradingbooksI havereadin the pastis thatthey
leaveout the "humanelement"associated
I mostof ourmarkets.
with the day-to-day
behaviour of
I Marketsare livingthingsand reactto currenteventsas well as technical

eventsratherthanto just movealongwith no consideration
for the outside
world,as mosttechnical
bookswould likeyouto believe.
I Technical
Analysisalonewill nota tradermake.Successful tradingrequires
an
of the players,as well as the technicaland the fundamental
understanding
I aspects
of anymarket,anda continuing handson day-to-day approach.
I My way is all about technicalpreparation,studyingthe fundamentals,

the unfoldingchaft patterns
listeningto the currentnewsand evaluating
beinggeneratedbetweenthe actionsof the buyersand the sellersin the
I marketsI follow.
To trade profitably in real time only requiresyou to identify low risk

I entry oppoftunity in my opinion. This is the bottom line between
successand failure.
I in the S&Pare often presented

Simpletradingoppoftunities
releaseof US economicindicatorrepofts,FEDEMLRESERVE
dailywith the
decisions on
interestrate policy,ConsumerSentimentlevelsor specificpriceearnings
I repoftsof the majorcompanies
highup in the S&P500complex.
I On top of this the intra-daymarketmovementis constantlyinfluenced

tradersusinggeometric pressure
to buyandsellat perceived
analysis
thatarerelativeto GannandElliottWavetheory.
by
points
I In times of indecisionthe S&Pmarketwill go throughaccumulation and

phases.
distribution These phases traceout or form patternson your chart
I that implyfuturedirectional
tendencies.Eachandeveryconsolidation
that a chartof the marketpricemovement
pattern
formswill haveceftainreliable
implications,
implications
that professional
traderswill act upon.
I All it takes is some good or bad news to be releasedand this will set
off a new seriesof impulse buying or selling that movesthe market
I to new DAILY highs or new lows. Thesesituations are our primary
sourceof trading oppoftunities.
I Nevertheless
the S&Pmarketwill nevermovegreatdistances
up or down unlessthe fundamental or psychological
in a straightline
attitudesurrounding
I currenteventsis quiteunusual.
I TTW Course lntroduction

Tradingto WIN Cowse- One day at a time [c] Bryce Gilmore2004
I
Againyou haveto understand trendsare alwaysinterruptedwith periods
where the exuberancein the marketflow slows down and WC : have
t
corrections
to bringthe buyersandthe sellersbackintobalance.
Eachand every market correctionor suddenrevensalof trend due to

I
an exhaustion behreen the buyers or the sellers is in itself
generatingyet another new trading oppoftunity. I
Learning to identify these oppoftunities is the basis of my TTW
Counse.Once you can learn to identify the low risk oppoftunity I
levelsalong the way where you can make trading entries you will be
tradingto WIN. I
the positionof the technical
I amalsoalwaystryingto evaluate tradersversus
the impactof suddenunexpectednewsthatcanenterthe market. I
I haveceasedto believethat one needsto be anythingmorethan a day
traderto makegoodconsistentprofitsin the market.Wellat leastI have
concludedthatwith 24 hourtradingthisis the leaststressful
wayto trade.
I
Therecouldbe occasions
in differentmarketsthanI currentlytradethatoffer T
tradeswhereyou enterandholdfor longerperiodsof time.I don'tdisbelieve
thisbutevenwhenyoudo theystillconfrontyouwithsomesurprises.
I
OnethingI cantell you beforeyou beginto studytechnical
methodologies,is
thatyou haveto havean appreciationfor the fundamental
the ebbandflowof the marketsthesedays.
that affect
aspects I
News surueillance
unexpected
is so fast now days that when somethingodd or
happensthe marketplayersoften reactin a way that was not
I
predictable
beforehandviathe normaltechnical
approaches.
why you needto havea fingeron the pulse

It reallygetsyou to understand
I
eachdayif youwishto be successful.
I
If you just want to breezein and out of the marketwithoutdoingany
preliminary researchor watchingfor importantupcomingreportsyou are
placingyourselfin a positionof luck.Luckhasnothingto do with tradingto I
WIN.
Successful tradingis all abouttradeselectionat the pointof leastrisk,getting

I
out fast if it doesnot work immediately
marketshowsno signof reversing
or lettingyour profitsrun whilethe
direction. I
Daytradingis all abouttradingpredominatelyin the directionof the shofter-
term trend. This trend could be influencedby patternsand geometry
occurring
in differenttimeframes.It couldbe dueto l-minutebars,S-minute
I
bars,3O-minute bars,60-minutebarsor dailychaftpatterns.
I
TTW Course Introduction
t
T Tradingto WIN Course- One day at a time [c] BryceGilmore2004
I Makingdecisions to entera positionrequiresa currentopinionof wherethe

marketis at, right now. Not yesterdayor whereit will be at tomorrowbut
l now.Moneyis won or loston the spotor in the next20 minutesmostof the
time.
I The noviceneverseemsto understand theseprincipals of tradingand as a

resulttheyall endup losingmoneyinitiallyuntiltheygetthe message.
I Themarketis not likeanythingelsein life,it goesbackwards

andforwardsall
thetimewithoutanyrespectto youropinionof the longer-termtrend.
I To be profitableyou haveto learnhowto dealwith the marketon a day-to-

daybasis.
Notonlythat, you haveto learnhowto dealwith the marketon a weekto

week,monthto monthandyearto yearbasis.
I In the largerpicturemarketsmovein seculartrendsandryclicaltrends,these
trendsareobviousafterthe fact.A seculartrendcanlastfor manyyearsbut
I the cyclicaltrends,be they bull or beartrendsvary in length;The ryclical
trendscan be motivatedby all sortsof economicdata and governmental
influences. trendscanbe brokendownintowhatI wouldcallseasonal
Cyclical
I trends;thesecan be influenced weather,interestrate
for all sortsof reasons,
policies,wars, threats of wars, companyearnings,employmenttrends,
consumerconfidence,bank lendingpolicies,naturaldisastersand even
t terrorismacts.
In a seasonaltrend the market will move through phasesthat are

I predominately influencedby the actionsof largetraders.Yousee,everyday
the traderscometo workwith an opinionof whattheyexpectthe marketto
I do.Theyhavesophisticated systemsthey havedeveloped that givethembuy
or sell signalsand they act on them.This is wherethe technicalindicators
giveyoua guideto theirmediumtermactivity.
I Oncea seasonaltrend developsand the mediumterm positionof large
tradersis knownthe marketmovement is thengoverned by the actionsthat
I Theseare differenttypesof systemsthat
haveshorter-termconsiderations.
shofter-termtradershavedevelopedor learntto take advantageof the day-
to-daymarketmovement.It is whenyou get downto the nitty-grittyof the
I day-to-day thatyoucanappreciate
the biggerpicture.
To becomea successful the overallpictureand

traderyou haveto appreciate
I thensubdividethe unfoldingpatternsintoseasonal
trendsandthentrendsof
a lesserdegree.Theneachdaytradethe currentinfluencesbe theytechnical
I or fundamental.
During the day-to-dayactivity the market will move from oversoldto

I overboughtandbackagain,sometimes manytimesovera day.
I TTW Cowse Introduction

theyunderstand to representsuppoftor resistance.
and the priceranges
Traderswill buy and sell basedon technicalindicators I
The future directionof pricewill be dictatedby the balanceor imbalance
betweenthe whimsof the traders.Pricedirectionof any marketonlycomes
I
downto onething,i.e.,whois in the majority,the buyersor the sellers.
!
To become traderyouwill haveto monitorthe buyersandsellers
a successful
eachday. If you know the pointswherethey will buy or sell or reverse
positionyou havethe EDGEto beatthemat their own game.Thisapproach I
allowsyou to movewith the ebbandflow of the marketratherthanrestrict
youractionsto somesystemthatcant adjustquicklyenough. I
Outlinefor this counsemanual:
In 2002I saidtherewouldbe no needfor me to write anymore,but that

I
hasn'texactlyturnedout to bethe truth.Althoughall my previously
published
workcontainsall the information I think is necessary
trading,I wasleftwitha slightlyunfulfilled
feeling.
to makea successof I
I decidedto re-writethe TTW bookas a moreinformativecourseand then I
whencombined with my DYNAMIC TIME& PRICE ANALYSFbookstudents
wouldhavea complete instruction
standalone course.
I
This manualwill take you throughin stagesusingthe methodologies
in
tradingprinciple
the wayI do it. I
Muchof the materialmaynot be newto you but it is the waythat I combine
it togetherthat makesit so poweful. I
Thismanualwill instructyou howto preparefor the tradingdayandthento
staya stepaheadof whatis goingon asthe marketunfolds. I
My hopeis that this finalcoursewill act as a reference
for yearsandyearsahead.
for interested
traders
I
At leastI will knowthat everyonewho hasthis bookwill at leasthaveevery
chanceof becoming a professional
trader.
I
The approachI am going to take is to lead you through the basics
and then expandon them as we go on.
I
The firct thing you need to learn is how to control risk. After that
you can learn to be selective with your trading entries. Once you
I
have mastered these simple things you should study the time and
price material, the Gann material and the other criteria I have
published in DT&PAso you will know the outer workings of the
I
market place.
I
TTW Cowse Introduction
l
I Tradinsto WIN Course- One dav at a time [c] BryceGilmore2004
I It is very important for you to understandwhat can motivate other

traders if you wish to be successful,as the market has technicians
I working on all different levels, i.e., they make decisionsbasedon
data over different time frames.
I If you understandthe basic premiseof WAVESOF SIMII.ARDEGREE

you will be able to monitor what is predictablein the intra-day' the
daily and the weekly price movementof any market.
I Study this material a little each day until you have receivedthe
messageI am sendingyou. It is in your own interest to do so.
I
I YOU EMBARKON THIS
ONETHING I NEEDTO TELLYOU BEFORE
I TOUR:
thingsI will teachyouthat helpyouto pickreversal

All the technical levelsin
I the marketareindications
work.
of whatmighthappen,theyare not guaranteed to
I untilthey Notso
confirmation.
of the time.Theyarealwayssuspect
At best,the bestsignals,maywork75o/o
provide much on the intra-daybut in the larger
picture.
I Butthe truthis thatwhentheydon'tworktheyarenon-confirmation andgive
youthe go aheadto keeptradingwiththe direction
of the currentmove.
I As longas you alwaysbearthis in mindyou will not havea problemtrading
I with StopandReverseOrders,I am an expeftat it.
If yourfirst
to makedecisions.
Lifein the fast laneis aboutusingknowledge
I choicedoesnotworkthenit is mostlikelyyour will.
second
in thisphilosophy.
I ama believer
I
I WILL:
SOMETHINGSWIIL NEVERAPPEAROBVIOUSBUTOTHERS
I I reckonthat whenthe technicallevelsare moreobviousto the crowdthey

havea greaterpotentialto work.
I You mustremember
loseror a winner.
this becauseit will be the differencebetweenbeinga
I
I TTW Course lntroduction
FALSEBREAKS:
I
Falsebreaksare alwaysa problembut you haveto rememberin life that
whenmarketsreacha levelwherethe technical worldknowsspellssupport
I
andresistance thereare playersout therewho dont knowand maketrades
thatwilltestthem. I
-
minutes thenanyreboundis the direction to trade.
- no longerthan5
If technicallevelsare testedandthey breaktemporarily
I
Thepatternsaftera falsebreakwill confirmthe reversal
in anycase. I
Thisis impoftantfor youto learnas nothingin life is perfectin the electronic
worldandyou mustlearnto adapt. I
38.2- 50 - 61.8 levels: t
Theseare the levelsthat everyonerespects.
because
Youwill knowif they are solid
the marketwill not breakthemby morethan 2 ticks.If it doesand
alwaysbarein mindthat on the nexttest they will mostlikelyget
reverses
t
takenout.
I
you are in the morereliablethey
The higherthe degreeof wavemovement
are. I
If theybreakyoucantargetthe nextlevelasyourbestoption.
I
THETWO.DAYCORRECTION
RULE: I
Oneof my strongestrulesin tradingis that marketsin any prolonged
trend
shouldnot makeany correctionthat enduresfor morethan 2 daysif the I
trendis to goingto resume.
Alwaysbearthis rulein mindwhenyouarein corrective

movesasthe second I
dayalwaysprovides tradingoppoftunity.
I
3.DAYBALANCE
POINTS:
Thethree-daybalancepointis the mid pointof the last3 daystradingrange.

I
Whenthe marketis aboveit, it is potentiallybullish.Whenbelowit, it is
potentially
bearish.
Thisis onlya rulein the shofter-termof course. I
I
TTW Course Introduction
l
I Tradingto WIN Course- One day at a time [c] BryceGilmore2004
I 3.DAY SWING HIGHS & LOWS:
I The3-dayswinghighor Iowevenif it is froman intra-daychartis the fastest

the on goingtrend.
wayto calculate
I If you get a false breakof the 3-dayswinghigh or low and the market
reversesyouwill knowfromthe unfoldingpattern.
I Normally if the 3-dayswinghighor lowis takenout it is a signof a reversal,

i.e.,if the marketis retreating
on the currentmove.
I
THESEARESOMESIMPLERULESTO STARTWITH:
I If you followmy rulesandtradewith tight stoplossesyou canwin - if you
chooseto usewidestopsyouwill lose.
I
I
NEVERFORGETTHIS: Never leavean open positionon if it is in a loss
I positionat the end of the day....
ALSO
I Believe what you see and not what you think,
I
I The only thing easier than making money is losing it. You must
trade by rules and disciplineto be successful.
I
I
I
I
I
I
I TTW Course Introduction
Section lt chapter
r: I
CloseStops:
I
The first thing a trader needsto learnto becomeprofitableis to control
losses.If thiswasthe onlythingI couldteachyouit wouldat leastgiveyoua
I
50/50chanceof becoming profitable.
Givingthe marketroomto makeup its mindis not partof my vocabulary.

As
t
far as I am concerned
immediately
my reasonfor takinganytrademustbe provenright
or I shouldn'tbe in thatposition! I
Marketsmovein thrustsbetweenimpliedsuppoftand resistance,
positions
if we enter
at the criticalpointthe marketwilleitheragreewith usor it won't.
I
Professionaltraderswhetherthey are systemtraders,programtradersor
floor tradershavetechnicallevelsin mindto buy or sell off. The market
t
ceateslevelsas it movesalongwhichwill eitherfacilitatetradeor rejectit.
Themarketflowis all I am interested
in asa trader. I
WhenI seethe levelsI am prepared
to buy or selloff I will givethe trade
severalchancesdependingon the degreeof price movementI think is
possible
I
at thetime.
It is betterto take L or 2 smalllossesand be sureyou are the rightway I

aroundthanto sit andwatcha position turnsouron you.
To staftwiththe marketcanonlydo 3 things:-

I
1. Goup.
2. Godown.
3. Gosideways.
I
If youare buyinga breakoutpatternthe marketmustmakea cleanbreakfor
yournewpositionto be profitable. If the previousresistancewassay1100on
I
the E-mini,the breakoutpointwouldbe a tradeat 1100^4,as thisshouldbe
enoughto catchthe initialstopsof the peoplearoundthe wrongway.Asthey
get caughtout there will be moreordersnestedup aboveby the people
I
givingthe marketa little moreroom.Theseordersshouldfeed the initial
thrust into new territoryalmostimmediately the breakouthappens.If the I
breakoutfailsit is becausetradershavesellordersin abundance nestedjust
abovethe breakoutpoint.In whichcasethe breakoutwill becomea false
breakandwill fail. Youwill knowthe breakoutis failingbecause the market
I
doesnot movein your favouralmostimmediately. So if that happensyou
shouldscratchthe positionassoonas it tradesbackbelow1100. I
Thesamesituationapplieswhensellinga supportlevelon a breakout.
I
CloseStops Section1: Chapter- I
t
I Tradingto WIN Cornse- One day at a time [c] Bryce Gilmore2004
I Thereis no second-guessinga breakouttradeas it will be provenrightor

wrongwithina matterof minutes- sometimesseconds!
I If youget a REVERSAL youto takethe

BARon a falsebreakoutit is signalling
reversepositionfor a quickscalpbackthe otherway.If you do takea reverse
I position
youapplya closestopof no morethan1^4 pointson thataswell.
Tradingto WIN is aboutgettinginto a positionthat will workwith the least

I possibleriskto yourcapital.Oncethe positionis workingyou canthenthink
abouttrademanagement.
I So let'sjust get thistacticfirmlyin yourmindbeforewe go anywhere

amtryingto createa foundation of goodtradingprinciples
else.I
beforeI teachyou
the finerpointsof tradeselection.
I If youarebuyingor sellinga breakoutpatternthe positionmustmovein your
or within a minuteto confirmyour decisionwas the
I favourimmediately
correctone.Othertradersmustbe in agreement with you or the tradewill
not workanyway.If it doesn'tthenVouabandonthe positionandstartfrom
I fresh.Thereis no pointsittingaroundwhenthe marketis not confirming you
are rightaboutwhatyou are doing.Hopewill not makeyou a profit!If you
wantto be a traderyou mustacceptthat you are eithergoingto be rightor
I wrong straightaway - not in 30 minutestime. Forgetabout tomorrow
because tomorrowis anotherballgame.
t Whensellinginto strength(marketis goingup in a correction)

established downtrend
in a 3 day
the levelsthat you selectmustbe exacton ratioor a
doubletop. Theselevelsmust not be exceededby more than 1 tick (2
t maximum) too meananything.Thiswayyoucansella doubletop or ? 50o/o,
evena 61.80lo retracement and placea stop1 or 1^4 just aboveyourentry
t point.The 1^4 is probablybetterbecause

BIDand not the OFFER
the first place.
the sellscanonly be doneon the
whichwill alwaysbe a 1 tick spreadat minimumin
Thecloseryou cankeepthe stopthe betteroff youwill be in
I the longrun.
The samethingappliesin reversewhenyou are buyinga RETMCEMENT

in
I an uptrendingmarket.
If you everhaveany doubtsin futurewhy you are not winningthen come

I backandreadthesewordsoverandoveruntilyouget it.
You can only be a consistentwinnerif you controllosses.You mustnever

I holda losingpositionunderanycircumstances. Youmustlearnto taketrades
at the criticalpointsand acceptthey will be eitherright or wrongalmost
I immediately.
A winneris a grinner- a loseris all but pasthistory.If you are in between

I thenI havehopefor youin the future.
CloseStops Sectionl: Chapter- I

Tradingto WIN Course- One day at a time [c] BryceGiknore2004 t
FORTOPS& BOTTOMS:
ENTRYTECHNTQUES I
WhenSelling- If youdon't seethe CrowsSCRATCH I
Stoolossor SAR.
5 MinuteBAR,S I
.t.............................
lr .-.......-..........-..ft
I
[
-- l point 6r'ids
I
Stoplossor SAR
When Buying - If you don't saa tha DovasSCRATCH I
When the t'eversolshov,rs the CROWS or bOVES movayour STOP to
breokevenimmadiqtaly.Onca thot is donethe cntry is riding for no I
risk. It will either turn into o WININIERor you ora out ond stort ogoin'
T
The SARis a stop and reverseorder that you can use becauseif the I
or the supportyou soldor boughtoff breaK the marketwill at
resistance
leastrun enoughfor you to retrieveyour originaloppottunitycosts.Most
timesyou may not wishto takethe SARbut it is alwaysworthconsidering I
whenyouthinkthe opportunityis an eachwaybet.
Nowthe realissueis in locatingthe levelto placeyoursellor buyordersand

I
onceyou havethat workedout you will be kickinggoalswith the bestof
them. I
Onceyou refineyourentrypointsyou are goingto be a professional
trader.
I am goingto tell
Beforeyou can do that you will needto learneverything
youin thisbook.
I
DonttakewhatI saylightlyas if youdo youwill not befollowingwhatI have I
to teachyou and you will becomea statistic- a statisticis my wordfor a
wouldbetraderwhoblowshistradingaccount to bits.
I
Enteringtradesat the pointof decisionis the onlywayyou cancontrolrisk,
i.e.,unlessyou are in a runningmoveandjust jump on boardandplacea
tightstopaboveor belowthe last5 minutebar.
I
Nevergivethe marketmorethan2 pointsto proveyou rightor wrong,if you
endup withthe arseout of yourpants.
do youwill eventually
I
I
CloseStops l0 Section l: Chapter- I
t
I Tradingto WIN Course- One day at a time [c] BryceGilrnore2004
I ENTRYTECHNIQUESFOR BREAKOUTTRADES:
I
I
I
I r StoFs
I BR,EAKOUT
LEVELS
I
I This is an exampleof a top patternthat was recentlydisplaying
a sign of
exhaustion andoffereda chanceto be shortingit.
I Therewas someto and fro in the middleof the priorrangethat causeda
coupleof headachesbut the end resultwas what counted.Noticehow the
I strongerbreakswereat the levelswhichhadpriordoublebottoms.
The moreevidence that you canfind that the supportlevelif brokenwill hit
I youneedto gather.
othertrader'sstopsis the evidence
In any caseas we work alongyou will see how the logicalsuppoftsand

I resistancelevelsthe market has to break through,to confirm further
haveto beobviousto otherprofessional
impulses, traders.
I Wewantto bewiththemandleavethe"geese"withtheirowndilemmas.
I Onceyou can understand how to read the patternand the logicallevels

yourcareeris beginning
traderswilleasilyrecognise to forma foundation.
t a professional
Thiswill beyourfirststepin becoming trader.
I But believeme nevergive the marketanymoreroomthan two points(B

ticks),on the E-minithat is only $100.If you breakmy rulesand cop a
beatingyouwill endup in so muchpainyouwill be betteroff to stoptrading
I untilyour mindreturnsto normal.Lossesare paft of this business
if youwantto stayahead.
haveto be controlled
but they
I
CloseStops 11 Section1: Chapter- I
I
Tradingto WIN Course- Oneday at a time [c] Bryce Gilmore2004 I
ENTRYTECHNIQUES
IN UPTRENDING
MARKETS: I
I like to sell predominately
because resultsseemto comequicker,but you
haveto be a buyerhalfof the timeandyou needto understand
the marketto get setwithoutriskingto much.
the habiGof I
Breakouts
in up trendingmarketscando oneof threethings. I
1 . They break out cleanly becausethere is a force of buyers
overwhelming the sellers.
2. Theybreakout andcomebackto testthe breakouthalfthe time.
I
3 . They breakout and get hit on the headby sellerssittingup there
waitingto takethemon. I
Soyou have3 possibilitiesto considerwhenyou aretakinga buysignaland
youstillhaveto followthe mainrule- controlrisk. I
In a strongmarketthe breakout willcomeandneverlookback.In a mediocre
marketthe breakoutwill come,exceedthe markethighit is breakingout of
I
by a few pointsand then comebackto the breakoutleveland then regain
strength.If the retestof the breakoutcomesbackmorethan 2 ticksinside
the breakout levelit couldbetellingyoutwothings.
I
1. I am nota buybuta sellasthiswasa falsebreak.
2. I am notsureaboutthisandit is timeto remainon the sidelines.
I
Youhaveto dealwith eachof thesesituations
information.
asthe markethandsyou more I
Trendindicators
canhelpwithyourreadof the marketmood.
I
BUYING in or uptrendwith the 3 doy trand
I
This wos q SELL here
eorrectivehi
I
I
50t
I
iAorkei is comingof o support level
Buys r
Stops r I
I
Aswe movealongthe logicbehindallof thiswillbeexplained
satisfactorily.
Close Stops
I
12 Sectionl: Chapter-I
t
I THINGSYOU NEEDTO LEARNTO BEA PROFESSIONAL

TRADER:
1 . Closestops.
I 2 . Enteronlyat the pointof leastrisk.
3 . Studywhatthe marketpatternis tellingyou.
I 4. Learnthe habitsof the traderswhoknowwhattheyaredoing.
5 . Preparebeforeyou sit downto trade.
I Youhaveto understand that it doesnot matterwhatyouthinkthe marketwill

do, it will not go anywhereunlessthereis an imbalancebetweenthe buyers
andthe sellers.Onesideneedsto bewinningfor the marketto trend.
I Theotherthingis that you canenterthe marketat anytimeyou get a signal
thatis valid.Thesesignals
appear5 or 10timesa day.
I Novicesneverget to learnthat the marketis easybecausethey rush in
withoutstudyingthe marketflow.Manyjust listento brokersandtheydo not
I haveon linedatato seewhatthe marketis doing.
I of the professional
Youhaveto havethe facilities
Mostof allyouhaveto act likeone.

traderto callyourselfone.
I The biggestcommonfault of losersis that theytakea positionandwill not

getout of it whenthe writingis on the wallthattheywerewrong.
I Youwill alwaysknowwhenyou wererightandyou will alwaysknowthat if
you took a tradeand it didn'tdo what you thoughtit wouldyou are now
I wrong.If it looK like it is not workingSCMTCHthe tradeand wait for a
betteropportunity.
To do anythingelseis stupidity.
I Askyourself!WouldI stayin a highstakespokergameand bet on the next

carddrawnif I was holdinga 7 and an 8 - NOyou wouldjust throwthem
I away.Yet if you hada pairof Acesin the holeyou wouldbet the livingshit
out ofthe pot.
I Thefirst thingyou needto learnto be a professional

traderis to removeall
the stupidityfromyourgameplan.Youmusthavea goodreasonto takeany
trade.
I Youcannotaffordto be lanl or for that matterthinkfor oneminuteyou know
whatthe marketwill do. Youmaythinkyou do but youwill still haveto wait
I to findout if youwereright.
Oneotherpieceof advice- avoidforecasters as all theywill do is causeyou

I to holdlossesin the hopethe marketwill comebackandsaveyou.
Themarketwill neversaveyou- you haveto saveyourself.

I
CloseStops 13 Sectionl: Chapter-1
I
SeCtiOn 1l chapter2: I
MarketMechanics: I
The primary most importantasset for the professional
understanding
of marketmechanics.
trader is his I
It cantake monthsfor the averagenovicetraderto understand
sensethat prevailsin the markets.Mostnewcomers
the street
neverget to appreciate
I
the experience
common
because theyare long
sense,nothingmore.
gonebeforetheyrealisethattradingis
I
There are so many "mad professors"out there that attempt to invent
Theycuruefit pastdatato work
foolprooftradingsystemsit is unbelievable. I
out the oddsof buyingand sellingwhen someproprietary algorithmthey
havedreamtup repeatsthe "set up" that producedprofitabletradesin the
past. I
Commodity tradingsystemsand horseracingbettingsystemsfail because
volatility,the marketis neverrunningin a consistent
way monthin month
of t
out.Sureit maydo it for 3 or 4 monthsandtheneverything looK likeit is a
licenceto print money. When you put these systemsto the test the
"Eldorado" usuallyturnsintofoolsgold.
anticipated
t
Systemoperator'swork on the pretencethat the marketwill "trend"around
the minimumof 30o/o
I
of the time.If it doestheycanculvethe datato their
Thetruth is you can"cuwefit" any
to projecta winningscenario.
algorithms
price series to a winning scenarioby manipulatingthe draw-down I
parameters.
sell their scenarioto the publicinsteadof tradingit

Systemdevelopers
I
themselves.
Thepubliclovethis stuffmainlybecause we havetradingmagazines devoted

I
to promoting -
the easywayto riches Geezes; peoplejumpout of the bushes
to get hold of this stuff. Boy! I couldtell you storiesI haveheardabout
peopletradingsystems. Mostof themarefunnybut sadstories.
I
I haveseensomesophisticated systemslastfor 15yearsor morewith several
lean years in between,but in the end they all fall prey to the market
I
mechanics.Or the peopleusingthemcan'tmaintainthe discipline
tradethe systemandstoptradingit. Reason is continuouslosses,
requiredto
just before I
the systemgetson a run.
It takes a very specialskill to trade a systemand be successful,

I'm not
I
sayingtherearen'tsystems thatwork,onlythattheyarerare.
I
Market Mechanics Sectionl: Chapter- 2
t
I How do I know?Well I actuallytradeda sophisticated

discipline
requiredfor nearly4 years.
It waswonderful
systemwith the
sometimes but in the
endwhenI wasn'ttradingit, and my ex-paftnerwas,it blewup likea land
I mineduringthe 1987crash.
I ThereasonI wasmoresuccessful wasbecause I usedto trademy systemon

the system,i.e.,I useda scalingsystemon the system.My partnercouldn't
standit, that'swhywe fell out.Onceaftera hugeprofitrun overa monthor
I twothe systemwasin profit$70,000a unit,I had2 andmy paftnerhad2. At
lunchoneday I told him I wasclosingout, he saidyou cant do that,what
will the otherswe managethe systemfor thinkof us?I said,"OKI will tell
I them', he saidno, he hada betterideahe wouldbuyout LVzof my units,I
agreedandhe paidme the money.Hecontinued on with 372unitsfromthat
th
point,I hadonly a unit, nowhowstupidwashe to enterthe systemat that
I level?
I 6 differentcommodities
wereextremely
the systemkept makingmoneyfor
Anywaythat wasn'tthe end of it because
another2 weeks,aboutanother$20,000a unit.At that stagethe positions
overbought.
in
I kepttellinghimto quit
I andhe keptlaughingat me for missingout. It reallyput a hugestrainon the
relationship.
I Thenthe tideturnedandthe systemstaftedlosing,it's priortrackrecordwas

neverto losemorethan50o/o / $25,000of its originalstakingplanof $50,000.
Eventuallyover a short periodof 2 monthsit lost $55,000a unit before
I turningthe corner.So he lost3% times$55K= $192.5K
-
fromwinninghis
$210K Net resultafterlosses+$17.5K,I hadwon $155Kandgivenback
$27.5K,my net +$127.5K. In the 5 monthsor so my shareof commissions
I backfromthe brokerswe weretradingthe systemfor wasalsoabout$35K.
The realproblems the systemwith a newunitjust

I beganwhenI re-entered
after it turnedthe cornerand then bailedagainwhen I got $20Kahead,
whichtook onlyabouta month.I did that severaltimesoverthe nextyear
I whileI wasworkingon my WaveTradersofhruare
trademy owndiscretionary approach.
andthenquitthe systemto
WhenI quit so did 80o/o
of the brokers
clients.
I Thenthe systemhit a brickwallin the crashof 1987andlost$65Ka unitin 2
days.SoI knowall aboutsystems, believeme.
I Thecraziest systemsI haveseenin my 20 oddyearsin this business arethe
"PlanetaryMovement" systems.Nowtheseguysare unbelievable, theydon't
I evenhavea cluehowto tradeyet they manageto selltheir
systems
"pie in the slqy"
to the gulliblepublic.Theymakeheapswithouteverriskinga penny
in the market.Someof the buy sellsignalscan be 4 yearsapaft.NowI ask
I you howdoesthat systemknowif that marketwill be evenopenin 4 years
time?
I
Sectionl: Chapter- 2
I MarketMechanics
MARKET
TRENDS
Markets of the time,overtime.
30o/o
usuallytrendapproximately
I
Nowthat doesnot meanthey will trend regularly,only that the meanis I
around30o/o.
Theycouldtrendfor 50o/oof the time overa givenperiodand
go
then choppyfor twicethe time. I
The marketdoes not give you any guarantees, it doesnot care
whatyouropinionis; it listensto the flowof moneythat is all. I
MARKET
MECHANICS
I
A professional so that he
trader needsto understandmarketmechanics
knowshowto expectthe marketto flow. I
All marketsgo throughperiodsof inactivityfollowedby periodsof mediumor
extremeactivityandthenmostlikelybackto inactivity. I
Knowing the reasonsfor the activity is paramount to your successas
a trader.
I
In short-termperiodsof 2 to 4 daysa marketwill gravitatearounda balance
pointwhenit is in a stateof inactivityor mediumactivity.In extremeperiods
I
of activitya marketwill movein one directionor the otherwith very minor
corrections duringthe sametime frame or eltendedtime frames.In a
protractedtrend the marketwill nevercorrectfor morethan a day or two
I
beforeadvancing
havereached
again,if it doescorrectfor morethan2 daysyou knowyou
the balance pointof the trendat thattime. I
Usually
the
the 2 or 3 daythrustperiodsof activityarefollowedby corrections
priormovement, backto whatI calla balanced
to
level.Thisis usuallyin the I
ballparkof 50o/o(38-620/o) of the advanceor decline,havingdonethat they
will attemptto test the priorhighor lowof the thrustandmoveon to a new
level.
I
Whenmarketsfail on a test of a breakoutthey normalcomebackto the
balancepoint again.If they don't and then break out they provetheir
I
strengthandaresafeto tradein the newthrust.If they comebackbelowthe
balancepointtheyaresaidto be in a weakpositionanda changein trendis
likely.
t
I.e.,theywill startthrustingfor newlevelsin the oppositedirection.Eachday
theybreakthe priordaysextremepointtheyaretrending. t
Youcantakethis analogyandapplyit to all time periodsif you wantto, but
for the purposesof trading we only have to capturethe short-term t
movements to makemoney.
I
Market Mechanics Section1: Chapter- 2
t
I Tradingto WIN Course- One day at a time [c] Bryce Gilmore2004
I RESIDENT
MARKET
STOPORDERS
All marketshavestandingorderssittingin the wings;they maybe to buyor
I to sell at dependingupon whichway the marketis breakingout of the
previous 2-3-5-10
daytradingrange.
I Thesestopsbelongto peopleeitherprotecting
position.
a positionor initiatinga new
I Themarketseemsto haveknowledge
just
of wherethesestopsareandwill often
move enoughto takethemout andcausea smallbushfire untilthe stop
then the marketwill movebackto test the breakout
ordersare exhausted,
I or the priorday.
pointof the day
levelor evenbreakbackthroughit andreturnto the balance
I In timesof extremevolatilitywhena markethasrun hardin onedirection for

severalor moredaysthe marketwill exhaustall the newbuyersor sellersto
I the pointthat therewill be no oneleft to suppoftthe newpricelevel.When
this happensthe reactionis just as severeas the newthrust,in the opposite
movesthe pricebackto the nearestbalance
direction, point.
I
TRENDS
DEVELOP
BECAUSE
I Trendsdevelopbecause
thanbuyers.And price
thereare morebuyersthan sellersor moresellers
pointis
will movein that directionuntilan exhaustion
I reached.
Usuallythe balancepointwill be exceededuntilthe marketwill not facilitate

I trade,thenthe trendwill reverse.
on how many people
The dimension
arecaughtat the new
of the reversal
levels
and staft
will depend
losingmoneyas
the marketreverses.The moreof them the fasterand strongerwill be the
I reversaland of coursethe balancepoint will be over-runin the opposite
direction
causing the samethingto happenagainin reverse.
I MARKET
FACILITATION
I Is a fanry expression
andsellers?
to describe
Themarket price
the balanceor imbalancebetweenbuyers
tradeas buyersandsellersarewilling
facilitates
to meeteachother.
I Someonlinesystemseven havea marketfacilitationindexto guideyou
mechanically. The theoryis that as the tick volumemovesup or downyou
I trade,i.e., is the volumeincreasing
can tell if the marketis facilitating
decreasing on the currentpricemove.As the volumedeteriorates
or
the market
priceis assumed
I notto befacilitatingtrade.
at anymarkethighor lowthe tickvolumewill reduceto nothing.

Normally
I
Section1: Chapter- 2
I Market Mechanics
Tradingto WIN Cowse- One day at a time [c] Bryce Gilmore2004 I
BALANCE
POINT
Whatis the balancepointI amtalkingabout?
I
Wellthe balancepoint is the pricethat will facilitatetrade,i.e., the price I
wherebuyersandsellersareevenlymatched.
I
OPENINTEREST
OpenInteresttells you the changesin activityof the main playersin the
market.On any givenday therewill be moreactivityfrom daytradersthan
I
longerterm holdersbut changesin openinterestare reportable
clueto the stronghandsandtheirobjectives.
andleavea
I
THEOPENING
PRICE
I
Oftenreferredto asthe bestkeptsecretby professional
Theopeningpricesetsthe"tone"for the day.

traders.
I
of the timethe openingpricewill bethe highor lowfor the day.
a) 50o/o I
b) Theopeningpricebecomes the dailycomfoftzonefor traders.
c) Traderswill buy and sell off the price movementsurrounding
opening price.
the
I
the tradespossible
I will illustrate in anothersection.
usingthisinformation I
AVEMGE DAILY RANGE
Mostmarketsin an averagestateof activitydevelopa tendenryto tradein an
averagerange. I.E.,Thedailyhigh/lowrangeof mostdayswill be the same
I
around50o/o
of the time.
I
TheS&P500 arearound18 points,or $900a contracton
futuresfor instance
the E-Minicontract.
I
arethese:-
Thetwo pointsto consider
a) Is the currentdailyrangeinsidethe averagerange?

I
b) Is the currentdailyrangeoutsidethe averagerange?
A professional
tradershouldbe awareof the averagedaily rangefor any
I
commoditycontracthe trades,this way you will not be puttingtradeson
whenyou are outsidethe envelopeunlessyou are sure of what you are
doing.
I
Theaveragedailyrangealsoindicates to you whenthe marketis buildingup
energyfor a sharpmove.Themoredaysa markettradesin a tightrangewith
t
smalldailyrangesit is saidto becoiling.
I
Market Mechanics
I
I Tradingto WIN Course- Oneday at a time [c] BryceGiknore2004
I Basically
it meansit is compressing
ordersaccumulate
like a spring.Whenit doesthis, stop
on eitherside of the future breakoutpoints,oncethe
ordersgo markettheywill causea sharprunfor a time.
I
I OpeningPrice- High- Low& Close
DAILYLEVELS:
Beforeyou contemplate
becoming a professional
traderyou will alsoneedto
learnsomebasicfactsaboutthe marketplace.
t The OPENINGPRICE:
I The openingpriceis a leveldeterminedby the amountof ordersin the
systemthatwillfacilitatefair-trading.
I Officialmarketmakersdeterminea level prior to the openingrotationof

stockswheretheywill bid andoffer individual stocK.Theiractionsstartthe
ballrollingfor the day.Fromthereon the pricefluctuations
aredeterminedby
I the supplyanddemandpressures of the day.
I
I
I
I
I
I
Themarket trades at the pnicethat focilitotes tnodes
I Thereis onlyonereasonpricegoesup or down:
I The priceof a stockgoesup becauseyou havemorewillingbuyersthan
sellersandthe buyershaveto BIDUPthe priceto actuallyownit.
I The priceof a stockgoesdownbecause you havelesswillingbuyersthan
sellersandthe sellershaveto reducetheirOFFERS theirpositions.
to liquidate
I The marketplaceis a self-regulating auctionwherethe demandsof the
buyersor sellersdetermine
the levelsthatwillfacilitate
trade.
I
rl MarketMechanics 19 Sectionl: Chapter- 2
Tradingto WIN Course- One day at a time [c] Bryce Gilmore2004 I
The DAILYHIGH:
Thehighfor the day is the pricewhereBUYERS refuseto payhigherprices-
I
the firstsignof the highfor the daywill be lowvolumeasthe highis reached.
As far as marketdepthis concernedtherewill be an abundance of OFFERS

I
andveryfew BIDSto keepthe marketrising.Asthe buyersareall consumed
the sellershaveto reducetheir OFFERSto find the next leveldownwhere I
BUYERS canbefound.
Thefast movesdownoccurbecause thereis no marketdepthof newBUYERS

I
standingwhenthe sellerswantto liquidate.
Thehighfor the daycouldoccurfor anynumberof reasons, i.Q.,it couldbe a

I
gather
technicallevelwheresellers in abundance or it couldbe somenews
releasewherethe buyersjust headfor the hillsor decideto liquidatetheir
longpositionsandbecomeurgentsellers.
I
As traderswe need to be alert and watch for the SIGNSto identifythe
reasonsfor the reversal.
I
I
The DAILYLOW:
Basically
SELLERSdry up.
of the dailyhigh- the onlydifference
this is just the opposite is the I
The SELLERS couldhaveliquidatedall they want to for the day and are
waitingfor higherpricesor theymayhaveprofitable positions
on the SHORT
I
just wantto covertheirpositions profit.
sideand at a
Whatoneneedsto be alertto on anygiventradingdayis the marketMOOD.

I
Thereis boundto be someoutsideinfluenceeitherin the newsor some I
fundamentaleconomicreportthat tradersare watchingout for that will
influence
theiractions.
I
The DAILYCLOSE:
The daily closingpriceis the placewherethe officialmarketmakersare
t
preparedto meeteachotheron the BIDandOFFER.
I
Forthe S&P500we have500 stockstradingall day and the CASHINDH(
(SPX)of theirvalueis beingupdatedsecondby second.Thefuturesmarket
of the CASHINDEXdirection.Buyersand
I
tradeson the trader'sexpectations
comeandgo alldayfor manynumerous
sellers reasons.
I
I
MarketMechanics 20 Section1: Chapter- 2
I
t Tradingto WIN Course- One day at a time [c] BryceGilmore2004
I SUMMARY
whatI havetold you in this chapteryou are half
Nowif you can understand
I waythereto becominga successful
trader.
I sayonlyhalfwaybecause youstillhaveto knowhowto execute

tradeswith
I theminimum of riskwhentheoppoftunity arises.
RISKmanagement is the singlemostimpoftantpaft of beinga successful

I trader.I haveseengoodtradersmakemoneyweekin weekout for long
periods,andthenall of a suddentakea biasedviewof whatthe marketwill
t do andholda positionagainstall oddsexpecting it to comeback.I haveeven

beenguiltymy self,my saviourhasonlybeenthatI havea ruleneverto hold
a positionat the closeif the tradeis in a losingposition,no matterwhatthe
cost,I haveto "eat" it becauseif I don'tI will not sleepat night.Eventhe
I nextday if it wouldhavecomebackI can livewith it because the oddsare
50/50andI knowthe worstusuallyhappens when you stafthoping.I willtalk
I moreon thislater.
I take the view that if you entera trade,for whateverreason,it
I will staft goingin your favourvery quickly- otherwiseyou are
wrongtakingthe tradeandshouldget out quickly.
I All marketsdevelophabits and if you are astute enoughto
understand thesehabitsyou will knowif yourtradeis workingor
I not. If your trade is workingstay with it until it showssignsof
slowing.
I You must learn to never hold a losingpositionif you want to
becomea successful trader.Youwill hearme repeatingthis over
I andoverthroughout this manual.
t Notes:
I
I
I
I
I
I Market Mechanics Section1: Chapter- 2
Section 1l chapter
3: I
Suppolt- Resistance& TREND:
t
Support,resistanceand Trend are the 3 most importantissuesfor the
I
professional
trader.
SUPPORT:
I
Thisis the perceived
levelwherebuyerswill returnto the marketandsellers
willstopsellingandbeginto cover. I
RESISTANCE:
Thisis the perceivedlevelwherebuyerswill stopbuyingandtakeprofitsand
I
Sellerswillstepup theirsellingactivity.
SIGNS:
I
Whenthe marketpricereaches
demonstrate
levelsof perceivedsupportor resistance
it will
signsas the buyingor sellingdriesup due to the increasein I
activitybythe sidethat anticipates
the levelin advance.
Tradersgenerallyhaveseveralmethodsfor anticipating
Professional suppoft I
or resistancelevelsin advanceandwill nestordersin the marketbeforethe
market pricereachestheselevels. I
It reallydependson how manyordersare nestedat these levelsas to
whethertheyactuallyturn out to become or RESISTANCE
SUPPORT Ievels. I
I havealreadystatedthat the onlyreasonthe marketgoesup or downis the
participation
resultof the buyer/seller andwhois the overwhelmingfactor. t
Aswe movealongI will teachyouall the waysthat professional
tradershave
for selectingcertainpricelevelswherethey think the marketwill run into I
resistanceor find suppoft.Someof the SIGNSthat the marketgivesare so
easyto predictin advanceit becomes
knowof them.
embarrassingfromtimeto timejust to
I
Thesimpleoneswe staftwithare:-
1. Double Tops
I
2. DoubleBottoms
3. 50o/oretracements
4. 1:1Alternatewaveexpansion levels
I
5. 1:l Alternate
wavecorrectionlevels
6. In uptrendingmarketspreviousresistance
7. In downtrendingmarketsprevious
suppoft
becomes
supportbecomes
resistance
I
I
Support- Resistance& Trend Sectionl: Chapter-3
t
I Tradineto WIN Course- One day at a time [c] BryceGilmore2004
I Thesemarketpricelevelsaloneare enoughmarketknowledge
makea successful
for you to
traderif you wereto tradewith a
careeras professional
closestoplossriskmanagement policy.
T I oftenwonderto myselfas I watchthe marketeek its way betweenthese
points"whois buyingandsellingin between".
I TheonlyconclusionI cancome
to is that it is the trend followers,systemtraders,marketmakersor the
gamblingpublic.Because any professionaltraderworthhis"salt"wouldwait
I untilthe criticallevelswerereached beforeplacingtheirtrades.
The only way to guaranteesuccessin this businessis to only act when

I everythingappearsto be in your favour.You shouldneverchasea trade
because you missedthe train. I havewatchedsometraders,evendoneit
myself,losemoneytime andtimeagainbecause theydid not actat the right
I priceandchasedthe tradeinto a territorywheretheycouldnot applyproper
riskmanagement.
I
TREND:
I Youhaveall heardthe saying,"Thetrendis yourfriend"!
Wellit is yourfriendbecause overtime a trendwill expandfuftherallowing

I youopportunities to go with it or againstit whenit is overbought
or oversold.
SinceI knowthereareso manytradersouttherewhohaveno moretechnical

I knowledge of tradingotherthan to buy or sellagainstoscillatorreadings,
knowthat whenthe 3-daytrendis UPandthe intra-daytrendis oversold we
I
I will likelyget buying.Theoppositegoeswhenthe 3-daytrendis DOWNand

the marketis overbought we will mostlikelyget selling.I cantake
intra-day,
tradesat the logicalpriceslevelsthat will attractbuyingor selling.Someof
I thesetradesmay only last for a very short time but they can be very
profitable.
I You mustalwaysmonitorthe trendon a S-minutechart,a 3O-minute

and a dailychartlookingfor situations
chaft
will give
wherethe trend indicators
systemoperatorssignalsto eitherenteror takeprofits.
I It is very importantto understandthesethingsbeforeI teachyou the finer
pointsof tradeselection;you mustfirstunderstand
the basics.
I If you understand the basicsyou will developa streetsensefor how the
I marketconfusespeopleand leavesthem caughtin a trap for professional
tradersto scalpthem.
I After all the facts are, 90o/ocometo the partyto losetheir money,it is a
provenstatistic.We are hereto get it and the only way to do that is with
discipline andknowledge.
I
Section1: Chapter-3
I Support- Resistance& Trend
Section 1l chapter
4: I
Three Bar Swing Chafts:
I
but the quickestindicatorto act
Thereare all sortsof TRENDINDICATORS
I
uponis the 3 BARPRICE SWINGCHART.
thatwerepreviously
If markets goingup in trendarebreakingbackbelowthe
I
previous3 bar low they are suspectfor a possiblechangeof trend in that
degree.Thesameappliesin reverse to marketsgoingdown. I
THE3-DAYSWING:
Thethree-dayswingchaftis the bestMEDIUM-TERM indicatorof TRENDas
l
in strongtrendsshouldnot persistfor morethantwo dqyr.They
corrections
mightin the earlydaysof a newtrendbut whenyou get into a 3'owaveof
ELLIOTT degreethe trendshouldbe wellestablishedandstickto my rules.If
I
theydon'tthen
is exhausted.
you shouldbe immediately
alertthatthe currentmarkettrend
I
3 bay Swing
I
tf I
I ilfl I
+ lf
I
TriggerPoint#
I
t
82061? AZBEZ? Ezg?LI t
WHERE
HASTHEMARKET
BEEN IN THEPAST3 DAYS?
GOING
I
This exampleshowsthe low on an OutsideReversal
-
day breakingup for 5
days triesto selloff for 3 daysbreaksbackup for 4 dayscorrectsintothe
I
3'ddayandbreaksoutto the upside.It wasa confirmed BUYat thattime.
I
3 Bar Swine Charts Section1: Chapter- 4
I
I Tradingto WIN Course- Oneday at a time [c] BryceGilmore2004
t We haveseveralwaysto determine the relevantdirectionas a guideto the

We needto knowif the marketposition
currentmarketstrengthor weakness.
I is ABOVEor BELOW POINTof the 3-dayMNGE.

the BAI-ANCE
The 3 day Swingchartis an indicatorof the currentMEDIUMTERMtrend.

I Theswingis eitherUPor DOWNbasedon the recentPRICE activity.
I 3-DAYSWINGCHARTS:
Theseare constructed usingthe highsand lows of the past4 days.For
instanceif the currentpricetodaymovesbelowthe lowsof the past3 days
I the swingis down- if the pricetodaymovesabovethe highsof the past3
of the mediumterm
daysthe swingis up. Eachsignalis a relevantappraisal
I directionof the market. If the marketmakesan OUTSIDE
past2 daysrangethe trendhaschanged.
REVERSAL of the
t The 3-dayswingchartis the simplestway you can keepyour mindfocused

on the generalmarketdirection.
I Onceyou knowthe generaldirectionof the marketyou canmoveontousing
toolsthatwilltellyouthe strengthor weakness
of the currentswing.
I I havetriedto drumthissimpleapproach intoeverystudentof minefor years
and foundthat to somethe simplethingsare easilydiscarded. - they (the
I idiots)simplyforget to look at the obviousSIGNSand attemptto make
decisionsbasedon otherthingstheythinkare moresophisticated. Youneed
to look up the word "sophisticate" in the dictionary- it means- MAKE
I ARTIFICIAL, - makeworldly-wise!
depriveof simplicity
makeit harderandcomplicate yourlife!
-
- a' la sophistication
I Keepit simpleandit is easy- that is my message.
I THE 3-DAYSWINGIS EITHERUP OR DOWN

It will holdformwiththe trendso it cannotbe ignored.If the commitment
of
I of the trendit willtell youto beware.
tradersis not in the direction
I
The 3 HourSwingChart:
I If you wantto filterthe 3-dayswingchaftyou canmovedownin timeto the
t hourly3 bar swing- it's hardlyworthgoingdownto lessertime frames,for
this you canjust use a SLOWSTOCHASTIC to determineif the short-term
movesareshowingoverbought signals.
or oversold
I
t 3 Bar Swine Charts Section1: Chapter- 4
dataoverthe sameperiodfrom the July24n,
Usingthe hourlyINTRA-DAY
2002 low shownon the chaft on page24 you can see how muchmore
I
information
process.
to yourtradinganalysisand decisionmaking
becomesavailable
t
3 Hour"lySuuing
I
ESBZU-68 t
I
I
3 Hourly Suringov€r sf,ni€period as ths
I
f______Jl
! r
ehort on pog€24 from the July 24th LOW
r r | | | | llllllllll
I
B?/19 E7/25 B?/31 B8/B? B8/13 88/19
t
Youwill noticethat whenyou narrowdownthe time frameit allowsyou to
gaina fasterappreciation
trendastheyoccur.
of the trendchanges to the current
or adjustments I
Themarketis alwaysgivingsignsfor the futurepossibilities.
1. It couldbe makinghigherhighsandhigherlowsthat indicateit wants
I
to keepgoingup.
2. It couldbe makinglowerhighsand lowerlowsthat indicatethat it
wantsto keepgoingdown.
t
3 . It couldbe makingfalsebreaKof supportandreversing
renewedstrengthin the currenttrend.
andindicating
I
4. It couldbe makingfalsebreaKof previous resistancelevelsandfailing
to go on indicating
inherent
weakness.
t
Youhaveto continually readthe marketmoodfromthe patternof the trading
to stayin syncwiththe currentmarketmood. I
To assistyourselfyou shouldcontinually watchthe newsenteringthe market
andevaluate the effectit is havingon the players. I
The newsis the foremostindication
the short-term,
of wherethe marketmaybe headedin
makeno mistakeaboutthat. I
To tradewithoutwatching
the newsis a realfaultsometradersfall into.
i
3 Bar Swing Charts Section1: Chapter- 4
I
t Tradinsto WIN Course- One dav at a time [c] BryceGilmore2004
I Section 1: chapter5:
t Old Highs & Lows:

I It is veryimportantfor yourtradingcareerthatyou understand
the habitsof
professional
I tradersin regardsto oldhighsandlows.
Traderswill treat old high pointsas resistance

until they are brokenand
I afterwards
theywill treatthemassupport.
Conversely they will seeold lowsas supportuntilthey are brokenandthen

I theywilltreatthemas resistance.
Between the mix you will find oppoftunities

to bothbuy and sellthe market
I witha limitedrisk.
Hereis just a simpleexampleof the processI havemanymoreexamples to

I comeaswe proceed. thisis oneof the basicprinciples
Neveftheless
thatyouneedto understand beforewe go anyfurther.
of trading
I ESBZU_EO
Qcharts CSU Old Highsond Lov,ts
gEs.sB
I 951.BB
"..11
,,l'ulr t
LowerHiqhs
-
s33.80 hhl/ry
.:!r,fl\t.....Ee.rsrsrr.e.e.....
I gts. EB
8g?.sg
I 8?3.BB
861.B0
HigherLows
I 843.88
825.BB
BASICPATTERNANALYSIS
t 8E?.BO
?89.60 RasistoncabecomEssupport ond support becomesresisfonce
ffil
I B?/a4/ZAWZ
Ha iri E7/ZZ 88/88 08/16 EE/27 0gl45
I The occurrencesof this phenomena are morelikelyon the intra-daychafts

varyingdownfrom 60 minuteto 5 minutethantheyareon a dailychaftbut
theydo occuron the dailychaftandmustalwaysbeviewedas possibilities.
I The dailychaft is morelikelyto containslightfalsebreaksat majordouble
I bottomsor doubletops.
I Highs & Lows
Tradingto WIN Course- One day at a time [c] Bryce Gilmore 2004 t
Section 1: chapter6: I
The 50o/oBalancePoint Rule:
t
50o/oof any marketrangeis an importantlevelto monitorwhenconsidering
the currentmarketpositionandtrend.
I
ThC2 and3-DAYRANGE:
I
The50o/o levelof the past2 and3-daytradingrangeis the oneI placemost
focuson. I
Tradershavebeentaughtforeverthat the 50o/olevelis the BAI-ANCE
POINTof the marketactivityat anypaticulartime.
or EQUILIBRIUM
POINT
t
rulesare:-
Mystandard
I
1. Whenthe currentlytradedpriceis abovethe 2/3 dayBAI-ANCE
POINT
it is in a STRONG
POSffiON.
2. Whenthe currentlytraded price is BELOWthe 2/3 day BAIANCE
T
POINTthe marketis potentially
in a WEAKPOSffiON.
In most strong UP trending market moves the price retracements

I
(corrections)
shouldnot comebackbelowthe 50o/olevelof the prior3-day
range.If they do thenthe degreeof wavein progresshasmovedto a higher
degreewavemovement.If the marketdoesnot correctmorethan 38.2o/o of
t
the 3-dayrangeit is in a far strongerpositionof trend.
I
ficharts CSU 85831{-5
I
s4a.Eg
S3?.BE
934. BE
CurrentTrendis in a StrongPosition I
g31.8A
gz8.68
t
9Z5.BB
szz.EE of 3 dcy Ronge
I
g1g.BB
glE. BB
I
913.E0
E5/ZZ/?;993
Hain 65/?6
I
I
The 50% BalancePoint Rule 28 Section1: Chapter- 6
t
T Tradingto WIN Course- One day at a time [c] BryceGilmore2004
I Hereis an exampleof the marketoverthe pastfew daysas I beganwriting

thischapter.
I On the 3'd day of the current move up the marketwas encountering

resistance It hadto tradehigher
at the 61.8levelof a largerrangecorrection.
I to havethe 3-dayswingchaftrollto bullish.
I [charts CSU
95.1.08
ESBS|{-10
S5B.BE
I
I s34. BB
lfiarkat is obovatha BALtlrlCE
t I|3B.BA
926.BB
t sz?.Bs
918.BB
I 914.BA
65/28/?;B/B.3
h{airr B5/L4 A5l15
t
Onecouldarguethat the 620/oretracement wasthe overhead resistance
and
I the rally had the potentialto fail. Well that was alreadya possibilitybut
beforeit wasgoingto becomea realitythe marketwouldhaveto breakback
belowthe 50o/o levelof the past3 days.
I
I 0charts f,SU
g4E.0a
g3?. BB
ESB3lt-5 The /lttorketis still in o
sTR,ON€POSITION
This LEVELis now RESISTANCE
I 934. BB
931.86
I 926.BB
szs.0B :
his LEVELis now
SUPPORT
I szz.gB
919.08
A break belowthe 50 would spell
a changein trend
glE. BB
I 913.BB
g5/23/zBE3
I l'fair.r ffi/ZB
I The 50% Balance Point Rule 29
Tradingto WIN Course- One day at a time [c] BryceGilmore2004 t
Alwaysremember no
that the 50% levelis the signof strengthor weakness
you
matterwhatdegreeof timeframe arelookingat.
t
Whatfollowedwasan insidedaywhichretraced38.2of the 3 dayrangeand
foundsupport.
I
Nowtherewasa holidayfor Memorial
chartandthe nexttradingdaywas
Dayon the Mondayfollowingthis last
goingto beTuesday27ffiMay.
I
I
Echarts f,SU ESBSH-18
954. BB
S5B.BB
I
s46. BB
s4z.aB I
s38.8A
s34.BB I
938.BB
SZE.BB
szz. E6
T
91CI.
BB
s14.BA
27thOpens4
beginsto rnlly
t
Bi5/27/?:BiB3
l{a in E5/13 Es/ZL 9/5/23 E5/27 I
Themarketopenedandtriedto testthe previous sessionslowwhichwasthe I
logicalsupportand then rallied- the rally neverlookedbackall day until
positionsquaring
tookplacegoingintothe close. I
I
WE CANLEARNA LOTfrom the 50o/oBALANCE
POINTRULE: I
You can evenformulatea tradingplanaroundit as the 50o/olevelof any
levelprofessional
rangeis the mostwatchedtechnical tradersarefocusedon. I
Theywillbuyandselloff it allthetime.
I
Asyou progress withthis manualyouwill seethe numberof examples I have
givenwherethe marketeitherstoppeddeadin its trackson a 50 or it broke
throughand then the 50 level becomesthe supportin an uptrendor
t
resistance
in a downtrend.
I
The 50% BalancePoint Rule 30
I
I Tradingto WIN Course- One day at a time [c] Bryce Gihnore2004
I If you are lookingfor a suppoftto holdat a 50 level it is goingto be a

strongertechnicallevelif somethingelsesuchas a lxl linesup with it, the
t same goes
movealong.
for resistancein a downtrend.
Youwill see what I meanas we
I The thingto rememberalwaysis that if the markettakesout the 50 easily

thenthe nextsolidpointof suppoftor resistance
shouldbethe 61.8
I Thetrendwill alwaysbecomeclearto youwhenthe 50 eitherholdsor breaks

and then you can tradewith confidence
becauseyou will knowthat every
otherprofessional
traderhasseenthe samethingandwill acton it.
I The majorityof professional
tradersare onlylookingat the 50 andthenthe
61.8or the 38.2. Theseare not goingto explainthe marketgeometry all the
I time but oncethey are not workingtraderswill revertbackto old topsand
bottomsand other lessimportanttoolssuchas trend linesor indicators to
I establish
an opinion.
My pointto you is that the 50 givesyou a clearinsightinto the trend in

I progress andyou mustlearnto useit because
is to a carpenter
asfar aswe areconcerned.
it is as impoftantas a hammer
I
I Todayafter re-editingthis chapterthis is what the marketdid and it is a
perfectexampleof allthe thingsI amtryingto teachyou.
I 0charts f,SU ESO3Z-30 The morket openedon its high for fhe day modeo
1848. A0
I 1s44.46
1848.ES
movedown and fhen went bock to the opening
highond failed, The 50 ond the l:1 were support
and w er e penetrated on two aftempts before the
I 1836.86
10.32.69
I
ilgzfr.w
LEZ4.Bg
LAZA.AA
I 1616.BB
1A1u.BB
r/q,
I 1488.AB
gg/24/26fd3
B9/LI 69:34 ISZ7.g6 1:g,?J.75 16Z4.Z5 1B,z.4.?5 gg/24
I
I
I The 50% BalancePoint Rule 31 Section1: Chapter- 6
Tradingto WIN Course- One day at a time [c] BryceGihnore2004 I
The 1:1 OverbalancingRule:
I
The 1:1 overbalancing
whenit comesto determining
the mostimpoftanttradingruleI have
ruleis possibly
wherethe marketwill go in the shortterm.I
I
useit primarilyon the S-minute
greattoolin largertimeframes.
chaftfor intra-dayswingsbut it canalsobe a
t
The 1st rule is: - I
Correctivewavesof simihrdegreein progressive marketimpulsemovements
shouldnot be greaterthanthe preceding waveof similardegreeif
corrective
the trendis goingto remainintactwithinthatdegree.
t
So let's start with the smallerwave degreeexamplefirst; this type of
progression is morelikelyon a dailyS-minutechartwhena newtrendgets
T
into progress.The corrections could be around3-4 pointson an E-Mini
continuation move. I
t
I
I
I
Trsnd is intqct while cort'ections do noi becomcgreoler thon before I
Oncea move of some substancebeginsit alwaysstafts from a market
of somelargerdegreemovement
reversal that hasbeenin forcefor a series I
of waves.If it didn't then the marketwould have been going sideways
withoutanydirectional
tendencies. I
Thefirstthingto remember whenyouareapplying thisruleis thatthe market
mustlook like it is heading in the intended directionwith someconviction,
i.e., if the marketis goingdownit mustlook impulsiveand then the next
I
andgivesyou the
correction
confirmation
comesbackto a 1:1 with the lst hits resistance
that it cannotrallyany higher.This is a signto re-enterthe
existingtrenddown.Thereverse alsoappliesto a marketmoveheadingup.
I
'
I
The l:l Overbalancing
Rule ?) Sectionl: Chapter- 7
I
Tradingto WIN Course- One day at a time [c] BryceGilmore2004
WAVESof LOWER& HIGHERDEGREE:

<.-NEWTRENDDOWN BE6IN5 HER.E
(- lst CorrectionAB
<- Higher &gren l:t

equafsl-? lron3
<- tst iargel 1:1ot [fl

this is the larger of
ab or cd
Marketwavesunfold1* aswavesof smallerdegreeandthentheyextrapolate

intowavesof higherdegreeasthe smallerdegreewavescombine
to formthe
wavesof higherdegree.
The 1:1 rule can be usedfor determining

supportor resistance
levelsin all
degreesof marketwaves.Youmustdetermineif the markethasmovedfrom
a lowerdegreeintoa higherdegreeto usethistoolcorrectly.
The l:1 Overbalancing

Rule Sectionl: Chapter- 7'
Tradingto WIN Course- One day at a time [c] Bryce Giknore2004
COMPLE(MNGE DEGREES:
In this examplewhenthe marketreversedtrend at (pointB) the correct1:1

calculationfor the overbalancingrule becomesXA from B. Oncethis degree
hasbeenexceeded the next1:1 becomes ZYfrom B.
I only ever look backwards TWO DEGREE LEVEISwhen I am calculating

markettargetson any giventradingday. If you staft trying to work out to
manytargeb you will just confusethe issue.Unlessthe currentmarketis
withinrangeof makingit to a 1:1I am not interested
in it.
PROJECTINGAN IMPULSEWAVETARGETPRICEUSING
THE1:1 RULE:
The 1:l Overbalancing

Rule Section1: Chapter- 7'
I The benefit of the 1:1 projection tool is that it can give you a profit
targettoaimfor. If the marketreaches the 1:1targetandcontinues
on then
I it is tellingyouthatthe currenttrendin progressis strong.
In contrastif the newthrustdoesnot reachthe 1:1targetandreverses

trend
I beforehand it is tellingyouthe trendis weak.
I don'tconsiderreversingpositionwhenthe marketarrivesat a 1:1 impulse

t projection
unlessthe targetpricecoincides
withsomethingelseimportant.
Forinstance whena marketis advancing froma lowpricein a retracement
of
I a previous rangeof largerdegreea 1:1 pCIectionmayterminateon a 38.2,
Thiscouldbe a goodreasonto reverse
50 or 61.8of the rangeit is retracing.
I positionat the targetprice.
I
I
I
I
;
I Situationslike these are especiallyimpoftantto you becausethe other

techniciansin the marketwill seethemandbe preparedto attackthe market
at thetime.
I Youwill haveto remember as I movealongthat manyof the technical
toolsI
t am teachingyouarewellknownto the top traders- whenI saytop tradersI
meanthe guyswho trade 1000'sof contractsa week.The publichaveno
chanceat allwhenit is saidanddone.
I The longeryou watchthe unfoldingmarketeachday you will realisethat
most of the things I am teachingyou becomeself fulfillingdue to the
I professional
tradersparticipation.
To becomea successful trader is not just a matterof knowingtechnical

t analysis
it is a matterof knowingwhateveryone elseis up to. Understanding
the potentialstrengthof technicalsupportor resistancelevelson any
pafticular
daycomesdownto howthe tradersarereactingat thoselevels.
I
I The 1:l Overbalancing
Rule
Tradingto WIN Course- One day at a time [c] BryceGiknore2004 I
FAILURE:
1:1 CORRECTION I
the littlethingsthat canprovideSIGNSof whatis likelyto come
It is amazing
asthe dayprogresses. I
I
I
I
I
I
has
Thisis a situationthat couldoccuron a regularbasis.The 1:1 correction
you believingthe marketwill take out the currentdayshighbut something
I
changes the mindsof the playersand the marketcan'tdo it. A breakback
throughthe 1:1lowis a SELLSIGN. I
FAILURE:
1: I PROJECTION I
t
I
I
I
I
I
Everylittle thing that happenson the day is impoftantto obseruein this
business.Youcouldcallthisexample
progression. Thebreakout
an UNDERBAI-ANCING MOVE in the next
of the highfailsandthe marketreturnsto the prior
I
support.Thisonlyholdstemporally andthenbreaksfor a SELL.
I
Rule Sectionl: Chapter-7'
t
t Tradingto WIN Course- One day at a time [c] BryceGihnore2004
I A LEGffiMATE1:1 CALCUI-ATION:
WHATCONSTITUTES
I in an existingtrendin wavesof similar

1 . The 1:1 mustbe a correction
degree.
in an existingtrendin wavesof similar
2 . The 1:1 mustbe an expansion
I degree.
In the examplebelowyou will seethat I dont considerexample[2] as a

t legitimate Thereasonis the marketwasgoingup priorto the
1:1 calculation.
BC correctionand the 1:1 being calculatedis supposedto represent
t resistance levelwhenthe ABwaveit is beingmeasured

for a correction
expansionary.Thetwo dont mixin my book.
off is
I
The rcosonexctrple [2] is not o legitimotc 1:l colculotion
I is becouseif is NOT in contsxt of the current trend " 1:1
B is higher thon X ond BC is grcatcr thm AB

I
I ES63U-18
I ,1-- "teffi::"i;"Nofii=""
This is o legitiinote
[3] is CORRECT
I
I Thisview of minemay not makesenseto someof you and I knowthat it
certainlyhasa few of my students In my opinionD couldterminate
confused.
I on anyratioof ABin contextof the XABCD
the possibilities.
A 1:1 is onlyoneof
relationships.
I If you stilldon'tunderstand
1:1calculations
the logicjust take my wordfor it anddon'tuse
as shownin example [2] as it onlyaddsanothercomplication
to youranalysis andour bestpolicyis to alwayseliminate whatdoesn'twork
I for us.
I Now I will showyou somethingsin the lesserdegreewave activitythat

in the legup that is projected
occurred as [3] in the example
above.
I At the time this happened

confused as to whichwaves
in the marketsomeof my studentswerea little
remained
a validpriceprojection
constituted
in the samedegreeandwhatactually
usingthe 1:1 rules.
I
'
The 1:l Overbalancing
Rule 37 Sectionl: Chapter- 7
I
Tradingto WIN Course- One day at a time [c] Bryce Gilmore2004
I
All you haveto remember
is that as soonas a correction a prior
overbalances
correctionthe wavedegreemovesup a level.You can start anotherlesser
I
degree1:1waveseriesbutyou needto alsocalculate
1:l'saswell.
the higherdegreewave
I
These are the optinnsfrom the
-5 correctionand hold good
+13''6 I
Neul
unlessthe marketcorrecfs
morethan 5 pointsIo exceed
the swingwe qre mecsuring
-_-_-----t
Frojections
I
After this high the
frum, +13^6 *e Ll correcfionhas a
mo<imum amplitude
I
of 5 to maintainthe
samewove degree
in the sequence. I
Now the -5 overbalqnc€sfhc prior
-4 corraction rahatora lhe next 1:1 I
I
rr I r |
options?
| | | | | lllry t
chartaboveinvalidated -5
the by declining -5^4
in progress
Thisis whatthrewthe spannerin the worK. Thecorrection
(twoticksmore).
in the t
Thecorrectwayto handlethissituationis this:
I
+15^4 T
I
l-csser1:1
L A R 6 E Rb E 6 R ,E E I
WAVETO A,lEASURE
-5^4 I
Just os longoe the new corraetion
exccsdadthe prior correclionstha
DEGREElbl THE WAVEShasto
I
ba roised for gcometricreasons.
I
Just go with the FLOWone step at a time and don't confusethe issue
anymorethanyou haveto. Stickto the rules- someare easierto seethan
I
othersbuttheseexamples
arethe wayI do it.
I
Rule 38 Sectionl: Chapter- 7
I
I The 2 Day CorrectionRule:

I Oneof the mostimpoftantmentaltrendfiltersI canteachyou is the TWO
DAYCORRECTION RULE.
I In a trendingmarketcorrections
to the maintrendseldomlastfor longerthan
t 2 days.Theycanalsobe onedayonlycorrections
explosivedailymove.
if theyare reactions
to an
I Sothe thingto remember is that untila reversal

to the maintrendcontinues
for over3 daysthe originaltrendmustbe considered asstillintact.
I Evenif the 3-day swing chaft rolls from long to shoft or short to long
the 2-day correction rule over-ridesit.
I If we lookat the corrections

in the S&Prun up fromthe March31slowto the
June17hhighyou canseewhatI am talkingabout.Thistrendremained up
for 54tradingdayswith onlyone3-daycorrection in the earlystages.
I
I S&P586
High 1414.fiB
Loru ?8S.58
Hge, €26.39
w p- ' ] J z i
I .:_-2
{- CORR,ECTIONS
3 b*vs
OF LE55THAhI
I B3BZ13 ffi4325
I
Thebullishtrendhadclearlyhaltedwhenwe hadmorethan3 daysdown.
I Sincethenuntilnowthe markethasbeenbackwards
andforwardsin a large
tradingrange.
I Maybeit is consolidating for a freshbreakto new highgroundor elseit is
grindingitselfout for a fall.I'm not sureyet but it recovered
in 2 daysfroma
I hugeoutsidereversal dayon the 22no Augustwhichsayssomething for it.
I
t The2 Day CorrectionRule 39 Section1: Chapter- 8
Tradingto WIN Course- Oneday at a time [c] BryceGilmore2004 I
Section 1: chaptere: I
Short Term Trend Indicatorsl
I
-r lffiffiF-l tr*ervat
fTd--l f alssi.onsl
I
Eave all the right
SIGNALSfOTA SELT
I
old Resistance
I
lirchsdic(14(1),3)
||,,__t
Thc Slow Stochostic od Thc Dirsctionol /lAovancnt Indcx
A,,vc'\:verbought
00
00.00
I
tl
ti .4.. #V \
0@
t
ADX above both
DI's
T
0 11 '12 t3
-:[l Frllav
14 15 10 11 12
06-m i,bffkv
13 14 'rs
olhulk'* I
Therearetwo indicators
aregoingto be counterto the trendof the 3-dayswing.
tradesthat
I alwaysmonitorasa filterto compliment I
If you are contemplating you
a tradeagainstthe short-termtrend,because
haveidentifieda geometricexhaustion takingplace,you shouldverifythe
I
potentialusingthesetwo indicators.
havebeenworking
if the indicators
A shorttradehasmorechanceof success
I
in Overboughtterritory.
I
havebeenworking
if the indicators
A longtradehasmorechanceof success
in Oversoldterritory.
I
Todaythe besttradeof the day was a counter-trend sellthat set itselfup
pefectly. A line of logicalsupportwas formed at the 975 level. The
Overbalancing rulewas in playas demonstrated in S1C7.It wasa foregone
I
conclusion that the daytradersstopsto sellwouldbe nestedunderthe 975
level.The potentialdownwas goingto be goodas the old resistance
become the newsupportandthatwasdownat 966.As you
had
canseefromthe
I
to.
that is wherethe marketdeclined
illustration
Youshouldalwayshavegoodreasons signals,I take

for tradingcounter-trend
I
mustbe right.
themallthetimebuttheconditions
I
Short Term Trend Sectionl: Chapter- 9
I
I Trading to WIN Course - One day at a time [c] BryceGilmore2004
I Whenyou take a lookat this particulartradecloseup it wasreallya gift set-

up that shouldneverhavebeenoverlooked.
I ,e [--------- -l r*avalE--l r as*i.* I
I
I -3^2-
''l 4 ll .r*
l[,r/ ftffH *",nn:g:r,'L'

I
I Ih+fl,-o One fhing fo renrenrbcr ad fhd is irespcctive ol ie Gc.onelty at
I 979'4t}e P/4TTER]'|wos indicoting WEAKNIESS- thc CROWS

were sqrolking orri lo{d befor.c the BREIK ol 975
I
The PATTERNS the marketmakescouldbe comparedto instrumentsin an
I airplanein thattheywamyouof the dangeror oppoftunity
that liesahead.
Youshouldstudysomeof the SIGNSI havenotedon this chaftthat led meto
I SELLthe breakof 975whenthe oscillators
werein agreement.
I Whenall the signalscometogetherTAKETHETMDE:

t ,o @-ll
(Et)r&
I*a'el6-*-l r-Arsm.
I 1t:15:m
o.m
0.m
0.m
0.m
{1_4
I &l
I
I I rur a 5lorr, Slochostic on o 5 rninule clrcl* os a rule - if helps
I
I
ShortTerm Trend
I 4l Sectionl:Chapter-9
Trading to WIN Course- One day at a time [c] BryceGilmore2004 I
The 1* rallyof the dayto B terminatedon the 50o/olevelup 8 pointsfromthe
low indicatingthat therewereplentyof technical sellersin the markettoday.
I
point correctionthat followedthe marketgainedstrengthand
After the 6
ralliedbackup towardsthe current61.80lo
(8x8).
levelthat wasalsoon the 1:1 up I
As the marketapproached the 1:1 (Bx8)andthe 61.8retracement
into
levelthe I
Stochasticon my S-minutechart was headingwell OVERBOUGHT
on the mentalpositionof the daytraders.
territoryaddingextrainformation
I
IT WASA PERFECT SELLhereI thoughtat the time- I canplacea limitorder
to sell2 ticksbelowthe 61.8andplacea stoploss
for a riskof L^2 points.
order2 ticksabovethe 1:1
at the timeI figured.
It wasverystraightforward
I
The reasonI use a little room on a limit order is to makesureyou get
YoucanonlySELLthe BIDso if the hightickfinisheson an OFFER
executed.
I
PRICEyouwill neverget executed if youcut it to fine.
T
TheBigPfT TRADEDCONTRACT
T
Price 963.53
I
Date 06ru3,m
Time l1:50:00
I
Close 972.50
Csr% -0.2
# Bars16
t
I
the PITtradedcontractmadean exact1:1 (8x8)on the 61.8to
Incidentally
demonstrate my point.Theremusthavebeenplentyof professional traders t
readyto acton thissignalwhenit camein. It wasas clearasthe trafficlights
on everysecondstreetcorner.
I
In any case my messge here is to keep your eye on your
t
as you get near stronggeometricpointsthat havea
Stochastic
reasonable for an intra-dayreversalin trend, it pays
expectation I
dividends.
Youwon'tbethe onlyonewatchingthem100'sof traderswill be.

I
I
ShortTerm Trend 42 Sectionl: Chapter- 9
I
I Tradingto WIN Cowse- One day at a time [c] BryceGilmore2004
I SeCtiOn 1: chapter1o:
I
ReversalBars:
I Oneof the mostimpoftantthingsa daytraderneedsto payattentionto is the
t S-minute
activity.
priceactivity,i.e.,the high/lowrangeandthe directionof the price
T Eachnewchaftbaris tellinga storydepending

uponwhatwentbefore.
The bestway I find to visuallyfollowthe currentmarketactivityis by using
I JAPANESE CANDLESTICK chafts.The UPBARShavehollowbodiesand the
downbarshavedarkor colouredbodies.Moston-linedata providers allow
youto setyourowncolours.I useWHITEbarsfor the UPbarsandREDbars
I for the DOWNbars.
The examples in this bookwill showthe DOWNbarsas BLACK.The bodyof

t the bar denotesthe openand the closeand the narrowlinesindicatethe
extremes between the highandthe low.
I TWO BLACK CROWS - 5 Minute Chaft REVERSALPATTERN:

I Thisis the mostimpoftantbarformationto be on the lookoutfor. In the case
of an up trendingmovethe marketwill makea newhighandthe barwill be
t whiteafterthe newhighthe bodyof the barwillturn black.
t
I
I
I If youwerewatchingthis bar unfoldyouwouldfirst seeit as all whiteas the
newhighwasbeingmade.Bythe timethe marketmovedon to the nextbar
I it hadturnedto a blackbodydenotinga possible in the priceactivity.
reversal
The bar followingthe reversalcouldnot regaintrend and was also black

I bodied.Thisdenotesa reversalandtimeto actto protectyourposition.
blackcrowsaftera newhigharethe first indication
thata
Two
reversal
short-term
of trendis in progress.
I
ReversalBars
I Section1: Chapter-10
BARPATTERN:
THEOUTSIDEREVERSAL I
Thisis the strongestsignalfor a temporaryreversalon a s-minutechartor
majorreversalif it occurson a dayonlychart- the difference with this bar I
andthe simplereversalbaris thatthe pricerangein the reversal baris both
higherand lowerthanthe preceding
thanthe lowof the priorbar.
bar andthe CLOSE of the bar is lower I
Outside
I
Reversol
Bar I
I
I
I
Oncethe low of the priorbarto the highis brokenit is timeto act,don'tsit
on yourhandsto wait andto see,you alreadyknowan OutsideReversal Bar t
is forming. are10/1on.
If it doesthenthe oddsof a fuftherdecline
I
WHITE BARSV,SBLACKBARS:
Visuallythe mix betweenthe numberof Whitebarsversusthe numberof

I
Blackbarskeeptellingyouthe stateof the trend.
I
I
I
t
I
Two 5 minuteblackbarsin a row usuallysignala correction in a bulltrend,
two white barsin a row generallytell you the correctionis over.You can
I
the process
reverse in a beartrend.
I
ReversalBars
I
GRAVESTONE
DOJI:
Thisbarcouldoccuron its ownor it couldconfirma reversalpattern.In this
example Dojifolloweda standard
the Gravestone pattern.
reversal
andthen it attacked
At first the marketlookedlikeit wasreversing the high
again,exceeded it andthenfailed.Thisshowedthe convictionof the sellers
at the timeandthe factthattherewereno buyersaroundto takethe market
higher.
6ravestoneDoji
I
II
+ 61,8%Retrocement
l+l
Tl {\nil i+
iil*r
Evenif youdid not seeit whenit happened fromthe
the 6I.80/oretracement
firstdeclineprovided
a "set for a goodchaftreader.
up"situation
Oncethe markethas demonstrated a reversalof the short-termtrendyou

normallyalwaysget a secondopportunity,either at a 50o/oor a 61.8%
retracement.
Youcansellintothe strengthwith limitedrisk.
I DOJI BARS:
Thereareseveraltypesof DOIIPATTERNS of themall

butthe maincharacter
I is that theyOPENandCLOSE
areindicatingindecision
the barat the samelevel.Theoryis that they
betweenthe buyersandthe sellers.
t
I
I Gruueslronc Doji Hanging*ion
I
I
ReversalBars
HAMMERS: I
Hammers or the HangingManDoji-
are similarin a way to the Gravestone
the onlydifference
is theyhavea headlikea hammer. I
Neveftheless
theycanbethe firstsignof exhaustion
to the currentthrust.
I
It is nicewhenyou seea HAMMER on a falsebreakof a MOB,i.e.,whenthe
marketpricepenetrates
leavinga HAMMER
a MOBlevelby a coupleof TICKSandthenreverses
BARor a barwith a longreversalleg.Evena HAMMER on I
any new low or high in the intra-dayS-minutechart is a SIGNthat the
hammer haspotentially
impulse stalled. I
Wheneveryou reachthe vicinityof a pre-calculated
MOB(Makeor Break
Level)you are lookingfor SIGNSof resistance
occur.
or supportfor a reversalto I
I
iangle
Morkel forces fail to close the gop

I
I
Honncr rJ
/r HOilitGF 15 ninuies
iltnl
l4ofrrcrthc OPEN
boublaTop
I
HommerBars
I
You are not goingto see everysmallreversalconformto standardreversal I
bar theorybut you will see at least50o/oof reversals
terminatedon BARS
similarto the onesI havementioned here. I
TheseBARpatternsare an indicatorof the currentto the minutetrader
interest- neverforget no matterwhat your overallopinionof the market
directionis it is onlythe traderswhotakeit fromonelevelto another.
I
Significant
intra-day
SIGNS daytraderare:-
for the professional t
1.
2.
3.
DoubleTops
DoubleBottoms I
OutsideReversal
Bars
4.
5.
Gravestone
Hammers
or Hanging
ManDoji's
I
I
ReversalBars 46 Section1: Chapter- 10
I
I Tradineto WIN Course- One dav at a time [c] BryceGilmore2004
I ReversalPatterns:
I of patternsis paramount
Identiffingthe potential to yoursuccess
asa trader.
I typesof patternsthat leadto a daily

Topsor bottomscan form numerous
reversal
of trend.
I II.ITRA-bAY REVERSALPATTER.NIs
I 5 minute bors
I t\Aorkeitnokesa boseevsr on
or longer.
I 'i+fil wiih reiesl

:_hr
t fricc Pon9€in eonsolidntiotrsmoll
I Theseare commonand normallyoccurwhenthe top or bottomis not on a

priceretracement
recognisable levelto a priorlargerdegreerange.
I In the caseof a bottomit first looK like a continuation

makingbut the bottomsof the rectangle
RECTANGLE
do not comebackto the
in the
originallow
and in fact what happensis a bullishrectangleforms.This infersthat the
I marketis consolidating
or forminga basefromwhichit canmakean advance
backup. This top formationcouldnot get backto the first highto form a
rectangleandthe two blackcrowsbeforethe breakof suppoftindicated that
I the breakoutcouldsucceed.
I Connotaven reoch lsi high!
I
I
I EXHAUSTIONTOF
I
I ReversalPatterns
Tradingto WIN Course- Oneday at a time [c] BryceGilmore2004
INTM-DAYTOPOR BOTTOM
Followedby a 50 or 61.8 RETMCEMENT:
The weaknessin the marketat a new high is evidentby the precise
retracement, therein force.
asthe sellershavecongregated
l'lev.rHI6H -> RetrEeement

5O or 61.8
Breok ->>
5 minute bars
II{TR,A-bAYREVERSAL
INTM-DAYDOUBLE TOPORBOTTOM
Followed
by a BREAKOUT:
Doubletopsanddoublebottomswill havemorepotentialfor profitif theyare
a reversal
backin the direction
of the dailytrend.
R€VERSNLBACKIN THEbIRECTION
OFTHE 3 DAY 5WI}'J6TRENID
ReversalPatterns Section1: Chapter- 11

I TOPPING
PATTERNS:
I
I
I
I
I TOPFtI'LG
F,ATTERFls
I The commonthemeof a toppingpatternis that it will makethe top then

retracebackto a recognisablelineof support.It will thenattemptto get back
t into trendandfail.The failurepointis the placeto sellbecause by the time
the marketfailsnegativeopinionwill be in the mindsof professional traders
andthe movewillbefuelledbytheirpafticipation.
I
I
I 5 minutes
I
I
Singlc Dcys Troding
I
I In caseswherethe markettriesto breakto a newhighandcan'tcontinueon,
the lineof supportbecomes
the lastcorrectionlowbeforethe newhigh.
I In all casesyou cannotbe sureif the marketwill makea re-testof a break
out so you musttakethe tradeon the 1$ break. If by chanceyou get a re-
I testandthe trendlookslikeit haschangedto downyoucanhammerit at the
time. Of coursethiswill dependon wherethe breakout terminated,i.e.,was
the newlowbeforethe re-testa knownsupport point.
I
I ReversalPatterns Section1: Chapter-11
TOPPINGPATTERNS: I
lrghs
I
<<<<<{<<<< Should trot bE more
..1t,
,nfl I
.lJul ft
thon 1:1
V
I
I
usethe1:lruleto sioyv,ith l*ofthl
I
il:i:::::e
I
Thenoviceusuallyhasa problemwiththissituation.
Whenthe marketbreaks
downonlyto returnbackas thoughit is goingto be a re-testbut it comes
backabovethe baseline.So longas the advancebackdoesnot overbalance
I
a priorcorrection
sincethe highwasmadethenthe trendis stilldown.
I
Naw High ->
t
Lowar HI6H Braok back through
retrocemcnt highs!
<- Sell Foilure
I
I
higher low ->
I
THIS ONECANBEA EE,AL
TESTER:
I
Everynow and againstrangethingshappenthat do not conformto your
I
expectations.Asa traderyou haveto acceptdayslikethiswhentheyhappen.
Thisdaythe marketsoldoff earlyaftermakinga newhighthen it formeda I
doubletop 3 ticK abovea 61.8,the nextlegdownto the higherlowdid not
extendas onewouldhaveexpectedanda rallybackbeganwhichbrokeout
of the doubletops. Onewouldhavethoughtwe wereheadingfor a newhigh
t
at thetime!
The signalto SELLcomeswhenthe marketbreaksbackthroughthe double

I
topsasthis is the SIGNof a breakoutFAILURE.
I
ReversalPatterns Section1: Chapter- 11
I
I Tradingto WIN Course- One day at a time
[c] BryceGilmore2004
I TOPPING
PATTERNS:
I LEVEL------.
rA4poRTi{NT
OverloppingWovas
.. 1.... .
I 2 NevisuFport
FJ TLURE
ERENK
I
I l:t into HI6H
3 Drivas to o Hf6H
I <<-Sirong Upv.rordsmoveprior:
I Mostprofessionaltradersare awareof this phenomenon, as it is a signof

short-termexhaustionin trend.Youcan obseruethis patternin the INTM-
t DAYpriceactionbetterthananywhere elseso it becomes
watchout for when the marketrefusesto gain HARDLY
a SIGNfor you to
any manymore
incheseachtimeit breaksoutto newlevels.
I 3-Drivesinto an exhaustionphase reversalshould have OVERLAPPING
I WAVESin my opinionto showthe exhaustion

process.
Onceyouget the washoutthe marketcouldrecoverfullyon the dayor it may
I continue
intoa two-daydecline.
3 DRIVESto cn EXHAUSTfON
I 956.BB
953. AB
Corractions
95A.9S over-bolancing
I 94?. AB
944.6A
I 941.BE
s38. 86
OVERLAPS
t s35.A0
!|3z.sa
9ZS.A0 <- Thrustfollor,ued
by Stognation
I sz6.Ba
I Thispatternis morelikelyto occurat newhighsin a bullishtrendbut it can

still occur in an upwardcorrectionto a prior decline.The HffiAUSTION
process becomes obviousafterthe correction
to the 2ndhigh.
il
;
l1 ReversalPattems 5l Section1: Chapter- l l

I
thesepatterns:
Trading I
As you learnto readthe patterns- takingtradesat the rightplacebecomes
easy.
t
Themarketpriceis alwaysworkingto the strengthor weakness
of the buyers
or sellerspreparedto committo the currenttrend - nothingmore and
I
nothingless.WhensuppoftbreaksSELL;whenresistance breaksBUY.
If the market is going up you buy it; if it is going down you

I
sell it. That is all you have to remember once you can
recognisethe patterns.
I
Impressin your mindthat the chartpatternsare tellingyou a storyof the
goingon betweenthe buyersandsellersandtheirstrengths
relationship and
I
-
to a hit by the otherside each
weaknesses. Whenone sideis vulnerable
what happensis a capitulation
sidewill knowit and basically by oneside.It
mightonlybefor 5 or 10 pointsbut if you havea 10 lot tradeon thatcanadd
I
upto a goodpayday.
I
Onceyoulearnto readthe patternsyoucancallyourselfa trader.
Understandingpatternis the first thing you need to learnto becomea t

tradereverythingelse I am teachingyou is secondary
successful to your
continuing
success. I couldtradeoff patternalonewithoutknowinganything
else.Thepatternis the marketsfootprint.
I
I
THINGSTO REMEMBER:
SOMEIMPORTANT
I
Whenthe marketgoesup in a hurryit cancomebackdownin a hurryand
viceversa. I
Whenthe marketis movingin tight rangesthen expectthe tight rangesto
continue stanceor standaside.
andtakeon a scalping I
Alwaysconsiderthe marketvolatilitybeforeyou starthangingintoa position
andgoingfor the HOMERUNhit. t
Themarketis notdissimilar ballmostof the time.Therisesand
to a bouncing
whenthe NEWSFACTOR
fallsare accentuated
other.
reallyspooksonesideor the t
I
I
ReversalPatterns Section1: Chapter-ll
t
I Tradingto WIN Course* One day at a time [c] BryceGilmore2004
I ContinuationPatterns:
I Identiffingthe SIGNS of trendis enoughon its own
that infera continuation
to makeyoumoney.
I Themarketpatternwill unfoldin sucha waythat it infersthe currenttrendis
stillintact.
I Whenyourecognize the signsyoucanenterthe marketwitha closestoploss
eachtimeit movesintonewterritory.
I
I BreakobovcoH high
.ffi
I
I
I
I
I Suppofton the 38.2retracement
the 38.2remains
is a signthat the trendis strongandwhile
to makeHIGHER LOWSit is
intactandthe marketcontinues
I indicating
the direction
is intact.
In this examplethe waveup afterthe 38.2correctedat a 50 minordegree

t retracementto the movedown.Thefollowingpushbackdownterminated
makinga HIGHER LOW.
by
I The 1* SIGNafterthe 38.2 retracement of the continuationcamewhenthe

marketbrokeabovethe minor50 retrace.Thedepthof the retraceafterthe
I 50 retracenow becomes the benchmarkfor any fufthercorrections.

trendto remainintact,in the samedegree,anysubsequent
upsidemovement
Forthe
corrections
shouldnot exceedthe lengthof this 1* correction.
to the
I Afterthis 1-1 alternatewavecorrection,

whichwasalsoa 38.2retracefrom
the doublebottomthe marketwentsideways for 75 minutes.
I
I ContinuationPatterns
I
I
1{r 5^4
: HIaHER IOTI/
t
I
I
ab= 13.58 cd= 6.?5 cdlab= 6.580
I
Continuation
Potterns
t
[C] Bryce6ilmore
I
I
Trend remainsinfaci becorsetha next I
correction doesnot bxcaadtha value of
tha lst corraciion. .
t
lPlrice ab= 5.50 cil= 5.5S cdlab= 1.BBE
I
The unfoldingpatternproduced a tripletop - this occursthroughthe actions
of the daytraderssellingthe priorhighs.Youcantell that theireffoftswere
t
notgettinganyfollowthroughbythe shallowdepth.
Afterthe 3'dtop the marketreceivedsupportat the levelof the reversalafter

t
the 2notop. Confirmation camewhenthe marketbroke
of the continuation
outthroughthe topsof the rectangle
that hadbeenformed. I
by geometryin the larger
The ultimateend to this rallywill be determined
picture. I
Whenwe get a correction
oppoftunities.
greaterthan5^4 pointsit is timeto lookfor selling
that is greaterthanthe
The first warningwill be a correction
t
latest4^4 pointcorrection.
I
SectionI: Clnpter - 12
ContinuationPatterns
I
RESTAN6LE
5^4
l/l/hifst the correetions do rrrl excad
ths 5^4 banchmarkthc trand is intact
IPlrice ab= 5.58 cd= 4.58 cd/ab= 4.818
of a reversalto this uptrendwill be the marketpricecrossing

Confirmation
backoverall the breakoutlevelswe havemadeon the way up as well as
exceeding
the original38.2correctionof 13^4 in the largerdegree.
are clear- if we followthemthe marketwill leavethe SIGNS

Ourguidelines
to guideus.
So let's recapwhat we should have learnt so far in this chapter:
1. CORRECfiONS shouldnot get largerin an ongoingtrend of similar

degree.
2. 38.2o/oretracements are an indicationthat the market is in a
continuing
trend.
3. RECIANGLES area signof a fufthercontinuation.
4. Buythe BREAI€if the trendappears pattern.
to be in a continuation
5. Buyany retestsof the BREAK OUTSwith closestopsin a continuation
pattern.
6. TheCONINUATION PATTERN is intactas longasthe marketdoesnot
overlap prior BREAKOUT levels. BreaK should be clean in a
pattern.
continuation
7. Wecanusegeometry to establishpricetargets.
ContinuationPatterns Section1: Chapter- 12

Continuotion
Potterns I
[C]BryceGilmore
High-rt
Breoksrlfrorning I
1:1
ondmrlier high
I
t
I
Hereis an exampleof a continuation
correction
patternthat developed
after a sharp
beganon the releaseof a 10:00amreport.The reportwasn'tthat
I
badit just camein as unchangedwhentherewasan expected improvement.
Afterthe fireworKsubsided the 1* rallywasretraced61.8andthe 61.8was
I
madeon a 5 minuteHammeror Dojibar.A breakoutup thensucceeded
the zonewherethe markethadpreviously
correction
brokendownfrom.Thefollowing
wasidenticalin lengthto the 61.8correction registering
into
a 1:1 with
I
it. The nextrallyhighpenetrated
blue)balanced correction
the openingrangebeforemakinga 1:1 (in
of largerdegree.Thenextadvance whenmeasured I
off its correctionlow to 1:1 (in purple) came out as a double top.
Theoreticallythis was a Sell point in my bookbut it did not work and the
marketbrokeup andthroughthe morninghighsignalling a CONTINUATION
I
anda BUY.
Themoralto this is if youworkthe guidelines

I am showingyouthenyouwill
I
knowif the technicalpositionis continuing
to be strongor weak.Theworse
casescenario on the day was you hadto buy the breakoutof the morning
high whenit came.But therewere severalothertradesbeforethat which
I
stoodout usingmy methods.
I
BEAR TREND CONTINUATION PATTERNS:
The sameprinciplesapplyto bear movesthe only differenceis that the

t
declines
willbeswifter.
I
As the declinecontinuesthe correctionsshould not exceedthe prior
correction
- a doublebottomfollowedby a correction
corrections
is a signof at leasta temporary
reversal
greaterthan a prior
in trend.Oncethe market
I
beginsto overlapprior correctionhighsthe trend has changedor it is
returning
to a congestion pattern. I
ContinuationPatterns 56
I
Section1: Chapter-12
I
','/"/"
I LARGERECTANGLES:
I Fromtime to time you will noticethat the marketgetscaughtin a BOXlike

patternmakinga seriesof topsandbottomsthatareequal.Thisis knownas
a rectangle
andin chartingtermsimplies a continuation.
I Continuation meansthat whicheverdirectionthe marketenteredthe
rectangle
in the first placeit will exitit in the samedirection.
I
t Qcharts 8SU
rraz.Ea--
109s.aB
Rectongles- IldtPLy CONTfNUATION
I
I
I 1884.80
u81.BB
DoublcBo*'hon
1B?8.BB
t
ESB'H-E
Foiluu
1875' BE down->
Continuation
lE?Z.g6
I 1869.80 r----___lltlxx+
E4/25 B,4/ZE 84/28 g4/28 g4/26 A /ZE
I Oncethe rectanglebreaksfor the first time you can expecta retestof the
break.
I The retestleg shouldnot retraceanymorethan38.2olothe length,of in this

example,D to the failuresupportlevelandthen the continuation
shouldbe
I ceftain.
On the nextbreakof the failuresupportlevelthe breakshouldbe cleanand

I keepgoing.
- it is
Oncethe breakoutoccursin the first placeit is implyinga continuation
I just a matterof time.
Onceyou canidentifytechnlcalbuyingor sellingoff specificlevetsthe whole

I approach to makingyour nexttradebecomes easy.You alreadyknowthat
whentheselevelsfail the traderson the wrongside haveto take evasive
action,andhelppushthe marketin yourpreferred
I Thisis the samefor all consolidation
patterns.
direction.
I
I ContinuationPatterns Section1: Chapter- 12
CONTINUATIONBARS: I
Thestrongest of trendis the outsidereversal
singlesignalfor a continuation
barin the directionof the priortrend. I
Thesesignals
willapplyto alltimeframes.
I
S&P5BB
date AZEBZZ
hi 966.88
I
trlrl I
I
[gcleTrader
ilr I
I
CONTINUATICIFISI6NALS
lu
date
?F7.58
EZlB18 I
BE1BB3 BZIBZ.T
Hain BUA?I? BZE8ES AZB833 BZB513
I
In both these examplesthe market had either overheadresistanceor
underlying
date.
suppoftbasisthe previousnearbyhighsor lowsin the movesto
I
The outsidebarswere a sign of powerand suggested
wouldsucceed.
that the breakouts I
youSIGNS.
Themarketis alwayssending I
Thefirst exampleon the UPshowsthe marketreversing earlyon the 3'dday
downfrom a doubletop. It actuallyturnedthe 3 day swinginitiallybut this
signalwas negatedby the highercloseat the end of the day as the 3 day
I
swingremainedup.
I
The secondexampleon the DOWNalsopenetrated the 3 day high but this
signalwasnegatedas a swingchangebecause the marketclosedoutsidethe
3 day rangeandstillon the DOWN.Thisoutsidebar heldabovethe nearby I
breakout asthe breakoutlowwasa
zoneon the daywhichwasnot surprising
major50 of the wavesup to the August22ndhigh966.The next day the
marketbrokethroughthe 50 andon it wentdown.
I
I
ContinuationPatterns Section1: Chapter- 12
t
I GeneralPatternTools:
I LINES IN THE SAND:
t The E-Minicanfrom time to time drawlinesin the sandovera 2 or 3-day
period.Linesin the sandcan alsoform over manydays. Firstthe line is
t drawnas a resistance levelthen,sooneror laterthe marketbreaksthroughit
andthen keepsreturningto that level,the levelhas now becomesuppoft.
Whathappens at first is that traderskeepsellingoff the levelandaftenruards
I they keepbuyingoff it. The linein the sandbecomes
anybreakeithersideof it signals a buyor a sell.
the balancepointand
I
t
t
I Linas in tha Sand
I
I HIGHERHIGHSWith HIGHERLOWS:
I Whenyou look at a chaft you shouldsee immediately if the currentchaft

patterncontainshigherhighswith higherlows,if so thenvisuallythe TREND
I is UPandshouldbe considered up untilsuchtime as it startsbreakingback
throughthe swinglows.Oldswinghighswill offerinitialsupport.
I LOWERHIGHSwith LOWERLOWS:
I Thesamethingin reverseto the above,Lowerhighswith lowerlowsindicate

a strongtrenddownis in progress anduntilthe marketbeginsbreakingback
throughprevious swinghighsthe trendremainsdown.Old swinglowswill
I offerinitialresistance.
I Thereis muchto be learntsimplybyvisually

examining
thechaft.
I GeneralPatternTools
TRENDLINES: I
Wheneverything elseis not clearyou shouldalwaysreveftto enclosing
currentpatterninsidetrendlines.
your
I
A trendlineis drawnup or downusingpriceextremes.
I
Irrf
I
*1,
'fl{ I
t*tt*,0,*;il# Er*akr
. SEll
$ell Cunfirm
I
I hr bsft opparhrnilies come wtsn tha trEnd lilre ir srrpporting 6 TrEnk rtruLirrrs" T
I
If you are unsureof the pricerelationships
andyou everneedto baseyour I
analysisof trendon simpleparameters youcanusethe trendlineapproach.
TRENDTINESact as a broad guide to the general market direction,

I
they also help to keep your mind thinking about which direction
offerc the best trading oppoftunity. t
It always pays to rememberTRENDLINESwere made to be broken.
They are most likely to break when they are suppofting a weak
market structure such as in this example,
I
A populartheoryamongst tradersis thatoftenwhena trendlineis brokenthe I
marketwill returnto the levelof the initialbreak.I havefoundthisto be an
oldwivestail.
t
Sometraderswill buy or sell on a test of the obvioustrend line and place
their stoplosssomepointsawayon the othersideof the trend line.If the
trendlinebreaKtheywill takea reversepositionandthenusethe trendline
I
as a guideto marketstrengthor weakness. Sometimes the marketwill come
backto test the breakof trend line similarf to the way a marketbreaksa
highor low andthen comesbackfor a retestof the breakbeforeresuming
I
the trendit hasjust begun.
It is handyto knowthesethingsbut I onlytradeoff trendslineswhenthe

I
marketis showingobvioussignsof exhaustion.
I
GeneralPatternTools Section1: Chapter- 13
t
I TRIANGLES:
I SymmetricalTriangleor CoilingPattern:
triangleis a patternformedin a trend wherethe market

The symmetrical
I goessideways
for sometimemakinglowerhighsandhigherlows.
Anotherdescriptionwe havefor this phaseis COILING,that is the marketis

I buildingup energyto go somewhere.
The longera marketspendsCOILING the ensuing

the more unpredictable
I movewill be.The reasonis that all the pafticipants,
bothlongandshoft,are
gettingneruousaboutthe futuredirectionand preparing to bailout if their
I positiongoesthe wrongwayon them.
You have to ALWAYSremember that the reason markets move one

I way or the other is becauseone side is capitulating.Trianglesform
when buyersand sellercare in a state of balance.
t
Bggqlogt
goigfs-
I
I il*ll
t points
Breokout
Coi I ing llltarkef Pattern
I
I Edwards andMageewouldsaythatthis patterninfersa breakout
the upside.My experience
eitherway.
will cometo
tells me that you couldexpectthe marketto go
I Onceenoughtime haspassedfromthe originalthrust,whichoccurredbefore

the congestion
began,any momentum the markethadonewayor the other
I hasbeendissipated.
Betterto beout andwaitfor a confirmation
breakout.
There are variousdescriptions for trianglesand each has a different

I implication.
Personally
misinterpreted
I thinkthat whentrianglesbeginto formtheycanbe
and just continueas enduringrangecongestion. Triangles
are more reliablein fast moving markeb.
I
I GeneralPatternTools Section1: Chapter-13
TRIANGLES:
ASCENDING& DESCENDING I
I
I
I
t
I
= Flattop withascending
Ascending bottoms.
I
If the ascendingtriangleoccursin a fast movingmarketthe higherlowsare
of the breakoutpotential.
an indication
t
Anymoveexitinga triangleshouldhavesomeseparate formof identification
triangle
and the descending
to confirmmarketdirection,i.e., the ascending
I
havethe doubletop or the doublebottombreakasa formof confirmation.
I
trianglehasa flat bottomwith lowertops.
Thedescending
The lowertops implyweakness so you wouldsellon a breakof the double I

bottom,whenthe marketconfirmsa continuation. If the marketwereto go
up you wouldbuy only whenit getsout of the areawhereit couldstill be
forminga rectangle.
I
fr'
T+
I
I
I
I
I
I
GeneralPatternTools Section1: Chapter- 13
I
I Tradingto WIN Course- One day at a time [c] BryceGiknore2004
I SectiOn 1: chapter14:
I Gaps, Gap Reversal Days, Average Daily

I Range
t GAPS:
tradinghours,i.e.,whenthe
Yearsagoin the dayswherewe hadrestricted
I markets the gaptheoryprobablyhadmorerelevance.
wereclosedovernight
A GAPoccurswherethe marketopensthe nextdayoutsidethe rangeof the

I previous
day.
Therecouldbe a numberof reasons but the majoronewasthat somenews

I hadenteredthe marketin the afterhoursandcausedtradersto believethe
marketwouldbe influencedto go up or downviolentlyon the comingtrading
day.
I Justbeforethe dailyopeningof the marketthe marketmakerswouldmakea
call indicatingwherethey were preparedto buy or sell, generallythe call
t wouldreflectthe buyingor sellingordersthey heldin handpriorto the open
outcry.
I s&Ps8a This wos fomousin tha 5&P pit bock on tha

I date
hi
8?1BBZ
333.88 r+o[*tl.
-"f
a++r
Ztnd Oct 1987tv.ro doysEfter tha CRASH
low.ThEmsrkei opcned59^& dovmfrom
' tl.
I the prior doysclosa.Andoll the floor'
I trodcrs boughtit took it back
up thansold
ii off ogainffd then qt tha endof thc doy
Accereration6Ap -rrrT
I I ii had recoverEdback inio ihc prior rdngc
I GscleTrader
, * t t t r ? l go r r l
l*ol
I Io 1s1.EB
<- ExhousfionS,4P
lllsrkat opcnsuay balowprior doy
t ricrte fi?lEZB
l'fain 8?E9ZB
t t
8?1BBg
tl r
87L8?'2,
r r
g?1164
t I
8?111?
t
8?13B3
I all his fundsS&Ppositions

liquidate
hadplacedan orderto
Thestorybehindit wasthat someIargefundmanager
on the OPENas he was $100million
underwater.
t
I Gaps,Gap Reversals,Avg Range Sectionl: Chapter-14
Theorderclerksentthe orderto the floorpriorto the openbut no numberof
contractswas mentioned.This all happened1 minutebeforethe market
t
opened.
Theoperatoraskedhowmanyandthe replywas,"sellas manyasyoucan!"

I
Thosein the "know"on onesideof the pit werecallingthe marketdown50 I
andon the othersideof the pit thosewhodidn'tknowof the sellorderswere
callingit unchanged.
I
Within30 secondsto one minutethe buyerson one side of the pit had
cleanedout the sellersandtookthe risingbid acrossto the othersideof the
floorandthenbackagainastheytookprofits.
t
As the storygoes,as told to me by a Eurodollar
millionaires
trader,therewere21 new
madein the first2 minutesof tradingthatday.
I
GAPSTODAY:
I
Gapstodayvary in significance due to manyfuturesmarketstrading24 I
hours.In fact if you chaftedthe 24 hourdatatherewouldmostlikelybe no
gaps.Welltherestillcouldbe in somemarketsas economic
croprepofts,are released
at the marketopening.
or productionor I
The realproblemwith the after hoursmarketsis that everythingis doneon
lowvolume.Whichmeansthat a minorityopinionof wherethe marketwill go
I
canbe overruledveryquicklyoncethe daysessionopensandmoretraders
assume a differentopinion. I
Thethingwith LOCALS (thesearethe guysthat tradeoff the flooreachday
providingliquidityto the market)is thattheyhavea tendencyto takeon the
orderscomingfrom the retailcustomers
I
because they think they can move
the marketthe opposite way.
t
Thesituationin the S&Pis uniqueto the S&Pin as muchas manyrepoftsare
releasedat B:30amET an hour beforeWall Streetopens.The European
marketsare openand they havea tendenryto reflectwhat they expectthe
I
USmarketsto do on the day.Theearlymorningtradersusingthe electronic
GLOBH(trading mediumcan run the market up or down based on
expectationsof what they think will happenwhenthe mainoutcrymarket
I
opens.Valuations canmovewayout of syncwithwhattradersliketo call"fair
value".FAIRVALUE is basedon the physically
tradedstocK index. I
FUTURES
MARKET.
MARKETS can trade at a premiumor a discountto the CASH
Futuresmarketswill trade at a premiumto the cashwhen the I
expectationis for the marketto go UP.The reverseif they expectit to go
DOWN.Duringthe dayit is important thatyou monitorthe SPREAD.
I
Gaps,Gap Reversals,Avg Range Section1: Chapter- 14
I
I The SPREAD be it a premiumor a discounton the futuresto the cashwill

provideanotherclue as to the future expectationsof traderspushingthe
I marketin onedirectionor the other.
Thereasonis that largefundswill oftenSELLfuturesbeforetheydumptheir

I stockon the marketas they knowthat dumpinglargequantities
forcepricesdown.Theythen selltheir stockand buy the
of stockwill
futurescontracts
backaftertheyhaveit done.
t Nowbackto GAPS:
t Whenthe marketGAPSfrom the previousday there is a beliefamongst
technical tradersthat GAPShaveto be filled.It is a psychological
thatis all.Butyouwillseeit happen
timeandtimeagain.
thingand
I So what we get from this is that the levelthat fills a GAPcan also be a
decision pointto buyor selloff. I'm not bigon sellingor buyingthe levelthat
I fills a GAPunlessit is a recognised
1:1 level.Nevertheless
retracement level,Linein the Sandor a
it paysto think aheadwhen gapsappearon your
chafts.
I ThebestexampleI couldgiveyouis onelikethis.
I S&P5BA 5E/95
date B3B5B5
hi 933.58
I
I EgcleTrader ]i+
6ri?
I ' | Tr
SmnllGoP/'-.ll
['
l-
t\ltorketfinds support
on the €AP braakout
I FillstheGAFand6AP5
rI r outthe next doy
I J
I
I 1o
rlate
?8fi.58
8383i"Z
I Hain B3E3B? 838318 B3B3Zfi
Nowthisis not a surethingbut it is a goodexample

B3B4B9 B384ZZ
of the waytradersacton
B3B5B5
I massbecause in
of theirbelief the GAP theory.
On a day-to-daybasisusingintra-daydatathe GAPtheoryhasto havea

I placein yourthinkingbecause
weakness
it eithertellsyouwhetherthereis strengthor
at that level.As eachnew pieceof information on an
is displayed
intra-daychaftyou needto readthe signs.
I
I Gaps,Gap Reversals,Avg Range Section1: Chapter-14
Thisis a 60 minutecharttakenoverthe periodwhere the GAPon the prior
dailychartwaswaitingto befilled.
I
Qcharts CSU
I
sBs.A6 GAPREVERSALS
8SS.BB I
8S3.BB
887.08
881.04
t
875.BB
889.BE
I
863.BB
057.BB
I
s51.BS
845.BB t
s3g.BE
fla in E3/2I E3/28 B3/ZA 64/gZ 8,4/87 9,4/IB
I
I
VARIOUS
TYPESOF GAPS:
I
I
TYPESOF 9,4P5
t
t
I
I
I
I
I
Gaps,GapReversals,
Avg Range
I
t Tradinsto WIN Course- One dav at a time [c] BryceGilmore2004
I GAPREVERSAL DAY:
AND AN OUTSIDEREVERSAL
I sfiF58S
Higlr
LLtq
Egrr
I
t This tignol i* oflvoyc going to be c 5I6i,! of c major
chorge rn tr-crd.
I Thc nargc for rhc dcl wc or+r d+ublc fhc *rcmgc mnge ,
I EJB531 S2ffit:I
I Youarenevergoingto seea reversal in trendsignalbetterthanoneof these.

you
When takeintoconsideration the magnitude of the daysrangecompared
I with the averagedaily rangeyou can see the magnitudeof the swingin
sentimentthattookplaceon the day.
t Onthisdaythe marketwason a newall time lowfromthe March2000high
andthe lowfor the daywasexactlya 50o/o declinein pricefromthe all time
I high.This is a commonGannsupportlevel.Technical
thereprepared to buyandtheydidat the 50o/o
discount
buyersweresitting
to the high.
I s&P5A0
I High
Lor,r
Fge
366.BB
773.A9
193.BA
I
I S
F
n <-- eAPREVERS/{L
& OUTSIDER,EVERSAL
b/qv
E
I A
D
T
n
R
I l
E
Y
z
I l(
6Z,6719 EZBTZE BaBSBZ BZBEBS 028816
t A Gapopeningoutside reversalday is the strongesttechnical

reversalpattern.
I
I Gaps,GapReversals,
Avg Range 67 Sectionl: Chapter-14
GAPREVERSAL
DAYS: I
to the S&P500on Fridaythe 6h June
Thisis an exampleof what happened
2003. t
[charts CSU
1611. BO
1085. BB
HiB3.t-15
1008^4 I
s|!|.00
sst.B0
t
s87.AB
981.BB
s?5.00
I
s6s.m
963.BO
I
S5?.BB
9s1.AB
ffi/ffirw
I
g8?.?5 986.0B SB?.?5 86/85
The market made a GAP OPENINGeven in the face of increasing

I
NUMBERSreleased an hour before the open.
UNEMPLOYMENT
Unemploymenthadrisento 6.10lo andthe consensus wasthatthiscouldhave
beenexpectedat this stageof the forecastrecovery.
t
The rallycontinuedup to the 1008^4level(7 times1214)
1008^4was45 points
before.reversing,
up fromthe 963^4doublebottomof the 3'oJune.The
I
ls impulsedownfilledthe GAPand foundsupportat the previousbreakout
high but t9^2 down overbalanced the prior corrections of similardegree I
indicating
the marketwas in a weak position.
The rally back up of 9 points
could not get past the openingprice and started down again finally
terminatingthe downmovefor the dayon the 50o/olevelof the lastwaveof I
similardegree.The rebsonfor the reversalcouldhavebeendueto the time
ryclespresenton the day- manyinformedtradersknewof them. I
I
ClaleTrader S+P 5ffi Ef,SH
TIHE CYCLE
rfil AZTSLA
TB] AZIZAZ
I
rlags 53
degs 53.8
ueeks ?.6
Uears 8.1,17
PRIJJEf,T
IOH
tcl
tT1
drgs
degs
83B3tZ
838686
BE
83.S
u e e k s 1 2 -3
This is o SWINO CHART
I keep of imporiort swings
:tAOO/t.61& t
I
gears 8.233
from ihe baginningof tha
BENRAltARKET
Scroll tiuirr$ = 6 Jun &3 ..... fA?.8S
t
Gaps,Gap Reversals,Avg Range 68 Section1: Chapter-14
I
I Tradingto WIN Course- Oneday at a time [c] Bryce Gilmore2004
I One thing to rememberis that everyELLIOTTICIANwotth his "salt" was

in newsletters
awareof thesetime ryclesand they wereforecasting for a
I downturnto a heatedmarketat thistime.
I am not makingany forecastsmyselfbut to havean all roundviewof the

I that movemarketsis important
markettechniques to the professional
trader.
Theimportanceof a GAPREVERSAL as
DAYshouldneverbe underestimated
t it sometimes
holdsthe sameimplications
asan OUTSIDEREVERSALDAY.
Aswe moveon fromthis marketpositionall we haveto do is followthe daily

I Eachdaywe will get confirmation
signalsfor guidance.
hasformed.
thata highof somesigniflcance
or non-conformation
I I'll run you throughthe important

justto showyou.
thingsI will be lookingat comeMonday
I Qcharts CSU ES63r{-5

1818.SB
I ffia?.oa
1:E,g4.B8
If tha 50 lsvel 986 holds in
eorly trcding ilt\ondoythen
t 1881.gB
ss8.68
sss.EB
the morket hos two lesistqrce
points obova ii of 989^2
ord 994^4 a 38.? relroce of lil : P95
I
Fridoy's ronge ond the 1:1
sgz.Ba
98TI.BB
I s86. gB
Sffi.BB
988.08
I 86/ffi/ZEE3
l'lain a66,/s4 B6/ffi 65/95 ffi/EE m/86 65/86
I To negatethe implications DAYthe marketwouldhave

of the GAPREVERSAL
of the TIMECYCLES
to tradeabove998^2.To negatethe implication the
I marketwouldhaveto tradeabove1008^4.
The nextlevelsdownthat couldact as supportshouldthe 50o/oretracement

t are : -
comeout firstthing Monday
I 1 . TheLINEIN THESANDlevelat 979.

2. The1:1of the l9^2leg downat979
3 . Thenequalwavesdownwiththe priorcorrection
of similardegree,this
I is 3B^4downandliesat 970.
4. Thethreedaylowis alsoat970^2
I
I Gaps,GapReversals,
Avg Range 69 Section1: Chapter-14
Youcanseetheselevelson the 15 minutechartI presented on page68. If
you prepareproperlyeachday you will neverbe in for any surprises
if the
I
marketdoesdo somethingunexpected.
0charts CSU
I
Current f,ange
Z,2.58
I
prior
I
rdnges
45.88 B.sBE
15.88 1,488
33.?5 8.867
18.58 1.364
t
51.84 B..t4t
38.58 8.584
31.56 6.714
2r.25 1.85S
3S.SB 0.5??
NExt Wove boek

of similar daE'aa I
-38.5
E6/ffirzaT3
Hain
r.-
84/39 A5/ffi
I
BS/LS
I I
B5{ZZ
I
g1/fr
I I
ir'-1"'
BE/EE I
Hereis a chartof the recentsignificant
swingsthe markethasmadeon the t
recentrun up. This marketwould haveto declineover 38.5 pointsand
overbalancethe lastwaveof similardegreeto confirma significant
top. I
Usingmy methodsyou will alwaysmaintaina flexiblepicturein yourmindof
whatthe markethasto do to confirmwhatthe currenttrendis andin which
youshouldbetrading.
direction
I
This is the BULLISH HICTUREtha
I
morket is pointingto the FUNDS
I
CgcleTrader
I
Itff ZBg = 886.
I
Io
date
?67.58
8z78ln
I
l'lain
I
Froman analyst'spointof viewthis marketwas considerably overbought at
currentlevels.But it is still clearlyin an uptrend.In the biggerpicture955
wouldneedto comeoutto forceyouto adoptan overallbearishscenario.
I
I
70
I
I AVERAGE
DAILYRANGE:
I s&P5A0 4 l'tn1
984.23
High 1608.58 lfi hrlz
I Lorrr
Rge
?BB.5B
zza.Ba
s 5 1 .g s
33.14
t AVERAgEDAILY RAN6E
I Todoy's
Ronge
I
zz.4B
I B3B31Z A3B3Z8 830415 ffiA581 B3B51S 430686
TheAverageDailyRangeovera campaign cangiveyou an insightintowhat

I to expecton anygiventradingday.On dayswherethe markettradesinside
the averagedailyrangethe speculator andthe
interestis usuallydiminished
marketis lookingfor energyto go someplace.
I If you keepa monitoron the averagedailyrangeyou will knowif the trading
environment is actingin a stableor erraticmanner.Whenthereis actionthe
I rangeswill expandandoffergreateropportunity
will attractgreaterspeculator
to the daytrader,thisin turn
interest.It followsthat on largerangedaysthe
sovolumeis yourclueto whethertodayis goingto be a
I volumes will increase
largerangedayor not.
I The hourlyvolumefor the day in the 1$ hourof tradingis mostlyalwaysthe

greatestduringeachtradingday so the clueis to monitorthe volumefrom
afterthe 1* hour.Whenyou get higherthannormalvolumesin the 2ndand
I 3'dhoursof tradingit is likelythatthe volumefor the daywill be greaterthan
averageandthat the AverageDailyRangewill be exceeded on that day.This
will giveyouthe clueto whatthe afternoon sessionmayofferas if thereare
I moretraderstakingpositions
themarelikelyto be pressured
earlyin the daythenthe morechancemanyof
onewayor the otherin the afternoon.Thisis
justsomething to thinkabout.
I The moreyou thinkaboutwhatyou aredoingthenthe moreSIGNS you can
I find to assistyou in your decisions.The problemwith mosttradersis that

theyforgetmanythingsthat couldbe important to theiranalysis
andonlysee
them after the event.You haveto keepgoingoverthe thingsyou do day
t afterdayto keepimproving yourself.
Everyday you shouldreviewwhat you havedoneon the day, studythe

I chaftsto seewhatyou missedandlearnfromit. Eachdayyoucanget better!
I Gaps,GapReversals,Avg Range
VOLUME
CHANGES: I
,otlffi--ll ru"a 16**l I- Arsessims
I
Low ss7.s0
Cbse 1005.50
-:; . Ir, .,*?+
I
i:* i;J"-guts6r+nr+ilj'11t+t+ur*+u'
Vot t:+,etO -ll
I
Doily
Ronges
Doily AverogcRongefrom itlolch 12:15.50
9.75 t7.75 13.75 I
I
I
I
TodayI figuredon the GAPREVERSAL
all the information
at my fingertips.
beforeit wasconfirmedbecauseI had
At first it lookedlikean Acceleration
Gap, I
but afterthe 10:00ambarwasdownandthenthe Dojibarcameon the next
bar it was time for a rethink. Thenyou can seethe healryvolumeon the
11:00amdownbaryou wouldhaveknownthat the earlybuyerswerebeing t
cut to bits.The 11:30ambar madeverylittleimpression on the previousbar
andon abouthalfthe volume.Sellersattackedagainlookingto fill the GAP
andtheysucceeded in doingit. Therewasanotherthingthe declineintothe
I
1:00pmbarexceeded the 38.2o/o retracement andwhenthishappens youcan
nearlybetthat levelwill fail90o/oof the timewhenit getsthe nexttest. I
If you prepareproperlyand knowwhatthe othertechnicalandfundamental
tradersare thinkingyou havea betterthan 60% chanceto makemoneyon
the day.Thecasinooddsareonlystackedabout51oloin favourof the Casino
I
andtheycanmakemillionsfromlazypunters.
I
Onething you must keepin mindaboutthe marketis that it is a LIVING
THING.It movesin one directionor the otheronly becauseone side has
moreinfluence
thanthe other.
I
Beinga Fridaythere could have been other influencesfrom the buyers
weakening as the weekhad beenan up weekand manytraderslike to go
I
homeearlyon Friday's.If they havehad a goodweekthey may closeout
theirprofitablepositions
andgo flat overthe weekend,
from fresh.You needto understand
Mondaytheywill start
tradersif you
the traitsof professional
I
wantto becomeone.
I
Gaps,Gap Reversals,Avg Range
I
I Tradingto WIN Course- Oneday at atime [c] Bryce Gilmore2004
I Tuesdayl0e, June 2OO3:

Mondaythe marketopeneddown and groundits way down to a low of
I 972/'2.This left the threeday low intactat 970,so the threeday low for
todaywas972^2. Theinitialmorningmoveterminated
yesterday's the 9 point
at 983^2 up 11from
correctionfrom Friday.
low,this moveoverbalanced
I The new moveup was followedby a 61.8 retracement to 976^4 fillingthe
GAP,this correctionwas 6^6. Then a retestof the days high was made
I the priorcorrection
of 6^2 whichdid not overbalance
followedby a correction
to the61.8.
I All signsare pointingupwardsuntilthe 6^6 is overbalanced

swingis stillbullishaftertoday'strading.
now. The3-day
I ElliottWaveexpertissueda
As I expectedRobertMinerthe self-proclaimed
over the weekenddeclaringthe Fridayhigh as the highfor the
newsletter
I next6toSweeks.
I Qcharts f,SU
1815. BB
ffill.48
ESB3i{-5
t 1BB?.BA
1883. AB
lrlo confirmoiion this is a pcrmoncntTOP
I sgs.Ba
sgs.EE
I ssl.8B
g8?.04
990^2
s9'2
s83.BB
I 9?S.AB
9?5.80
HIGHERLOWS
I s?l.88
l'lain
I The markettodaymadea goodrecoveryLATEAFTERNOON and as the 970

failure(38^4 downand the previouswaveof similardegree)area is still
I thatthe highis anythingpermanent.
intactthereis no confirmation
Nowthe 50 andthe linein the sandis the onlythingbetweenhereanda new

I high.
I ONEDAYATA TIME
If you just movealongeachday followingyour rulesthe marketwill keep

I givingyouSIGNS of whatit is likelyto do next.
I Gaps,Gap Reversals,Avg Range Section1: Chapter- 14

Tradingto WIN Course- Onedayat a time [c] BryceGiknore2004 I
Alwaysmonitorthe longer-term
the longer-term
as thesewill tell you what
trendindicators,
arelookingat.
systems
I
S&P5BB 3 bcy Swing - UP 4 t{ff1
985.58
I
High 1S68.56 18 HffZ
Lou
Rge
?88.58
zza.aa
i{orket hosto break
955. 5?
34. BB I
97O to confirm a chonga
T
R
E
lt
? TigZag in t'r;erid.
Closetodoy 986.7 I
I
T
B
R
STOCH
lAB
75
I
D
E
n
v
%tl
ft11
z5
I
z
t{ B
I
Thischapterappears to be gettingout of stepwith its themebut I preferto
the thingsI do as I go along.Thiswayyou will learnthe contextof
illustrate
t
howI useallthe techniques I amteaching you.
Themajorlessonhereis that I don'tknowwhatthe marketwill do, I canonly

I
guess.But I do havewaysto tell what it hasto do to changethe attitudeof
the majorplayers.I can developa tradingstrategyaroundthe SIGNSI am
you.Thatis all I needto doto makemoney.
teaching
I
Forecasting will not makeyou any money,you needto knowhowto tradeto I
makemoney.Youneedto knowwhatthe playersarethinkingandwhatthey
are likelyto do to makemoney.No amountof hopewill do it you haveto
workat it andfollowrules. I
If the marketis goingup you buyit, if the marketis goingdownyou sellit. It
is assimpleasthat.
I
Thereare a lot economicreportsto be released
to handtheywill exeftnewinfluences
this weekandas theycome
on this market.It couldgo eitherway
I
in my opinion.A coupleof daysbackI thoughtit hadthe chanceof going
down,nowI am notsosure,it hasn'tconfirmed it is goingdown. t
ButI do haveseveralthingsup my sleeve,as I knowif it breaK970 it will
havechanged if it doesn'tthenthe trendup is still intact.Eachday
direction, I
I candealwiththe micromovesastheyoccurandgo homefreein the mind
andstartfreshagainthe nextday.Flexibility is everything
in this business
soonas you try andforceyouropinionon the marketit will kickyou in the
as
I
teeth.
I
Avg Range
Gaps,GapReversals, 74 Sectionl: Chapter- 14
I
I Tuesday17h June 2OO3:
I I havebeenawayfor a weekandthis is what hashappened.

held,therewasa selloff backto a 61.8Thursday
correction)
The970level
andFriday(another2 day
but Mondaythe markettook off runningagain.The 3-daylow
I remainedintactsothe swingremained up.
I Scharts ESU
1815.BB
ESBSU_15 Ncv,rHigh 1014^6
32
1811.86 Controct
I 1BB?.BB Rollover
1zth
1883.86
I g9g.BB
sss.0B
I sgl. BB
g8?.BA
I s83.BB
S?S.BB Fridov' :
1 3 r h ' : 1 6 r hi t Z t t t
I s?5.08
E6,/L?/aEA3
|1ain
I
Todaywe madea newhighbut the rangefor the daywasverynarrow,9.75
I points.The patterntodayformedan Ascending Triangleso the implication
for higherlevels.This is beingconfirmedby the lengthof the two-day
is
advance at 32 pointsversusthe previous of 30.5points.

advance
I To datefrom the marchlow of 788.5we are up 226.25to this new high.
I OpenInteresthasbeenbuildingat a rapidrateandis nowat its highestlevel
in two years.All dailytrend indicators
are readingextremelyOVERBOUGHT.
The talk aroundtown is that the FUNDSare buyingso they can show
I participation
intothe endof the quafter,aftersucha dismalpeformance
the pastthreeyearstheydarenot missout now,
over
t the sceneis set for this rallyto cometo an end.Wearegettingvery

All-in-all
cfoseto an impoftant61.8retracement of the January2002- October2002
range,thisliesat 1021for the S&PSPX(cashindex).
I Thereis a FEDEMLRESERVE meetingcomingnextweekandthe speculation
is that they coulddrop the fed fundsrate by 0.5o/o. The rate is currently
I L.25o/oso we are livingin interesting
times.The realestatemarketis as over
cookedas I have ever seen it, it is hard to imaginethat the trend is
I sustainable.
I Gaps,GapReversals,Avg Range
Tradineto WIN Course- Oneday at a time [c] BryceGilmore2004
I
ilate
hi
AZETB?
11?6.S?
I
I
Cgclelrailer
I
sPX - 5&P500
t
lo
date
? E B .S 3
ffZ1818
T
I'lain B1BSZB
I
Wednesday18s June 2OO3:
I
Tradingtodaybeganon a jittery note and negatedthe ascending
theory.The futuresmanaged to strugglebackto makea TWO-DAY
triangle
DOUBLE
t
TOPbeforeweakness setin again.
I
1015.56 TOP
TWO-D/4YDOUBLE
I
1614.00
1012.58
1411.BE
I
1BBg.58
1088.06
I
1866.5S
10s5.as
5I6N of WEiKNESS
I
1BB3.59
B,6,/I8/Z0E,3
l{a i rr gE/t? 6E/t7 Bj6/I? 86/1S 0/6,/18 E6/lB
llll
I
I
After I saw the openingt2 minutesI realisedthe marketwas mostlikely
goingto be choppyagaintodayso I wentto bed. I
On reviewthe only clearcut tradetodayI sawwasthe SELLat the double
top,the restof the daywasmarredwith constantoverlapsmakingthe typeof
tradingI do very difficult.The past two days rangesare indicativeof a
I
confused market.Therangetodaywas11.5points.
I
I
I Tradingto WIN Course- One day at a time [c] Bryce Gilmore 2004
I Qcharts CSU
1815.BB
I 1011.68
taoi?.96
1863.SB
I st|I|.as
995.64
t s91.00
98?.08
s83.BB
I s?g.BB
975.68
This mErkci is raolly storting lo get
boggeddown - thE trend is in doubtl
I E6/1B/?g/g3
Hnirr BE/lI 66/13
I The only tradesI wouldcontemplate at the momentwouldbe a BUYif it

brokeout throughthe two-daydoubletop or a SELLif it breakstoday'slow,
whichhasnowbecome the 2-daylow.
I The pasttwo daysrangeshavebeen9.75 and 11.5pointsso what will be
happening is that STOPorderswill be buildingup just outsidethis 2-day
I range.The averagedailyrangefrom the Marchlow has beenaround15.5
pointsandthe 3-daySWINGhasbeenup for 20 consecutive tradingdays.
I This campaignis beginning

MEDIAis toutingcomments
to showsignsof exhaustion
thatthe movehas gonetoo
right now and the
fasttoo soon.
I llave Trader IlffItY lst Monih ContinuousFuturEs
I tsl ffiA3lz
tzl 83661?
rlltu. . . . This coufd provc io be axlramely
1.618 b
t Galendar
Ilegrees
s?
94-4
Ilisplag
imporiont - confirmqtionis requirad.
I
6?
HEEI{S
1 3 .S
YEARS
1.000
I 8.262
PEICE...
RffI{GE rld\[hltttil
zzd.3B
I CHAHGE
za.?Bft
Bat ios IPIrice ab= 1B?.ZB cil= 173.38 cillab= 1.61?
I Nowthat I havehada bit of timeto get my analysis

thisgeometryat Tuesday's
up to speedI discovered
high.Thisis importantstuffin ElliottWaveterms,
I it won'ttakethe professionals
longto seeit.
I Gaps,Gap Reversals,Avg Range Section1: Chapter-14

SectiOn 1l cnapter15: I
OpenInterest in FuturesMarkets:
I
The first rule to learn about Openfnterest is that it can only rise as
t
additionalsellersenter the market.
Somewill arguethat OI risesbecausenew buyersare enteringthe market

t
but this is a FAISEBELIEFbecausebuyerscannotinstigatenew positions
unlesssomeone sellsto them.Buyersonlyhavetwo choicesandthat is they
eitherbuy from a new selleror they buy from an existingbuyerwho had
I
alreadyowneda longpositionandis quittingit.
In the lattercasethe newbuyeronlyassumes the existingpositionandopen

I
interestdoes not rise. The sayingis SellersCOVERpositionsand Buyers
LIQUIDATE positions,
dont everforgetit. I
The secondrule to learn is that when OpenInterest is decliningthe
existingsellersare closingout positionsand are not being replaced I
by new sellers,
Largefluctuationsin the OpenInterest(sumtotalof all contractsoutstanding)

I
give you a clue to the positionsof the Fundsversusthe positionsof the
Commercials or the generalpublic. I
The top tableshowsthe OI for the ESE-Minicontracts andthe lowertable
showsthe OI for the SPpit tradedcontracts.The pit contractis 5 timesthe
quantityof the E-Minicontract.Thissnapshot
wastakenthroughthe rollover
I
periodfromthe Junecontractsto the September contracts.
I
I
I
I
l.Lun{3 112
isep-03
iUEC-UJ
Itvtar-ol
57
I
lJun-U4
iseo{q
Dec-04
Total
I
I
lDelta
OpenInterest 78 Sectionl: Chapter-15
I
I accommodating the exuberant

Sellersenteringand
A cursorylook at the tableswouldindicateincreasing
Buyersasthe trendup hascontinued.
I S&F5BB 4 t{Rl
Tha botle betwocn Buyors & Sellers
I
1885.85
High 1615.88 18 r4RZ
Ipu ?88.58 5 7 9 .6 Z
*ge a7-39 e5.43
Uolunre
I I
n
E I'Iornrolly on a contrqct rollovar OI
t9?o?'8
0per
Interest
H ?s8?84
I D
T
R
R
dacreues os Sellcrs codr qrt positiotrs
on ihe finql settlsnent price of the
rtlqrkat is
D up on high
I E
R
Y
volumeond
increosing
z OI
I ll
1 838618 1SB?.?B 1815.88 1BB4.S
t It wouldappearright now that the willingSellersare holdingon the wrong

side of the marketdirection.But there could be anotherreasonfor this
I unusualsteepincreasein sellersand that is they may be playingout an
optionsplay.Theycouldhaveboughton the moneycallsat a cheappremium
for insurance andplayedfor the marketto go downby selling.In anycasewe
I will find out soonenoughas we aregoingintotriplewitchingtomorrow.
is whenthe lune contractexpiresandsodo the Juneoptions.
This
I
I
Price 0-0O
Dde tFfl $83
Opa10(ts40
Hgh 1011 50
Low tt!07,91
q@ 1011.4O
Csr % 0O
I I Ears 23
Vol 1 2lA
lttir'rro,rrt-C
TrTl
Thrs is the new SEPTEiIIBER coniroct
cctivily - lhe rcceni week is fhe pcriod
where oclive troding begire r.niil the
I outgoing JU|.IE comtroct expip€s.
I
I
I Thethingthat looK oddto me (seethe tables)is that this pastweekthe OI
I in the September hasrisenrapidly.
PitContract
I OpenInterest Section1: Chapter- 15

Thefiguresfor todayareyet to be seenas they are repofteda day in arrears
on the chart.The ESE-MiniJunecontracthasretaineda largerthannormal
I
theymaybe hedgingoptionspositions.
OI indicating
In anycasethe thingwe needto knowafterthe expiryof the optionsandthe

I
Junecontractsis how muchopeninteresthasremainedcurrentin the new
Septembercontracts. I
Withthe S&P500andthe E-Minithereis verylittletradingactivityoutsideof
the currentlytraded ld month contract.This marketis not like a grain I
contractsuchas Soybeans wherelong-termhedgingor speculation occurson
futurecroppricesversusthe supplies
heldin hand.
I
The realityis that as longas you storeyour beansand keepthemdry they
are still one and the samething,yet you couldstorestockcertificates
they mightnot amountto anythingin the future.So why hedgethem?You
and I
usethemasa toolto buyor selloff basisthe currentstrengthof trend.There
is a completelydifferentmentalityrequired. I
I often wonderwhy the averagepersoncannotunderstandthe differences
betweenstockmanipulatorsandnormalcommercial
The stockmarketmanipulators
businesses.
haveit easyreallywhenyou considerthe
I
waystheycantry andmanipulatethe marketsusingonlypaper.
I
Thecluereallyis to try andunderstand technically
whattheycouldbe up to.
Fundsand Commercials both trade systematic
tradingin the samedirection
approaches.
or theycouldbeopposed
Both couldbe
to eachother. I
The way we determinethis is throughthe weeklycommitment
repofts.
of traders I
The CFTCrequireslargetradersto repoftfuturespositionson a weeklybasis.
Tradersarecategorised
as FUNDS, COMMERCIAE or non-repofting.
I
The FUNDS or the COMMERCIAIS arethe oneswiththe grunt,the littleguys
are not very impoftantbecausethey are the oneswho losemostof their
I
moneyovertime.Wellunlesstheylearnthe business
the knowledge
andknowhowto acton
Problemis mostof themdon'tknowenough
that is available. I
aboutthe market,I cantell you first handbecause I meetso manypeople
who have attendedseminarsor joined the Club144room of mine that
wouldn'tknowwhatdayit wasin termsof the marketposition. I
OpenIntereston its own may not tell you whatthe marketis goingto do
todayor tomorrow,butwhenyoucombine the factswithall the othertoolsat
I
yourdisposal
it all begins
to addup.
You should never forget that to be a professional

you have to follow a
I
professional
plan.
I
Openlnterest Sectiont: Chapter- 15
I
I Thursday19e June 2OO3:

Todaythe marketofferedmanytradingoppoftunities but beforeI explain
them,hereis a biggerpictureof howthe perceived
I Monday andlookinglikeit is in a weakposition.
suppoftsactedas signal
pointson the day. The marketis now backto wherewe staftedout on
whatyousee!
Believe
I Qcharts CSU
1815.08
I IBLL.gg
tw?.8a
1m3.00
I slg.0B
st5.BB
s1.BA
I s?.46
s83.AS
I c7s.Ba
!r75.46
E6,/LS.ZAB3
I l"la ir"l E6,/AS A6/LL
of whereyou cantake
Studythis chartbelowas it containsmanyexamples
ffi/Lz 86/16 ffi/L$
I ,"rlffi
you
tradesthe wayI havebeenteaching to date.
-l t,ter*ut f- Ailssbns i
l---l
t 'rEe l uw.ul
)de 06fi9fi3
'im
09:30:00
)pen 10@50
{qh 100S50
THIS IS Wt IKING LIKE A 5WIS5 WATCH
TODAY.
00
I
1 008 86 r70 7%
.ow 100750
]E 100875 180715r51
8%
lsr % -0.7
I Bars -1 6
lol 13,022
Buy 10o3^4
I 2 DoyLow1003 /YtoJor ubt

-
oErl
I lffiEEil
| 1:1and 61.8 |
Taroet
Achieved Buy )En
I Supports ore mode to be bnoken

, r"r.."-::\F-
I ; ,,,,,,lrlrrlr
rnl,rrrlilllllllJllilrlh
llllt',,r, 1100't
I rlrrlrl,l
I As the marketmovesalong you just have to keep re-adjustingto the
opportunitiespresented you
basedon my rules.Youdon'tneedto be Einstein
I just followthe SIGNS.As longas you stopyourselfout quicklywhenthey
don'tworkyou will makemoneyoverthe long-term. The onlyway you will
loseis if youcontinue positions
to holdlosing andletthemgetoutof hand.
I
rl Open Interest 8l Sectionl: Chapter-15
Tradingto WIN Course- One day at a time [c] Bryce Gilmore 2004 I
LastweeksCOMBINED CONTMCTS (ES& SP)COT(Commitment
reporthadthe Fundsand Commercials
of Traders)
net shortat similarfigureswith the
I
(smalltraders)holdingthe otherside.
non-repoftable
I
150000
Total 5&P500 NET positions (5P&ES contrncts axprossadas 5P)
I
100000
50fir0
t
0
-Non-Commercial Net
-Qsrnrngysisl l{gl
Net
I
-580t10
-100000
I
-150000
Reportdctc: l0th Ju* 20t13
I
*"{'$-"$"$.}4"S#f"lS.}'$"$.kF$tF{"'$*:"e Date t
Goingintothisweekthe OI wasstillincreasing meaningnewsellersandnew
interestis comingfrom.
buyers.Theideais to findout wherethe increasing
I
Non-Reporting
of the threegroups- TheFunds,the Commercials
The net positions
positions
andthe
are impoftantto monitorwhenyou seethe market
I
reachingan OVERBOUGHT or OVERSOLD basisotherindicators.
condition
I
The big pit contractchangesthis weekare interestingbut we alsoneedto
examine the combined i.e.,
contracts, the ES in
and SP total.
the
I
s6p soo srocr{ rrrDEX-
FUTUP.BSolrlY posrTro$S
FIT TRAbEb CONTFACTONLY
.LS OF t]6.rr?,f03
NO$N.BPON.TABLE
I
-l
-;;;;--;;;;;-;;;il;;;i-;;;--,--;;;;;-l--;;;;--;--;il;-i--;;;;-,-;;;;;-
I lc0r{HBRcrsr | | TOTAL I
I
UO}I-COIIIIBgCIIL POSITIO}IS
{ 5 6 0 5 0 0 r ! i l D E XX S 2 S 0 . O 0 }
I
OPEI.I $'ITBRE$T: 19A .1AI
CO}IIIITIIEIITS
s5,?83 9e.34r eI,O?1 519.S8? 50r..14r 596,T4r 614.?53 EOA.040r84.02S
CIIAIItrESFS,O![06/10/03
-
s . o o s 1 2 5 . 5 5 ?|
{CH}I,IGEM
9,255
0PBII IIITEREST: ?9.8641
??,r8o
In the wcck fill Tuesdoythc FUNDS infl.,eoscdnct shori positions by 20.56? qnd thc
8r.e39 2.684 -1.3?S
I
€ommercialsmouedinto o net long positiorr but not hy much conridering the numher
of contnccls thcy arc holding os o group. The non reportoblc positians fo'tour lhe
long sidc. So it is thc FUND5 uee$qsthe COJdTI4ERCIAI-S ond the PI,BLIC.
t
I
OpenInterest 82
t
I E-IINN SdP 5OO STOCR TIIDEX - CHIC.E.GO }IBRCAITTILE

FUTI'nES OULY DoSITIOUS .tS OF 06,rr?,/03
EXCIIf,IIGE
|
I No!I-Co!$IEECr.*.[ I
I LOrrE I
TUTAL
$HOnT I
I POSITIO}IS
r.outr | SIIOD.T
I ($so x s6p soo ilrDExt

COUTIITIIBIITS
L35.429 L76.A2Z 36.658
Volues redueed fo I fiffh
386.279 661,114 479.366
OFEI,I flIITEREST:
8?r1.594 466.43?
94S,ZO3
189,040
?O.609
a7086 35364 61e56 LaZZaa 95673 17491S 93367 14le1
I CH.LII68S FROII 06,/10/09
?,918 -L?2O77
Clo=ingSHORTS
{CH}!I6E I}I I}PBII IIITEREST:
ZS.St? 35.92O t1?.893
IncreosingSHORTS
3Z,ZS3'I
64,415 11.333 -32.L6? 20.9ZO
rtcducing longs
increosing Shortr
I When you exomine the ES eortro€tE it is the tleverca of the PIT contraetE so lrou
I nced to combine both rcports to get o sleqr pieture .
I Weekly Funds Funds Commercials CommercialsPublic Public
I Chanqes Lonos Shorts Lonos

SP s00s 25567 62920
ES(1/5m) 595 -26415 7L84
Shorts
464L7
23578
Lonqs
2684
-6432
Shorts
-L375
4L84
I Net s600
Net
-848 70t04
No
6999s -3748
Net
2809
Analysis Buvers basicchanqe Sellers

I
Thetotalopenintereston the 17frlune 2003combiningthe ESwiththe SPin
I termsof the biggercontractthe SPwasrepoftedas a gigantic987,820open
contracts.
Thismeansthereare493,910longsand493,910sholG.
I The Previous weekthe totalopeninterestregistered

we hadan increase
in at 901,606meaning
in the weekof 86,2L4contracts.Halfarebuyersandhalf
T aresellers.Theaddedvaluefor the weelqat the closeof business
June,for the contracts
on the 17h
on eachsideis $250x 1010x 43,t07or $10,884,5L7k
(11 Billion).Moreimpoftantly thoughis that the openinteresthasrisen10o/o
I in a week.
FromMay20h(totalOI was663,892)
the OI hasrisenby 323,928
or 49o/o.
I Thispaceof increase in OI is unsustainablein a risingmarket,as eventually
we haveto run out of buyers.Whenwe do andthe sellershavetheirwaythe
I marketwill fall underits ownweight.Therewill be no buyersleft to saveit!
Therearea few smartnon-reporters (Publicin the ES)takingprofitsandalso
I gettingintopositionfor a turn rightnow!
Thecracb are showingup in the dailypatternsrightnow,that is why I am

I currently
lookingfor shofttradingopportunities
allthe time.
I OpenInterest Section1: Chapter- 15

Total 5&P5OONET positions (5P&ES confrocts axprassedas 5P)
I
I
15m00
10m00
5m00
trlarch Lorr ->> - Nlgt

Nlsn-Qsrnrnsysi2l
I
t
0 -commercial Net
Net
-5IlB00
-10m00 Conneriialc
Report Dcte: l7fhJrnc 2OO3

I
I
I
The basicNETpositionremainsmuch the samethis week but if you look at
the patternat the Marchlow you will get the idea of what to expect.On the t
declineinto the Marchlow the NET publicwere liquidatinglongs,the NET
commercials
decline.
were coveringshortswhile the NETFundswere sellinginto the I
I
S&F5BB
High
Lou
t|3s. AB
?88.58
I
Rge 146.58
I
OpenInterest rising in o folling mqrket
I
I
I
B3ATL4 B3ALZg ASAZtr a3EZZ6 B3A3LZ
I
Eventhough the NETpositionsof the PUBLICand the COMMERCIALS were
rapidlychanginggoing into the low the overallOI was still risingwith the I
trend.
I
Open Interest 84 Sectionl: Chapter- 15
I
I Afterthe Marchlow andthe sharprallythe shortswerecorneredandhadto

cover.They staftedto buckle4 daysbeforethe high forcingpriceshigher
t (theyhadto buyto get out remember)
andthe closureof the Marchcontract
andevenwiththe dropfromthe high
theycontinuedto cover.
I S&PsBA
t High
Lou
Hge
985.A0
7S8.5S
116.54
Folling Opan Inierasi on a Rising Morket
I
I <--Thisl day drop wqsq euhuloiive
resuh from AtorchControetexpiry
ondolsoShort covering.
I
I
I Several I havemadeoverthe yearsarethese:-
observations
I 1. Whenthe net Commercial

the non-repofting
andFundpositions
positions
publicare not as organised
arein agreement against
therecouldbe violentmovesahead.The
or as professional of the
as the operations
I Fundsor the Commercials
theCommercials willwin.
andin any showof forcethe Fundsandlor
2. Whenthe Fundsarein oppositenet positions to the Commercialsthere

I is a battleof systemsin place.Thesewill be resolvedin time but it
paysto monitorthe changes as pricesmovealong.The reasonis that
if onesideattacksor capitulatesthe trendcan reverseor accelerate at
I a rapidpace.
3. The publicor non-repofting positionsare likelyto end up losingthe
battlebetweenthe Fundsand/orCommercials due to the abilityof
I thesegroupsto fundtheirpositions
4. In agricultural
commodity contracts
almostindefinitely.
the Commercials aremorelikelyto
I controlthe marketovertime.The reasonis that they controlthe carry
overstocK.
5. With eachcommoditycomplexyou needto studythe fundamentals
I and comeup with a sensibleview as to whichsideis actingwithin
reason.
I Onceyou havea view of what seemslogical,especially basisthe current

trend,it will be simpleenoughto comeup with an analysisof whetherthe
marketwillfavouran up or downdirection.
I
I OpenInterest 85 Section1: Chapter- 15
7

If you lookat the currentpositionof the S&P,right now you wouldhaveto
concludethat the markethasalreadyturneddownor will do so sometime
I
immediately in the future.The 2 daytrendhasreversed
asgoodasdown.
andthe 3 daylooks
I
0charts CSU
u15.AA
ESA3U-1A I
1S1Z.0g
1009.04 I
1886.BA
1Bm.AB
1098.aB
I
s9?.9A
gg4.0a I
sg1.86
988_AA
985.88
I
B6,/11 g6/14 66/16 06/18 B6/tg ffi/a t
Youneedto understand that as soonasonesidedecidesto takeprofitsor cut I
existinglosingpositions
on masstheywill propelthe pricein the direction
of a
buyingor sellingimbalance.
I
OpenInterestanalysisis a commonsenseanalysisprocedure that you need
to go throughat leastoncea week.Maybethe resultof whathappens in this
currentS&Psituationwill highlightit. Wewill see,but whenyou combine the
t
1.618geometry on the 17frJunesee51:C14:P77 we havea compelling case
degreehighto be in place.
for an intermediate I
Wealsohavea situationwherethe marketadvancehasrun for 3 monthson
speculationof an economic recovery,but thereis still no realevidence that
the recentbullrallyisjustifiedto the eltent that it hastravelledrecently.
t
Theonlythingyoucouldsayis that we mayhaveturnedthe economic corner
andthingswill improveovertime. OI saysthe majorityof professionals
t
don't
believewe arein a newbullmarketyet - theythinkwe arein a hugetrading
rangemarketandwe areapproaching the topsideof it rightnow. I
Whichever the case,if we take it one day at a time and useall the toolsof
to us,the marketwill tell us what it is goingto do next.At
analysisavailable
t
worstwe couldbewrongfor 2 days.
If we stickto onesimplerule- BUYwhenyou seethe marketgoingup and

I
SELLwhenyouseeit goingdown- youcan'tgo wrong.
I
Openlnterest Section1: Chapter- 15
I
I SectiOn lt cnapter16:
I News Events I Repoft Days I Economic

I Fundamentals:
I FUNDAMENTAL
VALUATIONS:
I Beforeyou can understand

youhaveto understand
the effectthe NEWShas on the marketplayers
the underlyingreasons
why.Thefollowingis a simple
but morethanenoughto giveyoua clearpicture.
explanation,
I Many brokeragehouses,investmentfunds, both corporateand private,
employa valuation to investing
approach in the stockmarket.
I 1. In normaltimesinvestment housesexpectgrowthin stocksbecause
the companies comprising the INDEXare profitableentities.If they
I weren't they wouldn't be in the top 500 stockswhen you are
evaluating the S&P500.
I 2. Profitable
increase
companies
earnings.
are expectedto continuegrowingand thereby
Theseincreasing
basedon the existingcapitalization
earnings
(value
wouldincrease valuations
of all shareslistedon the
I exchange) andthe rateat whichtheypaydividends.
3. Analystsfrom all levelsof the investmentadvisoryfraternityissue
EARNINGS ESTIMATES for the quarterandthe yearandrateindividual
t stocKasa BUY HOLD- SELLin simpleterms,
4. The individual
-
listedcompanies alsoreporttheirown estimates to the
streetfor eachquafterandyear.
I The FUNDAMENTAL reasonstockpricesriseor fall is primarif basedon the
investorperceptionof future companyprofitsand dividendsand how the
I returncomparesto the current10yearBONDrateof return.
I ECONOMIC
CYCLES:
Economic cyclesare knownto be eitherstableor they riseinto boomsand

I declineintobusts.
Consumersentiment,employmentrates,capacityutilization(capabilityto
I meetdemand),inventories, interestrates,consumer
of the $, exportandimpoftimbalances
value
creditavailability,
area generalwaywe canunderstand
rycleis on a positiveor negative
if the economic note.
I The consequencesof the economiccyclewill havean impacton earningsin
variousmarketsectorsas product
prices
eitherriseor fall basedon demand.
I
I NewsEvents,EconomicReports 87 Sectionl: Chapter- 16
COMPANYDIVIDENDS: I
The investormay or may not knowwhat motivatesthe profitability
companyhe investsin but he doesunderstand
dividends is in a position
if the company
the return
to keeppayingthem.
he will
of the
get in I
If the dividendratefallsbelowexpectations
-
an investoris likelyto consider I
movinghis investmentelsewhere this is knownas sectorrotationin the
investment world.
I
SPECULATION: t
Speculationin the stockmarketis basedon the assessments of massesof
in regardsto perceptions
investor's on the fateof futureearnings. I
Therecanalsobe the perception
poorfutures.Theseperceptions
by investorsthat somestockswill havehuge
potentialin the long-term;or a perceptionthat somecompanies will have
arethe causefor buyingandsellingstocks.
I
Not all investorsare that astuteso they will buy and holdevenwhenthe I
investment sours.Butprofessionalinvestment houseswill"manage"portfolios
in a waywherethey movefrom sectorto sectorastheythinktheycanspread
theirriskandtry andget betterreturnsthanthe overallindexwouldprovide. t
Strangely
veryfew investment
housesbeatthe overallreturnof the INDH(. I
Nevefthelesstheseare the conceptsas to why the marketmovesUPand
DOWN.The marketmoveson accountof the actualpafticipation
playersandtheiroverallperceptions
of value.
of the I
Psychologicallythe marketmovesas a wholebasedon why investorsare
buyingor sellingstocks- a simplenewsreleasecansetthe ballrolling.
I
Moneymovesin andout of the marketfromstocksto Bondsandto cash.At I
ceftaintimesBondswill becomehot andthe sharemarketwill becomeweak
becausethe Bond marketoffers better returnsat the time. Other times
moneywill flow backwardsandforwardsfrom the stockmarketto cashand I
backagainpoweredbythe actionsof shorttermtraders.
I
LONG-TERM
INVESTORS:
Long-terminvestorssuchasWarrenBuffethavea policyof buyinginto stocks

I
of companies
and good
buycompanies
that havea goodcashflow,a goodprodu@a solidassetbase
management. Playerslike Buffetseldombecomespeculative
with unknownhistories.If the companies
and
stockpricebecomes
I
overvaluedin histermshesellsup andmoveselsewhere. Hispolicyworks!
I
News Events,EconomicReports
I
I Tradingto WIN Course- One day at a time [c] Bryce Gitmore2004
I A simpleinterviewwith a personlike WarrenBuffetcouldinciteinvestor

on whathehassaid!
buyingor sellingdepending
I
THINGSTHATCOULDMOVETHEMARKET:
I 1 . Government Economic IndicatorReleases.
2. Largecompanies earnings reportingreleases.
t 3 . Changesin thevalue
4. FEDManipulation
of the US$.
of interestrates.
5 . Newsof a naturethatcouldaffectfuturecompanyearnings.
I It paysto watchthe NEWS!Evenfor the short-terminfluencesomeof these
I eventsmayhaveon the market.
I THENEWS:
The newsprovidesyou a meansof evaluatinghow the next eventbeing
I repoftedmightlikelyaffectthe dailymarket.
Mosttimesif thereis any significant reportdue it will be preceded by some

I asto its likelyeffecton the stockmarket.Thefuturesmarketmay
speculation
havealreadydiscounted or inbuiltinto its pricethe likelyeffectof the repoft
I on the marketbeforeits release.
willthenadjustto the news.
Oncethe newsis in the marketthe futures
I Weekof June23 - June27
I Jun24 10:00Consumer
Confidence
s5.0 85.0 83.8
Jun24 14:15FOMCMeeting Tucsdoy- no reports Mondoy

I (1st ofZ-day)
Jun25 BE:30Durable Orders M a y 1.0% 1.0% -2.3%
5.80M 5.84M
t
Jun25 10:00Existing Home M a y 5.90M
Sales
Jun25 10:00NewHome May 1000K 1830K 1028K
Sales
I Jun25 14:15FOMCMeeting
Bnd of2-day)
Jun26 08:30GDP-Final a1 1.9% 1.9% 1.9%
I Jun2E DB:30Chain
Deflator-Final
G1
Jun26 08:30lnitialClaims 86f21

2.5n/o
425K
2.5o/o 2.5To
NA 42'IK
I Jun26 10:00Help-Wanted May

lndex
Jun26 14:80FOMCMinutes
35 35
t
I News Events,EconomicReports 89 Section1: Chapter- 16
Tradingto WIN Course- One day at atime [c] Bryce Gilmore2004
I
Nearlyeveryday there is somereportor anotherthat hits the marketby
surpriseor confirmsthe latestpricedirection.Mostlytheyareeitherreleased
I
at 8:30amor 10:00am NewYorktime.10:00am
anytradingday.Aboveis an example
is a criticaltimeto watchon
of the reportsto be releasedthisweek. I
this manualyouwill seewhereI havemadereferences
Throughout
newsreleases
or eventsthat precipitated
to certain
heavybuyingor sellingon the day. t
Generallythe impactof individualnewsreleases on the marketwill be shoft
lived,but it can be enoughto causelargetradableintra-dayswingsin the
I
futuresmarket.It is not unusualfor the futuresmarketsto leadthe cash
index up or down outsideof the exchangetraded hours basedon a
perception that physical certainsectorswhenthe
traderswill buyor liquidate
I
dailysession
BLOOMBERG:
opens.
I
I watchBloomberg eachday whilstin my officeas they coverall the NEWS I
releasesof importance.
They conductinteruiewswith leadingauthorities,
CEO's,Economists,MarketStrategists,and InvestmentAdvisors.All these
thingscreatea moodaroundthe dailymarket. I
Reading impoftantfor a daytrader.
the moodaroundthe marketis extremely t
OftenBloomberg will interviewtradersfromthe floorof the S&Ppit andask
them what they expectof the marketduringthe day. You can see by what
they say what is on their mindsthat day.You haveto alsoremember that
I
guys just
someof these aretrading100'sof millionsof dollars on an opinion
andon somesmalltechnicalknowledge. Thebigtradersarealwaysawareof
the oversoldand overboughtaspectsof the market- they knowwherethe
I
buyingor sellingpressureis beinggenerated. I haveseenbig tradinghouse
trader'sjust standon a priceandtakeon all comersat timeswhentheythink I
the markettrend shouldreverse.Oncethey exhaustall the buyersor the
seller'sordersin the market,the pricewill movein their direction.Whenit
getsto wheretheythinkit shouldgo theycoveror liquidate the play. t
I said at the beginningof this manualthat tradingis a thinkingman's
occupation.Wellit is reallya highstakespokergamewith a difference. In
I
this pokergameyougetto readthe cardsbeingdealtto you beforeyou place
your bets.You can chooseto bet or check- if everythingis in your favour
you bet, otherwiseyou stayout. Youshouldjust wait untilyou seea hand
I
that lookslike4 Acesandthentakethe bet.
Knowing the mostprobable directionof the marketpricerequires

workto stay
I
on top of it. Knowingwhat the marketpriceis likelyto do in the next 30
minutesis a licenseto printmoney.It all beginswith knowingthe strengthor I
weakness of the playerson the day.Forthis you needto be informed,you
alsoneedto knowthe currentmarkettechnical suppoftandresistance levels.
I
News Events,EconomicReports Section1: Chapter- 16
I
I Tradingto WIN Course* One day at a time [c] BryceGilmore2004
I Youneedto understand
thingstogetherit is just
the habitsof the players.Whenyou haveall these
a matterof selecting to stad
the rightoppoftunity
t pickingthe moneytree.
Don'ttradeunlessyou areinformedis the bestadviceI cangiveyou.WhenI

I tradeI amTradingto WIN - notfor anyotherreason.
I Monday23'dJune 2003:
Todaywe havejust passedthroughthe Solstice, this cannormallybe a date

I the GANNdevoteeswouldexpectto see a changein trend possible. What
theyexpectout of this oneI couldn'treallyguess.Butit is a dateeachyear
I to watchin all markets.
Mylastchafton page86 wasa goodindication

of whatto expecttoday.
I You see if you had beenstudyingthe openinterestand the 3-dayswing
youwouldknowthata correction
levelsandthe Overbought oscillators to this
I uptrendwas OVERDUE.
downtrend wasin the
And it was showingall the signs that a new
process.
I Whythe hellwouldyou buy it wheneverythingpointsto easymoneyon a

decline? whenthe marketis tellingyouit wasgoingdown.
Especially
I Whenyou guysseethe reasonswhy psychology

youwill havemadeit.
withthetechnical
work in
andfundamentals
I it openedon its highandproceeded

Monday to fallover.EasyMoney!
I ficharts f,SU
1015. BB
ESB3U-15
I 1811. BB
lEB?, BB
1A83.gg
I 9SS.BB
995.0S
<-Opcn
I
s111.Bg <- Siillcrs
s8?. BS
983. BB
I g?9. BB
s?5.68 TRENIDCHl4Fl6E15 516NALLEb

'
BE/1?/ZBff,3
I flein UUrU
I wasa sellerfromthe openandtook8 pointsout immediately.ThenI hada

I couplemorescalps for a 1^2 andanother1^2 anda ^4 beforeI quit.
I News Events,EconomicReports Section1: Chapter- 16

I
Tuesday24thJune 2003: I
Insidedayrange9.5 points.
I
All I want to point out abouttoday is the effect the repoft releasedat
10:00amhad on the players.The marketopenthe day with a rally.The
previouslargestcorrectionsincelastweeK highhadbeen11.5pointsup.At I
10:00amwhen the reportwas releasedthe marketwas up 11.25from
yesterdays low (on a 1:1 reversalsignal).The repoftwas not as goodas
expectedand it addedcredenceto the technicalsell that the professional
I
traderswerewaitingfor.
I
Qcharts ISU
s:tl.58
9S0.ffi
ESO3U-5
: . ConsumerConfidcnce Report roleosed
, : at lO:OOon - com€sin qi 83.5 under the
I
sB8. s8
s87. gg
985.5D
: : tol'€cost trgur€.
,1O:O0orn I
984. S0
982.56
I
981. BB
9?S.sB
s?8.00
I
976.59
gE/24/ffi93
Lcrus E6E/23 1g:Bg 5&4.80 985.?5 S84.SB 984.?5
llll
ffi/24
I
The major announcementof the week is the FOMCInterest Rate
I
announcement at 14:15pmWednesday.
-
is thattheywill dropthe
Speculation
rateeither0.25or 0.5olo the rateis currentlyL.25o/o.
guess
Howthiswill affectthe I
marketis anyone's but the commentsfromChairman Greenspan about
the stateof the economyaresureto havean effectonewayor the other.
I
Thereis speculation that the FEDRATEwill eventuallygo downto ZERO
beforethisrycleof ratecutsis overanddonewith but that seemsunlikelyto
me.
I
The highestFEDratein this cyclewas 6.50/o
havebeen progressively
in May2000.Sincethenthey
cuttingit in an attemptto fire up the economy.
t
Unemployment hasrisenfrom4o/oto 6% in the past2 yearsas businesses
work on cuttingcosts. The problemwith theserate cuts is that they have
createda debtbubbleas refinancing of mortgageshasbeenrife in the recent
I
2 yearsand they havealsocreateda RealEstatebubbleneverseenbefore.
Thecommentwasmadeto me todaythat a onebathroomhousein SanLuis I
Obispothatwasworth$150k8 yearsagois nowsellingfor $500k.
I
NewsEvents,EconomicReports Section1: Chapter- 16
I
The FEDis alsopumpingmoneyintothe economyat an unprecedented rate

whichis alsoweighing some30%
on the valueof the US$as it hasdeclined
in valueacrossa basketof G7currencies.
lffl atiOn chngu ir thecwffi prw indet

5.ft
$7 8S 89 90 91 92 9] 94 9t 96 97 90 99 00 0l Of
YtaFi
Scl*t; {Lst! d Lii4r tltriir*
Rate
Unemployment
toq6
a7 8A S9 90 91 92 t3 94 9E 96 97 98 * O0 01 0)
YE'IF:
SDulqi gqry,!d Lntn'Srti'iht
Mythoughtson the paththe FEDis takingto rampthe economy is similarto

whattheytriedin Japanandthat hasnotworked.Neveftheless the difference
betweenthe US and the Japanesementalityis completely different,so it
mightwork.Whether it doesor notis notgoingto botherme.
The beautyof this business futuresmarketsis that you

of tradingleveraged
canbuywhenpricesare goingup andsellwhenpricesaregoingdown.All
you needis an officeat homeand the communication tools.Basically my
business proof.I don'toweany moneyto the bank,everything
is recession I
haveI ownoutright,whichis a goodfeelingwhenyou realisethe stateof the
worldright now.I haverecentlydonea completerenovation on my house,
newkitchen,bathrooms etc.,I boughta newcar lastyearandI havea new
boatsoI amsetfor lifeno matterwhathappens.
Youcando the sameif you learnto tradethe way I am teachingyou.Keep

your eyesandearsopenand followthe dailytrend.It is not difficultit just
takestime anddedication. So manypeoplefail because theywill not do the
dailyworkor theywill not takethe timeto get a holisticviewof the markets
theytrade.
NewsEvents,EconomicReports Section1: Chapter- 16

Tradingto WIN Cowse- Oneday at a time [c] Bryce Gilmore2004
I
Wednesday25s June 2003: I
Thebigday! FOMC
announcement
wasdueat 14:15pm
ET.
Wellit staftedoff witha rallyintothe 38.2of the rangedownfromlastweeks

I
high.This rally terminatedon a 1:1 up move. The rally hit the rocksat
11:00am andcouldn't moveabovethe 990^2high. I
Qcharts CSU
ffi15.96
I
1911. BB
1887. BB High iodoy terminolsd on
thc 38.2 relroccnncnl ond
I
1803.00
sss.B0
gss.06
o 1:1equal wovesupl
I
991.88
987.08
The high iodoy bcfore ihe
I
983. AE
9?S. E0
s?5.08
FEb /4N|NOU|{CEn\ENT
I
o6/?5r'zaaa
l'fa i n ffi/1;l 06/18
I
At first the marketshruggedoff the DurableGoodsOrdersreportearly
morningit wasa badfigureasit camein at -0.3oloon a consensus
of +to/o.
I
From11:00amuntil about25 minutesbeforethe FEDannouncement
markethoveredaroundon extremelylow volume,I had soldit a coupleof
the I
timesbut had beenstoppedout, then I caughtthe first thrustdownbefore
the repoft.Priorto thatI hadevenboughtit intothe 1:1for a quickscalp. I
Themarketgyratedon the reportannouncement
squareup theirpositions
but that is normalas people
andre-settheirobjectives. I
In the first 5 minutesfromthe reportreleasethe markethaddived5 points
and then recovered settingup anothersell.This was a ripperthe market
I
divednearly9 pointsin a hurry I wason that for 7.25points.
Afterwardsthe marketreturnedto the LINEIN THESANDfromyesterdayand

I
this morningandsoldoff. I missedall this because
I hadbeenawakefor 20
hoursandwastradingon adrenaline
to bed.
but it wasrunninglow andI hadto go I
Neveftheless it wasa very profitableday. I made7 trades- the first 4 were
not that flashbut the worsepositionI got into was beingdowna net 1.75
I
pointson the first two trades.
I
News Events,EconomicReports Section1: Chapter- 16
I
I to +2.5 net on the next2 trades.ThenI lost1.5on a sellin the

I recovered
no volumezone. Managedto catch3.5 out of the sell off prior to-the
I announcement andthentook7.25out of the postannouncement selloff.
If I hadhavebeenfreshI daresayI wouldhavesoldthe 986testat the line

I in the sandbecauseI wasconvinced I
it wasa sell basedon the evidence.
toldall my guysin theTTWroompriorto it in anycase.
I Qcharts ESU
SII3.BB FO,i\CReportrelaosed
I
I gg1. B0
s8g. o6
No Voluma
Zone
ITI
$
I
FedRoredropsO.25?'l
ro 1?l'
<-- Honging /lllonDoji
ttu
t
s8?.00
<- Atlorket rolls
s85.B0
tops from doy bcfora Ovar
s83.BB
I 981.66
s?!t.sB More Weokness
s??.a0
t
Todoys RAftlGE
s?5.aB
A doy to remembar but now rotes qre ot l?i thc
s?3.68
I g6,/25/zon3
Lous BiE{ZS 14:15 98?.54 988.25 s83.25 S?.25
t Whenthe fat ladysingsyouhaveto bethereto makea move.
t manualbecause
in this chapteris as impoftantas any otherchapterin this
The information
it mustimpresson youthe impoftance of the news.
I I couldn'ttradewithoutmy newsservicesbecauseI wouldfeel like a blind

manwithouta stick.
I WhenI combinemy tight stoplosspolicywith the technicalknowledge

wheretradersplacetheirstopsandthe valueof the newsreleases
of
I am on
top of it mostof the time.
I Thereis absolutelyno needto forecastwhat the marketwill do usingmy
tradingapproach.
I All it is necessaryto knoware the levelswherethe professional traderswill
act.Theselevelskeepchanging all the timeas the marketmoves along.The
I signsareclearlyobviousmostof the timeas eitherretracement
1:1 geometryin the wavesof similardegree.Asyou approach
levelsor asa
the logicalbuy
I or sell levelsthe newswill helpyou or the marketwill be demonstrating
indications of intra-dayoverbought
is go withthe flow.
All you haveto do
or oversoldconditions.
I
I News Events,EconomicReports 95 Section1: Chapter- 16
I
FailSafeTradeEntryTechniques:
I
I
ENTRYTECHNIQUES:
Mybestentrytechniques
to entera tradeare:
I
1.
2.
Buya breakout of priorresistance.
of priorsupport.
Sella breakout
I
3.
4.
Sellintostrengthwhena bearcorrection
Buyintoweakness
looksexhausted.
whena bullcorrection
looksexhausted. I
In all casesa tight stoplosspolicymustbe implemented.
wrongaboutthe levelyou selected
Youwill be rightor
in no timeat all.Thereis no needto risk I
morethan6 ticksif you canexecuteyourorderwithin3 ticK of the decision
pointyouselected to takethe trade.
I
EXITTECHNIQUES: I
1.
2.
3.
Exiton a pre-setstoplossif the tradedoesnot workimmediately.
Exiton a breakeven stopif the positioninitiallygoesintoprofit.
ExitwhenI feelthe marketmomentum hassloweddown.
t
4. Or exit on a trailingstop I movealongas the trade becomesmore
profitable. I
Beforeyou get into a tradeyou haveto havean escapeplan,that is the
reasonyou shouldonly trade liquidmarkets.Marketswithoutliquiditycan I
trapyou.Thatis why I nevertradeoptionsthesedays.
t
PROBABILMESON EACHTMDE ENTRYBEINGSUCCESSFUL: I
Whetheryou givethe marketroomor placea closestoplossthe probabilities
of successare still onlyaround40160.Thereare occasions
lookbetterbecause
wherethe odds I
of the fundamentals trend.
or the market'sestablished
Theseextraspecialoccasions cometo be recognised

by experience
andfeel I
for whatthe marketis doing.
When you combinechaft formations(patternanalysis)with fundamental

I
youareon yourwayto beinga professional
obseruations trader.
I
TradeEntry Techniques 96 Section1: Chapter-17
I
I Entera breakoutof current resistanceor suppoft:

I The 1* entrytechniquea noviceor beginning tradermustlearnis to find a
placein the marketflow wherehe can controlRISK.The professionals are
awarethat thesetypesof entrieshavethe greatestchanceof success.
I The breakoutentrymethodis the simplestof all disciplined
entrymethodsto
learnand practice.This is wherea marketbreaK out of a knowntrading
I rangeintoa newzoneof activity.
I TR{DE WITH THE TRENDON BREAKS

I
I
T
I BUY EREAKOUTS
UsE CI.OsEINITIAL STOPSANb i{OlJE IT,I fr TRAILIN€ PRCIFITSTOP
I
The practicaltheoryis that marketsfind levelsof supportor resistance
where
I tradersbuyandselloff whenthingsarein equilibrium.
identified
on a l-minute,S-minute,3O-minute,
Theselevelsareeasily
60-minute
anddailychart.
I Theunderlying benefitof theselevelsis that"stops"buildup in the marketon

the othersideof theselevels.So that whenthe marketpenetrates them,if
I they are there in abundance, the marketflow will facilitatetrade and the
marketc;tnmoveintonewlevelsawayfromthe existingtradingrange.
I TR,ADTN6
BREAKOUTS
AND R,ETEsTs
OF BR.EAKOUT5
I
t ?- Retest
I StoplossPlocementr
I
TradeEntryTechniques
I Section1: Chapter- 17
Tradingto WIN Course- One day at a time [c] BryceGilnore 2004 I
If the marketadvances cleanlythroughthe breakoutpointit couldpossibly
suffera re-thinkthrougha lossof propulsion andfadeitselfbackto the break
I
level.Thisis calleda re-testof the breakout
or sellwith limitedrisk.
andis anotheropportunityto buy
t
If there is no abundanceof "stops"then the marketwill makea '.false
breakouf'and retreatbackinto the priortradingrange.In whichcaseyou
don'twantto holdthe breakoutpositionyou mayhavetaken.
I
Prettysimplestuff but extremelyeffectiveas a tradingtool. I
If you get a falsebreakoutandget stoppedout thenwatchcarefullybecause
the lowersupportwill bethe priorbreakoutpoint. I
FALSEBR.EAKOUTS
t
I
LIS = Line in Sand
StoplossPlocemeni I
Tl Prtce com€sbock through fhc line in the sord
I
ord overbolorces prior corrections before the
BUY Breokout VOU SELL
I
The breakoutentry methodworksmorereliablywhenyou are tradingwith I
the dominanttrend,i.e., the dailytrend.But intra-dayon a S-minutechaft
youwillfindit an effectiveentrytooleitherwiththe trendor countertrend.
I
If you keepyour stopsas tight as possible,
like no morethan 3 ticksinside
the breakoutsignalyou cant losemuchandall you havedoneis payfor the
oppoftunity.
I
Breakout pointsarethe primarybasisof my tradingplan.what I am looking
for all the timeis a placewherethe trendwill continueto makeadvances
and
I
a safeplaceto enterwhereI cancontrolthe risk.
If you can masterthis methodof tradingyou can-makea living in the

T
speculative marketswithoutdoinganythingelse.All you haveto be awareof
is the forcesapplicable
on the day. I
The bestpatternset up for breakout entriesis in a runningmarketin the
direction
of the maintrend.If the setup is thereyoutakethe trade, I
TradeEntry Techniques
I
98 Section1: Chapter-17
I
I Myideaof tradingis to tradewiththe dailytrendon a S-minute

be countertrendthat day but the dailymovement
chaft,it could
off the openingpricewill
I tell you in anycase.Position
trenddailyindicators.
tradersshouldonlytradewiththe medium-term
I versusDailychaftbreakouts:
Daytradingsessionbreakouts
I it is onlypossible
Normally to tradewithclosestopsduringthe daysession.
t Breakoutson a daily chart can be violenteventsor like climbingout of

quicKand.Bythat I meanthe marketwill comebackandhit yourstopbefore
proceeding you planned.
in the direction Thisis the reasonwhyanyoneother
I thana daytraderwouldusesuchclosestopsas I recommend. Mostbelieve
thatyou needto givethe marketroom.I dont I believethat,youarerightor
wrongimmediately andthenyou re-groupandhaveanothergo.
I To avoid all the disappointments encounteredby those peopletrading
breakoutsystemson DAILYCHARTS one needsto managethe tradeentryby
I workingwith a 5 and60 minutechart.All the t'armchairHarry's"losemoney
because theycan'tmanagetheirtradescorrectly. Mostsystemsrequirethem
to give the market "lots of room". I have seen so many instancesof
I automated systemstakinga position,becoming
endingin a loss.If you
profitable
havealreadyexperienced this
andthenultimately
phenomenon you had
I betterreadon andlearnhowto avoidthis.
Wedon'twantto givethe marketanyroom,we wantto be rightimmediately

I or we wantto be out! Sowe mustfind tradeentrypointsthat relateto the
currentintra-daymoodof the market,if we get a runnerwe can hold it.
tradersshouldlearnto finessetheirentrypointsusingthe S-minute
Position
I patternsthiswayyoucansaveyourselfa lot of pain.
t 5-minute
chaft:
TheS-minute all of the time.Thedailychaft
chartcreatesentryoppoftunities
doessoveryinfrequently.
I
I 60-minute chart:
The60-minute of all as it shows
chartdefinesthe breakoutlevelsthe clearest
the dailytrendsandthe levelsthe tradersarementallytunedinto.
I
TheDailyChart:
I Provides the parameters
for changeof mediumtermtrendmostof the time.
It is not wofth muchto a day traderotherthanto tell him whatthe restof
theworldmaybethinking.
I
I TradeEntry Techniques Section1: Chapter- 17
Tradingto WIN Course- One day at a time [c] BryceGilrnore2004
I
The double or triple highs or lows breakouts: I
There'san old sayingin this business that any old top or bottomcannotbe
testedmorethan4 timesif it is goingto provideresistance or support.Once t
it is on its 4u'test then the chancesit will breaknexttime are way in the
favourof a break.If it doesnot breakandthenconfirmsa directional
thenthe reversewayis the wayto go.
change I
Youwon'tget to manyof theseon a dailychartbut theyoccurtimeandtime
chaftandoffergreatopportunity
againon a S-minute to profit.
t
I
I
I
BREAKOUTTR.AbES
Formotionsyou v,rillseeon occcsions

T
I
If the trend before the congestion is clear then the BREAKOUT
shouldsucceed, I
You couldsee a seriesof tops or bottomsthat were formedover a two or
three day period.Theseare the best breakoutoppoftunityyou will get
because the markethas giveneveryonea chanceto movetheir stopsinto
I
placeaboveor belowwherethe breakout wouldoccur.
I
Whenthe breakoutcomesall the peoplearoundthe wrongway"run for the
hillssoto speak".
I
Don'twait for a re-testof the breakoutin circumstances
like theseabove
becauseit will nevercome.The trend has beenconfirmedon the breakout
andeverysmarttraderwill knowit.
I
Theseareopportunities
will "load
sometradersjust wait for andwhentheycomethey
the boat".Thatis theywill tradehugepositions
andthe imbalance
I
of ordersgoingwith the trendareso greattheywill eat up any resistance
fastyouwon'thavetimeto blink.
so
I
Youshouldthinkaboutyourtradingplanin situations
giveyoua chance
likethesebecause
to doubleor triplethe sizeyou normally
they
tradeandgo for a I
killing.
I
TradeEntry Techniques 100 Section1: Chapter- 17
t
I Selling into Strength or Buying into weakness!
t Marketstrengthis an upwardmovement;Marketweaknessis a downward

movement.So it followsthat STRENGTH in a bear trend is a correction,
WEAKNESS in a bulltrendis a bullmarketcorrection.
I
I
T
I SELLFOINTS
I
t BEARTRENb
I
You must always favour the direction of the prior larger degree
I trcnd.
Whenyou seeformations unfoldinglikethesethe marketis tryinglikehellto

t go up in a beartrend or go down in a bull trend. It helpsif the line of
resistance
or supportis locatedon a knownretracement levelbecauseit gives
youthe chanceto placeyourstoploss just aboveor belowthat knownlevel.
I Thereasonis that at timesliketheseyou are likelyto get a FAISEBREAK just
aboveor belowthe congestion beforethe reversalactuallystartsto takehold.
I A falsebreakin circumstances liketheseis what is knownas a failedsignal
I anda failedsignalis the strongest
Onceyou seea confirmation

signalyouwilleverget.
of a falsebreakyou can instantlydoubleyour

t positionif you wish.The reasonis that as soonas the localsseeit theywill
just bombardthe marketwith ordersandaccelerate
is a no brainertrade.
the reversal,basically
it
I you needto seethe blackcrowsif sellingor the whitedovesif

Justremember
youarebuying.
I Marketpatternsare a measureof the psychological forcesat work in the
market.Theyshowthe thoughtsof the buyersor sellersin the market.When
I onesideis up againstthe wallthe superior
sidewillstickit to them.
I Youhaveto learnto thinklikea traderif youwantto becomeone.
TradeEntry Techniques
I l0l Sectionl: Chapter-17
I don'twantto makethis sectionovercomplicated
find levelsthat haveeitherbeenresistance
but the generalideais to
or suppoftbeforeandusethemto
I
initiatetradesoff with limitedrisk.
The pointis that thereare othersmafttraderswho will be lookingat doing

I
the samethingandas youall movetogetherthe chances
the marketby your
accelerate joint actions.
areyouwillturnor
I
UNDERSTANDING OR WEAKNESS:
GENEMLTRENDSTRENGTH I
TheDepthof the marketcorrections.
It is all a matterof patternbeforeyou determineto buyor sellthe strengthor

I
weakness havingregardto yourperception of the majortrend.
I
I
I
I
t
If the currentcorrectionis only a reactionand leavessomespacebetween
the previousimpulselevelin the seriesit is morelikelythat the strengthor I
weakness at the timewill fail.
The marketcouldalso retraceall the way back to the baseof the prior I
correctionswing level and fail. t n r s r s also knownas retestingthe prior
breakout. t
In mostcasesthe failureto take out old supportwill halt the moveand a
of the priormajortrendwillfollow.
continuation I
Thediagramshowsonlythe bearcasebut if you reversethe patternsthe bull
casewouldapply. I
an all roundtraderyoumustlearnto identifywiththesepatterns.
To become
Thesepatternswill giveyouan opportunity

to makemoney!
I
Thesepatternsareyourfirst indication
that the currentstrengthor weakness I
is aboutto fail.Proofcomeslater.
I
TradeEntry Techniques 102 Section1: Chapter-17
I
t Tradingto WIN Course- One day at a time [c] BryceGihnore2004
I BEWAREOF PATTERNS
THAT HAVETHE POTENTIALTO SIGNALA
CHANGEOF TREND:
I If the currentcorrectionis overlappinga previousswinghighor low in the
seriesof the currenttrend; then the trend cannotbe definedas strong,it
t maybea consolidation
anythingfor granted.
or a reversalof trend.You must bewarenot to take
I
*lor*ct ftloves
I aborc sccondory
Swing low
I
I I
Scll Point
t on o foilurr
POTENTIALCHAN€Es OF TRENDPATTERNS
I
I I likereminding myselfof thissituationbecause the marketcouldbe changing
trendandyou haveconvinced yourselfbeyondanydoubtthat a continuation
I wifl follow,i.e.,the marketwillresume the priormajortrend.
Anytimeyou havethatfeelingbeware!
I Overthe yearsI haveexperienced trend reversals that seemedillogicalto
I me: whentakinginto accountthe localnewseventsand thosearoundme.
Butthe trenddidchangeandconfirmed itselflater.
I Thepatternof the markettradingrangeseachdaymonitorthe moneyflow in

the market,the marketis alwaysright(youcanarguethat oneall you like,I
don'tcarewhatyoucomeup with).
I Thethingis thatwhenyouget overlaps the tradersarenot
in wavestructures
scaredof the past.You mustaskyourselfthe reasonwhy?The only reason
I canbe that they havea newagendafor somereasonmaybeunbeknown
you.
to
I Themarketpatternis the firstsignof change.Staywiththe patternno matter

whatyourpersonal
feelingsare. Therewards willfollowasthe yearspassby.
I
TradeEntry Techniques Sectionl: Chapter- 17
I
Tradingto WIN Course- One day at a time [c] Bryce Gihnore2004 I
ACCUMU1ATION TOPS:
& DISTRIBUTION
BOTTOMS I
TOP & BOTTOfi
I
TATTERNg
ACCUi,TULATION
I
BOTTOllts DISTRIBUTION t
I
Thesesituationscome along on a regularbasisin the intra-daymarket
I
activity.
Accumulation is a resultof buyersquietlytakingon the sellersat a ceftain

t
leveluntilthe sellersgiveup andmorebuyerscomeontothe scene.
I
is wherethe sellersprogressively
Distribution sell into the buyerswho think
the market
over.
is goinghigher.Finallythe buyersdry up and the marketfalls
I
likethesetopsandbottomsgenerally
Patterns formon lowvolumedaysuntil
the marketbreaKout andstaftshittingallthe residentstops.
I
I
AN EXISTING
RE-ENTERING TREND:
I
The safestway to re-enteran existingtrend is to use the OVERBAI-ANCE
RULE: I
RE-ENITER.INoANI EXISTINS TRENID
If ths TREND is to continua the next

I
correciion will not exceedthe ornplitude
of this one I
Allow for a 1:1 Stoplossobove t:l I
t
-U
I
I
TradeEntry Techniques Section1: Chapter- 17
I
I That is oncean initialcorrectionhasformedandthe trenddirectionhasbeen

confirmedyou can usethe initialcorrection amplitudeas a triggerpointto
I enterfor a continuation.
If the correction
amplitude youare
is quitelargeit alsohelpsif the correction
I re-enteringon is a priceretracement to the existingimpulse.
Buton a S-minutechartin the ESE-Minithesetypesof entriescanbe made

I areas smallas 3 points.
whenthe corrections
Beforeyou do enter like this checkthe S-minuteStochasticbecausein a

t downtrendit shouldbe comingbackto Overbought.
becomingbackto Oversold.
In an uptrendit should
I
SO FAR:
t I haveshownyou somesimplewaysto selecttrades,I haveothersthat you
will find hardto believe,but they are basedon mathematical andI
concepts
I needto explainthemin full detailandthendemonstrate themto you.
what I haveshownyou in the first sectionof this tradingcourse

Neveftheless
I is morethanenoughto turnyouintoa professional trader.
All you needto do is developthe streetsenseto go with the methodologies,

I because if you can'tdo that you will usemy methodsat the wrongtimeand
youwill losemoney.I haveno controloveryourpersonal actions.
I Opportunity tradersoftentradecountertrendwhenthe situationdemands,
you haveto get backin stepwith the marketonce
yet to be supersuccessful
I thoseopportunities Onlya few talentedtradersrealizethis,
are exhausted.
mostotherskeeptradingcountertrend all the time and missthe runstoo
often.I havebeenguiltyof this manytimesbut I keeptellingmyselfto watch
I overcomingmy ownproblem.
the marketmoreclosely,I am continually
Whatyou mustrealizeis thatyou muststayflexibleto the slightest changein

I marketsentimentto trade my method. You cannot
view.If youcant do thisthenstickto the breakout
afford to have a fixed
formulait will beenough.
I thesetwo thingsyou mustunderstand.

Nevertheless
I 1. Trendingmovesseldommakecorrections to the maintrendthat last

longerthan1-3days.That'sa lot of barson a S-minutechart.
I 2. Correctionsseldommakea retraceof the prior primarymovement

that is greaterthan61.8o/oi
llorlndlly50o/o is the orderof the
or 38.2o/o
dayor 1:1withthe lastalternatewaveof priorsimilardegree.
t
I TradeEntry Techniques 105 Section1: Chapter-17
Trading to WIN Course- Oneday at a time [c] Bryce Gilmore2004 I
SeCtiOn 1l cnapter18: I
Daily RangePatterns:
I
Everyday is a newdayand it is possible
anythingcouldhappen.We should
staftthe day knowingwherethe significant
38.2,50 and61.8levelsare.We
I
shouldalsoknowthe levelsof any significant
levels.
1:1'sandthe significant
MOB
I
If the marketbreaK any of theselevelsand negatestheir impoftance
shouldimmediatelyupdateourchaftfor the onesthatchange.
we
I
OnethingI shouldalertyou to is the patternof volumeduringthe day. The
normalpatternof volumeduringthe day will be highestin the 1* hourand
t
the last hourof the day. Fromaroundmiddayuntil 1:30pmFf the volume
generallyslowsdownunlessthe marketis runninghardin one directionor
the other.Whenthe volumedropsthe marketis inclinedto trade in tight
I
ranges.
I
TYTICAL VOLUA'TE
FLOW DNILY
9:30-1O:3O
I
12:OO- Z:OOpm
OPEl.lPRINT
t
A VOLUME
sruKE
I
I
on c high or low in a low volume
pcriod could be levalsol 516l'.1
I
I
Whenthe volumeis lowyouwill occasionally
morepronounced on your chaft. Basically
took placeat that level.Determining
seeVOLUME SPIKESastheyare
they meana lot of transactions
whatthey meanis anotherthingas the
I
standardlineof thinkingis thatmarketsriseor fallon highvolume.
I
Nevefthelessin low volumeperiodsa VOLUME SPIKEcan meanthe exact
oppositeespeciallyif it coincides
with a knownreferencelevelon the day.
Couldbe manyreasonswhy but you needto work them out on the day.
t
Remember I havealwayssaidthisis a thinkingman'sbusiness.
I
Daily RangePatterns 106 Sectionl: Chapter-18
I
I Tradineto WIN Course- One dav at a time [c] Bryce Gilmore 2004
I Anotherthingto remember
TRADERS
aboutlowvolumeperiodsis that PROFESSIONAL
who make transactions in big quantitiessuch as 250 or more
I contractsat a time cannot executemore than 250 contractsin one

transaction
on the E-Miniat a time.Sothey havecomeup with schemes
try andkeepthe marketin the areatheywishto buyor sellat untilthey
to
get
I set.
Forinstance if theywerebuyersat a certainleveltheycanget someoneelse

I to placehugeresidentordersto sellat a slightlyhigherlevel.The average
traderif he is a buyerseesthe SIZEjust abovein the MARKET DEPTHand
figuresthe marketcannotget throughit so he holdshis buyorderback.The
I manipulators buy up everythingat the levelsbelowand whenthey are set
they havethe residentsell orderscancelledleavinga clear path for the
marketto go up.The reversecanapplyequallyat placeswheretheywantto
I establishsellpositions.
t Sowhenyou seemassive
it just
SIZEin the marketdepthandthenall of a sudden
youwill knowwhatis goingon.
disappears
I Thissoft of thinghasbeengoingon, on the pit floorforeveranda day.Guys

who hadthe reputationas the largesttraderin the pit
like LouisBorsellino
hassaidopenlythat somedayswhenhe wastryingto establish a positionin
I one directionhe wouldhaveanotherbrokerdo the buyingfor him whilehe
stoodon the flooreitherofferingor biddinglesserquantitiesin the opposite
direction.As soonas his positionwas set he wouldthen try and pushthe
t marketin that directionby unloadingthe positions
to holdit backwhilehe wasgettingset.
he hadpersonally bought
I Thereis nothingillegalaboutdoingthis.Wellnot unlessyouget caught.
is that therecouldbe a lot of arbitragegoingon

I Anotherthingto remember
betweenthe pit and the electronicat times. You can see from the
Commitment of Tradersrepoftsthat thereis so oftenan imbalance between
I the Pit contractandthe E-MiniElectronic.
Reportable positions
MostweeK the reporthas Large
for tradersin the E-Minithe oppositeway roundto the
PITfigures.Just remember theycando this because theirtransaction costs
t areso smallcompared withthe average trader.
Nowyoumightsayaftermetellingyouall thisthatthe marketis rigged!

I - I preferto think of it as normal
Callit riggedor call it normalbusiness
business practice.
I knowwhattheyarecapable of andas longasyoudo you
I canlearnto dealwith it.
Humannatureis nevergoingto change,if someone

I canfindan edgetheyare
goingto exploitit. Unlessyou knowall thesethingsbeforeyou put yourhard
earnedmoneyon the line you are only goingto be a lambstandingin a
I paddock waitingto betakento the slaughteryard.
I Daily RangePatterns t07
Tradingto WIN Course- One day at a time [c] BryceGilrnore2004 I
Price
Oate
fre
Open
9S:2
08122183
0930:00
1t)11 50
t
I
r-fth 1012-6
Low 1m9.75
Cbs 101025
Csr % {2
t Etrs -483
t2:@ - Z:OOpm vd 13ln
I
This doy ws a 6AP OUTSIDE REVERS/4L DAY ondcvan
t
rhoughth€ rnorkct wos down oll doy thc nrorkct wart q.rici
belweq 1?:@ qrd Z:OOpm- look ot thc eorly volurrc. I
t
I
Duringthe 12:00-2:00pm periodthe marketwent into the doldrumsand
formeda continuation pattern.Wheneveryonereturnedfromtheir
rectangle
lunchbreaktheysoldit downfufther.
I
t
OPENINg PR.INT
I
If the volumewere buyers
obsorbirEfhe scllers Thcy oll boiled out here -->>
I
24 POIl.lT RANFE this doy
Thc rnorket wos in o continuing downtrcnd

I
r!\uchcon be lcarnt if you sludy volrrrc I
I
t
Justin caseyou arewondering
whereI am goingwiththisyou will find out
whenI haveshownyou enoughdailyrangepatternsto allowyouto arriveat
I
the correctconclusions.
justobserve
Butfor the moment asI go.
thesimplethingsI am highlighting
I
I
Daily RangePatterns 108 Section1: Chapter- l8
I
I WhatI wantto teachyou is to observewhatthe marketis doingfromwhenit

opensuntil it closeswithouteventhinkingaboutwhat happened the day
I before.Sometimes the influences
fromwhat happened
youoffthe beatentrackasthe dayprogresses.
yesterday canthrow
I The morningsessionis usuallya carryoverfrom what the marketdid

yesterday
andhowit reactsto the morningnews.
I Asthe patternof the dayunfoldsit hasto negotiate

and mostlikelythe dailystrengthor weakness
period
the 12:00-2:00pm
will becomeobviousas the
marketheadsinto the afternoonsession.Well that is what I am always
I hopingfor but it doesnot alwayshappen.
I This wos o correclivc doy in o dournlrad

To tell you r{re truth f couldn'i moke hcad nor toil of this doy
I OpeningPrint
T 12:OO- Z:@pn
I Eoch tirne ii rollicd I fhor4ht ii would *ll oll ad kccp going doum
.__Scneogoin rcllics
ond ccr't go ou.
I
I Thisdaytherewas no positiveretracement levelat the low for the dayto go
off andthe marketwassideways intothe 12:00otlock zoneandthencame
I to lifefor someunknownreason.I thoughtit wasa candidate to collapse
it neverdid untilthe nextday.Thenextdayis shownon the chaftprevious
but
to
this.
I NowI will proposea situationto you regardingthe OPENING PRINT.It is
I commonknowledge
the time).
amongstprofessional tradersthat the OPENING PRINT
areais moreoftenthan not the highor low for the day (betterthan50o/o of
I Sohowdo we usethat information?

Wellyou couldjust jump in at the openingof the marketin the directionof
I the 3-daytrendandbuyor sellwitha S-pointstopon the positionlikea lot of
traderswill do. A betterway is to HOOKthe tradein the directionof the 3-
daytrend.That meansif it goescountertrendin the first few minutesyou
I join the tradeas it hooksbackthroughthe openingpricein the directionof
the 3-daytrend.Thisis a populartradeandoftenthe othertraderswill helpit
workfor you.
I
I Daily RangePatterns 109 Sectionl: Chapter-18
This was a very interestingday becausethe marketwas openingfrom a
holidayweekendandit wasjust belowthe highsof a two andonehalfmonth
I
tradingrange.The ISMIndexreportcamein at 10:00amslightlybetterthan
expected.Severalthingswere in the favourof a breakoutbecausethe DJIA
andthe NASDAQ Indiceshadalreadybeentradingin newgroundandleading
I
the overallmarket.
The Commitment of tradersreportfrom lastweekhadthe Commercials

I
and
the Fundsholdingan increasing NETSHORTpositionagainstthe prevailing
trend,they had basicallybeenincreasing shoftsall last week.So the day I
beganas it hadbeendoingnearlyeveryday lastweekby,selling downin the
first hourof tradingas theytookmoreshortsonboardandthen rallyingonce
they took the pressureoff. Now after today I think they will have to I
reappraise their strategy,w€ couldsee the marketbeginrallyingfrom the
openastheyunwindpositions. Theyhaven'thada veryhappy2 months. I
TODAy wqslhc &y we bloke out to the upsidc
of q two & o hqlf month range fr.om fhe trulle t7
high 1014^6
Ovcrbolonce tl : Stror€
t
ttng t rn BF.ok Alt
Bncoks norniag
I
Open t
t
I
I
Themarketwentontobreakthe oldJune17andJuly14,1014^6doubletop
at 12:19pm on a hugevolumespikeas an attemptwasmadeto holdit back. I
Evenwiththe 1:1 at 1016therewasno continuing sellingof any magnitude
andall the marketdid was movesideways as usualfor the restof the quiet
periodintothe 2:00pmzone.Thenat 2:00pmwe bouncedoff an exact50o/o I
retracement for the day. This was the sign that the marketwas backin
businessandyoucanseewhereit wentto duringthe afternoon. I
Theimportantthingsto remember abouttodayare:-
1. Howthe marketwassolddownafterthe openwhileit wasstill below
the 1014^6doubletop as hadbeenthe casemostof lastweek.
I
2. Howthe marketadvanced
3. Howthe marketregained
50o/oretracement
to an exact1:1at 1016on a volumespike.
the trendof the morningrallyaftermakinga
backto its hypothetical pointon the day.
balance
T
I
Daily RangePatterns 110 Sectionl: Chapter- 18
t
I Todaythe marketopenedwith a GAPfrom the closeof the day beforeand

soldoff intoa I-ARGER
DEGREE
50o/oRETMCEMENT.
I
1019.3q116l.B%l
I *\*,
I lx1's Keep
Overbolotcing
I HI6HER LOWS Prie

Dale
Tm
1010.3
09'|2m
15:35:00
I
Opa 1fi725
HSh 1tX85
1o,|725
qN 1017.75
Cs% -0.1
t Brys 12
I
Vol 6,065
I Thehighestvolume5 minutebarfor the dayoccurred

on the low barfor the
t day.
Oncethe GAPfrom the openinghad beenfilledthe marketsolddownuntil

I 12:30pm.A burstof sellingat the timewascleartyabsorbed
marketmovedsideways
by buyers.The
to upwardsuntil2:00pm andthenbrokebackabove
the consolidation
zone(Greenline).Thesignswereevidentfor the restof the
I day that the marketwas goingup as the lx1's kept comingout and the
marketwas makinghigherlowswith goodimpulsesin the up waves.There
wasno apparentsellingat the 38.2andit wasonlywhenit hit the 50o/o
level
I of the week'sdeclinethatthe profittakingcameintoplay.
The dailybar couldbe described

as a KeyReversal
I madewitha higherclosethanthe daybefore.
Dayas a new low was
I Thedeclinefromwherethe gapwasfilledretraced6 full pointsandbecomes

the benchmarkfor the nextdaystrading.By this I meanthat we shoutdnot
retracemorethan6 full pointswhilethisadvanceremainsstrong.
I Eachdayyou shouldtry andmakean objectivereviewof whattranspired on
the day. If you do this then you will get the idea of what I say about
I professionaltradershavinghabits.
Onceyou becomefamiliarwiththeirhabitsyouwill be ableto readwhatthey

I areup to mostof the time.It's as simpleas that- onceyou knowwhatthey
aredoingyoucanusethe knowledge to makemoneyfromit.
I
Daily RangePatterns nl Sectionl: Chapter- 18
I
Trading to WIN Course- One day at a time [c] Bryce Gilmore2004
I
The next day: I
This is the followingdoy ord bosicollyit is telling us thot
I
lhe onedoy rolly hosstalled in its trocks'
I
I
I
I
I
I
I had no ideawhat was comingtodaybut I did havea plan,I
Personally
it in S3:C32P34.
explained
I
Whenthe day startedthere was not enoughbuyingto get the marketto
breakup throughthe 50o/olevelhigh(101S)so the localswentthe opposite
I
way knowingthat 6 pointsdownwouldbe an achievable target.The 50o/o
retracementof Friday;srangebackthe otherway was alwaysgoingto be a
problemfor the locaisso they took the pressureoff downthere aroundthe
I
alongnot knowingwhatit shoulddo'
1012andthe marketjust bumbled
tradersknowthe levels
I
Thethingto learnfromall of this is that professional
to focuson andtheycometo workprepared to actaccordingly.
I
If it doesn'tgo the way they are hopingfor theyjust takethe line of least
resistance
theirplan.
ani playoff ine dummies whodon'thavea planor haveexhausted I
of
If you watchthe marketday by day,figurethe strengthsandweaknesses
will keepcomingalong.
the playersthe opportunities
I
If you playthisgamethe smartwayyoucanwin andeasily.Youdon'tneeda
doctoratein piychology all you need is plain street senseand an
I
the playersto do whattheydo naturally.
understanding'otwhatmotivates
I
Theworldis nevergoingto change,believeme- onlythe pricelevels!
t
t12 Sectionl: Chapter-18
I
I Trading to WIN Course- One day at a time [c] BryceGilmore2004
I I just had to add these chafts to the counie:
Theactiontodayreiterates you in thiscourse.

allthe thingsI amteaching
I + JEq{dtier- Jr}herr'nErvab. @e+mlt €,!DC Ol gS e60 gosiit OTkt:
- Globex.S) Dtnrmicl:004:00 .-9jjt!e$_jt:1gq -!: Lrq??o--9:l_1ql09
! rm00
fi800
I 1t600
It400
I t
trz0lt
ttotttl
I This CHARTis a good one foryou

tttL00
to study. lt was the last fading day

r(D00
I
for Aprll 2004.
Volume
I Poblish€dby e5ignal(ww.aiyrdrom)
I Thisday was a Fridayand alsothe lasttradingday for the monthof April

2004.
I Ed+ J E q u i t i B r -J o & s i n E r ' / a : 6 . @ e + , x t ' tg l D c S 1 E 5
thjce's XABCITirl.6i!|
e50 &ori:r Oti:t
oiltt6s H:11&0 !:103ro et@9I|*
t4s6
I Thls ls the week leadlng up to and

including the day above:
|l500
r.1000
I ?.1$t
1425
11.v1
13fi
i
tt18.ofr
t0.2s
tADD
t r2500
I r.5r! I
27.s I
't0-cl
es.zso..
r
I
7.1trt"i
.29,5n
r2000
11{t.75
I The trend was clearlydornngoing into

Friday:
.21,50
a
tt00,50
I
I Publirhedby esgnal (ws,sigod,(m)
Whenyou learnto applyall the thingsI am teaching

I you in thiscourseyou
will realisehow simpleit is to find reliabletradingopportunities
everytradingdayof the year.
eachand
I
Daily RangePatterns 113 Section 1: Chapter - I 8
I
Section 1: chapterre: I
Summary:
I
In thisfirst sectionI haverelatedto youthe thingsI practice
andmonitoron
I
a day-to-daybasis.Usingthese tools shouldallow you to becomean
extremely profitabletraderif youcanmasterthem. I
I havewrittenmostof this first sectionin realtime to giveyou my thoughts
first handas the marketunfoldeddayby day.If you adopta dailyworkethic
for youranalysisand preparebeforethe tradingsessionopensyou won'tbe
I
Thenas the marketmovesalongyoujust keepupdating
in for anysurprises.
yourchartwiththe importantlevelsyoucantradeoff. I
Thereis still anotherworldof thingsthat I needto explainto you that will
giveyou a widerfieldof focuswhenyou needto drawon them.Thesethings I
arerelatedto old and newteachings andthe practices employed by analysts
andtradersthe worldover.Whenyou understand
to the investment
available
all the practicesandtools
worldandsomeof the beliefsthey holdyou will
I
havea far greaterappreciationfor whatit takesto bea winner.
what other peopleare up to and how they arriveat an

By understanding
t
willgiveyouan EDGE.
analysis
It is imperativethatyoustudythe restof the materialin thiscourseif youare

I
of the winner'scircle.
strivingto be in the top 0.1olo
Youneedto learnthe wholestoryto stayon top of the marketbecausethe

I
marketgoesthroughchangingphasesyearin andyearout. Newsituations
canpresentthemselves of knowingwhathas
at timesandonlythe experience I
happenedin the pastwill helpyou makeit clear.
Youhaveto havean understanding of whathashappened in the pastandthe

I
technicalreasonswhy.Simplybecause the futurewill onlybe a repetitionof
the pastin somesimilarformandif you knowwhathashappened
youwill beableto dealwiththe futurefar moreeasily.
in the past I
Youalsohaveto knowwhencertaintimesof the yearbecomeimpoftantto
eventsareimpoftant.It will all
tradersandwhy ceftainothercriticaltechnical
T
in the moneyflowof the market.Withoutthisknowledge
be reflected
no morethana mechanic.
you are
I
If you want an ongoingpeaceof mindwith the marketyou needto know
what the other playerscouldbe up to when you reachcriticaltechnical T
thattheywill actupon.
situations
I
tt4 Section1: Chapter- t9
SummarySection1
t
I Tradingintra-dayallowsyouto increase
yoursizebecause you don'thaveto
givethe marketanyroom,i.e.,likeyoudo with swingtradingwhenyouwant
I to stayon the systemtrade.
Whatyou shouldconsideris that nothinglastsforeverandit is onlyas good

I as it getswhileit lasts.The marketon an intra-daybasisis moreflexibleto
dealwithanda lot easierto beconsistentwith usingmy approach.
I Thereis no pointin havingto rideout largedraw-downs in youraccountto

comeout aheadin the end- that is if you actuallydo. It is betterto take
smallbitesthesecouldendup in hugemouthfullssometimes - if you hit and
I runwhenthe SIGNS arethereyouarebetteroff in my opinion.Thenyoucan
go homeandsleepwellanddont thinkaboutthe nextdaytoo muchuntilit
I comes.
As you becomemoreawareof whereto takeyour tradesyou can scaleup

I yoursizeon the onesthat offerthe besthistorical
intothe bigleagueyouwill beconfident
oppoftunity.Whenyouget
to tradein 20 lotsor more.Thereare
individualtradersout there pushinganythingfrom 5 to 200 lob on the
I reversalandcontinuationsignseverytimetheyappear.
Anytimeyou canget intoa tradewith a l-point riskfactorandcantakemore

I than4 or 5 pointsyoucankickgoals.
Eachday you shouldbe lookingfor 2 goodtradesand onceyou haveyour

I wagestakethe restof the dayoff.
is, is just a job, you will be

Themoreyou get to realisethat all this business
I muchmorecomfortable withit.
I
I ONEDAYAT A TIME.
I
I
I
t
I
I SummarvSectionI Section1: Chapter- 19
THE IMPORTANTTHINGSYOUSHOULDHAVELEARNT I
FROMSECTION1:
I
1. Payattentionto the NEWS
2. The50o/o BalancePoint
andthe release
Rule.
of ECONOMIC REPORTS. I
3. The1:1Overbalancing Rule.
4. TheTWODAYCorrection
5. PriorSupportbecomes
Rule.
futureResistance.
I
6. PriorResistance becomes futureSupport.
7. ThethreedayGannSwingis the bestmeasure
B. Rectangles pattern.
area signof a continuation
of trend. I
9. In a strongtrendcorrectionsshouldkeepreducing in amplitude.
10.OpenInterestcanonlyriseif newsellersenterthe market. I
11.TradersbelievethatGAPS on the daysession chaftshouldbefilled.
12.Volumespikesat geometric levelsarea strongsignfor a reversal.
13.A failedsignalsuchasa falsebreakis oneof the strongest signals. I
Formoredetailed
information
on falsebreaKseeS4:C1:P25. I
Theforemostthingto learnis thatyou mustneverriskmorethana pointand
a halfon anysinglecontracttradeyouenter. I
areyou
you enterit the chances
If a tradeis not workingalmostimmediately
arewrongandyoushouldscratchout andstartagain. I
whatyouseeandnotwhatyouthink.
Believe
I
I
I
I
I
I
I
I
SummarySection1 116 Section1: Chapter- 19
I
I SECTION 2: chapter1:
I SacredGeometry- The CardinalRatios
I comparing
approachfor
Time & PriceAnalysisof MarketTrendsis a mathematical
betweenmarkethighsandlowsin bothtimeand
the relationships
I priceamplitude.
throughoutthe ancientworld,suchas
Teachers in the centersof education
I those founded
of DYNAMIC
by PYTHAGOMS
GEOMETRY
& PLATO
and NUMEROLOGY
set their pupilsto practicethe atts
in orderto exercisethe facultyof
intuition.
I The ancientstaughtthat any situationin life would be represented
DYNAMIC PATTERN for whichthereexistsa precedent in nature.
by a
I GEOMETRY deals with pure form; philosophical

of eachformout of the
unfolding preceding
one.
geometryre-enactsthe
I The ancientsdeviseda canonof proportion.The canondemonstrates

squaringof the circle andthe bindingrelationships
the
betweenthe SQUARE,
t CIRCLE
the
& the GOLDEN
PERIMETER
MEAN.The circumference
of the SQUARE.
of the CIRCLEis equalto
I Circle= 8"OOO
t
I
I
I
I SQUARINGTHE CIRCLE
I
I This diagram representswhat the ancientscalled the 3 phasesof
consciousness.The squareactsas the base,the pyramidis verticalandthe
the squareverticallymovingbothaboveandbelowit.
circledissects
I
SacredGeometrv Section2: Chapter- I
I
Tradingto WIN Course- One day at a time [c] Bryce Gilmore 2004
I
NaturesLaw I
Naturallaw of growthphases,as we knowthem todayoriginatefrom the
dynamiccycleswithin the constructionof the Cosmos.Beforeone can
I
possibly
understandthe significance
of whatwillfollowin thismanual
thereis
a needto learnhowgeometric formsareconstructed. I
RatioSeries(1.618)
Geometric
R.N.Elliottin his treatise,'The ElliottWaveTheory",identifiedthat many
t
markethighs& lowsin the DowJonesIndustrialIndexwereformedrelating
to eachother on progressive ratiosof the GOLDEN MEAN.Basicallywhat t
theseratiosrepresentis the progression of cardinalpointsin a GEOMETRIC
SPIRAL. I
GOLDENMEAN 1.618
Goldensection
Square Root of 1.618
0.618
1.272
I
the unfoldinggeometrywithin a marketsstructurewe
To fully understand
needto be awareof the expanding and contracting
relationships
that occur
I
withinthe geometric
spiral.
I
t
GEOI'IETRICRftTIOS OF THE SPIRfiL EfiSEI' OH THE PYBRI'IIDOF GIEft
EXPNHEf,ND COHTEFCTON THE SOUNFEROOTOF 1,618

SFIRRL PROGBESSIOI.IS
l.?7? = Square root of 1.619 End 8.786 = the reciDrocaL 1.?_72
I
1.618 e.858 e.BsB e.61S
I
L,,""\L,=.=\L,",,\ I
r""7 l-''*"7 l-'*'7
8.78'6 I.BB8 8.618 9.78 6 B . 48,6 8.618
I
V V
Movingfromthe baseof the triangles of the 90o(rightangle
in the direction
I
I
-
leg) eachfuturelengthincreasesby a ratioof t.272to the preceding
leg.
Movingin reversethe legscontractby a ratioof 0.786to eachother.0.786is I

thesquarerootof 0.618,theGolden Section.
I
SacredGeometry Section2: Chapter- |
I
I The GOLDEN
everywhere
MEAN(Phi)ratioof 1.618is a growthproportionandappears
andmanyotherplaces.
in nature,in plants,in seashells Alsoyou
I shouldknowthatthe planetVenus(theclosestplanetto the Earth)orbitsthe
Sun 1.618timesfor everysingleorbit of the Eartharoundthe Sun.Put
anotherwayVenusorbitsoncefor every0.618orbitof Eafth.
I TheAncients left us a geometricblueprintwiththe diagramof the "Squaring
of the Circle".This diagramis alsothe exactmeasurements that the Great
I Pyramidof GIZA was built to. I have alwaysbeen surprisedwhy this
informationwasnevertaughtto me at school.As a resultof my subsequent
studiesin laterlife, I havefoundout manyotherinteresting things,on the
I strictwaysthat
the "squaring
geometry
of the circle."diagram.
to
can unfoldand still holda bindingrelationship
I Overthe past22 yearsof tradingI havewitnessedmajorreversals

all the MAJOR MARKETS I follow,thesesometimes
of trendin
deff normallogicwhenit
I comesto the ratiosinvolved.Butthe geometric relationshipshavebeenthere
for allto see.MostpeopleI knowhaveneverbeenawareof themat the time
either,so I havecometo the conclusion that there is a higherpowerof
I influence presentwhenthesethingshappen.Whatever
my mainconcern;all I am interested
it maybe is reallynot
in is knowingwhenthe marketreaches
levelsof geometricproportionthat align themselvesto the theory of
I NATUMLGROWTH.
Using Geometrywe can prove the ratio 1.618 maintainsa triangular

I with the square,the cube and the circle.This association
relationship
extremelyimportantfor our purposes becauseall geometric forms must
is
rotatefromoneaxisto anotherif theyareto continuetoo relatein the future.

I
TRIRHGUI,RNBRTIOS OF THE GOLDET{I'IERHBELRTEI}TO THE
I GOLDEHTRIRHGLE. THE CUBE & THE SqUHNE.
Diagonal of the Golden
I Rectangle
1 -gBZ necipr.ocal 8.526
I
I Diagonal of the Cube
I L-?32 reciprocal E-5??
I Iliagonal
1-41.t
of the
reciprocaL
Squari.e
E-?ts?
I
I SacredGeometrv Section2: Chapter- 1
I
GrowthSeriesof Ratiosare: -
TheFibonacci I
L,t,2,3,5,8,L3,2L,34,89,L44,233,377,6t0,985.....
increases by a factorof 1.618to the
every future number
numberandon it goes.Butin
preceding I
the true senseof the growthphasethingsmoveby a factoror L.272- when
on the geometric seriesnot by 1.618. I
phasesof growth.The keygeometric
I callthesethe geometric ratiosfor my
Time& Priceanalysispurposes
are:- I
Expandinq 1.000
Contractinq1.OOO
L.272
0.786
1.618
0.618
2.058
0.486
2.618
0.382
3.33
0.30 I
As a noviceyou may not understand
because
the significance of 2.058or 0.486
theyareso closeto 2.00& 0.500,but youwill in timewhenyoucan
I
identiffthe rhythm.
Whenthe marketmovesoverto a reciprocating unfoldingpatternphaseof

I
the SQUARE or the CUBEthe relationships we canexpectto witnessarethe
ratioson the differentplanesof the conscious - the squareratiosand the I
cuberatios.Sometimes the ratiosof the circlepinpointing
we will experience
marketreversallevelsat the sametime. You must be awarethat as the
geometryunfoldsthe ratio progressions movefrom each levelto the next I
level.No seriesof ratioswill keepsignallingreversalsconsistently - they
rotateas the marketmovesalong.Oneday a 0.618will arresta correction
the nextit will be a 50o/o,
thenotherdaysit will be a 0.707or a 0.786.Then
I
in strongtrendsit couldeitherbe a 0.382,0.354or a 0.333depending on the
rhythmof wavesin the unfoldingpatterns. T
To understand what I am goingto teachyou now,you will haveto havea
flexiblemind. I
I havealreadyhalfexplained
imperative
all of this in earlierbooK but nowI thinkit is
I writeit all downthe wayI understand it today.Previous
students I
may havealreadyworkedit out but I now havethe luxuryto explainit all
over again.My two yearswith the Clublzl4group have enlightened
immensely on howto knowwherethe novicejust lossestrackof whatI am
me
t
on about.
So manyunusualthingswill occurin the marketgeometrythat you haveto

I
be awareof whatwill constituteRHYTHM howthe continuing
to understand
progressions
will relatein the end. I
but if you learnto workwithwhatI will
All this mayat firstseemcomplicated
teachyou,youcangraspit. It is notthat hard,it is all a matterof logicasthe
marketunfolds.I havehadno problemusingit for wellover15 yearsandit
I
keepson workingfor me.
I
SacredGeometry Section2: Chapter- 1
I
I Harmonic
RatioSeriesof the SQUARE
I HARMONIC MTIOS are generatedfrom the diagonalrelationships
withinthe SQUARE.Musical
found
HARMONIC
notesvibrateon ratiosof the square.
MTIOSrelateto the number2 andsquarerootof 2.
I Sacred Ratios of 2.000
I SquareRoot
SacredCut
L.4L42
o.707L
I The SacredCut 0.707Lis equallyas impoftantas 0.618whendealingwith

proportion.Lateron we will see how the two ratiosintegratewithin the
I geometry
unfolding of a marketstructure.
I 2. EBB
1 . 4 1 4n 1 . 4 1 4 HHRI.IOHIC
SERIES
1,ts88
I SAUHREROOTOF 2
1 -414
2.OEE
2.S2S
4.EBE
t 1.EEE
fd-?6?
I 8.588
E-354
6.256
I
B B.5BB A,7A7 r.BBA
I HfiNI.IOHICPSOPONTIOH$FORI'IEI}BT THE SQURNE
I Theworksof W.D.Gannhavealreadymadefamousthe useof the ratiosin

of timeandpricein markettrends.
the squareandthe cubefor the analysis
NevefthelessI haveneverseenany mentionof the SacredCut (a Masonic
I term)in anyof Gann'swork.Theremayhavebeena reasonfor thisas Gann
wasa memberof the Masonic Lodgeand Mason's wererequiredto takean
oathnotto teachtheirknowledgeto outsiders.
I
I Expanding 1.000
Contractino1.000
L.4L4
o.707
2.000
0.500
2.828
0.354
4.000
0.250
s.6s6
0.t77
I The ratiosincreaseby a factorof L.4L42to eachotheror theycontractby a

divisionof L.4t42to eachother.I will referto this seriesas the harmonic
seriesof ratios.
I
I SacredGeometry Section2: Chapter- I
I
ThirdDimension
of the Square I
Thediagonal of the cubecanbe usedto forma ratioseriesthat continues
hold its pure geometricform in a similarmannerto the geometricand
to
I
harmonic ratioseries.
SacredRatiosof 3,000
I
SquareRoot t.732
Reciprocal o.577 I
It is importantfor you to remember
manytimesin the future.
theseratioas you will encounter
them
I
THIRD DIT'IEHSIOH
OF THE SSURRE I
PHOI}UCESNRTIOS
1.986
I
1 -414
1.?32
L.699
t
E.?E?
B-5?? I
DIRGOHRLOF THEGUBE= 1.?32
nEcIPnoGALOF 1.?32 = 6-5??
I
If you reviewthe diagramson 1-3youwill seehowthe squarerootof 3 also
I
canrelateto the geometricratios1.618and 0.618andthe squarerootof 2
relatesviathe squarerootof 1.618(L.272). t
The systemof ratio relationships
nothingto chance.
evolvesin a strict mannerand leaves
I
TheKeyRatiosdivisions sofar are:-
between1 and2 for our purposes
I
r.272 L.4L42 1.618 1.732
In a contracting
modewe usethe reciprocals of theseratios:Thereciprocal
of
I
a numberis the ratioof thatnumberdividedinto1.000.
The most impoftant division of I.OOOis half or 0,500

I
and the
following 0.500and1.000are:-
between
I
0.786 o.707 0.618 o.577
I
SacredGeometry Section2: Chapter- 1
I
I The4th Dimension
of the Square
I If we join two squarestogetherand measurethe diagonalrelationship
between the two extremecornerswe getto discover
the Squarerootof 5.
I SacredRatiosof s.000
SquareRoot 2.236
I Reciprocal o.447
pointfor you to consideraboutthe squareroot of 5 is that

An interesting
t 2.236is the sumof 1.618and0.618.Thereciprocal
alsoan impoftantratiofor ourconsideration.
of 2.236is 0.447andis
I IIIfiGOHRLOF TlfO SqUfinES = 2.236
I PRODUCES
RfiTIOS
1.066
I t.60B
2-? 3 6
5.BBB
1.BEE
I 6-447
E.zES
I ArithmeticRatios
I ARITHMETICMTIOS are generatedfrom the simple division of whole
numbersby otherwholenumbers.A few examplesare listedbelow.
I OneOuarter 0.250
One Third 0.333
I One Half
Two Thirds
o.soo
o.667
I ThreeOuafters 0.750
of geometric
Arithmeticratioswill playa part in the construction formsas a
T marketworksbetweenthe majorcardinalratios.The ratiosthat will form
aheadcanbecomepredictable. Eachnewgeometric formis workingitselfout
from the way the previousform hasbeenunfolding. Thisat first mayseem
I difficultto recognise
possible.
becausewe haveso manyratiosto considerbut it is
I If you wishto makea completestudyof all theseratiosandtheir originsI

wouldrecommend the book SACREDGEOMETRY by RobeftLawlor,published
t byTHAMES & HUDSON.
I SacredGeometry Section2: Chapter- 1

I
RocketScience t
In the past18yearsI havehadthe misfoftune new
the difficulties
to discover
studentsrun into when they are confrontedwith more than 3 thingsto I
consider. I haveto tell you that it all seemslikesometypeof RocketScience
in the beginning.But I havewaysof workingwith it that can reducethe
confusionmostof the time. It seemsnow that I am retiringthat I should
I
makea concefted effortto try andclearup the picturefor all to see,instead
of just a selectfew. I
Mosttheorieson Priceanalysis published
beforeI camealongtaughtstudents
to usethe ratiosof 0.382,0.500,0.618,1.000,1.618and2.618exclusively,
as if that wasn'thardenough!Gannmethodology taughtstudentsto workin
I
eighths,i.e., IlB,2lB (U4), 3lB,4lB(Ll2),5lB,618,718et cetera.Gannalso
taughtyouto workwiththe thirds,1/3 and2l3rds.Thishasjust confused the I
issuesevenfurther.
Studentsoften ask me, what is important?We have so many ratios to

I
considerthat the possibilities
are endless.I agreeand I wrestledwith the
problemfor manyyearsbeforeit became clearto me, I
I cameto the conclusion that everygeometricform had to makesome
LOGICAL SENSE whenit cameto proportion. If it didn'tthenI couldcastout
geometric
the ratiosaheadthatdid notfit the unfolding form.
I
Whatis impoftant allthetimeis this:-
to remember I
If a geometricform is workingout relationships
nextcardinalpointof the geometric
to saythe square,thenthe
formwill relateon ratiosof the square.If I
the geometricform is currentlyworkingalongon geometricratios(the Phi
group)thenthe nextcardinalpointwill relateto the Phigroup.I referto this
phenomenon as RHYTHM. Thesamegoesfor geometric formsworkingto the I
groupof ratios.
Arithmetic
The benchmark divisionof 1.000is a half(0.500)so that is wherewe start.

t
Equality is 1.000to 1.000anddoubleis 2.000.At leastonethirdof the time
geometric
proportions
formswill unfoldon the Phiseries(1.618and sequences
of 0.382,0.486,0.618and0.786.At othertimesthe sequences
thereof) I
will switchto harmonics or the ratiosof the unfolding
SQUARE, that is whywe
get ratios of L.4I42, 0.707L and 0.354 determiningproportionsof
importance. Thenwe havethe 3'ddimension wheregeometric formstakeon
I
propoftions of t.732,0.577,0.333
to workout whatthe geometric
and0.667.It all becomes
formis expanding
a matter
or contractingto.
of logic
I
Beforeyou determine
unfoldinggeometric
that a marketlevelis importantyou mustconsider the
form,if it makeslogicalsensethengo with it. If not wait
I
untilthe picture
becomes clear.
I
Sacred Geomehy Section2: Chapter- 1
t
I Geometric
Proportion:
I Besides so far we haveto consider
the cardinalratiosI havebeendiscussing
the rectangleof two squares.
I Thiscouldmeanthat we needto consider

by 2.000,what I meanby this is that somegeometric
factored
everyratioof impoftance
formswill contain
proportions or 1.236(2x0.618)
of 0.764(2x0.382) andsofotth.
I At first these proportionswill not seem importantbut if you study the
I completed geometric theywill beginto makesense.
format its conclusion
To becomeproperlyproficientat identiffingthe geometryin formsyou have

I to lookabovethe horizonsometimesandconsider
Noonesaidthiswouldbe easyas it is a scientific
the myriadof possibilities.
aft formandrequireslogic
to workit to itsfinalconclusion.
I Withoutpattingmyselfon the backI havebeenableto understand all of
thesethings.I havealso beenableto get other peopleto understand all
I thesethings.Notto manybut I havefoundmy teachinghasimprovedwith
theyearsI havebeenat it.
I It is importantfor me to get my message throughto the studentswho have

cometo me for help.Nothingmuchelsemattersto me anymoreas I have
I everythingI wantin lifeandif I don'thaveit I canbuyit nextweek.
Beforeyou can becomeproficientat identifoing the futuregeometryin the

t you
markets musthavea thoroughknowledge
Youcanonlyget this knowledge
of the geometric possibilities.
by workingbackoverthe existinggeometry
that hasunfoldedbeforehand. I havedoneall this for yearsandyearsso it
I hasbecomesecondnatureto me. Sometimes I takea littletime andjust sit
downwith a chaft and pull it apartfor hoursto reinforcethe principlesof
geometry I havelearntoverthe years.
I whenyou havea clearheadwhatyoucansee.
It is amazing
I the progressions
otherwise they becomeMNDOMnumbersandare not
in
The bottomlineto all of this thoughis that the ratiosmustmakeSENSE
just
I woftha bumper.
For trading purposeswe must be sure that we have a RHYTHMin

I the ratios if we are out to select a price point that the market should
revensetrend on. And I guess that is the only reason why we
endeavourto use these methodologies.We want to have an edge
I againstthe other market playerc.We want to know when to buy and
when to sell as fast as the market can tell us. I have becomepretty
good at it so there is no reasonanyoneelsecan't learn to do it.
I
I SacredGeometry Section2: Chapter- I
Tradingto WIN Cowse- One day at a time [c] BryceGilmore2004 I
Section 2= chapter2: I
GeometricRatiosin Market Corrections:
I
In previous
booksI havemadea morethanadequate explanationof the way
I
wavemovements canrelategeometrically
but I am goingto writea complete
newexplanation
for thistext. I
Thebasicsof the theorythat marketwavesmustrelategeometrically
on the ElliottWaveTheory.
hinges
I
Elliottstatedin his theory that, "All Wavesof similardegreewill relate
geometricallyin PriceAmplitude". I
Neveftheless and the way this phenomenon
becauseof the complexity can
occurwe needto approachthe theoryin a simplisticway first and then
I
extendourviewsto includemorecomplexthinking.
To beginwith the currentmarketwavemaybe a correction to a longer-term

I
trendor it maybe a continuation
of a largerdegreetrend.
t
I
I
I
I
I
I
Justsowe haveourfactsstraighta MARKET WAVEis a legeitherup or down
I
betweenobviousswing points.
if we arein a bullmovement
Themaindirectionof the waveswill determine
or a bearmovement. t
I
CorrectiveWave Relationships Section2: Chapter- 2
I
I Tradingto WIN Course- One day at a time [c],BryceGilmore2004
I PRICERETRACEMENTS:
I
I
I
t
I
I
I Priceretracements
arecorrections
in an ongoingtrend.
I levelsareour number1 toolwhenwe arelookingfor levels

Priceretracement
wherethe marketwill reverseandresumeits larger-degree
trend.
I The38.2,50 and61.8arethe majorratioswe needto focusourattentionon

thesearethe levelsthat eventhe noviceanalysthasbeentaughtto
because
monitor.
I Justthe samethe 38.2- 50 - 61.8will not markthe reversalpointsmore
thanaboutonethirdof the time.Therewill be timeswhen33.3,35.4,44.7,
I 48.6,57.7, 66.7, 70.7and70.7willSQUARE
THEGEOMETRY.
if the 38.2- 50- 61.8will

I It is all a matterof whatwentbeforeto determine
workor not.
I It mayseemcomplexto you rightnowbut onceyou knowall the otherways

that wavesof similardegreecan relateyou will have a 90o/ochanceto
whenthe levelswillworkfor you.
determine
I To reallyunderstandwhat I am sayingyou are goingto haveto be patient
andtake it one stepat a time untilyou can graspthe intricaciesof market
I geometry andhowit is the mostpoweful tradingtoolyouwill everlearn.
Butbeforewe go on just let mesaythata priceretracement levelon a 38.2-

I 50 - 61.8on its own is of no valueto you unlessyou cantie it into other
criteriathatwill meldthe geometry
important of the currentwavestogether.
I
I CorrectiveWaveRelationships Section2: Chapter-2
Tradingto WIN Course- Oneday at a time [c] BryceGiknore2004 I
MarketGeometry
tell you,
is not as simpleas manyof the so-calledGuru'swilltry and
but! It is not difficulteitherif you knowthe approaches
you haveto
I
followto keepeverything aboutElliott'stheoryin perspective.
I havea 4-waytestthatI applyto retracement levelsbeforeI tradeoff them,

I
the testdetermines
if theyshouldmeananything.Wewill getto thatlaterbut
beforewe do we needto discussall the possibilities. I
Whena marketis heading intoa retracementlevelpricethat hasthe potential
to reversethe currentmoveyou will needto seesomething elsethat agrees I
withthe geometry.
Thesecouldbe:
I
1. Thecurrentlegis reaching a 1:1witha similardegreemovethatwent
before.
2. Or maybeit's that the currentleg is approachinga previouslesser
I
degreesuppottor resistance
retracement
fromthe
levelwhenit testsit.
pastandthe pricewill SQUAREa
3. Then there could be an old top or bottomthat lines up with the
t
retracementlevelyouarefocusingon.
Let'stakethesepossibilities
I
andI will explainwhatI mean.
I
MARKETRETRACES38.2 - 50 - 61.8 on a 1:1 with a prior correction
I
and retests an old low or high:
I
I
I
I
I
I
Youcanapplythe sameprinciple
to a 44.7,57.7,or evena 70,7and78.6
I
retracement
at times.
I
CorrectiveWave Relationships L2 Section2: Chapter-2
t
I Thepointreallyis thatyoushouldalwayshaveat minimum2 goodreasons to

tradeagainstthe currentmovefor a reversalif you want to remainin this
for the restof yourlife.
business
I Tradestakenusingtheseprinciples havethe abilityto be tradedwithverylow
I risk.When you become
willseethe opportunities
at settingup yourcharGthe rightwayyou
proficient
in advance.
I Anothergoodplacefor a reversalin a correctivemoveis whenyou get dual

levelsfallingon the sameprice.
retracement
I
I
I
I
t
t thatyou need
Thenthereis anothercomplexsituationthat ariseson occasion
to be awareof.
I Multiple combinationsat a level.
I
I
I
I
I
t A situationlike this would mark a reversalat point D 95o/oof the time. If it
didn'tthen you would reverselongimmediately.D then becomessupport.
I
CorrectiveWaveRelationships l3 Section2: Chapter- 2
I
Thesesituations
areset up wellin advance
areprogressions
in the ongoingtrend.
if youlookcarefully
because there I
t* of all XBwasa 50o/oretracement
2ndYCwasa 38.2o/o retracement
of AX.
of AYanda 61.8of BY
I
3'dYc = XB
If youdo yourworkcarefully
youshouldnevermissoppoftunities
I
likethese.
of ratiossuchas 66.6- 50 - 33.3

Theycouldfall on a differentcombination
- -
I
or 70.7 50 35.4. lust as long as they are in a similargeometric
progression
theyareimportant. t
THE50o/oPRICERETRACEMENT
LEVEL: I
The 50o/olevelof any previousrangeis an impoftantgeometricpointto be
obserued for a reversal
stagesof anynewtrend.
of trend.The50o/olevelis normally
testedin the early t
Here'sa recent*ample fromthe S&P500. I
s&P5BA
ilete 83661?
hi 1815.flB
t
WAVES OF SIMILAR bEGREE
I
Egclefrailer
t
I
lo ?8?.58
5O-"i!Retrocemeni
I
date
llain
030312
S3BZ1S t
Ona day-to-day basisthe 50o/o
levelof the intra-dayrange,the last3-dayor I
2-dayswingor lastminuteswingis an impoftantlevelto monitorfor trading
oppoftunities. I
Tradershavebeeneducated to buyor selloff 50o/o levelsandtheywill place
ordersat themin advance. Youmayonlyget a bounceat themsometimes
if the marketthen breaksthe 50o/o
so
levelit is tellingyou it is goingfurtherin
I
the samedirectionandgivesyouthe opportunity to rejointhe ongoingtrend.
I
CorrectiveWave Relationships I4 Section2: Chapter- 2
I
I Trading to WIN Course- One day at a time [c] BryceGilmore2004
I Qcharts CSU
859. AB
ES63H-5
866.84
I 853.6B
86-6.AB
ABSOLUTELYPOETR.Y
IN MOTION
I 85?.BA
854.84
I
851.8S
848.64
845.8A
I s,42.W
839.08
Look ot this!
I aI.ll/?w
H ai n 61/31 gT/37 gt/3t
Here'san exampleof what I am sayingand it happensvery regularlywhen

I you start workingwith the intra-daymarket.The first 50o/odrr€stedthe
advancingcorrectionto the prior 2-day rangeand the second50o/owas
supporton the samedaystrading.Noticehowthe marketkeptcomingback
I to test the 50 levelafter it brokethroughit. On the 4h attemptit brokeback
throughandcouldntfind suppoftuntilit arrivedat the 50 of the total range
I for the day.It wasonlya S-pointbreakoutbut still5 pointson 10contracts
50 points($2500)with no risk whatsoever.
pointas it coincided
The second50 was alsoa buy
is
as a 1:1 equalto the morningcorrection,definitelynot a

I placeto holdyourshortto seeif the 50 wouldbreak.
Qcharts f,SU
I 858. A8
856. AB
Signs of STRENATH
Srcqk of 1:1
I s54.80
852.66 This high
wos 507"
Folsc Brreokof 50lc
in thc SAND E'15Y

858. BB
I 848. 88 Ronge
5 0 %& l r l
848. BB
I a44.SA
a4z,.aB
Enfries I seewhichhovesufficient reoson
I 848.AB
838.8B
r Buy rrBuy StopReverse
r 5ell re 5ellStopReverse
Doqblc r Close
I ffi6.48
lla in 6IT38 BLTST BI/37 aL/31 aIr3l aI/31
I Wearegettingjust a littleaheadof ourselves

withthe sellat the 1-1in green
but this was a chartI had preparedfor my S&PDiary in fact manyof the
chartsI will useareonesI havebeengathering togetherfor somemonths.
I
CorrectiveWaveRelationships l5 Section2: Chapter-2
I
Trading to WIN Course- One day at atime [c] Bryce Gilmore2004 I
Hereis anotherwayyoucanusethe smallerdegree50'sto get intoa lowrisk
position.You haveto makesure it coincides with a priorsuppoftof some
I
significance
and you would not risk more than 1 pointon a tradeentrylike
this one.Thetriggerto takethe tradein the first placeis the 7 pointsdown
hasoverbalanced the prior6 pointscorrection.
I
I
FRIOR,SUPPOR,T
I
I
I
-7^?,
Intro-doy 5 minutahors TAR6ET 1.7 I
I
I
I
I
$ign of Weqkness I
I
for takinga tradeif you wantto be a
Youmustalwayshaveseveralreasons
youcanfindthe better.
winner.Themorereasons
I
THE61.80loRETRACEMENT
LEVEL:
I
The sameprinciples
the 50 retracement.
applyfor tradingthe 61.8 retracement
Youcanusethe 61.8retracement
levelas trading
on movesdownto as
I
smallas4 pointsbut it becomessocloseto a 50 it doesnot mattermuch.
The 61.8 will commonlyoccurin the earlystagesof a new move,say for

I
instance
the firstcorrection
aftera doubletop or doublebottom.
I
Section2: Chapter-2
CorrectiveWaveRelationships
I
I Tradingto WIN Cowse - One day at a time [c] BryceGilrnore2004
I It can also occurin the middleof a wave seriesand is a very common

retracement levelin the S&P500
futures.
I
I
I
I
I
I
t THE38.2oloRETRACEMENT
LEVEL:
I The 38.2 is suited more to larger rangesthan the 50 or the 61.8

retracements.
t The38.2nearlyalwaysprecedes
hadoneor moreoriorcorrections
very strongand expansive
a continuationof trendafterthe markethas
in the currentseriesor the initialthrustis a
move.The dailyor 2 daytrendwill haveclearly
t changed directionbeforeyoucanrelyon the 38.2asa solidlevelto anticipate
a reversal
andcontinuation movetakingplace.
I Qcharts CSU
936.BB DOUI'NbAY AFTER,INITIAL STRU6SLETO 38.E
933.AE
I I|3A.BB
t3t^4
lsuindc rl lhc
sz?.EB $t.2 lcvd
I sz4.aB
fjzr.AA
+5
dl I
+z
11:33
3S.2
3 8 .2
I 918.BB
s15.BB
-18
I g12.40
gag.Ba NEWS: Bush670bln stimulusplanfo fake o
longfime to ba pussedfhroughCongrass.
I 986.B0
oI/86/2-;863
ESB3H_5 6L/47 VVg? EL/ffi Bt/98 g1/gt8
I
CorrectiveWaveRelationships I7 Section2: Chapter- 2
I
Trading to WIN Course- One day at a time [c] Bryce Gilmore2004 I
3B.e& 6LB 4^6 I
SELL
4^4
4^&
CONHTR,II'IED I
-4
I
3^4 OUER,
B.4LANCEb
I
3^4
I
I am puttingthischaftin here,asthiswasthe waythe markettradedintothe
38.2& 61.8shownon the previous page.I willexplainthe implications
of the
1:1'sgoingintothe highfor the dayas we moveon. Butfor the momentyou
cantakeit frommethatthisgeometry
t
wasa signalthatthe chances the 38.2
wouldstopthe marketin its trackswasa 100/1ONbet. I
Here'sanotherinstanceof a 38.2retracement
in the bearmarketfrom2000.
The highin January2002wasan exact38.2on the SPX(CashInde<).The
I
priorwavesof similardegreehad madea 50 retracement
high.
at the May2001
I
The correction
38.2
from the October2002low retraced23.6whichis 0.618of
I
llaue Trad.er
1839.BE
i{SEHtT S&PsEB
This 23.6% retracemanthos

I
1559.68
14?9.BB
1399.aa
bearishtechnical implications:
I
1313.BB
1239.BB
I
1159.BB
1879.E0
rareek
ending6th Dee I
Opan936.31
sgs.BE
gls. EB
High 954.28
Low 895.96
I
Close 9L2.23
83S.BB
?5S.BB
l-laitl tZHsu99 lEJunBB ZEJanBl 0?SepBl l9flprEZ BEIlec{Z
I
At the timethe 23.6hadbearish
implications
pointsdownintothe March2003low.
andthe marketdid decline167 I
I
CorrectiveWaveRelationships 18 Section2: Chapter- 2
I
I 1:1 PRICEMOVESWITHIN CORRECTIONS:
I 1:1 movesare very commonin the S&P500.I have beenteachingthis

phenomenonto studentsfor manyyears.
I Theycan comein two's or three'smostof the time and offer a possible

confirmation that the trendwill reverseif the end pricefallson a geometric
levelof the waveof similardegreethatthe marketis correcting to.
I Thisdiagram
shouldexplain
whatI mean.
I li igh r {.1 Tl{l tA* KE:]$OriREdl I l
I
i ; ':'l i -i -:"ir i
..,- I "--, 'r':":-l , "i'i-.-I.
'f
i - - 1i
i.;.i iJi-;,J
\ Woi ai- 1, 2.& i.i*i l i b r o f e ill I ttttr
i .-rj-I' t-:-j-i _l -t-iIl.
,'i--i i , i . l
i_T-i
';.'i'i -: ' i i - r - ' i -t-.
I
a-: i
,'\ thi! litil iTi[i-cdtl ba
''t
evcl"
"",^
orifl 'Bull i l
:
_;
": r-i--r :-l
i : ' l 'jI ,Tr€lI|'{rOl.:l:€i :fi0n l.-:..i

't ";
i-1
\'i'.' -:"i
i -i r-i*ir-fir-ri , J i : - : .
I
iI-i
1..'t- i :
i,.i / ' \ :
r-i-l a
-".t
'li fii Ii,.',
:il
s9I, fi I i 1 :j f
I
t€]t t l
csu t r {i 1 i,lf'r
ri\ .,il
t:
rll',
l i j
i i
': _f'
I
j..i
{: t
l-r w
Il: ilu
I Knowingwhat is possible,will give you the EDGEto work out wherethe
marketcango to andwhereit cant go to, this will oftentell you what it is
I mostlikelyto do next.
Whenyoubreaklevelsthat historically
I havea historyof workingthe marketis
telling you the currenttrend is strong.If the marketreverseson the
predictablelevelsit is tellingyou that the priortrend couldstill be strong.
I Whichever waythe marketgoesit is tellingyou a storyandif you listenyou
willseethe nexttradesetup easily.
I ThefirstthingI do whenI realisethe marketis in a correction

the retracement
is to calculate
levelsof the currentrangesandthen applythe 1:1 rulesto
seeif theywill comeout at anyof the importantretracement
levels.
I If the levelsbreakI staywith the movein progress,if the marketreversesI
go withthe newdirectionfollowingthe sameprinciples.
I By doingthis I can remainflexibleand am alwayspreparedfor a situation
I whereI cantakeadvantage of anyfastmovesthe marketmaymake.
I CorrectiveWave Relationships Section2: Chapter- 2

I
GOINGINTO DOUBTETOPS: t
Whenyou are headinginto a Doubletop it is impoftantthat you havesome
waveequalityas the smallerwaveshaveto "Squareout" at the top to give
youa clearindication
to SELL.
I
I
I
I
I
I
I
I
Therearequitea numberof otherpossibilities
buttheseareyourbestbets. I
Bearin mindthe doubletopsI am referringto couldoccuroverseveraldays
or evenseveralweeK.
I
For the doubletop to attract sellingpressurethe News shouldbe in
agreementandthe wavestructureheadingintoit shouldmakesense.
I
If the wavestructureand the Newsis not in agreement
thingto do is to waitto seewhathappens
then the prudent
or buya breakoutif it comes.
t
Anytimeyou get a significant
timeto evaluate
on a doubletop youwill haveplentyof
reversal I
the situationandestablisha positionasthe evidence
gathers
itself.
I
If the top turnsout to be impoftantyou will get the signalsas the future
marketunravelsand you can use all the other techniques
discussing a shortposition.
to establish
we havebeen I
Shott-termdoubletopsare morereliableover a 2 or 3 day tradingperiod.
The longerapaftthey arethe lessreliablethey becomeand are likelyto be
I
brokenor the marketwill neverreachthemandcanjust fall short.
I
I
I GOING INTO DOUBLEBOTTOMS:
TheonlypracticalruleI havefor knowingthat a doublebottomwill holdis if

I 1:1goingintoit.
thereis an obvious
I for howlongis alwaysa problemin a fallingmarket.

Knowing
amountof time
BeforeI wouldfeelsafethat a bottomis in for anyreasonable
I the current2 or 3 dayswingwouldhaveto retracemorethan38.2olo.
Majormarketlowsseldomoccuron doublebottoms,theyareeitherexceeded
I by a little(falsebreaks)or theyjust don'tgetthere.
doublebottomsoccurall the time in the intra-daypicturebut

Nevertheless
I onlygoodfor intra-day
theyarenormally trading.
I 'i:-tfE as;D 't'i'

t',
I ,,1/'|
[.' I \ I \i
/-.i f
I ,\
fi
f:, I I ll' fli I
:I 1
t, 'l"
:\
I at; I
t
l
:,i
2[
I f. \
l:
i . i '
f
-: r;,'.
I
:-'i i
b{ UBt lr,Ti I/1115
i'1-
I
I Theonlypractical adviceI cangiveyou otherthanthis is to waitandconfirm
thereis a bottomin beforeyoutradeit.
I If the originalbottomyouaregoingto doublewith is an existingcardinalratio

retracement of a largerrangethen it hasthe potentialto hold.Youwill have
to evaluate thatsituationasyoufindit.
I Whenyou seehowstructures canrelateoverallin bullandbeartrendsit may
add somelight to your overallanalysisdependingon the currentmarket
I position.
I
I CorrectiveWaveRelationships
I
POSSIBLE
EXCEPTIONS
TOTHE1:1 OVERBALANCING
RULE: I
When the current correction overbalances a prior correction of
similar degree, i.e., the market correction exceeds the 1:1
measurementof the prior correction.
I
The nerG geometry where the market correction may terminate I
couldbe on a L;L.272or a 1:1.618alternatewave relationship.
A correction
in a bearmarketcouldtakeon the followingform. I
I
I
I
I
I
Regarding
the overbalancing
rule:
I
If a correctionin a trend (CD) overbalances
degree(AB)the normalconclusion
a prior correctionof similar
is that the trendhaschangedto a higher
I
degree.Nevertheless
some circumstances
you shouldstill be awarethat the correctioncan in
extendand finish as a ratio of the alternatewave I
correction,i.€., CD:ABin Ratiosuch as L.272and 1.618are the main
possibilities.
The chances thiswill happenare moreceftainif for instance
werea ratioof XCor BCor both.A ratioof 38.2or 50 of CDto XCwouldbe a
CD I
betterreversalsignalat D in mostinstances.
Whenyou havea situationwherethe marketreverses in circumstances

such
t
as this, on a greaterratiothan 1:1 of the Alternatewaveof similardegree,
dont treatit as a guaranteed
morethan61.8of the CDleg.
continuationsignuntilthe markethasretraced I
I haveseenmanyinstances
alsoseenmanyinstances
wheremarketsdo continueon down,but I have I
wherethe marketwill retraceonly 50o/oof the CD
leg and then reversebackon up and continueon up. The bestthingto do
whenthe currentcorrectionhas overbalanced its Alternateis to take each I
geometric signalas it comesandseehowthe marketreactsto it.
I
I
I COMPLEXWAVE STRUCTURES:
t Hereis an exampleof someratiocombinations

wheneverything
structures
that canoccurwithinmarket
relyon appearto be unclear.
elseotheranalysts
I
I
I
I
t
I
I
I I am not goingto explainwhatit all means,I just wantyouto be awarethat
throughthe useof sacredgeometryit is possible
justify
to explainwavestructure
adequatelyenoughto the ELLIOTT WAVE THEORY.
I This is an actualexampleof how a seriesof wavesof largerdegreein an
uptrendin the S&Pmarketcameout. The smallestwave-amplitude in the
I serieswasCD at 34 points.
In this casethe correctionthat terminatedat D was what I wouldcall a

I RUNNING CORRECNON.
I PointD coincidedwith a retracement of BC at 0.707 (reciprocal

of XC at 0.447(reciprocal
squarerootof 2) anda retracement
of the
of the square
rootof 5).
I Theseratioscameout withinan accuracyof 0.002overrangesof XC= 76.4
andBC= 47.9on the S&P1stmonthfuturescontinuous prices.
I of the marketgeometryI would

Asyou pursueyourstudiesin the intricacies
adviseyouto keepthingssimplewhenit comesto trading.Neveftheless it is
I imperative
for you thatthesethingsactuallydo
to understand exist.
I
CorrectiveWaveRelationships 23 Section2: Chapter- 2
I
Tradingto WIN Course- One day at a time [c] Bryce Gihnore2004 I
BearMarketTrends:
I
Weareveryluckynowto havea completedbearmarketin the S&Pto study. I
Duringthe bear marketfrom 2000to 2002I was neverwrongaboutthe
marketdirectionfor morethan a day,I wasableto identiff everymajorturn I
alongthe way usingsacredgeometryof time and price.As otherswere
predictingthe bottom time and time again I remainedfocusedon the
downtrenduntilthe markethaddeclined50o/oin value.Notwithstanding we
I
tradedallthe ralliesup fromprogressive
lowswhentheywerein progress.
I
I
EgcleTrailer S+P 506 CffSH
IIARXERS
tsl 6BE3Z4
1552.87
TO
AAoy2OOl
5O%Retracement I
azl f,,zt01B
?68.63
TI}IE ItCLE
Jqn ?OO2
38.2f" Rstrocement
I
ilags S3E
degree 913
ueeks 132.9
nths 38.6
gears 2.536
I
t
RRTIGE
it0uE 7fr4.24
B 50.5
Sqr9d Zl:Bj
in this bearmarketwerepredictable
Thetwo majorcorrections in as muchas
I
theywerepefectexamples of ratioin wavesof similardegree.
I
TheMarch- May2001bearmarketrallyterminated of the totalmove
at 50o/o
downfromMarch2000to March2001.Pointsin thisrallywere235.
I
TheSeptember - January2002bearmarketrallyterminated
at 38.2o/o
of the
total movedownfrom March2000to September
were233.
2001.Pointsin the rally I
bearmarketrallieswereequalin amplitude.
Thetwo consecutive I
Thefirstthingto remindyou of is that corrections
shouldneverget largeras
a beartrendprogresses.
trendhasterminated.
If theydo then it is reasonable
The currenthigh (June
to assumethe bear
2003)is now up 246fromthe
I
October2002lowandwouldindicatehigherlevelsto comein the future.
I
BearMarket Trends
I
I TheMay2001highwasa no-brainer of the existingbearmarketand

at 50o/o
impliedfufther downsideto come.The economicrepoftswere becoming
I increasingly
negative
at thistop.
TheJanuary2002highwasalsoa no-brainer at 38.2%of the thenexisting

I bearmarket. Therewas very little doubtthat the 38.2 and the 1:1 were
goingto mounta formidable technical for the marketat the time.It
obstacle
wasbecoming moreandmoreobviousthatthe eventsof September 11,2001
I werehavinga devastating
in a disastrous
effecton business
activity;the airlinebusiness
state.The Fedhaddroppedratessignificantly
was
by thistimebut
unemployment wasrisingat a rapidpaceandwe werestaftingto hearnews
I of massivebankruptcies.
just
market continued
As moreand more bad newscameto passthe
to selloff.
I TheSeptember 2001lowsupportcamein 10 daysafterthe 911disaster

to be honestno onecouldhavepredicted this low in advance.
and
But by takng
I thingsonedayat a timeit wasclearwhenit did.
I Ggclelrailer
FRIf,ECYCLE
TRl BBB3Z4
it\arch 2OOO
S*P 568 GffSH
The leg down from the 5O?,

Pr 1552.B?
I TB]
Fr
ALBSZZ
1881.19
Eng 4?1.68
rstrocemcnt raros78.6 of
the /Ularch2OOO- Mqrch
H 3A.4?,
2OOlnst declina.
I FROJECTIT]H
TCl EL&SZZ.
Fr
tT]
1315.93
B1BSZ1
I
Pr 344.?5
I
I
I Whew: Grim
Week Ends
Shroudedin uncertainty,
I U,5, stockindexesFost
historicweeklylosses,
lrlarket Uodete
Efiillr*.no
I
I Dow Jonas Indusl"iols Indcx
I The na*et ruas wcolc bcforc

nowit k wcoker..,...
I Scptcnber 2001
I Bear Market Trends 25 Section2: Chapter- 3

Tradingto WIN Course- One day at a time [c] Bryce Gihnore2004
I
NEXT2 DAYS: I
S&PsBE
date B1B5ZZ
hi 1315.93 I
I
Markets
Rise
I
Investors
werefinallyin a
buying
moodtoday, pushing
theDowup367pointsandthe
Nasdeq 78.
Market Update >
I
(il'l.cortr
Ebr.tt About rt F
I
rBushfreezesassetsof suspectedterrsrists s44;?5
*londay 24th Scptrember 2001
dat
B1B8Z4
818S21
I
THE FOLLOWINGDAYS:
I
l.lave Trader fift ILf
,507c
I
Ilate BIBSZZ
TffI 1BB1.19
Ilate BlBgZ1
tBI 944.?5
61 doys Uf
I
]l[il'l']
ilnge 138.44
Hoot
Sqr9it
11.68
386
I
PERCEHTfiGE
>
<
-12.62g
14.449 WATERFALL}ATTERN I
IIECBEE L77
uib a.772
;ht['\r I
uib B. ?46 Srings
ueeks ZE.!
Uears 8.4S1
( Six Alonths 180q
U?
I
l{ain ZZFebBl B9HprBl Z5}lag8l L3JuI61 Z$ffugEl ZZOctBl
I
Thetimingwaspeffectfor a technical
reversal 21 low.
at the September
Gann'sEquinoxdate for a reversalcombinedwith a DynamicTime ratio I

betweenthe previous up swingat a 2:1 to the day. Sixmonthsfromthe prior
majorlow.Allthe thingswe havelearntto monitorovertheyears! I
It wasallthere...
I
Bear Market Trends 26 Section2: Chapter- 3
I
I January2AOZand March2002 DOUBLE

TOP:
I l,laue Trader BftII,T

/Ulorch?OO2High
Ilate B1BEZ1
I tHI S44.?5
Ilate EZB313
rBl 11?3.34 I Jon 7th
Fnge ZZ:t.19 r Tolol Beor
I Boot 15.14
Sqr9il 835
Rclroccncnl
33.e DoublcTop
PER[EI-{TflGS
I >
(
zL.zB*
-19.5Utr
NEGNEf, ffiB
I uib
nffYS
Uib
1.272
1?S
1. ZBB
I r,teeks 25,6
gears B.5BB
t80o-
llaiu 68HarB1 B1Jun01 ??ffug61 ZZFebBZ Zlt{agBZ

I
t March2002 high: This was anotherno-brainerin the progressive
bear
market.Therewas alsoanotherimpoftanttimingelementthat cameout at
for posterity.
the doubletop that is wofthmentioning
I
I l.lave Trader
157 EZEZZA
Ilegrees
tzl BzB319 Jon.Tth rlA.ini

Triple Top
I II].|E... .
f,alendar
27
I Ilegrees
z 7 .E
Ilisplag
z7
I }IEEHS
3.S
YEfiFS 44 ?7
B. B?5 Doys boys
I P n I C E. .
HRI{GE
1.OOO' 0.618
98.58
I IHRHGE
s.zw{
H ai n B65epB1 Z6tlctEl 15llecE1 BZFebBZ Z4llarEZ l5l,lagEZ
I Thereis reallyno excusefor missingSIGNSlike theseif you understand

marketgeometry andthe classic
teachings
of Elliott& Gann.
I
I BearMarket Trends 27 Section2: Chapter- 3
Tradingto WIN Cowse- One day at a time [c] Bryce Gilmore2004
I
SOMEMARKETLOGIC: I
Whenyou arriveat a decisionpointthat seemsto be of a majordegreeyou
shouldinvestigate possibilities.
all the technical The moreimpoftantthe signs
you canseeat workthe better.Somebottomsor topsin the marketwill not
I
beasclearasthe onesI amshowingyounowbuttherewillceftainlybesigns
for youto follow. I
As my policyis onlyto tradeintra-daynowthe majorturnsneverhaveme
holdinga positionfor very long,but it is handyto knowwhat the general I
marketdirectionwill mostlikelybe.As I go fromdayto dayI seethe smaller
wavesworkingthemselves
fonruards
takingadvantage
into completion and I can trade backwards
of the ebbandflowof the market.
and I
I havebeenstudyingthe otherplayersin the marketfor well over20 years
to amazeme howpredictable
andit neverceases theycanbe at times.
I
Whetherthesetechnical
preordained
thingshappening
naturallaw or just
in the marketare because
of some
becauseof the actionsof tradersactingon
I
pre-taught
technical
thingshappen
education is not very importantto me.Thefact is these
andthatis allI careaboutasit givesmean EDGE. I
I alsoknowonethingfor surethat marketscanonlygo up or downbecause
morepeopleare buyingratherthansellingor vice-versa. If theystaftbuying I
or sellingin forceaftera majortechnicalsignalI am going to followthe flow.
Whatevertheir reasonsfor buying or selling there is always some
fundamental reasonbehindtheiractionsthatwill makesomesenseaswell.
I
It maywellbe that whena marketis fundamentally
it takestechnical practiced
signals by a large
readyto makea reversal
percentage of tradersto come
I
into syncto tip the balance.
Thiswouldbe the onlylogicalexplanation
marketswerenotworkingto somepreordained naturallaw.
if the
I
Thiscouldexplainwhyat timesit is nearlyimpossible
highsandlowsthat nevermakeexactgeometrical
to explainsomemarket
sense. I
Nowsomepeoplereadingthis pagemightwantto callmea hereticfor saying
this nowafterall the booksI havepublished on the geometric
subjectin the
I
past.But I will haveto livewith that if it is youropinion/becauseI am only
you
telling howI feelrightnow,that'sall I everdid in the pastanyway. I
The thing is I startedout lookingfor waysto forecastthe future and as the
yearspassedI decidedit wasa fool'serrand.Forecasting wasfun but it never
reallyhelpedme makeany moneytrading.To makemoneytradingall I had
I
to do was readthe marketone day at a time andthat is how I havebeen
doingit all my life.At timesmaybeI thoughtI wasdoingsomething elsebut
now I realiseit was only my constantdailywork ethicthat hascontinually
I
mademea successful trader.
I
BearMarket Trends Section2: Chapter- 3
I
I Tradins to WIN Course- Onedav at a time [c] Bryce Gilmore2004
I THEJULY246,2OO2LOW:
I A flashback
manual.
to August22nd,2OO2 whenI waswritingthe 1* Tradingto Win
Thisis whatI saidat thetime.
I As it turnsout my ideaon how wavesof similardegreeshouldrelatehaskept

my mindin the right directionthroughoutthis bearmarket.
I
2000
I Ggclefradu
ilRnrcns
S+P 5BB GASH
AuErst 22nd,2DO2:
HISH
I tsl Ef,03u4
1552.8?
m
SeP5m hasrnadea significonttechnical
Lorru
ct this tine horing relracad tO years
of goinsby 6LB and follen 5O%in
tzt En?24
I 7?5.68
III{E EYCLE
dags 852
fronr tha all tirnc yeor 2OOOhigh.
50% FALLIN VALUE
I
degree B:l?
ueeks IZt.?
lrths Z.fj.tr
Uears 2.fr6
NRNGE
f*ffi'
I sqrsd\!QS,/
I Rightnow a solidtechnial bottomhasbeenregisteredand it is onlya matter

of time to see whatthe endresultwill be.
I From my point of uiew I have been trading the upside more than the
downsidesincethe Juty 24 low - but then as you read more chaptersyou
I will seethe reasonswhy.
Situationright now is that the S&P500is tradingat 950 up 175 points from
I the July low. Thepreuiousralliesin similardegreewere235 and 233 poinB
so it remainsto be seenif this rally can exceedand overbalancethe CYCLE
DEGREE andstaft a newseriesof wavesof similardegree.
I As far as I am concernedthe trCLE bear marketis still intad until we take
I out the 38.2 of the total declinefrom 1552to 775. Thatwouldmeana level
of 1075has to be exceeded.Timewill tell, in the meantime it is businessas
usual.
I 775wasthe July24frLowandthe rallyup fromit failedthe dayafterI had
writtenthis, the thing was that the August22ndhigh of 966 basisfutures
I didn'tmakea hellof a lot of sensegeometrically
OTHER thanthe percentage
increasefrom the July 2001low to August2001highwas identicalto the
percentage increase fromthe September 2001lowto the January2002high.
I
I BearMarket Trends Section2: Chapter- 3
I
August 22ndr2OO2Bear Market Rally High: I
l.laue Trader
IZBE.8E
sfl Itt lst Month ConiinuousFulures I
1ffi8.94
11zs.0a I
1888.BB
1848.09
1008.08
I
+134.8
968.BB
sz8.oB I
888.88
848. AE
8S8.A8
Augusl22nd High didn't quile moka
the l:1 or the 5O of thc prior ronge 57.7
retroce
I
?68.64
I'lain 05Feb0Z l5llar8Z ZSftprBZ B4JunBZ lSJulBZ Z3AugBZ I
Nowthesearethe situations that createa dilemmafor you.The marketjust I
failedto makea 1:1 with the priorwaveof similardegreeand it alsojust
failedto makeit to the 48.6or the 50 retracement.
I
The48.6wouldhavebeenat 969andwouldhavefittedwiththe 1:1- the 50
wouldhavebeenat 975. The highwas966 on the futuresand965 on the
cash.Neveftheless the marketreversedand went on to makea new low
I
whichjust brokebelowthe July low by a minornumberof pointsand that
didn'tmakemuchsenseeither,I am nowtreatingit as a biggerpicturefalse
breakbecause so quicklyat the time.
of the wayit reversed
I
I
S&F5gB
ilate 9,ZBBZZ.
hi s66.08 2l Trcdingbays
I
I
Ggclefrader
I
I
ln
date
767.50
&ZIALE
34 TradingDoys
159.4
I
f{ain WZSTZZ 421915
I
Bear Market Trends 30 Section 2: Chapter - 3
I
I The thing I have learntover the yearswhen the ratiosdon't comeout

perfectly
is to go withthe patternandmyotherrules.
I 1. Corrections
shouldnotlastlongerthan2 days.
2. The3-Dayswingis the fastestindicator
for the currenttrend.
I 3. Corrective
wavesof similardegreeshouldnot overbalance.
Following
theseruleshasalwayskeptmeaimedin the rightdirection.
I
THECOMPLETED
BEARMARKET:
I
I
CgcleTrader S*P 500 CASH BEARM/4RKET
2OOO-aOOZ
G
HRRHERS a
r
t
tSI BBA324 t
1552.8? I
: \4339 1 e
ro U
IZt EZIAilA S
232.2
I
764.63 t!
11 I
n
c
^ u
I s 2
k
-40E.3
I Keepo record of cverything
OnethingI wantto remindyouof againis to alwayskeepa recordof events.

I If you do this thenyou will not overlookanything.It is easyto forgetsome
thingsandthenrealiselateron thatan oppoftunity got pastyou.
I As I saidwhenI startedwritingthis chapterthe S&Phascurrentlymadea

highof 1015two weeksago,that is 247pointsup fromthe October2002low
and226up fromthe Marcht2, z}O3low.Thewaveup fromOctober10h to
I December 2ndran 187anddid notoverbalance but nowit is a differentstory.
I s&P500
rtate 83661?
hi tBI4.Ag This wos not enoughto OVER.
I
BALI4NEE thc bcor trend
+1E73 .
Cgclefrader
I
I lr
d n 1e
?6?.5S
az7ai8
I llain
I BearMarket Trends 3l Section2: Chapter- 3

Tradingto WIN Course* One day at a time [c] BryceGilmore2004
I
Thisis howI potentially
presenting
seethe currentElliottWavepositionof the S&P,I am
this as a guidefor my studentswhoarecurrentlytakingrealtime
I
trainingwithme rightnow.
I
l.lave Trader
1682.A0
tSzB.aa
tlEEl;L'l s&P5as sPX
llty ELLIOTT WAVE inlerpreiotion
I
right nouris this:
1438.0S
1356.BB
It moy not help me mokeony money I
but it is o focus T con concenlrote on.
tz?4.89
1192.0B D+th I
Lt1'A.sg
1BZ8.0A
946.08
I
864. BA
78Z.gg
Somcmay dispute the olb counl but it is
coveredin Elliolt's work: F 2
I
?EA.A8
I'ln i tl B3l,farBB TTBgfBE Z9Jun61 ZZEebEZ 250ct0Z BlJulB3
I
PointE was the July 24tr'2OO2low. Officiallythat is whereI seethe bear
marketended.The up and downmovebetweenJulyand Octoberalthough I
still withinthe confinesof a bearmarketdid not extend.We couldcallthis
periodan adjustment period.The interesting
thingaboutthe low on October
10th2002wasthe waythe marketjust tookout the Julylow on a panicsell
t
off dayandthenreversed VIOLENTLY. Within3 daysthe markethadregained
over116 points. I
I
I
I
t
AZ1A1B ??6.88 88?.38 ?E?.58 BBZ.58
I
The conceptof the A-B base at the end of a bear marketwas twice
mentionedin "NaturesLaw"according writtenby
to the ElliottWavePrinciple
I
FrostandPrechter[C] 1978.
I
BearMarket Trends Section2: Chapter- 3
I
I Section 2l chapter+:
I Bull MarketTrends:
I Bull movesexpandin orderlyways,i.e., they movein stagesof minute
degree,medium-term
degreeandlonger-term degree.
I shouldnormallyrelategeometrically
Eachdegreeof movement withinitself.
I Whena moveof similardegreeis in progressany corrections withinthat
moveshouldneverexceedthe amplitude of any priorcorrection
of the same
I degree.If theydo thenthe wavestructureis saidto be movingup a degree.
Waves
of similardegree:
I
I
I
I
I
I
I
I Thecommonwavesetsyouwill getarethese:
I Wave1
1o Resistance50 of Wl
From orior
Wave2 Wave3
1 : 1o f W 1
Wave4
1:1of W2
Wave5
1 : 1o f W 1
57.7of Wt t,272of W1 38.2of W3 1:1of W3
I Downtrend
Couldbea
61.8of Wl
66.7of W1
t.4L4 of Wl
1.618of Wl
38.2of W0-3 1:1.618W0-3
44.7of W3 38.2of W0-5
38.2or 50 70.7of Wl 2ofW2 44.7of W0-3 50 of W0-5
I retracement 78.6of Wl 2.618of W2 50 of W3 61.8of W0-5
Thesearejust a guide,asthe marketunfoldsyouwillseewhatI mean.

I
I Bull Market Trends
Trading to WIN Course - One day at a time [c] BryceGilmore2004
I
BullTrendCompletions: I
Oneof the waysyou can tell if a bull trend has reachedcompletion
lookingat the wavedivisions
of the completedmove.
is by
I
Forinstance the totalmovecouldbe 100pointsandthe amplitude of Wave5
is 38.2it canalsobe 50 of the totalmove,in somecasesit willbe61.8of the I
totalmove.
I
j
I
I I
I
T
I i
5 -+
TERMINATTONPOSSIBILITTE
r L ! \ a t t 4 t
t , t
r a r
I I
r 4 v t r
i ,
r
; i I I
v g g * v + L r . r L g
t - - , ,
:
i
]
i
I
; i I I J - r I i o '
l - l
I
Oftenyou will find that becauseof the internalstructureof a wave seriesit
will terminatein a way where the last leg into the conclusionbecomesa I
Cardinalratioof the entiremove.
Froma trading point of view it is betterto keep it simpleand only deal with I
wavesetsin similardegree.
I
I
I
I
its
l
I
1.272
yourfirstexpectation
Whenbuyingbreakouts targetis the 1:1
I
I
Bull MarketTrends Section2: Chapter- 4
t
I ,ot jffi
Price 839,56
j ,n,otu, p--3 | Hrr^_.urc : u : E H s j ts A ' i E B i e * t f f i i A F i e
Date o3,/31,i03 This is vuhothoppencdover the
I first two doys of the weak.Ii

is worfh renremboringhow
technicol buy ord scll poinis con
I be if you do thc cElcs.
I
I ALL WAVESCOLOR
I C O D E DA R E 1 : 1 ' s
I Hereis an S&Pchart I savedfor the two daysof March3l and April 1 when
we resumedthe establisheduptrend.We reversedbackinto the uptrendoff a
50o/oretracementon March31, 2003.
I Sincethen this has beenthe progress.
t Price 961.74
Date 06/S,iO3
I open 97612
High 9ffi.61
Low 973.60
cl@ 974-50
Csr % 5.0
Morkei Trcnd in lAojor Degree
I
# Bars 1
I -36.6
30th June 2OO3:

Thc morket is o{J 41.7 fron its high this is
I 5 points mot'ethon the prior corection of

simifor de4reoso l'he rrcxl decisionpoint is
fha 52 ? dovn ot the end of lAoreh.If ihe
I trand up is lo renroinintoci we hovoto stoy

obove963-96O olhervlisewc ovcrbolonce
I
Thedifferencebetweenthe March31 lowandtoday'slow is the patternover
I the pastfew days.The"windowdressers" havebeenat it againbut it is hard
to saywho waswinning.Whenthe Junefuturesrolledovera weekagothe
majorityof the short positionsthat expiredwere Non Commercial or most
I likelyHedgeFundsshoft positions.It meansthat
shortingthismarketallthe wayup andmaycontinue
the hedge funds
to applypressure
were
in the
I daysahead.
Bull MarketTrends 35 Section 2: Chapter- 4
I
timesasthe feelingnowis thatstockshavereached
Interesting fairvalue. I
In anycaseyou shouldhavethe ideaby nowthatfor tradingpurposes we go
it wantsto go uF,go down,or
withthe flow.The marketis eitherindicating
restalongthe way.
I
As a traderit is not terriblyimpoftantwhetherthe marketis goingup or I
down.Whatis impoftantto knowis whereit will find technicalsuppoftand
resumethe up trendif it is bullishor whereit will hit resistance
andcorrect.
I
On a day-to-day dailytrend.
basiswe haverulesto followin anyestablished
Thetrendwill alwaysbe clearto you if youfollowthe rules. I
If the marketis goingup in an established
trendit will havemorebuyersthan
sellers.It is normalthat marketswill havemorepublicparticipation
uptrendthan a downtrend. The publicare just in
not educated
in an
tradingbear
I
movesandmostlytheyhavethe mentalityinstilledin themfrombirththatthe
onlywayto makea profitis to buy- hopeit goesup- andsit with it. I
The publichavea habit of holdingpositionsway pastthe top of market
advances andget themselfwashedout on the corrections.
Whena bulltrend I
reversesmostwill hangon untiltheirworstfearsare realisedandthenthey
willcapitulate.
I
As marketsmoveinto overbought you will
territory,basistechnicalindicators,
findthatthe public arebuyingin casetheymissout,whereas
traderis lookingfor a placeto sell.
the professional I
Professionaltradersarewellversedin markethabitsandthat is whytheyare
alwaysthe big winnersovertime.Theyare alsomarketsawy so they know
t
whena moveis runningand will buy with the trend if they don'tsee any
in the way.
barriers t
Neveftheless on anygivendaythe hardcorewill followrulesandbuyandsell
the levelsthattheythinkofferoppoftunity. I
In advancing
levels.
theylikethe 1:1or L:L.272
markets or the 1:2.000
or 1:1.618
I
So as you approach thesepricelevelsyou haveto be watchingthe market
activityto seeif theyarelookingat a reversalto go backthe otherway.
t
Tradershavean abundance of reasons or excuses for theiractions,afterthe
eventtheywill tell the mediabut then it is to latefor the averagepersonto
I
the levelsat the timeto pafticipate.
actupon.Youhaveto recognise
Tradinga bullor beartrendis no different- it'sjust that in a bulltrendthe

I
publicwill havea greaterpafticipation,
evenif it is onlyviathe mutualfunds.
I
Bull Market Trends
I
I Tuesday1* July 2003:
Todaywe bouncedoff the 1:1 levelwith the Marchcorrectionafter a gap

I downopening.
Themarketclosedon its highsfor the day.
I S&P5BB
date BSBEl?
hi 1815.86
I 1:l Corrcction*
in similordagrec
I Cgclefrader
I
I
ls ?88.58
I date
l{ain
8383tZ
AfAfZq
I Nowin the shorttermthe 3 dayswingonlyhasto turn backup to changethe
I currentmoodof the market.We havethe 4mJulyholidayon Fridaywith half

daytradingThursday.
the endof the week.
Thereis likelyto be a Iot of booksquaringgoinginto
I Echarts ESU
sse.BB
ESB3U-5
: 3 Doy High- 988

I SEg.BE
sCI6.08
I s83.68
98B.BB
-a-
Pgttliglt: ?-E?-.9
I S??.BB
g?4.98
Linein the $snd - 971^4

I s71. BB
s58.BB
965.89
I s6z.BB This low is o lcrge degrec 1:1-->>>
EE,/3B,/ZAE3
I l,lain
Timewilltell butthe lowtodayhasallthe earmarks

of a majorreversal.
I
Trading to WIN Course - One day at a time [c] BryceGilmore2004 I
Sohowdoesthe ElliottWaveinterpretation
fit togetherrightnow? I
S&F5BB
date ffi4617
I
hi 1815.33
W 3 : 1 . 6 1t8i m e sW l
I
W4 is 1:1rnrith
W2
EgcleTrader
I
I
The conclusionright now is lhot
the trend is up os longos tha lorar
of W4 ramoinsintoct.
I
la
itnte
?fifi. Sfi
B3'&313
I
I
l{ain B3B1Z4 83833?
Eachday you just movealongand readthe signs.That is why it hasto be

onedayat a time.In ElliottWavetermswhilethe W4 low holdsup the bull
marketis still intact.If it failsthenthe wholestructureup to the highwould
countasanA B C conclusion.
I
l.lave Trader
t
ilegrees
tsl 838331
tzI B3B?81
Somaconventienollechnicol things
I
T I I { E . ...
f,alendar
9Z
Ilegrees
sean betvJeanthe lov.rs
I
88.9
Ilisplag
8g I
l,tEEl(5
1 3 .1
YERRS
E.?.47
I
9O begreesTima :
I
tdain Z?SepE? lEHovBZ lBJanB3 B?l{arB3 03Ha9BI BlJul83 I
Justfor the recordrightnowtherewerea coupleof thingsI sawthat might
be in playat this low.Theyareon Gannrelatedteachings
that you canread
I
aboutin my DT&PAnalysis book.
I
Bull Market Trends 38
I
I Wednesday 2ndJug 2003:

tntavatliF--= I- Alsessions
I I
5 P 0 3U
I
T ir lrov,lUP
t
I
I
I
I Todaythe marketopenedandat first met resistance at the 50o/oretracement
but laterworkedit's way slowlybackwards andforwardsto the 61.8. The 3
I day swinghigh was at 9BBso that is now up again.Nowthis has to be
countedas the secondday up so we do not knowfor sure if it is just a
correctionin a downtrend or a newwaveup that will keepgoingandtakeout
I the 1015high.If it is the beginningof a newwaveup we canassume
has everychanceof goingup a minimumof the amplitudeof W1 (108
that it
I points).Sofromthe lowof 960.5thatwouldtakeus up to 1068.5.Nowthisis

onlyhypothetical
useour knowledge
at this stagebut I am just givingyou an ideahowwe can
to mapout an ideaof whatto expectin the futureif the
I confirmation comes.
The 1:1 targetwith W1 wouldmakea 0.618:1with W3 so that would

I definitelybe a logicalresistance
areaalsocoincides
in any furthermarketadvance.The 1068
closelywith a 38.2retracementof the total bearmarket
rangefromMarch2000to October2002.
I I am not makinga forecastherebecause I will be takingit onedayat a time.
Nevertheless it is handyto havean ideaof whatis possible. Someweeksago
I a coupleof the selfproclaimed ElliottWaveexpefts(BobPrechter
Miner)were still callingfor a markethigh and a resumption
andRobeft
of the bear
I marketto newlows.Theyhavebeenthe wrongwayaroundall the wayfrom
the Marchlow.Youknowtheybothpreachthe powerof contrarythinkingso
I won'tturn bearishuntiltheyarefinallyforcedto admittheyarebullish.
I
Bull Market Trends 39 Section2: Chapter- 4
I
Solongasthe recent960lowholdsI amgoingwiththe trendwhichis up. I
Just for the exerciselet's havea look at the big pictureand see how the
markethasdeveloped sincethe Octoberlow. I
Cgclelrader
t574.ffi
HIGfl
I
Morch ?OO0
t
I
I
Oetober'2O02
L0l.l
t
?6?.56 zf,aaa3z{ - Z9,BSETBZ
I
Therecenthighhasexceeded the two previoushighs- old resistance
= new
suppoft.Thosetwo highsare 966 and 955 respectively.
tradesabovethesehighsit hasto betreatedas bullish.
Whilethe market I
The 50o/olevelbetweenthe 2002JanuaryhighandOctober2002low liesat
973.Whilethe marketremainsabovethe 50o/o
it hasto be considered
bullish.
I
Anotherthing is that the marketbrokethe simpledowntrend channelline I
sometimebackandhasremained aboveit for sometimenow.
Theseare just simplethingsbut they are thingsthat the investment

funds I
haveto take into account.Manyfundshaveremainedsidelinedin the early
stagesof this rallyfrom March2003and mustbe gettingneruousthat they
havenowmissedthe bottom.The mediais nowpersistently that
broadcasting
I
the USeconomicreportsreleasedrecentlyindicatethat the USeconomyis
rebounding.The factsareencouraging
fundamentallyfor higherprices. I
With fundamentalconditionsthat encouragepeopleto invest in stocks
aboundI wouldn'texpectthe marketto go intoa tailspinlikewe sawin 2002.
Repoftsalsoshowthat there hasbeenrecordinflowsof moneyinto fundsin
t
recentweeks,this indicatespublicparticipation.
That indicatesthis current
moveis a bull market,maybenot in the samesenseas the bull marketfrom I
1990to 2000but a bullmarketneveftheless.
Nowyou can haveyourchoice.Do you fight it or do you go with it? I think I

you knowthe answerto thatquestion.
I
Bull Market Trends Section2: Chapter- 4
I
I PREPARINGYOURANALYSIS:
Just in caseyou are not 100o/osure how to go about it - here is the

I procedure:
1. You look at a LONGTERMchartand establishwherethe marketis

I basisthe past3 yearsor so.
2. Nowyou go to the dailychaftandworkout wherethe marketis basis
I the pastfew monthsto a year.
3. Havingestablished the likelypositionrightnow,i.€.,if the marketis
goingup or down,yougo to the mostrecentmovesandlookat where
I the supportandresistance zonesare.
4. Onceyou have done this muchyou are staftingto tune into the
market.
I Nowyou canworkto the 60 minute,15 minuteandthenthe 5 minutetime
frames.
I Thesewill giveyouthe placeswhereyou needto watchif youwantto initiate
trades.
I Thursday3d July 2003:
I u @--fJ
Price s7155
t"t"'a lE6-*l r. snsessiom
I
Ode 07fi}3io3
Time 89:30:00 Thursdoy3rd July 2OO3 Holf doy closed1:1OET
Open 98625
Hsh 99425
LOW s85.50
Cle 989.00
I Csr % -0.7
# Ear$
Vol 144,1S
,rllI
I <--- This spike di
I Somev.rildswingstodoy: l didn't renlly

expect the 61.Eio comooui todoy.
Holf doy iroding todoy
I
I
I The rallythat beganat 960two daysbackhasyet to confirmit is a W1 of a
new expansion. Still it couldprovidegroundsfor a 1-2 with the deepspike
downto 974.5today,asthe Linein the Sandat 971.5is stillintact
I Whenhalfthe regulartradersare awayon holidayit's not unusualto get a
suddenreaction
off a cardinalretracement
levellikewe didtoday.
I
I
Tradingto WIN Course- One day at a time [c] Bryce Giknore2004
I
Let'stakethe holidayweekend whatwe knowtechnically
to summarize about
this marketrightnow.I am writingthesechaptersin realtimesoyoucanget
I
the ideaof howI go aboutthings,I don'tknowwhatwill happenin thefuture
but if I followmy rulesI amalwaysprepared. I
Wecanstaftwiththe bigpicture:
I
TherecenthighJune17 qualifiesasa W3as it wasa 1.618:1expansionwith
the W1 from MarchL2. In Elliotttermsit wouldbe eithera W3 of a bull
marketor a WaveC of an ABCbearmarketrallyfromMarch12.
I
This week'slow at 960.5(Big pit Contractlow) qualifiesas a W4 in a bull
marketor a W1of a newbeartrend.
I
Today'shigh994wasa 61.8retracement of the Junet7 (1015)highandthe
July1 (960.5)low range.Thisqualifiesit as eithera W2 in a beartrendthat
I
beganon June17or a Wl of a newexpansion thatbeganon July1.
I
Qcharts GSU
1B16.BB
1616.06
W3orC ELLIOTT W/4VEPOSITION I
1S84.BB
99B.OB I
!xtz.g0
!I85. A0
:t8B.gB
I
s74.BE
gbt-BB
s6z.Ba
I
!F6.ES
a6,/1?rZAWl
|{a in
ES83U-58
r
g6,/13
r j r
:
BE/Lz
| | | |
g6,/2A
r r i
AWZS
l i
W4 or wr
l
ffi/3n
i l l
g7/63
l l l l
I
If you applythe ElliottRulesto the currentmarketpositionthe WaveCount I
possibilities
areveryclear. 960as a W4 lowimplieswe go higherand994as
a W2implieswe go lower. I
Soour largerdegreealternatives
areto buyit on a breakof 994or sellit on a
breakof 960.
The short-termtrend (3 day swing)is currentlyup, yet the current61.8
I
resistance
doesn'thelpthe Bullcaserightnow.
Positives
for the Bullcasearethatthe marketis stillabove973,966and955,
I
the levelsI mentioneda coupleof pagesback.
Rightnowthe caseis strongerfor a bulltrendthana beartrend,i.€., unless

I
the 960lowcomesout andconfirmsa downtrend in progress.
I
Bull Market Trends 42 Section2: Ctnpter - 4
t
t Tradingto WIN Course- One day at a time [c] Bryce Gilmore2004
I Monday7u July 2003:
Whenyou see what has happened

this morningyou will knowwhy I am
I marriedto thisbusiness.
I The Globexsessionfrom Sundaynight traded up towardsthe 994 level

indicating
the marketwouldmostlytestthe 61.8resistance.
I The marketday sessionopenedandwithin5 minutesthe breakof 994was

completed.
It wasa no-brainer
tradebuyingthe breakof 994.
I 0charts GSU
tw?.w
I u&.08
ffi81.48
st6.80
I s95.BB
s9.08
61.8broken: Trad UP
s{1.80
I s6.48
9&t.08
t SB.E8
s??.48
E?/6?/zg]A3
g?/BZ
Laus 1E:15 LEhZ.AB 1AE4.ZS m81.68 1B83.Zs W./A?
I It's a toughlife@.A breakoutfroman established suchaswe saw

resistance
todayis likehavinga licenceto printmoney.
t
I
Qcharts ESU
tgz4.ffi
18ffi.04
leLZ.W
I 1Bffi.SO
IEBB. E9
I 994.m
s88.m
s8z.@
I s?E.m
sm.w
I gFt.06
g7/97/m3
Rat ios tPlrice ab= 54.50 cd= .14.?5 cil/ab= 0.8e1
I The retracement
hasextendedto 82.1now,78.6wouldhavebeena levelto
watchso nowwe shouldexpectit to go higher.Thedoubletop at 1015is the
I nextresistance.
SupporGarenow1000andin the worstcase994.
t Bull Market Trends Section2: Chapter- 4

I
I hopeyou guys are learningfrom my day-to-dayanalysisof the current
situation. I justfocuseachdayon whathashappened andformanopinion on
I
what levelsother serioustraderswill see as impoftant.Oncethey have
analysed the importantlevelstheywill placeorderseitherunderor overthem
to sellor buy.
I
This is how the market flow works. The more buyers that are I
present and the price goes up, more sellers the price goes down,
nothing else matters, it is a fact of life.
t
All that is important each day is to identify the levels the buyersor
sellersdeemto be critical to their current opinion. I
S&P5BB
t
t,'ttfu
date S3861?
hi 1814.80
Just o lcminder - or vuokeup colll
I
I
I
I
PRICf, RB= S4.ZA f,l= fl-38 = I-BEZ
ln ?S8.sfi
riate 83E3tZ
I
Scroll * rrr,
The bull trendfrom the March12 low is still well and truly intact;the only
thingthatwillchangemyopinionnowis a two-day break below960. I
Tuesday8h July 2003:
Todayafter a lot of backingand fillingthe marketfinallybroketo a new

I
Futureshighof 1008.5fromthe 960 low.Youcanseethis marketis coming
underpressureasit getscloserto a doubletopat 1015. I
1818.BE I
1BB6.OB
1AAZ.BB I
gg8. BB
994. BB I
I
Bull Market Trends Section2: Chapter- 4
I
I wednesday9u' July 2OO3:

r'u"a ff---l
I lffi--] F Arsissions
Prbe 1000.43
Date 07r@O3
Iine 12m(x}
Open 999.50
l High 999.75
Low g96IXl
Close 99l"fl)
Csr% 0.3
t Eers-120
T Vol 17,42
t
I <-Vohenespikc on low bor
I
I Thedaystartedoff in a choppyfashionand hadthe lookof a countertrend
dayafter 10:30amET.I loston the 1s two tradesbefore10:30amandwas
t underwater 1.5 points,I was not comfoftable
with the chop.I managed
shortafterthe highof 1010at 1007^4and as soonas I had recouped
to
my
closedout andquittradingfor the day.
losses
I Openinteresthasbeenbuildingup the pastfew daysso it seemsthereare
I plentyof traderswho don'tthinkthis marketwill takeout the June17hhigh
of 1014^6.
I
I
I
PersonallyI thinkit canbut it needssomegoodnewsto helpit along.Weare
I into Q2 profitrepoftingso someextragoodnewsmaytip the balance. The
if
linein the sandis stillat 994andthe 3 daylow is at 995.5so technically
thismarketbreaksbackthrough994it is in a weakposition.
I Any moveup to the old highat 1014^6is surelygoingto attractextreme
I sellingpressure
support zone.
but the encouragingthingtodaywasthe volumespikeon the
low bar of the day. It showsthat there are plentyof buyersdownat the
I
Bull MarketTrends 45 Section2: Chapter- 4
I
Qcharts CSU
16z4.W
E:iE3U-3O Whilethis markettrades above994 the doubletop
1014.75or breokouttradeis a reol possibility.The
I
ffi18.m marketis becomingcrompedright novrrsomething
1612.04
1086.gB
tA14.75 Rasisionce needsto aive.
Retrocement is now 91.3?. 1O1O I
13]gA.W
sg4-m I
SB8.EB
s8z.m
s76.ffi
t
s?a.m
s54.AA
g7/wrzh0.3
t
nat ios lPlrice ab= 54.58 cd= 49.?5 cdlab=
Let me explaina few morethoughtsI am havingat this time as they may

8.913
I
comein usefulto youin the future.
We toppedout on the 17h Junewhenthe W3 went 1.618of W1 and the

I
progressive
wavesin W3 went 1:1. Now everyoneworth their salt as an
analystmusthaveworkedthis out by now. Nextwe reversedbackup from t
whatI am callingW4on a 1:1withW2.Theentirewaveformin majordegree
is"square"
to theW4label.(SeeS2:C4:P38) I
Nowby my rulesthe onlywaythiscurrentmovecanreversebackdownis for
it to makea doubletop with W3 (1014.75)or go on to 1068to keepthe
integrityof the wavestructurein the samegeometricform.Oncewe passed
T
abovethe 61.8 (994)of the move
the maximumgeometricpossibility
fateof the W3asa conclusion
down from 1014.5
to 960.25we exceeded
that wouldhavesignedand sealedthe
fromthe March12hlow.
t
In anycaseanytestof t0t4.75 is goingto be metwithstrongsellingandany
breakaboveit is goingto attractstrongbuying.This is very clearto me, I
I
hopeit is clearto you.
I
Neveftheless in the shofter-termpicturewe couldstaybelow1015andabove
960 and still maintainthe integrityof the wavecount.WhatI am sayingis
that while the markettradesin this rangeit is a tradersmarket.I was
I
explainingratiosas we went alongjust so we havea "road map"of the
biggerpicture.Nowwe are in a "no man'sland"so to speakso it is very
impoftantto watchthe dailypatternsand usethemas a tradingtool.As we
I
have beengettingcloserto the old high (1015)the markethas become
choppierandchoppier. Thisis because we havetraderswho believeit cango
higherandon the othersidetraderswhobelieve1015is the seasonal high.
I
The marketstillhasto tell uswhichsideis correct,thereis no needfor usto I
decidein advanceallwe haveto do isjust followthe signsto makemoney.
I
I
I Tradingto WIN Course- One day at atime [c] Bryce Gilmore2004
I ADDENDUM- 1* December2003:
Theprocess thismanualhadbeendelayedfor overtwo months

I of completing
sinceI completedthe originaldraft so I am addinga little extra to this
chapteras the S&P500todayhas finallyachievedthe target I havebeen
I talkingaboutfor so long.
swingchaftsoyoucanseewhatI mean.
Here'sthe up to datelong-term
I
EgcleTrader S+P 5BB CftSH
I FRICECYf,Lg
ifft
Pr
BaB3z4
1552.8?
1 I l e c Z 0 B 3. . . . . 166S.95
tB] B21618
I Pr ?6fi.83
Fng 744.24
2 5B.5:r,
I
PRI]JECTIOH
ICI EZtAtB
Fr ?6ft.53
tnt B3L?8t
Pr 1868.E5
I R
'4 n g 335.
RRTIOS
BB.32
L:4
Pr E-38e
I pr
'1
't
S.383
9.774
fr.774
I The high this morningrepresents of the total points

a 38.2 retracement
declinein the 2000-2002bear market.Alsotodaywe havea time factor
T present.
highas well.The ls major

Thismorning's highis in linewith an anniversary
I highafterthe bearmarketlow.Willit holdthat is the questionrightnow?
I Egclefrailer S+P 500 CffSH
, This is as close os it gcts so if

1 Ilec 2963
I'IARHEBS
I T5] BZ1B1B
?68.E3
i ii is not o high iodoy v.reshould
, go muehhigher:
TO
I 121 sSLZEt
1B6E.9s
i tll becember
lst 2002
t
TI},IEf,Yf,tE
dags 4I'l
degree 412
uleeks 5t1.6
mths 13.? Vcry close to exocf
?
I
gears I.144
RAIIGT 4-5=t
it0uE 3BB.3Z 4-i = 3xO.618
B 39.1
Sqr9d 8S5 $\arch 12th 2003
I
I Bull Market Trends 47
Whicheverway you look at it there is plentyof evidencetechnicallythat this
marketcouldhavea setbackat anytime.
I
But as the day wore on the tradersdidn'tseemedto be phasedaboutmy
targetand plentyof themknewit wasthere.I evenwitnessed a floortrader
I
interuiewed on Bloombergearlierin the day sayingthat the markethad
arrivedat a KEYRESISTANCE LEVELandwastestingit. I
liEEf+ i J E q r i u e s 'L f o f p r t n b r v a l s@
- nc @r @s @oo @oaih @r* I
I
I
I
t
09:00 10:00 U:oO 1e;00 13:00 !4:00
I
I
t2/ou03 O: {08225 H: loatso L:10815{,
P{ilbtf,d by esgEl (m,esiJnd.@J
t
CSU Ilata
I
ES-I}RY
Current Range
82.75
prior
f,I-BC
[i]"frE
ranges
1.618
1. 825
I
f,D-XR 1.465
Reuerse Cross
fiD_EC Z. TSE
Insiile Cross
I
f,I]*Rn A.737
0utsirle Gross r iil
B D _ R I ] 8 , 7 . 4 1 ' ' ,, , i '
Iloub le Crtrss ll,.,r"'
Hn-xc 4.15? It's not out of thc woodsyetl
I
Retrace Z
cil- xc 3. 8fi5
ffI}_Xff Z.ABg By ony meonsbut of leost our I
torget v.rosochievedtodoyl
tz/81/83
Lnus LB/Zg 1869.BA 1B7B.58 1455.75 1868.?5 I
I
Bull MarketTrends 48 Section2: Chapter- 4
I
I It hasbeena roughrideup to today'slevelsoverthe pasttwo monthsbut we

haveeventuallygot hereafterallthis.
I WhatI can'tunderstand
of this year
is thatthroughout the pastmonthsbeginning
in April
"Guru's"
Bob Prechterand Bob Miner,both self-proclaimed of
I ElliottWavehavebeencallingfor a finaltop and a resumptionof the 2000-
kept their
2002 bear market.Effectivelytheir forecastinghas successfully
newsletterfollowerswrong footedall the way up.
t alwaysa forecaster,
Oncea forecaster andthe marketwill do everythingin its
power to prove you wrong. Now that the market is way above the
I psychological
1000levelandclea.rlyin a 5b Wave,the chances
backbelowthe levelsof the 4* Waveof lower degreeare
it wouldtrade
remote in the
t future.Therangeof the 4h Waveis the 1015-960

area.
As I havesaidin the lastchapterof this boolgthe marketshouldeventually

I keepgrindingits way up overtime.It will havesetbacKalongthe way,but if
yougo backovermyworkthisyearyouwill seethat I amwellawareof that.
I Whatwill be will be, but it helpsto havethe knowledge

by othertradersif you are goingto beatthem at their
of all the toolsused
owngame.
t CSUllata ES-IIflf
I Current lange
48.25
prior ranges
Sfightly exeeedso mqjor dagree 1:1 +E?15
I 34.25 1.1?5
48.25 4.ffi4
39.58 1.A1s
58.96 B.5SZ
51.25 S.?85
I sB.?5 8.4S8
45.?5 B.8Sg
3A.58 1.328
4t.E A.g?E
54.54 0.?3S
I 55-58 8.725
-5L.25
Corractionshovenol overbolonced.
I IZ/SL/E3
f{ain g7lzL
I I will leaveyouwiththisobseruation:
the Trend is still UP.
Whilstthe nextmajorcorrection downdoesnot exceedthe largestcorrection

I sincethe March12m2003low, minus56.5points,the majoruptrendhasto
be viewedas still intact.The hightodaywas 1070.5so the marketnowhas
plentyof roomto remainabovethe 1000level.
I ElliottWaveis a great tool for trading;it helpsyou preparefor what is
I possible. morethana one-dayaheadis for fools.
Butforecasting
Section2: Chaptnr- 4
Section 2= chapter5: t
Alternate Waves& RetracementLevels:
I
Combination LevelswhereAlternateWavesand Retracement Levelscoincide
in trend
I
continuations
are extremelyimpoftantto lookfor as they cansignal
mostof the time. I
Alternotc / Reiroca ment R,otioRevarsol
I
I
I
t
I
I
CO,IABINATTONs I
Example 1: Uptrendin Progress.
The marketis going up and is currentlyin a correction- the correction
terminates on a retricementlevelof the previousimpulsewave(Green)and
I
terminates on an equallengthto the previous
at the sametimethe correction
correctionin the series(Red). Ideal situationsare (38.2 or 50) direct
retracement anda 1:1withthe 1* alternate.
I
WhenI havea situationlikethisgoingI almostalwaysbuyintothe weakness
belowthe 1:1level.
I
in thevicinityof the 1:1witha stopandreverse
I
Buy@4vrhen3-4=t-2
of 2-3
&3-4: retrocament
/;'n,
I
4 Sell
I
Sell below4 af 3-4 exceeds1''2
I
Alternate Waves & RetracementLevels 50 Section2: Chapter- 5
I
I on a S-minutechart and offer you a

Thesesituationsare commonplace
precise
entrylevel.
I
Example in progress.
2: Downtrend
I Thesamesituationappliesin reverse
to example1.
I This is a strategyfor buying or sellingat the extremepoint of the

retracement. The beautyof thesesignalsis that you havean alternative to
I tradeif the continuation
canSAR(stopand Reverse)
not
of the originaltrenddoes eventuate becauseyou
pointturns
yourtradeif the wave3 termination
outto bea reversal of largerdegree.
I
I
I
I
I Reversolof largar degrce ai 3
I
The longeryou studythe geometrythat unfoldswithinthe marketstructures
I youwill seethe obviouspointsof forcethatthe marketnormally to.
adheres
I An idaqlsituotionto SELLinto STREFIETH
I 2
I 1:1on at the 5O ratroca
I
I
I
I AlternateWaves& RetracementLevels Section2: Chapter- 5
Trading to WIN Course - One day at a time [c] BryceGilmore2004 I
Section 2: cnapter6: I
The ReverseCrosst':
I
The Reverse techniqueI
is a term I havecoinedfor a ratioanalysis
Crosstm
useto helpclearupthe picturesometimes.
I
Thisconcepthasbeenmentioned in my earlierworkandinvolves
measuring I
the relationship
of the 2ndwavemovement 3 wavemovement.
to a completed
I
l:l'19
t
I
I
-,-----:*-/'.
I
0
;"J--il;;il[;rffi,;;;j;; I
By checking
the internalmathematics
geometry
binding
of a structureyou will oftenfind the
to alertyouto a trendtermination.
necessary
I
This diagramillustrates
approachapplies
the approachin an upwardtrend and the same
to measuring wavesin a beartrend.
internal
I
Whena 3 wavemovement extendsthe ratiocanneverbe lessthan 1.000so
in caseslikethisI wouldreferto the ratioasan Outside
Reverse
Cross.
I
It's a funnything but I haveneverseenmentionof this conceptanywhere I
beforeI first broughtit up so I am claimingit as an originalconceptof my
own. I now expectanyoneteachingthis techniqueto referto it as Bryce's
Reverse Crossin future. I
Findinga future pricelevelwherethe marketmight meet resistance
suppoftcan be locatedin advance using3 price measuring
or
You
techniques.
I
wantto usethe Cardinal Ratiosfromthe Sacred Cannon. Whentwo or more
ratiosfromthe samefamilyof progressions
wherethe priceis saidto "Square up".
hit on the samelevelthenthatis I
I
ReverseCrossTechnique )z Section 2: Chapter - 6
I
l Tradins to WIN Course- One dav at a time [c] BryceGilrnore2004
I Whenyou areworkingout possible

orderare:
geometric
targetsthe procedures
I usein
I 1. PriceRetracement
levels
2. Alternate
WaveExtension levels
I 3. Bryce'sReverse
Crosslevels
I
I
I
I
I
I
I
Usethissametemplatein reversefor targetsin a beartrend.
I Onepieceof adviceI cangiveyou is this:
I 1. If you find a levelwhereThe ALTERNATE

RETMCEMENT
WAVErelates1:1 and the
is goingto be 38.2,50, 61.8then the chances
of a
I reversal at that levelareabout90o/o.
2. If the ALTERNATE WAVErelates1:1 andthe REVERSE
out at 1.618,2.000or 3.000thereis alsoalmosta 90o/o
CROSS comes
chanceof a
I reversal at that point.
Therearemanyothercombinations that offera highprobability

for a reversal
I in trendbuttheyareso numerous
to exploreallthe possibilities
I cannotlistthemhere.Myadviceto you is
withinthe markets youtrade.
I I havea routinethat I havedeveloped in my WaveTradersoftwarethat

allowsmeto testimpoftantlevelseitherin advance
or at the timetheyoccur.
t WhenI amworkingwitha 5-minute

asI go usingmyX-ABCD
priceseriesI findit easierto checkthem
routinewhichwillbeexplained in a futuresection
of
I thismanual.Mypurpose
rightnowis to getyoureadyfor thisexplanation.
I ReverseCrossTechnique Section2: Chapter- 6

INSIDE REVERSECROSSES: I
patternit is not a
The insidecrossis morelikelyto occurin a continuation
majorreversalsituation.The insidecrosshasa ratioof 1.000and lessthan
1.000
I
I
I
I
I
I
I
Lessthan 1.000 ratiosare more likely in a watefall type patternin a
I
downtrendbut they can occurin an ascending
uptrend.
diagonaltrianglein an
I
Whenyou are havingtroublejustifyingthe existinggeometrywithina wave
serieslike this it is one way to turn. The 0.786 ratio and the 0.707are I
probably the mostlikelyratiosto "squareout" in thesesituations.
If the ratio
comesout at 0.786thenthe targetfor the movedownfrom D will be L.272
of BC.
t
In an uptrendyou just reversethe diagramdemonstrated
example.
for the downtrend I
In an uptrendI wouldn'ttreatthisasa buysignalbut I wouldtreatit as a sell
signalin a downtrend
if othersuppoftinggeometryis present.In a downtrend
I
you havethe lower highsand lowerlows in your favourand the market
strengthwouldlookweakto mostplayers. T
The mainbenefitof understanding
occursit will setyou
this geometricformationis that whenit
upfor the continuation
movethatcomesout of it. I
Justremember
tradewhenyouaresure tradehasa good
that comesalong,just
thereis no needto tradeeverything
your chanceof success.
I
I
ReverseCrossTechnique 54 Section2: Chapter- 6
I
t The 1.000 : 1.OOOREVERSECROSS:
I Whenyou get a 1.000to 1.000ReverseCrossit is most likely it will be

with a patternthat containsfalse breaksas the CD leg is
associated
overbalancing
the amplitude
of theABleg.
I
Here'san example recently:
that occurred
I
Cross= 1S.25
I 6O lUlinutaChort
I l"-]ffi,'-d
,,,,rhlhtr- : 1S.25
biogono.l
t Thc 5&Pfirst modao FALSEBREAKto the
upsideondtheno FALSEBREAKto thedouln
I ill I
Ul sidercsultingin o Revcrse
Crossof 1:1
I
The signto buy was not confirmeduntilthe marketmadethat 1$ little 1-2
I outsidethe Rectangle pattern.
andthenbrokeout of the consolidation
T
I
I
I
I
I If youarehavingtroubleunderstanding
whatthe geometryis tellingyouthen
you had betterrememberto checkthe ReverseCrossFormation as it may
I holdthe answer.
I
I ReverseCrossTechnique Section2: Chapter- 6
Trading to WIN Course- One day at a time [c] BryceGilmore2004 I
Section 2! chapterz: t
Inside, Outside and Double CrossLevels:
t
Thesemeasurements are just anotherway for you to see if the unfolding
geometryis workingto somepreordained geometricplan.
I
I
I
I
I
I
I
I
If CDterminatedon ratiosof 1.000,1.618or 2.000with ACor BDterminated
at ratiosof 0.618,1.000or 1.618with ABthey wouldbe verystrongsignals.
I
I
*' Double
l#;:; cnoas ,{D cs ratio XC
Occursin on arpcrdingTRIANGLE
I I
Current Rarrge I
lti.'/5
prior rdnges
A t I
clt-Bc 1.z8s
cn-Rn 1.675
I
f,n-xfi 1.554
ffe"uerse Cross I I
I
I I
.
I
lfrG = 13.?5 to BLUE' 13.'15 PflICE ltatio l.gUO
I
OtherGeometricMeasures 56 Section2: Chapter- 7
t
t Tradingto WIN Cowse- One day at a time [c] Bryce Gilmore2004
I Boththe INSIDE& OUTSIDE

a retracement
oftencomebackintoplayas
ratiorelationships
levelof somefuturesignificance
sostayaleftto them.
I
INSIDE RATIO
I If th is markefpatternrollied
backto the 61.8youwnuldSELL
I J*t1r it agoinstthe priortop:
I 1.618
I Cb is Shortar thon ,48

D
I
I If you examineall the optionsas the marketmovesalongyou will seewhere
the geometrycomesbackintosync.
I The moregeometrythat comesout at priorhighand lowswingsthe greater

the significance
is, thentheywill act as a supportor resistance
if the market
comesbackto testthem.
I
I SUTSIbE R,ATIO
I In this coseyouwould
I t,r*Ft s e l l t h e3 8 . 2
I
I
I Thereis no excusefor not knowingthe internalpricegeometrythat the
I marketis workingto.
I
I OtherGeometricMeasures Section2: Chapter-7
Tradingto WIN Course - One day at a time [c] BryceGilmore2004 I
Section 2: ctrapter8: I
Bryce'sX-ABCDGeometricPriceApproach:
I
Nowthat I haveexplained that are possiblein the
the geometricstructures
unfoldingmarketpatternsyou shouldhavea basicunderstanding of where
I
we aregoingwithallthis.
The first thing to rememberwith my approachis that wavegeometrywill

T
form in small,mediumand largerdegreewavestructures. Ratiosthat bind
the smallerdegreeto the mediumdegreeand the mediumdegreeto the I
largerdegreearethe criticalmarketpoints.Thatis, at theselevelsthe market
cansignala reversal of trendor it canconfirma continuance. I
As traderswe need to considerthe way the wave structuresdevelop.
Potentiallythereare 100'sof waysa bullor a beartrendcandevelopandplay
itselfout. Butalongthe waytherewill be verycleargeometric signsthat we
I
willwitnesswhichwill allowusto taketradesat criticalpointsandcontrolour
risk. I
Beforeyou embarkon this expedition you needto be clearon
determining
of discovery
whichwavesareof similardegree. I
this - the overbalancing
I haveone rulefor determining
whenany set backto a trendexceeds
rule.This is where
a priorset backin the currentwave
series.If this happensI assumethe wavestructureis then workingto the
I
nextlevelandI will recalculate
all mytargetobjectives.
I
t
I
I
t
I
It is irrportontyou understondthis to uEefha XABCDcffectively
I
Bryce'X-ABCD s8 Section 2: Chapter - 8
I
I
I Tradingto WIN Course - One day at a time [c] BryceGilmore2004
I RATIOTESTSREQUIRED:
I PRIMARIES:
/ / /
I i
B t B
I / r t
/ , J , '
/ c r ' c {
I A
AD no XA
A
CD no AB CD to BC lD no EC
I DIRECT lsr TTLTERNATE DIRECT RE!'ERSECROSS
#2 c c
I
I t
A
,t
\
I X
I /
B
X
I Cb no BC
Rclrrocencnt1
Cb ro )(C
Rclrrccncnt 2
CD no AB
1st llnernoie
I
I
I
I r
I CD no tD BDr'o lD tD no )(C
INSIDE CRO9g ouTsIbEcRoss DOUBI,ECROgS
I
I of the waveformsyouwill be measuring.
Theseareexamples
I
Bryce'X-ABCD Section2: Chapter- 8
I
Tradineto WIN Course - Onedavat a time [c] BryceGilmore2004 I
BUTIT IS IMPORTANT
HOWTHEWAVESFITTOGETHER: I
and othersjust won'tmeananything.
Somecombinations
formations
will be important
The best thing I can do is to go throughthe possibilities
andtry to pointoutwhatI thinkarethe impoftant
of the wave
combinations.
I
arethe easyonesto read.
Straightout bullor beartrendsin development I
t
thelX,a
t"
I
i-"j
I
I
I
I
Nowif you get intosituations
likethesebelowit mightcausesomeconfusion
I
to otheroperatorsusinggeometryso theywill not be as committed
whenthe
ratiosbetweenthe wavescometogether.Standasideor go on holidayis my
bestadvice.
I
Tha mor:lr
... ,'l
et dilGSn
. , . , -, ,- ]
5'€,1 hovr on) dir'ricti I
I II I
t I \; ll' I t\
\,
I
\
I
J I ,l I
I
\ I \
{ 1l
t
' . - . i* v [u ct 'uld lEe;+r
, I knov of rothing,-tF
m Et t :
I
I dici vE.
I
Wh,n m (r:kes str
i/'
'his
YF€o f t ring sto"d,."j
I
t
Bryce'X-ABCD
I
I FROMA TRADING POINT OF VIEW:
I As the marketmovesalong it encountersgeometricsituationsthat will

influence
traderswhouseELLIorrWAVEtechniques
to buyandsell.
I The majorityof informedtradersare awareof the retracement

applyto the ELLIOTT
rulesthat
WAVEtheoryandElliott'stheoryof expansion.
t 1.
2.
wave2'swill normallyretrace50o/o
Wave4'swill normally
or moreof the prioradvance.
findsuppofton a 38.2o/oretracement.
3. Wave4'scannotexceedthe priceamplitude of wave2's.
I 4.
5.
Wave3'swill begreaterin amplitude
Wave5'scanextendor theycanfail.
to wave1's.
I Thesearegeneralrulesthat applyto ALL wavedegreesandit paysto know

themsoyouwill be ableto understand whyothertechnicaltradersareacting
I the way they do. The big point to rememberis that traderswho have
suruivedin the marketandlearntto makemoneyfromit are habltualpeople.
The betteronesare basicallymindreaderslike myselfbut theyall knowthe
I rules.
The best opportunitiesfor a profit are to buy into weaknessor sell into
strengthwhenthe marketis correcting againstan established
trendand is
I readyto reversebackintothe largerdegreetrend.
I
I
I
I
I
I
I This examplewouldbe the perfectset up but as long as pointD did not
overlapthe priorresistanceor supportat pointA the ratioswouldbe enough
on thereownto signala reversal.If two of the ratiosare present,i.e.,a 1:1
I Alternatewith the priorcorrection,
or a 38.2of XCor a 50 of BCa reversal
almostceftain.If CDto XCis 38.2andCDto BCis 61.8thatwouldbe odds
is
onaswell.
I
I
Tradingto WIN Course - One day at a time [c] BryceGilrnore2004 t
of CD- XCand CD- BCthat are impoftant:-
The ratiocombinations I
1. 38.2/ s0
2.
3.
38.2/ 61.8
4.7 170.7
I
4.
s.
6.
48.6I 78.6
33.3| 66.7
35.4170.7
I
7. 33.3| 57.7
I
I needto mentionthat whena strongtrendis in forcethe impulsewaveswill
normallytakeon a steeperappearance to the priorimpulses.
Thismeansthat
whena correctionis overand donewith the marketshouldtake off like a I
rocketas it stepsbackinto trend.If it doesn'tyou shouldbewarebecauseit
maybeout of steam. I
Nowif thereis othergeometryin the lesserdegreewavessuchas a 1:1 or a
reversecrossas the largerdegreecorrectioncomesinto a retracement
will alsosignala reversal. you
Sometimes will not get a retracement
ratioit
levelof
I
BCor XCat pointD but therewill be convincingpatternandgeometryin the
smallerdegreewavestructure. I
I
I
I
I
I
I
I
Thesesamesituations alsoapplyto a bearpatternas well.In a bearpattern
the CDto BCratiowill mostlikelynotexceed38.2if the trendis strong.
I
Beforeyou applytheserulesto buyingor sellingintoweakness andstrength
the priortrendmustbe clearlyvisible.If the markethadnot beenin a strong
trendpriorto its currentcorrectionit wouldbe muchmoreprudentto waitfor
I
a breakout tradeor a correction
to the nextadvance.
I
I
I When the trend is not obviously strong and the retracement exceeds
38.2 of XA:
I You need to be careful when the trend in progressbeforethe current
correctivewaveswas obviouslynot a strongthrustingmove.The market
I couldreverseon a retracementlevelof )(A only to go backand retestthe
breakoutpoint at B. It could also break back insidethe BC rangeand
terminateon a 1:1withBC.
I
R,ulesfor buyingo
I RETRACEiAENIT of XA
L Thereshouldbe evidence
I thot the smqller degree
hossomegeornetry.
I 2. Bc coreful of the 1:1

with BCos o resisionce
levafto ov€r'com€"
I 3. The trend chongeis not
confirmeduniil the 1:1
I BC is overbalonced
pricesexcaadlavelC.
qnd
I It paysto be carefulin situationslikethls because a 50, 61.8or 70.7on its

ownwouldattractElliottWavetraders.Whatyoudont knowto startwith is if
I the supportat D wasjust because
that terminatedat D contained
of profittakingor not.If the S-minutebar
a veryhighvolumethenthe reversalis more
likelyto succeed
I in the biggerpicture.
My first instinctif the reversalat D wason low volumewouldbe to sellthe
t retestof B, evenif the pricebrokebackaboveB andvolumedid not increase
I wouldsellthe 1:1 with BCfrom D. If that didn'twork I wouldbecomea
buyer.
I Justrelyingon geometryon its own is not goodenoughas any reversalof
substanceshouldbeobviousby attractingmoretraderparticipation.
I Whenit is all saidand doneany reversal
to trendshouldshowhighvolume
on a S-minute barto bevalid.
I Forthat matterwhenthe marketis headingin a constantdirectionfor more
thantwo S-minutebarsandthe volumeis increasing,
I movewill continuefor a whileafterthat. Whichever
you cannearlybet the
directionis fuellingthe
volumeis the directionyou wantto be goingin. As soonas the volumedries
I up it is timeto takeyourprofits.

I
Trading to WIN Course - One day at a time [c] BryceGiknore2004 I
XABCDratio situationsthat are not valid signals: I
will meannothingat all andif
In certainsituations
somewaveconfigurations
youthinktheydo youwill be usingfalseinformation. I
Theonesthat meansomething
andso is the 1sAlternate
alwaysimportant CD-AB.
directis
I haveoutlinedon the right.A CD-BC
I
I
I
I
I
I
I
I
I
t
I
Depending
canrelateon ratio,but normally
onlyabout3 or 4 areimportant.
that
on the wavestructuretherecan be up to 9 wavestructures I
What I am lookingfor mostof the time is situationswhereanyoneusing I
ElliottWavecan recognisethe obviousgeometry.The signalsneedto be
strongenoughfor themto puttheirmoneyon the line. I
Whenthe signalsarenotobvious to everyone in the knowandstillthe market
reversesyou shouldalwaysbe ableto
unfolding patternsconfirma
justify
reversal you
whyafterthe event.Thenif the
will be able to trade the new
I
Thisbusiness
with moreconfidence.
direction is alwaysaboutprobabilities.
I
I
I Trading to WIN Course - One day at a time [c] Bryce Gilmore2004
I Thischaptermayappearto be a littledisjointed
for a period
fromthe flowof this manual
becauseI haverewrittenthis chapteron the XABCD just before
I publicationin May2004.The reasonI havedonethis is to introducea new
aid to tradingI havehad in development
draftwasconceived.
for sometime sincethe original
I we havedeveloped the Bryce'sxABcDprogramas an add-onto the Esignal

advanced intra-daychartingplatform.It is a visualprogramthat you canuse
I to applyall the thingsI havebeenteachingyou in this manualin realtime
tradingconditions.
I I havebeendrawingmoreandmoreillustrationsfor my TTWgrouplatelyto
clarifythe impoftanceof the systemand havedecidedthey needto be
included in thischapter.
I Thcscore priority AD-
A
I x
I Eqnd tc E
lr. bchw
b
I Equclte.B
Abcvc
I Thcsa situ.rtions abova muld be rrre importorf if they conrbinedwith a

A
1:1 Alierncie or ord qrfsidc Rz.ter* Cr.ossdf point D
I 4D.BC
1.516
AD-X4 4.000
I 0.38e
0.500
0.618
2.286
2.6t4
9.000
I 0.707
o.786
1.000
I Tlrasa a<onples clrlrbc rever*d for *re w,illera X is a lout
I
If you wereto find the marketpatternin anyof thesesituations therewould
I be a verygoodchancethatyoucouldscalpit for a reversal
on moreconfirmation.
firstandthenadd
or if it kept breakingout throughthe geometryyou
couldtradeit for the nexttargetzone.
I Thesepointsof geometricforce act as our road map as we movealong
throughthe day.
I
t
Trading to WIN Course - One day at a time [c] BryceGihnore2004
I
Somethinga little simPler: I
Cb-XC Pduity Strings I
6D = 0.382
o.#7
0.500
I
o.3Tl
0.51t
0.707
I
o.786
1.000 I
IIIfiFONTINT
I
CD-BC=1.000I xc= nATro
Cb-AC=1.000f XC=IATIO
Spccial Siiuolien:: Oonbinaticrr 6D ic XS and BC
I
0 . 3 3 eI 0 . 5 L
0.E82./ 0.500 I
1.447 I 0.707
0.500 / o.8L3
0.500 I 0.707 I
0.486 I 0.746
ahc
o.$sg I 0.557 I
0.t54 / 0.707
I
at D will be at leasta scalpat the veryworstbut it couldturn into
A reversal
thattakesthe marketto newlowsor highs.
a majorreversal I
to be in a steadyuptrendor
SignsliketheseareGOLDif the marketappears
you are lookingfor the termination
steadydowntrendpriorto the correction I
of.
The mainthing to keepin mind is that there shouldbe no extraoutside I

aboutto hit the market.If the newsis alreadyin the marketandit
influences
is beingabsorbedat a steadyrate the marketshouldcontinueto trade
technically.
I
Whenyouget a RHYTHM PHASE
futurecriticllpricelevelto coincide
in a priceseriesof wavesthat allowsfor the
the majorityof
with multipleconjunctions
I
will pickup on it in advance.
ratioanalysts
If they feel comfortablethat is wherethey will targettheir ordersfor profit

I
of it if youcanrecognise it.
of trend.Takeadvantage
takingor a reversal
I
66 Section2: Chapter- 8
Brvce'X-ABCD
I
t Tradingto WIN Course - One day at a time [c] Bryce Gilmore 2004
I Prior Suppoft or Resistancelevels:
I when the marketretracesbackto a prior pivot pointand the CD leg hasa

ratio of retracementto the XC portionthere is a strongerpossibilityof a
reversal.
I Whenthe CDretracement
of XCfallson a 38.2,50 or 61.8ratiothe reversal
guaranteed.
is almost
t
SIilAPtE PATTERNCoililEINATIONS: FOR A REVER9AL
I OtD SU?PONT& OLD RESI9TAT.ICE
I ANy CCXL$NATIONS
oF eBOirtETRy
rsstsT yout
WOUTD
I DECI9ION TO TRY A
REVERSAL TTADE:
I IN ADEN iAY
PNIORITY WOULb BE:
I CD-XC=
0.ttE
0.500
I 0.61t
AC - eD.; 1.000
I OF
CD - BC: 1.000
I NETIERLOOK A EIFT HORSEIN THE iIICtr'T}I
I
I Anytimeyou can combinean XABCDsignalin with a straightout pattern
suppoftor resistance
levelit will be important.
I Thethingyou shouldappreciate is that thereare plentyof traderswhojust

tradeoff simplepatternrules.Everytimethe marketapproaches a priorhigh
or lowof somesignificance theywill usethat levelto buyor selloff. Whenthe
I level is connectedto a wave seriesby ratio it becomesdoublyimportant
because it willattractthe attentionof the tradersusingElliottwave.
I Youmustalwaysremember therearethousands of tradersout therewhoare

usingElliottWave.It is not impoftantif ElliottWorksunderthe circumstances
I it is onlyimpoftantwhatactionsthe othertraderswilltake.
Bryce'X-ABCD 67 Section2: Chapter- 8

I
Tradingto WIN Course - One day at a time [c] BryceGilnore 2004 I
SpecialSituations: I
It is wellworthyourtime to studythe situationswheregeometryformsin the
Reverse Crossconfiguration. I
Sometimes
retracement
in a progressivemarketthe CDleg will be longeror shofterthan
the AB leg as the marketis tryingto reacha levelthat may"squareup" a
levelto a prior )(A leg.The ABCDneedsto relatein someway
I
andif the BCandthe AB legsdont relateby ratioto the CDleg it will most
likelyrelatein the BC-ADReverse Crossconfiguration. I
IITIPORTANTWAVE FORl,lATIONS - REVERSE
CRO55 I
BCx 1.618 = A b I
BCx L.732 = A D
BCx 2.000 = A D t
BCx 2.236 = A D
BCx 3.000 = A D I
I
I
B C x 1 . 0 0 0 =A D I
H E1uc Gilnorc
I
Thelowerformationon this illustration I havewitnessed
wassomething more
I
than once.It can be confusingat the time becausein both instances
marketmadea false breakto the upsideand then a false breakto the
the
t
downside.It sort of rules out the RECFANGLE formationbecauseCD is
greaterthanAB.
I
But if you were just using patternas your tradingguide the rules of
engagement reversebackthe otherway
with falsebreaksis to immediately
whena breakoutfails.
I
Whenyou havegeometryto substantiate
confidence.
the priceat D it givesyou more I
I
I
I Tradingto WIN Course - One day at a time [c] BryceGiknore2004
I IIUIPORTANT .
WAVEFORITTATIONS INSIDE CROSS
I Inride Crocs CD asa Rntioof AD
I II'IPC'RTANTRATTO$AR.E
6t"g7. sOf. ond 98.d.
:
I This mkcs the lqst wqvaCD

0.618. O.5OOcrd O.382of tufol ABCD
I Ollr;r CDIAD rafios arc'possible:

0.333, 0.447. 0.577. 0.667. O.n7. 0.746
t INSIbE CRO55 I5 NOT

APPLICABLETO A
I PATTERNLIKE THI5
D
I
I -
II,IPORTANTWAVEFORIIAATTONS OUTSIDECRO55
I
OutsideCross BD qsa Rctioof AD
I IIUPORTANTRATIOS *R,E:
6Lt8% 50% od 38.2%
I This rnEkesthe distcrce of BD

0.618, O.5@ord O.3EZof totol ABCD
I Other Bb/dD rctios are possibla:

0.333. O.47. 0.577. 0.667
I OUTSIDE CROSS]5 NOT

APPLICABLETO *
I PATTER,NLIKE THIS
D
I
I Theseare internalmeasurements a
that couldbe fulfilledto demonstrate
bindingrelationship
withinanABCD
conclusion.
I
I Bryce'X-ABCD 69
Trading to WIN Course - One day at a time [c] BryceGihnore2004 I
COMPLICATEDWAVESTRUCTURES: I
Someunusualthingscan occurin wavestructures andthey don'tappearto
perspective
beclearfroman analyst's at the time. I
I don'tusethisconfiguration
the wavestructuresometimes
as a tradingsignalat all but it is handyto check
to seeif theydid relatethisway. t
In Elliotttermsthe marketwouldbe in an expanding
triangle.
or contracting
diagonal
I
Thistypeof patternwouldmostlikelyoccurin the smallerdegreewaveseries
somewhere alongthe waybetweena significant markethighanda significant
I
marketlow or viceversa.In whichcaseit will be eithera distribution
or an
accumulationtypepattern. I
Yet it is possibleit couldoccurat a significant
markethighas sometype of
headandshoulders
higherdegreewaves.
typepattern.In whichcaseit will be a formationbetween I
If it is a markethigh or low terminationa new trend of majordegreewill
I
beginfromlevelD.
I
-
LIiPORTANTWAVEFORiTIATIONS DoubleCrcss I
The mly importort Rqiio is a tl
I
I ruoul*r't gef to involvad with this
ona but if it comcsout os o tt
I
thon it corld be on exccllent sigrul.
t
[C] BryceGilmore Ab=XC osal:l
I
Therccouldberroinne
srpprtirg
geometryirwolvedsuchas :-
I
CD/BC= t"272or
C6|AS: 1.618or
Ab/XA = L.27?
I
I
I
I
I Trading to WIN Course - One day at a time
[c] BryceGihnore2004
I Hereis a reversalday that really got them going:
I BE+ JEquitjss- JDfrsrirEr";b.€.'eS.Xt'r gtDC (}r SS &OO goaiil 61,.t

: s e : F s r - "r t € D + t l X
6snt=z sarsootrinir,irurs-Gi;;roijttoinoriifriurar,rn
ij,iiibri i,ii6Ei i.iri{;i"e,iruitia
Brycel:tr\BCltfi.oej ,tf0.0{ , -
tr,.fl,23
t 6
tclualty
Ha.k€t Evess on bili 6l.8 and lesr
douhle toDped irr

earller- : d
degree 66.7
1lre ):t I ola_rEa 1flr00
r.t500
t
: tt:lt3)
6t,E XC 66,r *
td00n
I
I soFF Tor i {s-At I lhi: bvtar tatpfned rqdsy Tlcdat April A0
I
Gann llidr I << >> I
Thb wB a daythrt GteeBpatr annoumed dBllalior w6 ndv not an lsu€
I April20h 2004:The marketopenedat 9:30ETat 1136on a breakout - the

@
overnightGlobexhad alreadybeento 1138.5in earlytrading,the 61.8

I retracementof XC.Greenspan was goingto talk to Congress
currentopinionof the economic
regardinghis
situationin the USA,sothe dayniO an iir of
I indecision
aboutit to beginwith.As the dayworeon the 61.8andthe break
backthrough1136becamethe technicalconcerns.Buyersfled the market
whentheythoughtthe FEDwouldsoonraiseinterestratesfromthe 1olothat
I everyone
Ed+
hadbeenenjoyingfor manymonthsnow.
J E q u i t i s r - J O r h s r j n t s i , r a 6 .G E $ , : O H g r X @r OS SeO €Oair Sri:r
I {ESt!!-2 - StP 500E-tr

B{yce} x{Bfo Y1.6j5
A
,148,25
o_i.1@9. H:11H.0 !,1!U?9 c:J.L!!!-Q
1.000nrfltrpl
I 0.iB[t11,{3]b) r73tJ0
o.orolrtori;
c l1]t-5
613 Y:0
lll ?5 .1tsJ.25
I to.st,l
B - 1119.00 f,125
A - l14BJ5 15.25
X - 113300 l/,00
tt.so 05m i3500
t$00
t F ArR
F-8tr-1
F-aoI
t2500
I S.OFF TOFF .
GAP OUTSIDEREVERSALDAY
sr5
a5 t;
rtt3.2t
l:t - t1075
I Volume
r,r 0t.it5 otitc l8:lt0

I
Now the next day ChairmanGreenspan
Economic committee in Congress
appearedagainbeforethe Joint
andtonedhis remarKdownsomewhat. He
I
inferredthat the rateincreases
wouldnot be neededimmediately butwarned
thattheywereinevitable. Themarketrallied.Whena congressman askedhim
why the stock marketwent down so sharplyafter the televisedsession
I
yesterday?He replied,"I read in the newspapers
responsible,
today sayingthat I was
(andwitha smile)but I don'tknowwhatthe marketwilldo." I
LatestUpdates
Clce Dor +2117at LO3L7Zl. S&? +5.9?al I,l21.L2,Iasdaq +17.(D at 1,995-63:Today's
separatedinto two parts,withthefirst beingduringChairnanGreenspan's
@aOd&_rvv:e!g!l
session
couldbe
testimonyin frontof theJoiatEcouomic
I
Committee andlhesecondbeingafterlhesaidevml... Notethalthis wastheseconddaythatthe FedCbairnanmanaged to
In yesterday's
ruffletaders'feathers... session,Dr. Oreenspan's
ratherinnocuouscomments regardingtheaboence
deflationandbanksbeingreadyfor higherintereslntes ledto a 122.1% sell-offin themajoraverages...
of
I
Today,theftst partof thesessionnasspentwiththemaix averageo tradingin a choppyfashionasparticipantscontinued
to weighthebenefitsof thegeneralltbetterthanexpected eamingsreports,highlightedby Motorola's(trlOf 1930 +3.08)
stellarresults,withtheprcpectsof risinginlerestratesandaccelentinginflation...TheChairman,
for hispart,appeared
hawkish,sayiry thatthefedfundsnte will haveto riseat somepoiut,butindicatingthatasof yet,theprotracted
Iess
periodof
I
monetaryaccommodation hasnotfosteredanenvironment in whichbroad$asedinflationpressuresappearto be building...
Asa result,themarketbreathed a sighof reliefwhenDr. Greenspan's

driftingwitha slightupwardbias...Themajoraverages
testimonywasoverandspenttherestof theaftemoon
closedwelloff theirsessiouIowsandin positivetenitory,rryiththe
I
Nasdaqatfreshsessionhighs...Accordingly,thebulk of lhe sectorsclooedin lhe green,withleadersto theupaideincludiae
theinlernet,networking,semiconductor,telecom,biotech,healthcare,hotel,airline,andindusrialsectors...Amongthe
laggardsof nolewerethegold,metalmining,coal,iron & steel,aluminum,andpaperproduclsgroups... I
Likethestockmarket,thebondmarketalsohada volatilesession,withthe l0-yearnoleclosingwithina shortreachof its
hiehs,up 682, bringineits yielddownto 4.43%...NYSE
AdvrDec1560/1?7f, NasdaqAdv/DecLffill%z
I
Two days later:
ra-c
+ J Equitis. - J
,.Jg
Dlherlntrvab- @Es-€c'il omc Sr Os e60 Sroai;.1@ti:t,
DyEmic0:002{t00 .!; !-!-t$g .9j-1|lq!,1"
_q-j-1-E-0n..-l;,.r$q4.o.-.
I
t
tLJ 4q.r{l
Bryceix.{acovlJEl
GANNS}AflNGCHARTOVERLAY As seen in Sl:Cl:P26

Tr6d ncnecio. ' tulrl
fltn
0ti224d:
tx',?t,,04:
0rr0,o{: 2515 \bi
tf33,5t
0,61t
trr,rzr;Jt3l'fi
61.8betorr de€liD€ I
0,tJt9'o,l: t-m
rat i or;rg,olt t0-15
4lns*i urlsor, 1{.50
^ -. r uilto{: 11-25
-'ot'Y i u,tit3,t)<t 2?rn
.M!-9!i1 g1r1244; 5l$\rh
I
Av€rag€ flange: 14.60
2 and 3 Day Balance Points

-t1.25
-14.50
A : Gr6s6p.n
[as FerE
Ioddtdals hcru
I
trrc,0o_0.mq ll11326l _
VolumE
For nqt| ddy
t
l i l , r
0{o6 0{.o7
I
Asthe bandplayson thereis a craziness
to the musicandit continually
sends
I
out signals
to you.Youeitherrecognise
themor youdon't.
I
I
Trading to WIN Course - One day at a time [c] BryceGihnore2004
Section 2! chaptere:
Someexamplesof X-ABCDGeometry:
Overthe pastfew yearsI havebeensavingchartsof the X-ABCD geometry
thatwaspresentat impoftantreversals
of trend.Sometimestheyareas clear
asa bellothertimestheyhavebeenobscurely esoteric.
l.lave Trailer I.IEfiP.L'J SAPsBB sPX

15gB.gB
1s36.BB A
t4?8.88
1418.
Bs
13so.B6
h
ltlil.
ItH
,,I
il.|
'tt[lt,
I
ft/"'\ BC: O.5OO
AB
C Cb:0.618
lzsa.00
AB:1.ggg
123S.BB
11?0-BB I'tirr
t l
IIIB.BE
1858.BA B
SSB.BB tember2O01Lsv,r
g3B.BB
lta i rr 14JanB0 BZJUnBB ZB0ctBB 161{ar81 B3ffugB1
This was how the pricegeometryin the big picturecameout when the
S&P500 madea majorlowin September 2001.Thislowcamein 10daysafter
whenthe terroristscrashedtwo planesinto the NewYork
the 911 disasters
TwinTowers.Thetimingwasperfectfor a lowwhenit camein.
Haue Trader IIEE]4LY S&PsBAsPX

1598.64
153S.00 TIA,tINIg
L47B.W C b : 2 . 0 0 0B d
Bb : O.5OO AB
1410.BB
ffi54.68
us8.m
1z3a.a0 AB: 363 doys Cb = 7?? dovs
Lt?a.ea
EQUII.IOXES
tltg.Ea
1B5B.OB
g9B.0B
S3B.BB
l4a i ir 14JanB0 BZJun90 260ct0E
ExamplesofX-ABCD Section2: Chapter- 9

Tradingto WIN Cowse- Oneday at a time [c] Bryce Gilmore2004 I
Therallythat beganfromthe September
2002on a 38.2retracement
on January
2001lowterminated
of the entirebearmarket.
7h, I
In Elliotttermsthis was pefect as 4m wavesoften terminateon a 38.2
retracement. It wasn'tuntil the doubletop on March19u',2002,6 months
I
fromthe September lowthat the bullsweretotallywornout andthe market
setoff downhillat an amazing pace. I
Have frader
1598.90
IIRILT S&PsBBSPX
I
x
1538.66
1478.gA
6r'owfh pFogtlBsdon
I
1418.00
135S.08
tzsa.50
CD=AB
C D =0.618BC
I
C D =0.382XC
tz38.gE
11?8.BB
D I
1118.0A
ffisB.BB CONTINUATTON
D : Jon 7th
I
s98.60 PATTERN
938.86
llain ZBJUIBB
I
Whenyou go backoverthe geometryat the majorswingsin the bearmarket
I
to this pointyoucanconclude that thereis a definiteElliottWaveinfluence
in
this market.Whetherit is preordained or simplya sideeffectfrom people
actingon massusingtechnicaltoolsthey havelearntfrom all the published
I
methodologies is not impoftantto me.Theonlythingthat is importantto me
is that it happens. I
Thepointis you needto keeptrackof the geometrysoyouwill knowwhenit
all comestogetheragain.If you dont you will be left in the darkwhenthe
to profitcomesalong.
oppoftunity
I
You must never forget how impoftant the 6l.80/o, 50o/oand 38.2o/o I
retracement
canbe in the mindsof technicians.
1 . PointB on the chaftabovewasa retracement of the )(Arange.

of 50o/o
I
It is well knownthat I told all my peopleaboutthe potentiala day
beforethe marketreversed at that pointin May2001. I
2 . PointD on the chaft abovewas a retracementof 38.2o/o of the XC
rangeanda 61.80lo retracement
as tellingmy students
of the BCrange.I am alsoon record
wellin advancethe importance
of this levelwell
I
beforewe got to it.
I
Examplesof X-ABCD 74
I
I S&PsBBsPX
date gZgLgT
hi 11?6.97
I
I Ggclefrader LON6-TERA4 TOPS
DOUBLE
I Sapt
The $IfiNS of a sariously waak
markat were obviousto any chartist.
t lo ?75.68
After /lltay LT the Corrcctions to thc doumirand
naver lasted longer thon 3 days - most werc Zdays.
I
date EZI?Z4
llain 0
I Oncethe ballstartedrollingthe declinebeganto feedon itselt newsof fresh

and companyfraudabounded.
bankruptcies It was clearto me at the time
thatthe marketwasin a freefall.
I
I ACCURACY
IN RATIOS:
I I am convinced if you want thesemethodologies

mustadopta policyof accuracy. Byaccuracy
to work for you then you
I meanyou needto workto the
I third decimal
benchmark
place, If you don't you will only be .foolingyourself.My
is 2 tradingticks.If the accuracyis not thisexactI haveto justify
otherreasons why.
I It does not matterwhat the marketpatternlooK like as long as you can
differentiate
betweenthewavesof similardegree.
I A goodstartingpointis to workwith a 3-wavesequenceand seewhatyou
canmakeof it. Afterthat addthe 4h waveandseewhat becomesof it. If you
I alreadyknowwhatwentbeforeit shouldbecomeas clearas a bellif the next
reversalfits intoa ratioprogression.
I If you followmy procedures

progressions,
you will find that marketsunfoldin geometric
if they aren'tdoingthat you do not havea pricesignal,You
I shouldonly tradeagainstthe prevailing trendwhenyou haverecognized
valid signal. This is a disciplineyou mustfollowto removethe errorsof
judgement
a
thatcreepintoanytradingplan.
I By reducingthe marketto the previous4 wavesyou are still complying
-
with
the ElliottWavetheoryof markets that is, all wavesof similardegreewill
I in a sacredpropoftion.
relatemathematically
I Examplesof X-ABCD Section2: Chapter- 9

I
I can'tstressthe simplicity
of this approach as soonas you
enoughbecause
add extra wavesinto the systemyou leavethe systemopen to personal
I
interpretation
andthatcanbedangerous.
If youcanfind geometricwavesetsin two or moredegreesof wavestructure

I
youwill be in chargeof the situation
9 timesout of 10.
I
Allthisworkis worththe effoftandit hasa definitereward.
Whatyoumustremember is thateachwavein a seriesshouldbeworkingout

I
timeand pricein relationshipto whatwent before.Identiffingthe degreeof
the seriescansometimes
X-ABCD approach
THANpossible
be difficultbut it is MORE
the wayI haveperfectedit for myself.
usingthe I
Whenyour mindis preparedto believethat this systemmustgiveyou the
answersyou can throw awayall the falsetruthsyou havebeentaughtby
I
othersandmoveontoa higherlevelof consciousness
The approachis DYNAMIC

andunderstanding.
and can be appliedto all free tradingmarketsif

I
theytradewithsufficient
volumeandarenot manipulated by insiders.
I
Wavesetsshouldbe obviousin all degreesof marketmovement for you to
adoptan opinionthat the trendwill change.Whenyoufind onewavesetthat
fits yourcriteriago furthera fieldand lookin the largerdegreeto seehow I
yourtargetpointis in the largerschemeof things.
significant
Knowledge is power neverforget it. Overthe yearsI havecalled100'sof

I
marketreversalseitherin advanceor on the day,sometimesthe dayafterif
the marketpatternneededto confirmmy signals.Butnevermorethana day
out.Thestrongesttradescomewhenyougetthe confirmation in anycase.
I
DualRatiocombinations in wavesof similardegreeoftensignalreversals
trendor the beginningof a correction
of
in similardegree.If the marketdoes
I
throughthe *SIGNAL
not correctandcontinues
non-confirmation and confirmsa continuation.
LEVEL" the signalbecomes
Whicheveris the casethe
a
I
signalbecomes a tradeentrypoint.
Thisis the mostvaluableinformation I canpasson to you,trust it forgetall I

the otherthingspeoplehavetaughtyou unlessthe marketfits a geometric
citeria. I promiseyou it will saveyou a lot of heaftbreakand makeyour
process
tradingselection far easierto dealwith.
I
Thisstuff is like magicif you canunderstand
whenyou loseyour impatience
it - you will onlyunderstand
andlearnto openyoureyesandtakea little
it I
in at a time.
Followingis a geometricsituationI recorded

in the JulySoybean
contractat a
I
correctivehighin April2002.
I
Examplesof X-ABCD Section2: Chapter- 9
I
I Tradingto WIN Cowse- One day at a time [c] BryceGilmore2004
I The ABCDfell togetherlike this:
I Have Trader
4A4.86
S0YBEftNS-Julg
I 4?S.00
I
4?Z.Bg
466. BB 'iil't,t
I 468.68
454.89
I 44S. E0
44Z.Ag
lJrt
436. BB
I 438. BB
4Z4.gA
It'
f,lr : 49.75
Rat ios BC : 38.75 f,$rr$f,: 1.618
I
I l{ave Trader
484. BB
BiilLY S0YBERHS-JuIg
bIAGOFIALOF A 6OLbEl.lRECTANGLE
4?8.08
I 472.89
486. BA
[|tr
I 468. A0
454. A6
448. BB
I 44Z.Bg
436.00 1.9O2: 1.OOO
I
43S. B0
4Z4.EE
Rat ios lP Irice
I
is geometrically
Thesignificance formation.
a GoldenRectangle
I
I
I t.Aofu/ ' , 1.ooo
I i r.are i i
I
t Examplesof X-ABCD Section2: Clnpter - 9
Tradingto WIN Course- One day at a time [c] Bryce Gilrnore2004 I
ATTERNATEWAVESIN A SERIES: I
The recentJuly 14thdoubletop with June17u'2003.
Qcharts DSU sPB3U-38

I
Lgz4.E8
u18.AB
\EIZ.EE
1014.8 bouble Top +32.8 I
1SBE.68
1886.AB
Altarnaies
+33.7
t
ss4.0B
988.66
9fJ2.88
I
s?6.48
s?B.0B boy only PfT COFITRACT
I
s64.AB
E6/17/mg3
t{a i r-r gE/L? 86/23 EE/27 g?/E? g7/L1 E7/17
I
The 1:1 AlternateWavelevelsare the bestto targetin the intra-daymarket
patterns,if theyareexceeded
you lookfor a continuation.If the marketstops
I
on themyoucanstafttradingthe reversal
Youcanseeby the waythe marketadvances

asthe marketconfirms.
on the way to the doubletop

t
wereforming1:1 patternsin the Alternate
Wavesof similardegree.
t
Evenif this top hadexceededthe priortop of 1014.8whichit didn'tit would
1 pointaboveandmostlylikelyreversed
haverun into resistance in anycase.
Thetradewasto sellthe doubletop andplacea stopand reversebuyorder
I
1.5pointsabovethe priorhigh.
Allyou haveto do is readthe signsfromeachswingpointto the next.

I
Sometimes you will find someodd-ballgeometryintermingling
morerecognisable
with some
geometryin a differentdegree.I havea goodexampleto
I
showyou in the nextchapterbut for now learnto pickup on the easyones
first. I
Followingis an excerptfrom my diary I was keepingon the S&P: I
This excerptis taken way back in February2003 when we were in a
downtrendbefore the decisionto go to war with Iraq was actually
I
consummated. Thecoalitionwerebuildingup forcesas a signof authorityat
the time but the moodof the marketwas negativeat this time because
UNwereobjectingto any attackon Iraq untilall the negotiations
the
underway
I
hadbeenexhausted.Eachdaythe uncertainty wasgrowing.
I
ExamplesofX-ABCD
I
I The mainfocusthis weekwason the geopolitical

GeorgeBushand ColinPowellconcerning
eventsandthe rhetoricof
the mountingthreatof war with
Iraq.
I Nevertheless continuedto unfoldin their normalfashion.In
the technical's
I fact someamazingsignalscamealongthroughoutthis weekand I had to
documentthemfor my records.
I u @,--fJ
432.48
mlwlo3
l5:{Xl:0O
r't"'"ali6'-l r Atsessidrsu g E s l 5 De } t , 1 l f BI l r n l f f i l A l # i d
4:07pmE5 spiketo
921bustedby C[{E
I
EZefil I
@?ro
&25-25 liore WARTALK
re m6.5O
qr -{L4
Brs -7
I
t 1,4?a
pf
I
I
I
On Tuesdaythe 4h lust after the 4:00pmbell someoneattackedthe'ES
I session with somelargebuyordersandset off a chainreactionthat cleaned
all the stopsfrom 850 up to 920.The exchangeannounced it was"busting"
all tradesabove860.The pit hadonlytradedto 854 so a lot of peoplegot
I burnt.
I Therewas a doublebottomthat occurredon Thursdayafternoonand set up

anothertrade the next day when the EMPLOYMENT
released
at 8:30am.TheX-ABCD
REPORT was to be
ratiosfor the doublebottomarebelow.
I Current [ange ESO3H-18
A^ U^B.I .
1 1 .S E C = ?8.2RETRACEIAENT
I prior
clt-Bc
ranges
1. gBg
cll-ffB g.3az rqtios
All Fibonocci
cn-xfi fl.484
I fleuerse Eross
ffIl-BE 2.618
i \ r'1''J
I f e+r
11
t
I RII-Xff L.Z?Z
DOUBLE
BOTTOAAXABCD
t Lnurs EZ/ES 15:34 ffi?.?s 838.68 832.60 832.?5 EZlffi
Examplesof X-ABCD 79 Section2: Chapter- 9

I
I
Overnight
the Globexsession tradedup againstthe prior843higha coupleof
timeswhileit waswaitingfor the morningreport.
I
Whenthe EMPLOYMENT
60lo.Firstindications
figurecamein at5.7o/o down0.3%fromthe forecast
werethe marketwasaccepting it as a signthe economy
I
wasimproving,
economists
i.e.,whenit sparked a rapidrally.Butthisdidn'tlastlongas
beganto arguethat the figurehadbeenseasonally adjustedand I
wasnotcorrect.Thisinformation wasbroadcast overBloomberg at the time.
861.0A
I
ffi8.m
I
ESB3H-18
Eochleg up lL^6
ffis.@
ffiz.m
84S.m
846.m
I
843.@
840.Bs
8B?.BB
I
6lobex
884. AA
BZ/g,6,/?giB3
boublc Bollom
0vcrnight
I
llain EZ/87
The highon the spikerallywas 849^4 - The fir$ leg up from the double
I
bottomwas 11^6 followedby a 6 pointcorrection(50%)and then another
11^6up.The61.8levelwasat 849^6. I
openedthe printwasbackto 845.
Bythetimethe daysession
Qcharts CSU ESA3H-18

I
Current Range
17.?5
EVER.YONE
BE6/{USE
His TO sEETHIS
I CALLEDIT E'RLIER,
I
TODIY BEFORE H/4ND.
I
prior ranges
cll-Bc 1.618
cn-RB 1.618 LiDTUSTEb THIS HI6H l TICK
ctl*xR 8.61S
Reverse Cross 849'6
RD-BC 1.618
Insitle Cross
CD-AD 1.AA6
0utside Cross 843
I
BD-AII 8.382
J\B
Ilouble Cross
RD-)(c B.618
Xetrace Z
cll-xc 0.618 Notice how the ronges
\
I
I
RII-XR 8.618
I
are oll LUCASvolues
gz/95/z;68'3
Lotls 03:35 843.50 844.58 843.A6 844.25 82/67
This MBCD relationshipwas totally predictableafter the double bottom at I

832.lust lookat the ratiosin the X-ABCDprint out they are perfect.
I
Examples
of X-ABCD 80 Section2: Chapter- 9
I
I Ffiday was a down day from the openingbell.Terminating

in a low of
825^2at 3:00pmET.
I It was prettyobviousthat therewouldbe someshoft coveringbeforethe
closeastherewasa heavysnowstorm in NewYorkthat hadmanyWallStreet
I tradersleavingearlyfor the weekend.
I 851. BA 7th Februsrv 2OO3

848.SS
I 845.84
B4Z.W
I ffig.94
836.88
833. B0
I 838.00
BZ7.gg ES03H-14
t BZ/97/Z:9i83
lat ios tPlrice ab= ZE.B0 cil= 18.60 cd/ab= 4.500
I I wasexpecting
-
the marketto go slightlylowerbasedon a 1:1withthe 861-
832 849^4but nowthat I haveinspected the dailypicturethe 825^2 low
I fits fine as a 1:0.500downon the day.You mustadmittherewas a great
tradeon the shortsidestaringthe smarttradersin the faceat the beginning
of the dayandtheyjust didwhattheywereexpected to do!
I
LEARNTO OBSERVE BASIS:
THEMARKETON A DAY.TO.DAY
I If you analysethe unfoldingpatternseachday you will find that set-ups
I become veryobviousto the trainedeye.
I get phonecallsall the time from peoplewhojust wantto learnall this as

I fastastheycan.It is impossible to learnovernightandwhenI tell themthey
don'twantto hearit. WhatcanI do,I canonlywarnthemthat'sall.
I Theaverageguytradingthe marketsis a moronwhenit comesto combining

technical fundamentals
analysis, andmood,mostcant do it.
I Mostgoodtradersare "StreetSmart"and they havelearnthow the wrong

sideof the marketthinksandtheyjust lookfor placesto do the oppositeto
the"wrongside"mostof the time.It is a goodapproachfor intra-day
trading.
I yourselfto do the samewhenthe timeis appropriate.
Youshouldeducate
I
I ExamplesofX-ABCD Section2: Chapter- 9
Section 2: ctrapter1o: I
Odd Ball RetracementLevels& Targets:
I
Undernormalcircumstances
retracements,
we are alwaysexpectinga standardratio in
e.9.,38.2,50,61.8,70.7andsofofth.
I
Manytimesthe markettrendmaycorrectto a levelthat doesnot conformto I
yet the patternwill reverseanda newmovement
ourexpectations begins.
Thegeometrymaybe ableto be explained by crossrelationships
but at other
I
timesit seemsa mysteryuntil the next changein trendwherethe picture
becomes clear. I
58.6 & 41.4 Levels I
Whenyou get levelsof 58.6or 4L.4thesecan be easilyexplained
theyarethe means(internals)
of the squarerootof 2.
because I
In geometry
thesecanbe explained
as: I
I
I
I
I
I
The marketmakesa 58.6retracement andeveryoneis expecting it to go to
I
61.8- so theywait.I alwayswait too, i.e.,untilI seea higherlow or the
patternindicating
a reversal. I
Whensomethinglikethis happensit foolseveryonebut it is legitimateand
you cancalculate out a futuretargetwherethe geometrywill "square"up in I
the futurein thatsimilardegreeof movement.
I
Odd Ball Ratios Section2: Chapter- 10
I
I Tradineto WIN Course- Onedavat a time [c] BryceGilmore2004
I Don't mistakea 58.6 levelfor a 57.7 becauseit is a 58.6 and indicatesthe

marketis workingto the "square"in HARMONIC Ratios.
I
I i 1
i 1
t I
I
L000r
, : , i l .
i
_ --,1-
i
i
i 1 '
i
i
i
l1
_l
;;.j-- fi.
I
l l i
I
I
I
I
I
I The UP Examole:
CD = L.4L4of BC
The DOWNExample:
CD = 2.828of BC
CD = 2.000of AC CD = 2.000of AC
I
Here'sone that markeda major bear marketrally high in the S&P500on the
I 7thJanuary2OOZwith a minor doubletop. The high day was even more
impressiveon a long-termratioof 38.2 (see52 C9 page74).
I Qclrnrts |jfiU
5&P500- Jonuary20SZ High
I
ll_88. Htt
1l?it. BB
cb = I 4t,t Bc riE : 1 707 E4
11lfi. BS ac=0414J.8 CD=0tt|i6
t 116e.EU
1156.BB
I t 15fi-ffff
ll,t,l . Bd
1138_Bn
t 1 1 3 I .A B
T126,BE f ,414 0.58$
t 1 1 Z Bg_8
lll{. tsu
l{ain
ESBZT{-15
tzl18
,,
tt|H
,
].2t13
t t i
IZ,IZE
0-i07
t t
BI/EZ
1.000
l
El/E?
l
I
I OddBall Ratios 83
Square Root of 3 I
I
I
I
I
It paysto knowall thesethingsso you will saveyourselfsomeconfusion. I
bet everyonewho hasstudiedratioanalysisseesretracements
pastthe 0.618levelbutstopon 0.634or 0.636.
that just go
I
Thisis a commonoccurrence; the difficultywith 0.634is decidingwhetherit
appliesto the geometryof Root3 or to Phias 0.636is halfthe Squarerootof
I
1.618whichis t.272.Sometimes in the smallermoves1 tickwouldmakethe
differbnce. I
for ballparktargets- but keepit in
Betterto stickwith the 0.618projections
mindthat the geometrymay be workingon the CUBE.If it is the next leg
mightbe L.732timesthe lengthof the 0.634leg.
I
I
Square Root of 5 t
C IUO 'eiF
I , -:--:'i l
of 5 l
36
I
0;3l9-. rfli I
.l{.{ qt 'fi'F:0t
s
I
Sameprincipleappliesto the squarerootof 5 the mean0.691is so closeto
the 0.707ratiowe useas a cardinalratio.The ratiosare to closein many
instances
unlesstheyarecalculatedon largeranges.
I
It is reallynecessary
to understand
downto this levelof analysis.
the preceding
STRUCTURE whenyou get
I onlyworryaboutthesetypesof thingswhenI
I
can'texplainthe geometry anyotherway.
I
Odd Ball Ratios Section2: Chapter- l0
84
I
I Section 2l ctrapter11:
I Bread& Butter TradingSet Ups:

I in priorchaptersI am goingto
AlthoughI havecoveredall thesesituations
giveyoua summaryof the marketsetupsI amcontinuallylookingfor.
I
I THE 1:1 ATTERNATE WAVE COMBINED WITH A
CAN RECOGNISE:
TEVELTHAT EVERYONE
RETRACEMENT
SOLID
I r.f-.:
'A s E ( ;otti 1 - O I
I rtai Ettt nt.'
o 38 IrirFl:oll m l
.1.,:...
'1
I
I / I T
f, \
I I r
I :,j,t /
5 t:i
\
:I::.;l
p,.$[tv
LL.
P...5J
I
{,", \ I
I T .,1 {
v-::
I tl
I Thisone is a moneyin the bankprobability
because you havethe oppoftunity
waythe marketgoes
whichever
to buyintoweaknessin an uptrendandif
the 1:1 doesnot holdyou can reverseshortalmostimmediatelyand prOfit
I fromthe continuation.
The probabilityof a reversalbackup in a situationlikethis is in my opinion

I closeto 90o/oif the 5 minutestochastic
is
andthe 3 dayswing up.
is readinganywherenearoversold
I If CDis alsoa retracement evenstronger.

levelof BCthenthe signalbecomes
degree1:1youcannearlyputthe houseon it.
Alsoif CDunfoldsasa smaller
I Everyone of thesethat you missis tantamount
to standingon a cliff edge
andthrowingyourmoneyaway.
I I see thesesituationscomealongvery regularlyin the intra-daymarket
patterns.
I
I Bread& Butter SetUps
THE 38.2 RETRACEMENT
ON A 1:1 WITH THE 1STALTERNATE
WAVE: I
x\
\
', gB
, ,
? R.etr.acetner
rl on o 1 : Altilrnoie t
,*rtnl",otn
I\ i I
Ir / t
t l \ /
f
T
l i \/
I
i
i
i :
i
l
t
I
BU
'l
5E '
\ l
i
i
3 8 ?ri"
I
11
-.--j-
t j t
' , l]: , \I t
t
Neverlook a gift horselike this one in the mouthif the dailytrend is down.
I
The onlytime it is not likelyto work is if the low at C was somethingmajorin
the biggerpicture. t
I
A 38.2 or 50o/oRetracementmay even form like this examplebelowwhere
the wavesup from the low are holdinga form of equality.
I
oistl I
I
I
I
I
If you are planingto sell the retracement
levelyou needto havesome
I
evidencethat the move upwardsis workinginto a geometricform that
providessomeevidencethat it will exhaustitself at the suggestedprice I
retracementlevel.
I
Bread& Butter SetUps
I
TRADINGSET.UPSon 1:1's:
: 5 I
r'
r.'f;
I f,rA
f
I
{ I /\
j
'6'
f't,, / $'
I [.8,
l r " rl ' {
50
V V
11of l;8ri , 5 0 i R I TR; iffiENr '
iEr-rl
tqi; . e . : ; */
EQ'IAL ot',I)out la 1: I
w/1 ts:
UP: Bu' Bt:t ak, > { \, A
I\ I ,u'-t
LL
:'t l
, B r B n'Loko ti >> /
i, \ \
J\ , t :l
grl
3t 4,
1:1
/,, \ {.'' {
.\ -,ff,
I t . , . ii .. : . . :
\ I L( W ; IT5K.EN]i Rv [EVl L5

Trading to WIN Course - One day at a time [c] BryceGilmore2004
I
DOUBLETOPSon 1:1's: I
I
I
I
I
I
signalsI know
Tradingset-upson 1:1 alternatewaveratiosarethe strongest
of. I
It's a strangephenomenon that DOUBLETOPSkeeprepeating in the market
placeso often,but theydo, andyou haveto learnto takeadvantage
whenthey line up with something
of them
elsethat seemsto be impoftantin the
t
unfolding geometry.
I
I
I
t
I
I
I
Doubletops that form without any obviousgeometryshouldbe taken
cautiously. t
The bestwayto handlethemis to wait andseewhatthe marketdoesandif
the top doesnot breakthe marketgenerallytries for a retest.The market I
mightbreakthroughon a secondor thirdattemptbut if it doesn'tthenyou
just sellthe basebelowthedoubletop.
I
Bread& ButterSetUps Section2: Chapter- 1I
I
T Tradingto WIN Course- Onedayat a time [c] BryceGilmore2004
I DOUBLEBOTTOMS:
I Normallyfor a doublebottomto holdit hasto havea foundation

strengthin its favour.Something
of geometric
suchas a pricelevelfroma previous larger
degreewaveseries.If it doesn'tthenit will mostlikelyfail andit is betterto
I besoldasa breakout tradeto the downside.
If a doublebottomis goingto holdit normallywon'trunawayfromthe lowin

I a hurryso it is betterin my
somestrengthbeforeyou buyit.
opinion to wait and see if the marketregains
I longasyoucanjustiffan unfolding
then you can beginbuyingso
Oncesomepatternof rejectionis recognised
onthe chaft.
strength
I allthe smat traders

ThereasonI don'tlikebuyingdoublebottomsis because
preferto sellwhenthe marketis showinginherentweakness, as it is more
I susceptible than
to failure recovery.
Thereis no bettertradearoundin my bookthanwhena markettakesout a

I doubleor triplebottom.
I
I
I
I
I
I
I
I Betterto tradethe breakof a doublebottomthan buy it. I havegenerally
foundin the pastthat impoftantbottomsform quickly,they are normallya
I i.e., unlesstheyformwithinthe
singlebar low ratherthana consolidation,
middleof an upwardstrendingmarketandthat is anothermatteraltogether.
I
Section2: Chapter- l l
I Bread& ButterSetUps
HOOKTRADINGA RUNNER: I
Somedaysthe marketwillget intoa runningmoodandyouwillslowlyrealise
that it is not goingto stoprunning.It maystartoff unexpectedly
getsmovingyouwillseeit happening.
but onceit I
Youwill knowbecause will be verysmallandnot lastfor very
the corrections I
long.The ES/ S&Pseldomcorrectmorethan2-3 points,maybe4 maximum
whena runneris in progress.
I
Theeasiestwayto tradeit is to BUYthe hookbreakoubbut sometimes you
whiletheyremainlessor equalto the
couldtry andbuythe smallcorrections
previousonesin the series.
I
I
I
t
I
I
I
I
All you haveto rememberis that whilethe corrections
do not over balance
eachotherthe trendis stillintactandyoucankeepbuyingthe breakoutswith I
verylimitedrisk.
Runners will normallyhappenon dayswherethe marketis receivingconstant I

positivenewsfrom economicrepoftsor is beingbuoyedby the mediaand
speculationfrom the pit. Youhaveto be tunedinto the newsto seewhatI
mean.Thisis whyI amalways watchingBloombergduringthetradingday.
I
Runnerscan be very severereactions in a marketthat has previously
been
extremelyoversoldand everyoneis coveringshortpositionson the day. If
I
youare not prepared earlyenoughyoucanmissthe ridecompletely. Runners
canlastfor the entiremorningor afternoonsessionandon somedaysgo all
day.
I
I
Bread& Butter SetUps 90
I
I RECTANGLE
BREAKOUTS:
I
I
I ----fi
-,-: -r----:--
I i ' i i i
i\'
I
On occasions afteran extremely mayform as a
strongrun UPthe rectangle
I seriesof tops.A bullishrectangleseldomhasmorethanonedoublebottom
so if the movelookslikeit is exhausting
the best-case is that it will
scenario
I reverse directionbackdown.
I
I
I
I
I
I
Youshouldbe ableto recognise aseachattempt
thissituationwellin advance
I at a breakoutto the upsideis metwith heavysellingby professional
whodon'tthinkit cango higher.
traders
I In thesesituations will flushall the longpositions

the breakto the downside
andthe movedownshouldbeverydramatic.
t The conclusion
takingtheir
shouldend with a SPIKEVOLUME bar as the shottsstaft
all togetherastheyrun intoa nestof buyordersproviding
profits
I underlyingsupport.
t Bread& ButterSetUps Section2: Chapter- 11

RE-ENTERING
A DOWNHILLRUNNER: I
I
I
I
I
I
I
Sometimes whenyou get a messybreakoutand it is followedby a steep
t
declineto confirmthe marketweakness,you maynot be on the move.If you
seea haltto the declineandthe trendlooksclearlydownyou canplana re-
entrywiththe trendbasedon the amplitudeof the 1ocorrection
in the series.
t
The next correctionafter a move showstrend shouldnot exceedthe 1$ I
correction by morethan 1 tick.Youcanalwayssellat the 1:1 backup with a
tight stoploss I preferto sellthe 1:1
or sellthe hookon a furtherbreakdown.
as it givesyousomelatitudeif the nextbreakoutdown a messyaffair.
is
I
In all the yearsI havebeentradingI havenoticedthatthe problemwith most
novicetradersis that they deliberatefor so longoverwhereto takea trade
I
theygiveno consideration to the factthat it is possible
to stepin andout of
the marketat will. If your risk is smallyou can practically
anywhere. Whenyou combinehighprobability
enter a trend
with smallriskthenyou are
I
tradingto WIN.
If youtakethe timeto studyeverythingI am sayingandwatchthe marketin

I
S-minute you
timeframes will beginto understand you.
whatI amteaching
Aftera coupleof yearsit will becomesecondnatureto you and you won't I
thinktwiceaboutit whenallthe patternsignals
lineup.
ThetradeentrytechniquesI haveoutlinedin this chapterare yourguideto

I
becominga professional
trader,if you havefaith and manageyour trades
properly
youmustWIN.Onlythefearof losingwillstopyoufromwinning. I
"Theonlythingeasierthanmakingmoneyin
the marketis losingit." Anon.
I
I
I LINESIN THESAND:
I
t
I
I
I
I
I Linesin the sandbecomeobviousfrom time to time when an old market
I resistance
turnsintoa supportzoneor viceversa.
It becomes a reliabletechnicallevelbecauseit tendsto becomea decision

I pointwheretraderswill definethe trendas eitherstrongor weak.Although
the criteriafits the doubletop or doublebottompatternit is even more
importantin a way as a tradingsignalbecausethe LINEIN THE SAND
I viftuallybecomes the currentBALANCE POINTfor the market.
backthroughthe LIS
Thebesttradesusuallycomewhenthe marketreverses
I at the beginning
of the dayon a GAP
opening.
of an LISif it
I It usuallymakesa big differenceto the suppoftcharacteristics
has a price levelof 38.2, 50 or 61.8 attachedto it. For instancein this
diagramif the marketreturnsto the LISand it is now a 50o/oretracement
I thenthe oddsaremuchmorein its favourto attractbuying.It couldevenact
assuppoftfor a secondtimeas it becomes a doublebottomon the 50.
I The abovescenario
that hasd 90o/o
then setsup the LISfor a SELLING
chanceof successin myopinion.
BREAKOUTTMDE
In somecirclesthistypeof patternbreakdown couldbe viewedas a HEAD&

I SHOULDERS in progress. the NECKLINE.
TheLISis basically
ThetradablepatternsI havedemonstrated analysis.

herearefor short-term
I Mostof the timeyouwouldonlyneedto takeintoaccountanywhere between
I 2 daysto 5 daysdataon a S-minute

timeframeto seethe opportunity.
I Bread& Butter SetUps Section2:Chapter-11

Tradins to WIN Course- One dav at a time [c] BryceGilmore2004 I
ONEMOREOPPORTUNTTY
THATARISESSOMETIMES: I
Thisis an exampleof whatcanhappenwhenthe marketis tryingto breakto
newhighsand becomes
the way.
boggeddownas it is shedding
itselfof the sellersin I
I
I
I
I
I
Thesamethingis possible in reverseon the downsidebut in the casewhere
T
the marketis struggling
to makenew highsit is far morelikelyto taketime
out intoclearground.
breaking I
Whenthe new breakis achievedafter a coupleof attemptsthe bearswill
relentandlet it go.Thisnormallyresultsin a goodtradefor the day. I
Situationslike this tend to occurwhen the marketis travellinginto new
groundwherethereis littleto no technicallevelsthat seemimpoftantin the
biggerpicture.Thetrendcouldbe clearlyoverbought shorttermandthat will
t
attractthe sellers,but when they try and sell the marketdown buyers
reappear andtakeit backup. I
Generallythis sort of situationoccurson low volumedayswherethereis no
newsto swaythe previous
significant trendin force.
I
The key to buyingthe runningcorrectionis that the secondcorrectionleg
mustnot overbalance the flrst leg.The marketshouldhavea confluence of
I
higherlowsfrom the outsetof the new moveupwards.The only negative
thingsthat appearto be therewill be the overlapping
wavesinfringingon the
old highs.Eachtime they do this and recoverthey sendan arrowinto the
I
heaftsof the bears.
Eventually
I
as the daywearson the bearswill runfor the hillsor reverselong
andhelpthe upwardmomentum gainpace.
I
I
Bread& ButterSetUps Section2: Chapter- 11
94
I
I THE KAMAHL:
I
I
I
I
I
I
Nowthe reasonI callthisthe Kamahlis becauseit is so obvious.Kamahlis a
t famoussingerandoneof his popularsongshada verselikethis,"I hearthe
soundof knockingit's comingdownthe hall... hasthe soundsof
goodbye....."
The otherreasonis that Kamahlwassucha sook,he usedto
I get on stageandthenaskthe audience
himonceon the beachin Fiji.
why they hatedhimso much!I met
I The basedoesnot needto be exactlypreciseas a triple bottomit could

containa falsebreakon the 1ddoublebottom.Thestructuremayevenbreak
I downon the 3'd bottomattempt.But if the 3'd holdsthe 4tr breakwill be
cuftains.
I In the oddcasewherethereis no breakdownfromthe baseor the market

doesbreakit but gets backabovethe basequickly- it is showingnew
strengthandbecomes a buy.Thisis very rarebut you still needto be aware
I it is possible.
The longera markettradesin a confinedrangethen the ensuingmove

I comingfrom a breakoutshouldbe largeenoughto offera profitabletrade.
Thereasonis logicalas the longerthe marketremainsstaticthe stopshavea
chanceto buildupjust outsidethe congestion
area.
I Markets onlymovefor onereason!Therearemorebuyersthansellersor vice
I versa.Whenyoucanlogically
will havemastered
workout wheretheyareplacingtheirstopsyou
thisbusiness.
I Alwaysrememberit doesnot matterwhatthe marketdoesoverthe longer

period,just think of yourselfas a JOCKEY
lookingfor the pefect ridewhen
the oppoftunityis present.
I
I Bread& Butter SetUps Section2: Chapter- 1l
Tradingto WIN Course- One day at a time [c] Bryce Gilrnore2004 I
Section 2: cnapter12: I
MarketLogic:
I
Marketlogicplaysan impoftantpartin whetheryou will becomea successful I
traderor just anotherfoolfloundering
aroundin the fray.
whenthe signssetyou up for the mechanical

Knowing is probably
application I
asimpoftantasthe execution
of the tradeitselfat the time. ,
wrotemanyof the booksI first readon profitingin the market

Technicians
I
yearsagoandnoneeverwentontoexplainwhatwasgoingon in the market
whenthetimecameto takethe trade. I
Butwhatthey all had in commonwasthey saidto be profitableyou should
alwaystry andtradewiththe currenttrendin progress. t
Let the trend be your friendwas the commondenominator
mosttradingbooK overthe years.
I havereadin
I
of the timethe trendwill beyourfriend.Notso muchthe
Wellit is true,75o/o
1 monthtrendbutthe 3 daytrend. t
Whenthe marketis reactingto pressuresfrom the most recentnewsit is
trendingor feedingon the currentnewsavailable
to it.
I
As a daytraderthis is all I needto know.It doesnot matterwhatthe news
will be in a monthfrom now,what is in the newstoday,yesterday andthe
t
daybeforewill be enoughto judge
givenday.
whatthe marketbiasis likelyto be on any
I
traderyou haveto continually
To be a successful keepyourmindcurrentwith
the eventsof the day and forgetwhat happened lastwee( as that is over I
anddonewith.
Eachday is a new day and the technicallevelsare clearbeforethe market I

begins
trading.
Whatis importantto the traderis how the marketreactsor confirmsas it

I
teststhe predetermined
levelsof supportor resistance.
Themarketactivities will eitheragreewithyourthoughtsor theywon't.I take

I
the viewthat whenI havean opinionon the daythe marketwill alwayskeep
tellingme if I am on the righttrackor not.If I find I am out of stepwithwhat
is happening I figureI bettertakea breakor reversemy opinion.Believeme
I
it onlytakes3 smalllossesin a rowto havemeadoptthisstance.
I
Section2:Chapter- 12
Market Logic
I
I I'm goingto tell you a few thingsthat can happento you on anygivenday
and you will alsofind they will happento you in the future sometimeor
I anotherandyouhaveto learnwhatto do whenit happens.
1. ceftainis goingto happen.

You startthe day believingsomething
I Thenit doesn'tso whatdo
reassessthe situation.
you do?Answeris - you stepbackand
I 2. Somedaysyouthinkthe trendis intactbut something

-
comesalong
to wreckall yourplans,sowhatdo youdo?Answeris yougetout
of the marketandreassessthe situation. '
I 3. What ever happensthat falls out of line with your thinking
you fall back on the technical signals before you do
I anything else.
t If you want to win over the longer-term picture you have to have a
plan that stops you from getting involvedwhen things are not doing
what is logicalwith your current knowledgeof the market position.
I Let's face it you could be totally off base with the market for some
I reasonand the only clue that you are out of whack is when you staft
losingmoney!
I So when you staft taking losses forget your pride and get out
immediately.
I If you don't you are heading for the scrap heap where all
unsuccessfultraders end up.
I I don'tsaythis lightlyeither,I haveseenall sottsof genius'scomealongto

meandsay,"Whyareyousittingout of the marketrightnow?
I I just say,"I am uncomfoftable

Normally rightnow".
withwhatis happening
Howmanyof themoverthe yearshavesaid,"I am stayingin the marketit

t mustgo to hereevenif it is choppyrightnow".
I FAMOUS
I.ASTWORDS!
they get awaywith it but sooneror later

I've heardit all before.Sometimes
I thatapproach catches themout.
I am still hereafter 20+ years,so are manyothers,but I havewitnessed

I 100'sof bomboutsoverthe yearsevenamongst the smaftestpeopleI know.
Theplanis 3 stepsforwardandonlyonebackwards
at a time.
I
I Market Logic Section2: Clnpter - 12
Everyloser I have ever seen in the futures industry has one thing in
common!
I
Theytook a positionand heldit whenit was goingagainstthem.To make
thingsworsetheycontinued to believethat the positionwouldcomebackso
I
they toppedup the marginto fund morelosses.Eventually they couldnot
fund the positionany longerso they hadto closeout or the brokerclosed I
themout.
Thentherewereotherswhowentandgot somemoremoneyopeneda new I

positionand repeatedthe process.
It was likethey had losttheir mindand-
wantedto provetheywererightandthe marketwaswrong. I
Themarketis neverwrong! Onlypeoplearewrong.
to seewhatsomepeoplewill do whenthey havean

It is reallyenlightening
I
openpositionin the market.Onthe wholetheyaresayingto themselvesand
everyoneelse that they havea winnergoing,evenwhenthey are so far
underwater thattheycan'tbreath.
I
Thisis the reasonyou mustneverholda losingpositionno matterwhatyou I
think the marketmay do in the future. Because,as soon as you are
undennrater
paralysed
your brain cannot think objectivelyanymore.You become
to actsensibly
andonlyexacerbate further.
the situation
I
I knowbecause
tell you.
I haveexperienced
Eventually
I learntfromit.
it manyyearsbac( morethanonceI can I
Frommy experience
is a faulteveryone
in thisindustryI haveseenmanyothersdo it as wellit
willfall intoonceor twiceandmaybe ableto sulvivebut if
I
you keepdoingit youarea deadmaneventually.
to tradeout of a losingpositionmostof the time,whichis

It is impossible
I
whythe losingtradesmustbecut at the firstsignthattheyarenotworking.
I
It is far easierto waitfor a betteroppoftunity
andtry againthanflog a dead
horse.
I
The marketwill alwaysbe herefor you,to be a winneryou haveto decideif
youarealwaysgoingto be herefor it. I
Thereis no otherway!
If you wantto be a consistent

winnerrememberwhatI am sayingbecause
if
I
youdont you mightaswellforgetthisbusiness
This businessrequiresmoreself-discipline
you.
beforeit destroys
than the averageman is capable

I
of. I haveprovided
thetoolsto shapeyourdiscipline;
it is up to you now.
I
Market Logic Section2: Chapter- 12
I
I Section 3: ctrapter1:
I
Daily CheckListr S&PE-Mini
I Justin caseyou havenot got it yet I amgoingto outlinethe dailyprocedures
youneedto followbeforethe marketopensandafterit beginstrading.
I to giveyourselfthe
Eachdayyou are goingto haveto followthis procedure
of Tradingto WIN.
bestopportunity 2
I If you don'tthen you are lazyandyou will nevermakeit as a professional
trader.I don'twantto tell you anymorewhy you can be a loser(thatwould
I takeanotherbook)- I just wantto showyou howto be a winner.
I DAILYTRENDAPPEARANCE:
I 1* youmusthavea clueof the currentdailytrendandyou mustknowwhere

the ne>Gtechnical MOBlevelsare at.
I If you knowonlythis muchbeforethe marketstaftstradingyouwill havean

ideaof the currentmarketMOODandwhereto switchyouropinionaboutthe
daysprobable priceactivityasit unfolds.
I
NEWSBEFORE
THEMARKET
I Neverapproach
OPENS:
for the
the marketfor the daywithoutwatchingBloomberg
I asthisis paramount
latestNEWS, to yoursuccess
asa daytrader.
I GLOBEXPREMARKET:
Reviewthe GLOBEX sessionand see how the overseasmarketshavebeen

I the USpriceactivity.
influencing
If you do your analysiseachday beforethe marketopen you will place

I yourselfin a positionof Tradingto WIN. If youdo notthenyouaregoingto
placeyourselfin a positionof tryingto "catchup"all day.
I It is importantto be preparedbeforeyou even considertrading.Markets

sometimes movevery quicklyand if you haven'tgivenany thoughtto the
t currenttechnicalpositionbeforethe openyou will becomea casualtyor you
will nevermakethe cut.
I BEPREPARED without any preparation.

or suffer the consequences
I Day to Day Checks Section3:Chapter-1

ADVICE: I
Eachday beforethe marketopensyou haveto get yourselfin the ZONE.If
youdont youwill nevermakeit asa trader. I
TheZONEto me is whereI seethe currentsupportor resistance
to halta currenttrendor confirmit is stillin force.
thatis likely
I
patternsastheymovealong.
OnceI am in the ZONEI canreadthe unfolding
I
If I couldn'tdo that then I wouldnot havea cluewhat I am doingand L
wouldhaveto givethe gameaway. I
Sometimes oncethe market
I haveto sit backandwaitfor moreinformation
beginstradingfor the day but other timesthe marketjust unfoldsas I
originally
expected.
I
The realissueis that you eitherhavethe VIBESandyou haveCOMMITMENT
or you haveDOUBTS! If you havedoubtsjust sit andwatchfor a while.
I
Thereis no realneedto takeanytradeon anydayunlessyou havethe right I
SIGNS. Whenthe signsare not therejust staypatient.Eventually
the market
willshowits handandthenyoucanjumpalloverit.
I
Asthe marketmovesalongkeepyoureyeon the NEWS as it will giveyouthe
MOODand as the day unfoldsyou will eventually
howthe markethandles
the MOB points you
seethe BIASas you see
havecalculatedin advance.
I
Eachstepof the tradingday you will re-adjustyour MOBpointsand learn
moreaboutthe strengthor weakness on the day.Whenthingsappearclear
I
youcanhit it. Youwill be rightor wrongveryquicklybutthat is trading.
Readthe patternsas the day unfoldsandyouwill alwaysknowwhichsideof

I
the marketto beon.
There are always 3 or more STANDOUT trading oppoftunities per

t
day, Learnto recognisethem and you must WIN.
I
Be patientif you makeseveralentriesyou haveto closeout andtheywould
havebeenprofitableafterthe event- just put themdownto lostopportunity.
I neverworryabouttradesI closeout for a smalllossthat wouldhavebeen
I
profitable
laterbecauseI knowtheycouldhavegonethe opposite anyway.
Only worry aboutthe WINNERS whenyou get them goingand dont quit
I
themuntilthe marketgives
youa reasonwhy.
Do thesethingsand it will all turn out the wayyou want.If you don'tthen
I
don'tblameme because I haveno ideaof yourabilityto thinkandact.
I
Section3:Chapter- 1
Day to Day Checks
I
I Tradingto WIN Course- One day at atime [c] BryceGilmore2004
I MOB,S- MAKEOR BREAKLEVELS:
I The traditionalMOB'sare levelsthat standout as prior levelswherethe

marketfoundsupportor resistanceduringthe past3 days.
I If the marketis generally levelsaregoingto

trendingup the lowercorrection
be MOB'sof suppoft.The 1:1 projections are goingto act
of prioradvances
astargetMOB'sif the marketmovesup into newterritory.
I
A BULLTRENDMOBDGMPLE:
I BULLISHIII\OB,s ,TIOB3.
I A doubletop possibility nAoB2.

I
tl,IOB1.
t
I
I
I BEARISHCONTIFIUATION mob's
I
I
For the continuolion down to seem real
I lhe markat shouldnot exceed the 1:1 level.
I Basisthis currentpatternexampleoncethe marketopensit hasto do two

thingsto confirma bullishcontinuation.
I 1. Takeout the Linein the sand(LIS)whichis MOB1.

in the movedownfrom
2. Breakabovethe 1:1 levelof the 1* correction
the high.
I If neitherof the abovelevelsare takenout andthe chaftbreaksthe recent
I largerdegree61.8it becomes a SELL.
I Day to Day Checks Section3:Chapter- I

READIFI6THE 5IgN5'->>>
I
I
A breokabovcthe 1:l wouldsignal
t
o BUYin progrcssos oll tha moin
tachuicalresistoncecomosoul. I
If you go throughthis exercisedaily using the currentmarketpatterni
availabbto you,on anygivendayyouwill seethe obviousMOBlevels.These
I
levelsactasconfirmation
or non-confirmation
of the marketdirection.
Youonlybuywhenthe directionis up andyou onlysellwhenthe directionis

I
down.If youfollowtheserulesyouwillWIN.
I
in cosa you or€ vlondering vuhathoppenedl
I
I
I
2 doys dov.rnio
I
61.8rctroce
I
THE TWO.DAYCORRECTION
:
I
Alwaysbe awarethat a correction
expected
of majordegreein a volatilemarketcanbe
to expireafter2 tradingdaysor at leastby the 3'dday.
I
If you lookfor the signs,i.e.,watchthe toneof the news.Thenlookfor the
logicalgeometriclevelsthat couldsignalresistance or supportyou will be
I
prepared to changedirection quickly.
I
It shouldbecomeobviousto youthatthe overalltrendhasnot expiredby the
newsand the opinionsof the "experts".Sometimes
whilstit is awaitingsomeveryimpoftanteconomic
the marketwill correct
datato be released.
Once
I
the newsis released it will be business
as usual.
I
Section3:Chapter- 1
Day to Day Chec}s
I
I Tradingto WIN Course- One day at a time [c] BryceGiLnore2004
I If you followtheseguidelines you will be ableto placetradeswith a limited

outcome.If you ignorethe signsand tradeon
risk and a high probability
I opinionyouwill remainin the 90o/obracketof losers.
I TOTHINKABOUT:
SOMETHING
for anygoodtradingteacheris to stopthe bleeding.

Thefirstobjective If you
I followmy examples
themselves
the oppoftgnities
and learnto recognise as they
you will stop your accountgoing down. Onceyou become
present
withyournewsituation
comfortable thenyoucanbecomemoreaggressive.
I of a goodtraderis to be ableto executewithoutFEAR.
Thefirst requirement
Youcanonlydo this whenyou canenterthe marketas closeto the SIGNAL
I PRICEas possible.If you take the view that when the marketdoesnot
confirmyour choiceof tradeyou betterget out - only then canyou WIN
I consistently.
Smalllosseson bad entriesset you free to start againfrom fresh,this way

I you do not missthe nextoppoftunity.Loserswho holdontopositions
they will come good becomeso confusedmentallythey are ineffective
hoping
traders.
I Goodtradingis aboutplayingthe"hands"astheyaredealtto you.
I Thereis no roomfor HOPEin the professional Thatis just

tradersapproach.
liketryingto draw1 cardto fill an insidestraightin Poker.
I Nowthat I havetold you all thesethingsyou needto be awareof to trade

it is up to you to do it - not me. Youmustthrowawayall the
successfully
crutches brokersand advisoryletters- just watchthe newsand do your
-
I ownanalysis.Thatis whatI callTradingto WIN.
I
Someoneasked me recently to explain my attitude to trading and
I this was my reply:
the marketpriceaction!
3 thingsmotivate
I Traderc,Tradercand Traders,...
I whattheseguysaredoingandyoucanmakemoney.
Learnto recognise
I Youshouldbe ableto tell whateverytrendindicator is doingjust by the price

activityin the time frameyou are watching.But it paysto watcha normal
Stochastic for Overbought
andOversold indications.
I
I Day to Day Checks Section3:Chapter- 1
Tradingto WIN Cowse- Oneday at a time [c] BryceGilmore2004 I
You shouldknowfrom the normallyacceptedresistance
howthe marketis flowing.Wellyoushouldknow70+o/o
and supportlevels
of the timewhenthe
I
trendis clear.Theflowis eitherup,downor congested.
trendjust tradeit andtradeit andtradeit.

Whenyouseea clear-cut
I
Whatyou don'tknowis how manyordersarestandingin yourwayto cause
pluckedandyou just
I
but you cantell whenthe feathers^are
the reactions,
haveto jumpbackin afteryouseethemflying.
T
signalsto bea pro.
Youneedto tradeby feelandnot by mechanical
I changemy mind10 timesa day sometimes untilI get the feelfor whatis
I
goingon. OnceI see the signsfallingtogetherI am seldomwrongabout
whatis goingto happennext. I
Always try and get a clear view of your objective and then you can
trade with a free mind. I
lust oneotherthingto remember:
Veryimpoftant.
I
Thereis no priceto high to buy and there is no priceto low to sell.
Yournusttradewhatyou seeandjust go with the moneyflow. Do not refuse I

to take a trade just becauseyou have an opinionit is overpricedor
underualued.
you
Thestrangest
-
thingshappenandyou haveto be guidedby the
SIGNS arewitnessing notyouropinionof whatshouldhappen!
I
THE3 DAYSWING& AVERAGE
DAILYMNGE:
I
Alwaysmonitorthe 3-dayswingchart (and alsothe 2-dayswing)so you
knowwhatit willtaketo makethe swingchartchangedirection.
I
ln 70o/oof caseswhena medium-term trendis in progressit will not reverse
I
trend(say5 to 10daysat least)is exhausted.
untilthe medium-term
Whenthe currentdaysrangefalls well belowthe averagedaily rangethe

I
marketis stagnating.Whenthe daysrangeexceeds
you can identiffan exhaustion
the averagedailyrange
by a largemarginyoushouldstaftthinkingabouta countertrendtradewhen
pointin the patternas this is wheretraders
t
willtakeprofitsandreverse
I am continuing
the intra-daytrend,it'sonlycommonlogic.
I
thischapterwith somemoredayby dayanalysis examplesto
illustrate
whatI amdoingto workout wheremy nexttradewill comefrom.
I
I
Section3:Chapter- I
Day to Day Checks
I
t Tradingto WIN Course- Oneday at a time [c] BryceGilmore2004
I Monday4h August 2003:
t Todaywas anothergoodexampleof what I am havebeenteachingyou.

Alwaysbe alertto the possibilities.
The highThursdaywas 1004andtoday's
low was 964.75a rangeof 39.25pointsDOWNin 2 days and then the
I reversal
rallyretraced levelin 1 day.
allthe waybackto the 50o/o
I Qcharts GSU
Ilisplag
Thursday
l1:lOsm 4:15
Bars r;
I 154
PRIEE...
NANGE
Each day thc
semeprocadura
39.25 r
I CHAHGE
3.91S
SQNg r ItllOB
I
ilegrees
113
t ESA3U-5
2 Doy Corraction ???
3 bay S.u'ringbOWN
I g?/3g 10:36 966. EB 966.50 964. ?5 966.25 g9,/44
I Thedaylookedlikethison the l-minutechaft:
I 0charts GSU
s86.66
s84.49
REVER,SAL
ES03U-1
DAY
I 982.68
980.40 Elose 979 2
oB e7e
g78.BB
I 9?6. AB
9?4.44
I g7z.ta
s?9. ga
I 968.94
965.68
gg/a4/zgffi
I EA/EL A8,/84 E8/84
go throughthe sameprocedures
EE/94
so you are
a8/g4
Eachday you mustreligiously

I fully preparedfor the nextdaystrading.This is the onlyway you will know
what is in the mindsof the technicaltraders.The low todaycamewithin4
pointsof the criticalWave4 lowmentioned in 52:C4:P38.
I
I Day to Day Checlcs Section3:Chapter- I
Onanynewtradingday: I
It paysto remember signalsbeingusedby the daytraders
that the technical
couldrelateto only what has happened duringthe currentsessionor they I
couldbe usingrangesout for upto 3 or 4 days.
Forinstance the 50o/olevelof the currentday sessioncouldseemimpoftant

I
to them,gapson the openmayseemto be importanton the day andthey
willtry andfill themearlyin the session. I
The openingpriceis impoftantin respectto the initialpositions
that traders
staftthe daywith.It is a wellknownfactthatthe openingpriceprintsetsthe
benchmarkmostdays,historically the openingpricerangewill markthe high
I
or lowfor the dayapproximately
As the day progresses

50o/o
of the time.
I
and everyonegets into stepwith the latestnewsand
the developments
predictable.
comingfromthe cashmarketthingscanbecome a lot more
I
Theveryactiveperiodsare normally
the morningandthe afternoonsessions
witha lullperiodmostdaysbetween12:00-2:00pmET.
I
On Monday's tradersbeginthe weekwith a freshmindso anythingis likelyto
happenif institutional tradersare caughtthe wrongway aroundfrom what
I
hashappened the previous
week.Tuesday's tradeis normallyadjustingto the
relevantmoodof the marketand so it goesthroughto Friday.Fridayis an
dayunlessthe trendis quiteclearas manytradersquitearlyfor the
unknorrun
I
weekend.Weatherin NEWYORKcan be an importantissueon Friday's,
if it is snowingastraderswill leaveWallStreetearlyto get home.
especially I
Daysprior to holidaysand days prior to optionexpiryare battlefieldsin
themselvesas buyersand sellersfight it out with their view of the current I
marketpositionand it dependson who is prepared to holdpositionoverthe
optionscloseout or holidayperiodto seewhowill rulethe roost. I
Thenthereare daysliketodayas we go into the open,it is now9:10amET
and we havehad newstodayof a terroristbombingin lakarta Indonesia
where a car bomb was explodedoutsidethe MarriottHotel and caused
I
massivedamage,killed13 and injured200.Yet with all this the European
markethasbeenrallyingin the earlysession. I
How the US marketwill open is yet to be decided,it is beingcalledup
marginallybut that meansvery littlerightnow.Thereis goingto be a huge I
$60 billion bond auctiontoday which is likely to influenceproceedings
somewhatastradersdecideif moremoneyis destinedfor the stockmarketor
not. I
I
Section3:Chapter- I
Day to Day Checks
I
I If anythingI wouldbe lookingfor a downmovement in the morningsession

so we will seeif I am rightor not.ButI havemy parameters in mindandwill
I workwith them so it mattersnot. 9:25amETandthe GlobexS&Pfutures
aretrading979.5down.5 fromyesterday's close.
I ET. TheBELLHASRUNG:
9:3OAM
The futuresopeningrangehas penetrated

the 979 MOBto 978.5and is
I sittingon979,theopening
5 minuterangewas979.75-977.5.
I In the first 20 minutesand the markethastradeddownto 977 and up to

981.25andis currently at979.25. 985to 977= 8 points.
I Thereis an ISMSeruices repoftat 10:00am so I will waitfor it beforeI takea

trade.If the 977 levelbreaksit is the wayto go basedon my lowerMOBat
979. \
I 10:00amISM camein at 65.5 muchhigherthan expected- estimatewas
58.5froma prior60.6so that is something
newto consider.Theseweremy
I thoughtsaswe progressedthroughthe earlystagesof today.
10:05am the highso far hasbeen982andthe low 977we areat the high
I endrightnowandreallyin a no man'slandacceptfor the 61.8retracement.
10:07ammarketbreaks977hasonly3 pointsdownto makea 1:1

I 10:09am
10:23am
low973.5a priorswinglowfromyesterday at thislevel.
977.25marketcomesbackto testthe 977breakout.
10:26am977.25- 3 topsherenow- retesthelddowntrend - it'sa sell.
I 10:37am -
972 Nowwe arethroughthe 973.5priorlowtrendis down.
10:39am97I.5- priorswinglowyesterdayat thislevel
I 10:40am -
972.75 Close
-
the shoftand on a breakof 97L
resell
10:51am974 rallyingbacknowthe higher1:1 is at 976.5let'sseewhat
happens.
I
I IltroB 979 Siqn of weokness
I ralast break
I 985 to 9II = I
I
I ffi/U 6A/94 AA/A4 ffi/94 BB/WL gE/Ss
I Day to Day Checks Section3:Chapter- I

Tradingto WIN Cowse- One day at a time [c] BryceGiknore2004
I
Whenthe marketralliedbackabovethe 976.5I did not stayaroundas I had
beenworkingall dayandnightfrom 3:00pmETthe day before.Butthe day
I
progressed
andthe reallygoodtradeof the daydid not materialise
3:00pmwhenthe lateafternoonsession
untilafter
brokeallthe existingsupport. I
Tuesday5th August2OO3
I
98?.46
!184.AB
981.OB I Tickfrom61.8
I
9?8. AB
9?5.80
I
97Z.gg
965.CIo
s66. ga
RETRACE
Breoksthe 50
WEAKNESS NoSupporton l:l
I
963.80
sEB.B8
t
I
g8/95/zgg3
s?2.96 s?2.25 969.?5 'J79.ffi 9E/ES
InitiaffywhatI sawat the 97L.5lowwasa 66.7retracement of the rallyrange

of yesterday.The clue for the breakouttradewas the fact that the market
was sinkingafter havingmadea 61.8 retracement. The minimumtarget
I
wouldhavebeena 1:1 with the earlierrangeof 985-971.5andthis gavea
target of 966 and then there was the doublebottom with yesterdayat
964.75.Now with the marketbelow both of these levelsthe next logical
I
objective the declinefrom 1004to 964.75whichis
is a 1:1 off 985measuring
39.25downfrom985at945.75. I
Anyrallyat thisstageshouldnot exceedthe 8 pointerfrom971.5to 979.5so
we shouldbe prepared for tomorrownow. I
the MOBon the
Evenshouldthe marketrallyovernightin the Globexsession
upsideis the 964.75low but we also haveto considerthat the low today
I
brokethe 960.5low backon July 1s so the marketis in a very vulnerable
positiongoingintoWednesday.Justthe wayI likeit. I
Formy biggerpictureanalysis
youcanreferto S4:C1:P10 as 54: is wherewe
havebeentrackingthe marketactionfor about2 weeksnow. I
Youmustlearnto go throughthesestepseachdayevenif youdon'ttradeon
the day,as it will keepyou in tunewiththe market. I
Alsolistento the Bloomberg
reportsandinteruiews of the tradingdayas most
overthe next 18 hoursor so as they try and
of them will be rebroadcast I
explainwhythe marketdidwhatit didon the day.
I
Section3:Chapter- I
Day to Day Checks 10
I
I OPENINTEREST:
Eachdayjust beforethe marketopenthe OpenInterestfiguresfor the day

I becomeavailable.
I Youshouldkeepa trackof theseas it can shedsomelightontomattersat

hand.
I Thesewerethe figuresavailable
6h August2003:Assupplied to usby ourTTW member Carl
morningthe
astradingbeganon Wednesday
Phillips.
I Contract Jfll-JuI 3I-Jul I tAug 4-Auq | &Aus

ES Ol Volume Ol ilolume Ol t/olume ol
I
lVolume
Sep-tB 5ffi871145119: ozororlsorrtr ro+mol s2w't2 zrarral48689t
Dec-B 0l t sml 162 x)91 1667 3A2l 1741
I
Contrac 31.JuI I taw ud 54uq
I ilolume Ol tlolume Ol
571tFE
3gffi
y'olume Ol dolume ol
555,ftr
42trt1
153: 154!
I E1
21t
281
11t
I Total
Delta
J/t17rl0l-5[E|{Fl]'t@ll
-217391 174sil 413131 27t -198701 44131 -5n71
5/8661 6113f 1
-1721
6283i
/tgFFl -ln
I The interestinginformationhere is that the OPENINTEREST had had a

dramaticdeclineon the day that the marketwashedout into the 960 low
I area.
I Thiscanonlymeanonething: SHORTCOVERING
earlieropeninterestcanonlyriseas newsellersenterthe
AsI haveexplained
I market.
OnTuesdayan abundance of existingsellersboughtbackbookingprofitson

I the decline;mostimportantly new sellersdid not replacethem.Thismeans
the othersideof their tradeswere consumed by existinglongsliquidating
losingpositions.
I If you go backa few daysyou will seethat the selloff from the 1004high
attracteda heavyincrease in openinterestandthenon Tuesdaytheybegan
I covering.Thismay
(Wednesday)
have been partof the reasonthe marketheldup today
and didn'tfall off the cliff like I thoughtit might.Everylittle
I pieceof information
is important andwe shouldn't forgetit.
Section3:Chapter- I
I Dayto Day Checks 1l
I
Continued
from:S4:C1
:P35: I
Thesearethe preparations
I am doingfor Monday25d'August
2003:
I
Fridaythe marketmadea convincing
highandthe daysrangeresultedin an
OUTSIDE GAPREVERSAL
daysrangeand reversed
DAY.Thatis the marketopenedup abovethe prior
trendand by the endof the day havegoneall the
I
waybackto Monday'slow.
I
t*ervatp6---ll
I
"r lffi--ll F Alsessirrs
s.11
@D2n3
15:3000
9S475
s5 25
991.75
9S275
Btrs 35 ,f*il*-d+r4L'T[{r*
tee4^?
I
t
6s,967 lurr,
3 doy SWIlrlE - DOWN

t
PREPARATIOI'IS
for Mondoy25th August?OO3: I
I
I
Friday'slowtestedthe 38.2retracement of the entiremovefromthe August
-
5m 958.25low.Technically youcouldexpecta reactionbackup at this level
but it occurredrighttowardsthe closeand hadno chanceto tell us if there
I
wereany buyersthere.A breakbelowthe 38.2andthe nexttargetis the 50
andif thatbreaKthe61.8. I
Eventhoughthe 3-dayswinghasturneddownthere is alwaysthe chance
thatthisdownmovecouldonlybe a onedaycorrection at thistime.Untilwe I
havebeengoingdownfor morethan2 daysI will bearthisin mind.Oncethe
marketbeginstradingI canseewhatit is doingas I nowhavemy downside
guidelines. I
If the marketfindssupporthereI haveto alsodetermine whatwill constitute
a buy situationfor me. In this caseit is quitesimplebecausethe current
I
rangewe areworkingwithis onlyFriday's range.
The largestcorrection
in the movedownon Fridaywas3.25pointsso that is
I
the startingpoint.
I
Dayto Day Checks t2 Section3:Chapter- I
I
I Tradingto WIN Course- One day at a tirne [c] BryceGiknore2004
I Friday'sESlow was991.75 so a movebackabove995from hereconstitutes

an overbalanceandwe wouldhaveto consider
a changein relativedegree.
I ,u lffil tnervat
lE--l |- rutsessirns
I s7.01
@tz2@
15:55:@
99250
9S2.75
I
s1.75
992.00
% {3
Bars-l 5
I
I
I Evcnif we makeo lowcr low crd rolly trtOB 1& 2 will rernainimportcrt:
I
I Mythinkingat this pointin time is this:
I 1 . Thetrendis nowdownanda breakof Friday'slowconstitutes
a SELL.
we cango higher
2. A breakbackthrough997will be the 1* indication
I but I wouldstillSELLa retestof 997if it comes.
3. A breakbackthrough999.75wouldstartme thinkingthat thisdecline
is only a one-daywonderbut I would still sell at the 38.2 for a
I continuationbackdown.
4. A sellat997onlyrequires a ^6 (3/4 pointstoploss).
5. A sellat 999.5onlyrequiresa 1 pointstoplossandyou couldreverse
I longat 1000.5for a testof the 50 andgetyourmoneyback.
6. If the 50 (1002)breaksthe marketis backabovethe psychological
1000levelconvincingly, I wouldthen expecta retestof Friday'shigh
I andperhaps the 1014area,so I wouldbecome a buyer.
t So you can see that basedon my preparation

Monday
oncewe begintradingon
planof actionto follow.
I havea clear-cut
I Followsimilarstepseachdayandyou will knowwhatis requiredto be done

to makemoneyon an intra-daybasis.Youwill beTMDINGto WIN.
I Asthe marketmovesalongI will re-adjustmy planto takeintoconsideration

any changesto retracement
levelsand any 1:1 levelsthat mightcomeinto
play.
I
Dayto Day Checks l3 Section3:Chapter- I
I
Section 3! chapterz: I
Weekly Check List:
I
No tradingmanualwouldbe completewithoutgivingyou a run downof all
thethingsyou needto remaincurrentwithon a week-to-week
basis.
I
Besides the normalthingsthat influencethe marketon a day-to-daybasisthe I
underlying strengthof the marketwill be fairlyobviousby the week-to-week
activityaswe continuallymoveforward.
I
Someof the longer-termissuesthat will affect the market strengthor
weakness
political
arethe technical
andeconomic
aspects,but underlying
considerations.
thesecalculations
arethe I
It paysto keepan eyeon the LONGTERMINTEREST
be manipulated -
MTESas thesecannot
by the FED the FEDcantry andinfluence the marketwith
I
its overnightratemanipulations
government, companies
auctionsystem.
but whenit comesto costof borrowingsfor
or publichousing,the ratesare governedby an I
Basically
moneyfromthe economy will find its way intothe variousavenues I
of investmentbasedon rate of returnsand the perceivedsecurityof such
investments.
Theabilityof banksto makenewloansis limitedto the amount
of fundsthey can attractfrom investorsor pensionfunds.If longratesrise I
thenthe borrowermustpaymoreandthe increases are passedon downthe
line. I
llave Trader
155.00
IIEEHLY US I-B0HI!S 6?. Coupon t
1,l5.AA t5i0 = 4!,
135.EE
125.E6
Whotyouconread intothis charfrightnowisthat
borrowingcostsore increosing
strong,
onddemandis quite I
iiy reod isthst the moneyis dryingup.
115.94
185.gS 1OO: PAR6%
t
I
95.48
g5.aB
The bond quoteswork os on index whero lOO
?5.09 : a couponrote of 6-o./"
65.68
55.88 5O = t*.
The index ulorks in reverse/inv€rs€for yield.
I
I I | | | I i I I
45.8A
Hairr
I
31llec99 lSSepBB BBJunBl ZZFebE? 15Hov82
rlllllillll
15ffugB3
I
I
Weekto Week t4 Section3: Clnpter-2
I
t Tradingto WIN Course- One day at a time [c] Bryce Gilmore 2004
I A goodavenueto monitoris the trendin the 10 yearT-Bondsas thesewill

tellyouif the costof moneyis increasing overall.
or decreasing
I Let'sfaceit unlessthe costof moneyis movingcommensurate
earningsandGDP changes thenthe to
opportunity fund
withcompany
business expansions
I is goingto be limited.Right now the cost of moneyis increasing
unprecedented rate (the =
indexhasbeenheadingdown ratesrising).You
at an
haveto ask yourselfthe question? Are companies in a positionto take on

I moredebtfor expansion or cantheyexpandby reinvesting theirownprofits?
Thenagaininvestment moneycouldbe in shortsupplyandrateincreases

are
I an obvioussignof it.
Therecouldbe manyreasons for this rightnowas realestatehasboomedin

I recentyearsas the stockmarketdeclinedand the FEDdroppedshort-term
ratesdramatically growth.The realproblemfor the FEDis that
to encourage
growth.
I theydon'tknowwherecheapmoneywillflowto stimulate
I sawa similarinstance of thisway backin the earlyBO'swhenan economic

I recessionand fall in stockpricesresultedin a massivedrop in shott-term
ratesand a boomin real estateprices.Realestatecontinuedto boomfor
someyears,up untilabout1989whenthe ratesbecameso highonceagain
I the sidessplit and cleanedthe clocksof those who couldn'thold their
positions.
The stockmarketdeclinedfor a whileuntil ratescamedownand
thentook off in a wild ridethroughthe 90'sas techstocksofferedthe best
I gambleof the century.
The pointis that whenthe costof moneygoesfrom cheapto expensive or

I expensiveto cheaprelativeto the economies abilityto repaywe can have
largeswingsin stockpricesandrealestateprices.
I Knowingwhentheseinfluences goingto provideuswith trading

are possibly
we shouldreflecton oncea week.
is an impor[antexercise
opportunity
I WhileI am on this subjectit hasbeenan interestingfew yearswatchingthe
stockmarketfall into disarrayand the realestateworldgo into a boom.I
I haveseenpeoplemakefortunesbecause they positioned
"It's
righttime but the old sayingkeepsringingin my ears.
themselves at the
all overwhenthe
fat ladysings"!
I it hasto bejust
Whenthat is I haveno ideabut basedon pastexperiences
aroundthecorneronceagain.
I As a traderit will neveraffectme so I don't care but for thosewho are
hockedup to the eyeballswhenthe trend in long-termrateshascertainly
I turnedthe cornerI canonlyexpectto seebloodin the streetssometimesoon
in the realestatearena.The pointI needto concernmyselfwith thoughis
I will it benefitthe areaI makemy moneyin?
I Weekto Week
Tradingto WIN Course- One day at a time [c] Bryce Gilnore 2004 I
So eachweekit is a goodideato watchwhat is goingon andevaluate
progress
the
of the marketsyoufollowwiththe currentcostof moneyavailable.
I
Boomsof any kind havealwayshadtheir foundations
creditexpansion
and they alwaysend because
basedin a poliryof
the creditexpansion
cannot
I
keepup the pace.
It is simpleeconomics
really.
I
I
THELONG.TERM
POSITION
OFTHEMARKET:
On a week-to-weekbasisyou shouldreviewthe long-termpositionof the
I
market.
I
I
I
I
I
r
Z1ffug8?
r r
Z6tlctll0
r r
07Jan94
r r
14]lar9?
t
ZEI{a906
r r
15tu9t3
l I
Whenyou lookat the marketin thiscontextthingsdon'tlookthat badvisually
I
but the low last year was a drop in valueof 50o/ofrom the all time high.
Whichmeansto recoverallthe lossesit hasto go up a 100o/oin value. I
Presently
the marketappearsto be in a recoverymodeandat its recentbest
hadgained32o/oin valuefromlastyearslowpoint.
I
Economic figurescomingthroughthe pipelinewouldsuggestthat the US
economyis on the mendas companies are returningto profitability.
The
I
biggestdrawbackright now appearsto be the unemployment figures.But
that is not our majorworryas valuations
assetvalueandtheirabilityto produce
of stocksrely on their underlying
profitsandpaydividends.
I
Historically
benchmark
the establishment
PEvaluation
looksat PE's(Priceto earningsratios)and a
of a solidcompany
is 15timesearnings.
I
I
Weekto Week l6 Section3: Chapter- 2
I
I Often the marketover valuesa stock basedon the PE if it believesthe

company will improveits earningsovertime.So purevaluations on PEratios
-
I arenotan accurate guide theyareonlya ballpark figureto go on.
In recenttimesthe overallPEratioof stocksin the S&P500 hasbeenas high
as 2511,whichin my mindis the reasonholdingthe currentmoveupward
I back.
Theredoesn'tseemto be any other strongreasonas there is plentyof

I investment
moneysittingon the sidelines
by all repofts.
The main reasonthe marketfell over in the first placewas becauseof

I overualuation,fraudulentaccountingpracticesand a weakeningeconomy.
Thento top it all off the USAbecamea targetfor terrorismthat hasviftually
brought the airline and travel industryto its knees. Reducinghotel
I occupancies,retailsalesandthe ensuingunemployment
in consumerconfidence,
all addedto the drop
whichthen found its way into the stockmarket
I sentiment.Investorsturnedto real estateand otherthingsas well known
companies droppedin marketvalueby as muchas 70o/o.
sharemarketsfollowedsuit reducing
The majorworld
the apparentwealthin the worldby an
I enormous percentage.
undisturbed
life as we knowit hasgoneon relatively
Neveftheless
andthereis no reasonto believethatthingswill change.
I The worldhas beengoingfrom one crisisto anotherfor as longas I can

remember andthe stockmarkethasbeengoingup anddownwith it at the
sametime.
I My mainfocusis on the S&P500 - the top 500USstocks.Onehasto realise
thereare thousands of companies in the USand as time goesby and new
I companies
S&P500
grow they increasein wofth and becomebiggerthan existing
companies. Whenthishappens theyarethenmovedintothe indexto
a growth
I replacethe onesleaving.As a resultthe S&P500is hypothetically
index.Thisis wherethe indexfundsget theirnamesfromas theyswapand
changetheirportfolios to reflectthe stocksin the index.Soyou canseewhy
I a majorbankruptcy
whenit is replaced
like ENRON
by something
can affectthe indexfor a while but then
elsethe bleeding canstop.
I It is my view,if the worlddoesnot changemuch,the S&P500bearmarket

bottomof 2002is the lowestwe will everseethe S&P500
thiscentury.
I Sohavingsaidthat I canmoveontowhatI wouldbe lookingat eachweekto

keepconfirming
myview.
I As I haveexplained in otherchaptersthe marketmovesalongin ups and

downsthat relateby timeratio.SoeachweekI needto research the existing
I timecyclesso I canseeif the existingoneshaveanyrelevance
market position.
to the current
I
I Weekto Week
Recentlythe S&P500futures marketmadea doubletop on the E-Miniat
LOL4JS(July14b day session). This doubletop coincidedwith a 1:1 time
I
rycleof majorimportance so as we are approaching
a re-testof this double
top it is becoming
moreandmoreinteresting. I nowneedto seeif
Technically
thistimeryde lookslikeit hasanybearingon the immediatefuture.
I
llave Trader
I
LZg3.8E
1163.OO
Itz3.g6
I
1083.6S
1843.BB
I
1683.66
s53.00 I
9u3.60
883.08
843.00
Evcntuallyit
hos to breqk
I
883.A6
?63.A0
ftat ios lC la lenilar cd/ab=
onewoyl
1.844
I
To see the currentshort-termpositionof the marketyou shouldrefer to
I
S4:C1:P21on.
I
We are at the crossroads becausethe currentrally high is up
technically
against
a 61.8retracement. I
One thing on my mind this weekend(16h August2003) is the possible
implications
of the POWER OUTMGEon the Eastern
week.Therewerea lot of disruptions
Seaboard of the USAthis
to the transportindustrynotto mention
I
the lossesto the freshfoodindustryandthe retailbusinesses. Losseswould
haveto bein the 100'sof milliondollars. I
the situationwill becomeclearbeforelong.The purposeof my
Neveftheless
is to showyou the detailI go throughto stayin tunewith the
explanations
marketaction.
I
that you needto understand
I am a firm believer everylittlethingthat might I
be in the mindsof the tradersas it is the traderswho takepricesfrom one
levelto anotherandnotanythingelse. I
You need to understand the technical, the fundamental and the
psychological aspects surrounding the traders to be successful
I
today.
I
WeektoWeek 18 Section3: Chapter- 2
I
I
rradingto wIN course- one dayat a time [c] BryceGilmore2004
I Thereis no pointjust crunchingnumbersintosomesystemandhopingit will

work becauseit won't.Thereis no needeitherto get involved with any
"Guru"
I planetarybullshit promotedby some of the so-called
Stayawayfrom thosewho promoteFINANCIAL
forecasters. ASTROLOGY
market
as a
tradingtool if you want to makemoney.Everything they say boilsdownto
I absolutebullshit.Theylive in a worldof makebelieveand to saythe least
theyaredelusionary people.I haveseenit all overthe yearsandI knownow
to neverevencontemplate anythingtheysayas impoftant.
I Justto provemy point here.arethe combinedGeocentric and Heliocentric
planetary the 14hJuly2003andaboutthe onlythingthat shows
positions'for
I of the 13h.
up is a fuli moonon the evening
I CgcleTrader GEOCD{IRIC Sfi ANGIJS Ilag 37814.73

GI,iT 14/ 7/ZBB3
Gt{T 5:31
Phase 1?4d Z4n
I RSPECTS 274 llDncun?

12L Z7 t9 lE
UEHUS
I 161 38 5 Cn
HRBS
338 38 51 P i
Ji:i'i:ilfi
I
l, i.:
SffTUNH
9 5 1 8 5 tn
B------------- UNRilUS
332 1? 48 Pi
NEPTUHE
I 312 21 22
PLUTO
257 34 2A
Sun
ffq
Sg
111 24 4 Cn
I SUN
ERRTH
3B
l,loon
296 59 46 Cp
I Cgc lefrader SUI{ RNSLES

HELIOCENTNIC Ilag 37814.73
G}IT 14/ ?/2893
GIIT 5 : 3 1
I HERCUNl
Phase 1?4d Z4rn
gB
RSPECTS
ui 139.33
I
152 4?
Uf,NtJS
8? 4? 24 G e 156.33
I,IRRS
386 Z8 ? fiq 14.93
I SRTURN
S3 22 1
UNAHUS
Ctr
1BB
145.s3
1 6 1 .S 7
I 338 23 3? Pi 38.S9
NEPTUNE
311 33 5? fiq za.26
PLUTO
?58 38 3? Sg 32.74
I IRRIH
ZSl Z4 4
I't0olr
116 53 46
Cp IRNTH
SUN
I
Weekto Week t9 Section3: Chapter- 2
I
MEDIUMTERMTRENDINDICATORS: I
TrcndTrader TR E H0 [ He t YS I $ [E] 2ll[1B;Gilnore I
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3 IIRY[NH[E UP HF 9S6.15 LIHE I tt2-8[$ 97t.5[
I
to this repoftunlessyou knewanythingaboutmarketgeometry
According
youwouldhaveto saythe trendis on the up. I
This is effectivelywhat the systemtradersare seeingso it paysto keep
informed. I
s&P540 4 t{R1
sE8.Z?
I
High 1014.86 1il t-tHZ
Loru
Rge
958.58
56.38
s B 3 .8 5
59 lrff3
gB?.?4 I
n
E
H
T
50 doy iifiA
I
D 18..- Slow Trend STOCH
T
R
R
D
1ffS
AE
{ J
I
ztl
E
n
T
9.18
L3
I
z
t( tt
I
You shouldreferto your trendindicators eachtime you are approaching a
I
stronggeometriclevelin the market.If the trend indicators beginto show
signsof overbought
indicators.
or oversoldat impoftantlevelsthey becomeveryuseful
if the 61.8comesout the marketwill be metwith
In this instance
I
anotherfloodof buyingorders.Thetrendis in the balance rightnow.
I
Weekto Week 20 Section3: Chapter- 2
I
I COMMITMENTOF TRADERSREPORT:
to your overallviewof
of tradersrepoftis essential
Finallythe commitment
I the marketposition.
I
120000
I 100000
80000
I 60000
40000
I 9
ao
€ 2oooo
n
U
I -20000
-40000
I -60000
-80000
L2
I .".^5**${s}*'is}+i.}si"{'"s*,'-{r"{us
o3
OE
I It's a littlehardto makea lot of senseout of thisotherthanto saythe middle

of Juneperiodwherethe marketrandownfor a whilesawthe publicliquidate
I longswhilstthecommercials boughtbacka substantial amountof shorts.
The activitysince has been relativelyflat exceptfor the odd days we

I witnessedrecently.
Nevertheless positions
the unreportable haveremainedquiteresoluteto the
I longsidewiththe commercials
andnon-commercials
anypressure
shoftwithoutapplying in recenttimes.
remaining
basically net
I Eitheranotherswingup or downin the non-reportable

significant
for me on a commitment
positionswouldbe
basisbut as we are at a crossroads
rightnowthatis onlygoingto beseenwhenit happens.
I situation
technically
I In any caseif you followthe analysisprocedures I am showingyou each

week.Youwill findthat everything
importantwill lookafteritselfandyouwill
I neverbe the wrongway aroundin the marketfor morethan a day at the
worst.
I
Weekto Week 2l Section3: Chapter- 2
I
Tradingto WIN Course- One day at atime [c] Bryce Gilnore 2004 I
Week ending 22ndAugust 2OO3: I
Fridaythe marketopenedon its high 1012.25and closedon its low 992
forminga GAPOUTSIDEREVERSAL DAYpattern. I
Anysignificant dailyreversalpatternsuchas this is a realsignfor technical
analystsand as I have said so manytimes beforeit is impoftantto go I
to seeif the TIMINGFACTORS
throughall the exercises haveanymeritbasis
the GANNor ELLIOTT methodologies.
I
]lave Trader
1eS3.gB
Totcl timc 1.618 I
1153.66
ITz3.EA
1083. Bg ry
I
ffi43.49
1003.60
I
I
s63.86
9z3.BA
883.66
843.04
g03.BB
I
?ffi.48
f{aitr Z1sep61
I
The breakdownon the dailyactionhas beenexplainedin S4:C1:P34
showsthe overbought T1meis
situationin the dailystochastic.
and
present
so
I
reversal.
is in favourof a
everything significant
I
llave
u3g.m
ror*'w
frader HSEXLY
I
oRW: (
g8s.m
s64.08 ( I
I
I
?64.m -
I
I
Weekto Week
I
I Tradingto WIN Course- One day at a time [c] BryceGihnore2004
I I hadto laughon FridaysinceI havebeendiscouraging peoplefromtaking

any noticeof planetarypositionsin this chapter.But I haveto admitthere
I wasa significantaspecton Fridaythatwouldhavebeenpsychologically
in the mindsof anyonewhopractices Financial
Astrology.
active
I I am surethat if today'shighturnsout to be anythingof majorimportance

amgoingto copsomeflackin the yearsaheadas hashappened in the past.
I
I NevefthelessI will stillstickto my originalwordsin thischapteras evenif the

planetscan be provento be importantI havebetterwaysto time the market
andmywaysarefar moreaccurate asa tradingtool.
I Thesewerethe aspectsfor Fridaythe slqypilotswouldhavebeenfollowing
I and I mustadmitif enoughof them divedinto the marketit wouldhave

helpedfuelthe selloff thatoccurred
on the day.
I f,gcleTrader HETIOEENIRICSUHRHGTES Ilag 3?854.11

GllT zz/ 8/Z-B,43
GHT 14:31
I Phase 61d {5r,r Neu.rYork 9:31om
ffSPECTS
t HENf,UBY ss
48.63
OppositionL 7 7 . 4 4
I Conjunction z . B 4
OPPOS I TIOII
1?S.84
I URftHUS
1Z;5.74
338 4S 3 pi
I TIf,tsTUHTJ
I ERRTH
SUN
I 278
Eorth / Sun - Venus,Mors,Jupiter & Uronusore oll linedup.
I This is somethingyou wouldnot see happenvery often and it is hardto

imaginewhat it reallymeansin an economic senseonly a psychological
I sense.ButI do remember backin 1987whenthe marketcrashedit did do it
duringan Eafth/Sunfupiter phase.
Opposition
I My mainpointin showingyou this is just to makeyou awarethat it paysto

keepan eyeon whatothertradersmaybe usingevenif you don'tbelievein
I of playingoff the otherplayersnothingmore.
it. I am in the business
Weekto Week Section3: Chapter- 2

I
OF THE S&P 5O0 is the DJIA - the top 30
ANOTHERCOMPOI{ENT
Industrials.
I
I shouldhavementioned
obseruation
this earlierbut it wasnot relevantuntiltoday.This
mayhelpyouweighyouropinionof the S&Ppositionon a weekly
I
basis.It paysto keepbotheyesopenif you havetwo.
I
o Effi--'l rt*."a $I--l F !,ltlssions I
/LL TIAAEHT6H
1500l]
1mo0
I
I
I
DOW JONES INIDUSTRIAL ovclog€:
the 3O top slocks in th€ 5&P 5OO

I
Oct loth Lovr ->l
I
Apr Jul Oct Apr Jd Oct
I
The DJIAbackedoff a 50o/oretracementleveland the word will be out by
Monday,believeme. I
Whichever way you chooseto look at thingsthere will alwaysbe some
suppofting
performing
DJIAor the major
for you to fall backon comingfromeitherthe
technicalevidence
stocksin the index.
I
lookslike "the FatLadyis aboutto sing".
Certainly I
Nowwith all the informationwe haveextractedfrom the data we haveat
handwe cango intonextweekfullyprepared. I
Wedon'tneedanyoneelse'sopinionor newsletters,
doneour own work each and every day of our
because
trading
we shouldhave
If you haven't
career.
I
thendon'texpectto get the resultsI get.
Preparation and marketanalysisis the only way you can be successful- I I

noticetimeandtime againthat the invariable losersall thinkmy approachis
too muchworkandas a resulttheyfail. Youhavea choice!Dothe
fail- thereis no otherway.
work or I
I
Weekto Week 24 Section3: Chapter-2
I
I Tradingto WIN Course- One day at a time [c] Bryce Gibnore2004
I Tuesday 2ndSeptember 2OO3:
I A WEEKMAKES.
WHATA DIFFERENCE
Lastweek the marketdeclinedfor two daysand then found its feet once
I again.
Thetwo daysdowndid not violatethe uptrendeventhoughthe 3-dayswing

I didturndown(seemy rulesin 51:C8).
Todaythe S&Pbrokeout into new territoryand the DJIAbrokeabovethe

I levelshownon the previous
retacement
50o/o page.
of the marketrightnow.
Thiscanonlyleaveuswith a bullishconclusion
I
I S&PsBB
date 638582
hi rnz.sg
I
I Cgclelrader
I TuasdoyZnd Saptanber 2OO3

qfler o LongWeekendlhe morkei
shruggadoff the consolidotionperiod
I la
date
?Bfi.5B
&3831?.
railh a nice break lo a new high.
I Lookingbackat the positionof the marketon the closebackat August22nd

I andthe OUTSIDE REVERSAL DAYyou can seewhy it paysto remainflexible
in youropinionandnottry andbe a forecaster.
I FunnythingI hadan acquaintance

seenthe PIANETARY positions
callmeearlylastweekandaskme if I had
on Fridaythe 22no.He saidhe was goingto
take a long-termshort positionbasedon the 50o/oretracementin the DJIA
I and planets.
I wonderhowhe is feelingthisevening.
It doesn'tbothermethat the markethasmadea newhighafterthe signalsI

I wasworkingoff a weekor so backas I wasflexibleand revertedto the long
sideagainwhenwe madethe OUTSIDE REVERSAL DAYto turn backup on
I TuesdayAugust26s.
Follow
Do the worK followthe rulesand thingswill lookafter themselves.
I whatthe marketdoesanddont try andforecast whatit will do.
Section3: Chapter-2
I Weekto Week
SectiOn 3l chapterg: I
ContractRollover:
I
TheE-Minitradesthe followingdeliverymonths:
1. March- CodeH
I
2 . J u n e -M
3. September -U
- Z
I
4. December
The tickersfor the variouscontactmonthsthis year are ES03H,ES03M, I

ES03Uand ES03Z. ES is the symbol,03 denotesthe year and the code
denotesthe deliverymonth. I
Up untilyesterday (U) andtodaythe
the current1* monthwas September
activecontractis December (Z). I
rulesdeemthat the activetradingvolumeroll to the forward
The exchange
on a Thursday.
month1 weekbeforethe deliverydate,it usuallyhappens I
defusethe volatilityon the lasttrading
The reasonfor this is to supposedly
daywhenyou havea triplewitchingwhereoptionscontracts
futurescontractsreachsettlement.
anddeliverable I
I
Retrccementlevelsare ofthe recent decline sver 3 doy!
They SOLD the 5O on a lxl I

retest
I
Theyhought
the retest
I
CONTRACTROLLOVERinto bacember
I
I
I
Thisis the December contractES03Zin 5 minuteinteruals.
from the chaftthereis negligible
volumein the December
beforerolloverandthentodayit lightsup.
Youwill obserue
contractthe day I
I
ContractRollover Section3: Chapter- 3
I
Trading to WIN Coune - One day at a time [c] Bryce Gilmore2004
Just so you c;;tnseethe differencehereis the expiringSeptember

contract,
the ES03U andit stillhas5 tradingdaysuntilexpiry.
l,lardly ony VOLUAIEtodoy but it is still troding
Theseare the total volumeand openinterestfiguresfor yesterdayand the

weekaswe wentintothe rollover:
Therearetwo thingsto notein thesefigures:
1. Howthe OpenInterestin December is buildingup as we headinto

the rollover.
2. The volumein December is not all represented in the additional
openinterestfigures.

Tradingto WIN Course- Oneday at a time [c] Bryce Gihnore2004 I
openinterestfirstas it isjust a simple
Let'stakethe buildup in the December
matter.
I
Theseare the positionsbeing taken by either new trader'senteringthe
marketthat knowthe rolloveris comingor theyaretradersmovingtheiropen
I
positions
fromSeptember intoDecember.
Evenwith the rolloverapproaching

therehasstill beena conslstentincrease
I
in overallopeninterest.Nowwe knowthat meansmorenewsellersentering
the market,and buyershaveaccommodated them. But up until todaythe I
previoustwo daysweredowndays.(Seethe chartS4:C1:P39)
Youcouldaskyourselfthe question,"Whyis the volumegoingintoDecember I

notfullyrepresented
in the OpenInterestbuildup in December".
Well the simple answeris that arbitrageis taking place betweenthe

I
SeptemberandDecember contractsin thistimeframe.
If you look at the low priceyesterdayin the Septembercontractit was

I
1009.25 andin the December
Yes,a discount
in December
contract
1007.75.
of 1.5points.
I
Nowunderstand
this: I
The reasonfor the discountin a forwardmonthfuturescontractagainstthe
currentmonthis that SELLERS haveto OFFER LOWER sotheycanget buyers I
to transactbusiness.
It reflectsthe factthat sellersarethinkingthe marketis
heading for a downturnandwantto makesuretheyget intoposition. I
Thenthereare the guysBuyingDecember and SellingSeptember thinking
that comethe day beforeSeptember expirythe December contractwill fall
contractandtheycan pickup the 1.5 pointsin
into linewith the September
I
the spread.
Youalsohavethe realheavyplayerstradingoff positions

in the September
I
contractagainstoptionspositions
at thistime.
I
I saidto my studentgroupthe otherdaythat I hatethisrolloverperiod- the
reasonis that whenwe comeinto the rolloverthe heavyplayerscomeup
withall sortsof schemes
thattheythinkcanmakethemmoney. I
Theproblemis,youneverknowwhentheywill strikeandsendthe marketup
or downseveralpointsunlessyouhaveeyesin the backof yourhead.
t
contractgoesoff the
I will be muchhappiertradingwhenthe September
boardandI knowtheseguysareout of the way.
I
I
ContractRollover 28 Section3: Chapter- 3
I
I Here'sthe problemI haveduring rollover week.
I 0charts ESU
1835.66
ffi36.48
Sepietnber Controcl:
I 1033.60
1839.SE Herc's tha problan I hoveduring
rollover uueak:is the irend bock up
1AZ7.Ag
I rgz4.86
r0zt.Ea
or not???
13
10^4
t 1618.69
ffi15.04
IALZ.BE
I uag.BB
69,/I?,/Z$g'3
t Thecurrentrallyhasoverbalancedboth lxl's but it is wedgedon the 50o/o

of the 1xl's wouldindicatestrengthyet the 50
I retracement?
retracement
Theoverbalance
indicatespossible
resistance.
I ficharts f,SU
1838.SS
ESBSU_38
1032^6
I 1831- BB
1026.BS
tgzt.g6
t 1816.BB
1811.06
I 1468.Ag
1841.AB
ss6.BB
I 9S1.00
986.48
Is this o 5O% relrocanreni reversol?
I gig/EE/ZBE3
I The September (wellit brokeit

contractis rallyingfrom a 50o/oretracement
by 2 ticks).
I I knowin my mindthat the 982^4 low andthe 1032^6highweremadeon
highvolumetradingandwerelegitimate pointsof force.
geometric
I It's the December levelswhenyou go backthis far that becomea mental
problem for meastheywerenot madeon highvolume.
I
I ContractRollover 29
Tradineto WIN Course- One dav at atime [c] Bryce Gilmore2004
I
u34.AB
I
1831.08
taza.sE
DECEMBER
CONTRiCT
I
t
1025.BB
Ig2Z..BB
1019.BE
1S16.AB
1413.68
I
10u.Ea
168?.BB I
Bg/lz/zw3
I
All the rangesare identicaloverthe pastcoupleof days.It is whenyou go
backa bit theyvaryslightlyandI am continually
wondering whichcontractis t
leadingthe otherduringthe rolloverweek.
I
1831.AB
L6Z6.W
LEZL.gA
I
1S16_
sO
1811.48
I
1086.00
1901.09 I
![|6.BB
!t!t1.00
s86.BB DECEJIABER
CONTRACT
I
aS/ffir?$Tt
I
It maybe nothingto worryaboutbut the reasonI worryaboutit is because
in my bookany breakof a stronggeometric
concern.
pointby over2 ticksis causefor I
At the lowtodaythe December E-Minicontractbrokeifs 50o/oretracement
over 1 full point.Nowwhenit happened
by
it lookedto me like it couldkeep
I
goinglower,but whenit brokebackabovethe low of yesterdayI calledit a
buy.The problemfor me at the timewasthat I couldnot buythe 50o/o
"lost
level I
withanyconfidence dueto the motion"in the geometry.
Whensomething you reallyneedto referto the pit contract

likethis happens
I
andseewhatit did.
I
I
I Tradingto WIN Cowse- One day at a time [c] BryceGilnore 2004
I Qcharts
1g3s.0g
CSU sPfftz-68
lffiB.AB
I Igz5.w
tgzg.BB
I 1615.BB
1418.E0
1010.5
1
1885.AB
I lgw.gg
gss. BE
I 9SS.AS
985.44
gs/Ea/zBBs
I
I Youhaveto askyourselfwhy the Pit cantradeto a perfect50o/oretracement
andthe Electronic
ESoverruns sometimes.
I Nowif youwereusingmy accuraryparameters of 2 ticksmaximumdeviation

from perfectgeometryyou canhavecompletefaiththat we hadmadea 50o/o
I retracementandacton it.
I haveseenrepeatedinstancesof deviationsin the ElectronicESto the PIT

I tradedpriceat 50o/oretracements in the past.The lasttime it happened
bigwaywasbackat the March31st2003lowwhenthe EStradedat 840and
in a
the SPtradedonly841.5andthe 50o/o retracement hadcalculated to 841.5-

t ScottManyalertedme to it on the dayandI immediately
a minuteor so beforeI thoughtthe 50 hadcomeout.
boughtit whenjust
t
I
I
I
I
I
I
I
ContractRollover
Another way to possiblyresolveany dilemma is to inspectthe CASH
CHART:
I
5&P5OOCASHINbEX
I
ffi33.49
L0,2E.EE
LO32.4t
I
LBZ3.8g
1818.BB
1813.ES
I
1BBg.gB
ua3.ss
9glB. BS
I
s93.08
s88.08
I
I
a9/98/?ffi3
NowI havelookedat it underthe microscope

havemadea 50o/oretracement
I canconfidently
at the lowtoday.
saythat we I
The next issue becomesthe lx1 correctionsupwards.The ES has
but the SPhasn't.The SPhasjust brokenthe 50 backup yet
overbalanced
I
the CASHandthe EShavenot. Pointis we are righton a criticalMOBat the
endofthe day. I
Anotherissueis the discountin the December
was1007.71so the discountwas2 full points
contract.The CASHlow today
in the futures.Thisis a bearish I
signnota bullishsign.
In anycasethe onlyconclusion I canarriveat is if it breaksupwardsI should

I
bea buyerandif it staysbelowthe balance pointI shouldbe a seller.
Thebiggerpictureis interestingwhenyoustandbackandtakea goodlookat

I
in the past8 tradingdays.Themarkethasgonesideways
whathashappened
to downwith a strongfinishon Fridayafternoon. t
The Bloomberginteruiewsare all decidedlybullish,the main comments
comingthroughare blamingthe currentsluggishness on a marketthat has
goneto far to fast.The majoritythink that as soonas the currentsetback
I
resolves
itselfthe buyerswill return.
I
I'm not entirelyin agreement
with theirviewsbut I don'thaveto worrywhat
the marketdoesin the longtermI am onlya daytrader.
The marketcango anddo anythingit likesfor all I care.I will knowhowto
I
handleit.
I
ContractRollover 32 Section3: Chapter- 3
t
I If the marketcomesbackdownand breaksthe largerdegree50 I should

expectsupportat the major1xl level.If the lxl failsthenI canbe a happy
bearandselllike crazy,althoughthe chances that will happenare remotein
I myeyesat the moment.
t LikealwaysI haveto wait untilthe markettellsmewhatto do. I keepsaying

hasto be handled
thatthisbusiness on a onedayat a timebasis.
I Monday15s September2003: INSIDEDAY

Mondoy 15th Soptember2003
T LEZ6.g8
1A18.58 1 0 1 82
I 1gr?.06
1815.54
I1'L51DEbAY
t 1914.60
1812.58
1611.OB
I 1BOS.5B
1688.BB
I 1086.58
Bg/15/ZBA3,
Eg/tg 6g/a1 BS,/LZ gg/tz Eg/15 Bg/15
ll
I E5 Volume ol
Sep-03 6/17E 52[ffi1
I Dec-03
Total
Deha
1ffi
ES OI increosed lOOk
I
SP
I Sep-tl3
Dec-03
Mar-04
7142
2757
Jun-04
I Sep-04
Dec-04
Mar-05
Jun-O5
I Total
Delta
I Todayturned into a lacklustreaffair with a downwardbias.The market

openedbelowthe balancepointon our chartand beganto retreat.Overthe
previoustwo tradingdaysthere has beena substantial build up in Open
I Interestandwithoutany encouraging newsthe marketjust groundout the
day.The mainnewsstillaroundthe marketis the $140millionpaypackage
awarded to the CEOof the NEWYORK STOCK H(CHANGE.
I
I ContractRollover JJ
NOWWHATHAVEI NOTICEDOVERTHEPASTFEWDAYS? I
Outsideof the buyingFridayat the 50 levelof largerdegreethe playersare
sellingintoany50o/o
retracements.Theydidit onThursday andagaintoday. I
The S&Prallyfrom Fridaycouldnot sustainitselftodayandthe big 6 point
correction wasoverbalanced slightlywith the marketfinishingthe daynearly I
on its low.I mentioned the significanceof the 6 pointcorrection
in a reviewof
Friday's dailyrangein 51:C18:P112.
I
The continuingbuildup in the OpenInterestis comingfrom the Fundsand
the Commercials
trendcontinues
sellinginto the NonReportable
something
sideof the market.If this
hasto giveone-wayor the other.
I
Thereis ongoingtroublewith the occupation
the Israeland Palestinian
of Iraq andthis combined
conflictis not addingany confidence
with
to the stock
I
marketsituation.PresidentBush'spublicopinionpopularityhas dropped
significantly
as the costof the Iraq invasioncontinues
budgetdeficits. Continued
to growand increase
talk of moreterroristactivitycontinuesto deter
t
peoplefromflying.
I
Althoughthe economic figuresreleased overthe pastfew monthsindicatea
recoveryof some descriptionthe employmentfiguresshow little to no
improvement. The progressof the recoverydependson consumer spending I
whichhas beenvery good in recentmonths,now if it stallsor consumer
confidencefallsthe marketwill be susceptible
to sharpsetbacK. I
5&P 5OO lsf Month ContinuousFutures Prices
High tg3z.7g
4 Hfl1
taL5.z8
18 I,IRZ
I
Bcck below old hiqhs
Lotrt
Ege
958.50
74.2A
1471.24
50 llfi3
996.11 I
Trend Indicotors ore oll funting down.
I
t
I
I
Youonly haveto reviewthis dailychartof the S&P500'sprogressin recent
monthsandyou canseewhy the FundsandCommercials areaddingto their I
shortpositions.
I
ContractRollover
I
I lst MONTHCONTINUOUSFUTURESCHART:
t Now that we are in the rolloverperiodand the activetradingmonthis

December we shouldbe appending
futureschart.
the December pricesto our continuous
I technical
Thischartis the onewe usefor all ourLONG-TERM analysis.
t TheS&P500 an active
futuresbegantradingin 1982andI havebeenkeeping
recordeversince.
I l^lave Trader
1558.88
bISHTHLY lst ,l,ilonthConlinuous Futures
I 1560.69
ffi50.48
nErnffcEt{f,ttrs
8.888
ft.333
E.3jBZ
a.447
?6"7.50
1836.86
la?s.s8
trzE,BL
"-'----
120i8.86
I ffi59.88
SOB,BB
8.4S6
8.508
B.577
6.618
8. EE?
1153.46
LL7g.?5
1232.8s
12ffi.92
1385.44
I
E.?AV fi37. ?E
?50. 88 8.786 1491.41
1.008 15?4.88
649. BB
456. A6
I 3Bg.BB
lsE.AA
I s.ss
30Jul8Z 3OSep86 3fll,ecg8 Z8Feb95 ZSla999
Whenyou examinethe currentmarketpositionrelativeto the bearmarketof

I 2000-2002 we haveyet to retrace1/3'dof it. The38.2is a wayoff at 1075.5
(1068on SPX),if you recallfromearlierchapters(see:S2:C2:P18) duringthe
Bearmarketthereweretwo very impoftantretracements. Onewas50o/oand
I and eachwere approximately
the other 38.2o/o
52:C3:P23).
equalin length,(alsosee:
I Fromthe low in October2002we havenowbeenup 265whichis 25 points

morethanthe previous largestcorrectionon the waydown.Thiscouldmean
I we aregoingto go higheror it couldmeanthatwe haveonlyjust movedthe
wavecountup intoa higherdegree.Nevertheless, if you believewe arein a
recovery, onewouldexpectthe marketto makeit backto the 38.2or the 50
I beforeit ranintoa brickwallfor a time.Wellthatis the theoryof ElliottWave
if youbelievein it.
I Mymainpointis this,100'sof otheranalysts

linesandadvising
arealsothinkingalongthe same
theirclientsof the possibility.
If we indeeddo continueup
the 38.2levelat 1075(SPX1068)
in thistimeframewe will haveto negotiate
I and that couldcreatea technical
stateit is in.
problemfor this marketwith the current
I
I ContractRollover
Tradineto WIN Course- One day at a time [c] BryceGilmore2004 I
In anycaseno matterwhathappens youshouldkeepa correctrecordsoyou
will knowthe preciselevelsthe professionals
areworkingoff.
t
Tuesday15s September2003:
I
Anotherdayanotherdollar!Marketshiftsup a gearasthe buyersreturn.Now I
theonlybarrieraheadis a testof the 1031high.
I
1834.Bg
1631.EB
LBZE.EB
1031 The someold things continueto tell the story:
1028^2
I
1825.99
tilzz.SE
[ni
#
t}1'rt
Overbaldnce13x13
Bullish :
T
1819.BA
1016.BB
1013.08
ESB3Z-14
FO#iC
Raies
Unchanged
I
1418.AS
LOET.eA
3 DaySuing
bockUF
I
0i$/Bi8,/ZBB3
Bg/16
I
I wouldexplainthe changein sentimentbetweenyesterday
combination of no bad newsand technicalbreakouts.
andtodayas a
The early morning
I
breakoutof the 50 only left the 61.8andthe 13x13as resistance.Afterthe
testof the 61.8the marketcamebackto the 50 levelasthe marketdigested
the FOMC minutes.Theoldclich6sayingis, prior resistancebecomesnew
I
suppo$ sotheyboughtit andoff it went.
I
Thecontroversy DickGrasso
surrounding of the NewYorkStock
the Chairman
Exchangeis an oldstorynow.
t
Thismarkethasits sightsset on the 1075levelrightnow.The3 daytrendis
positiveonceagainas the bearsare gettinghoseddown.The bearshavea
smallchanceof a doubletop at 1031but judgingby the finishtodaythe
I
buyersshouldkeepcomingfor the timebeing.
mayget a
Withonlytwo daysleft untiloptionsandfuturesexpiryconditions
I
rightnow.
littlevolatile,that is the onlythingto consider
It's timeto remindyouonceagain:

I
If the market is going up you buy it - If it is going down you sell it.
Youcan keeploadingthe gun untilyou run out of bullets.Whenthe SIGNS I
are clearyou can be surethat the professionals will act in their sameold
ways.
I
I
I Tradingto WIN Course- Oneday at a time [c] BryceGiknore2004
t Thereis nothingnewunderthe Sun.Themethodologies I havetaughtyou in

this coursewill keep you on the correctpath if you continueto do the
I preparation
workandtakeit onedayat a time.
l I recommendTTW traderc to keep a continuous 1$ MONTHSWING

CHARTof significant market swings:
I Thisway you will havea properperspective of wherethe markethasbeen

andan ideawhereit maybegoingin the future.Youwon'tbe guessinglike
mostof the otherswhowill be losingtheirmoneythroughlackof knowledge.
I Theswingswilltakeon the appearance of wavesin lesserandhigherdegree.
I :+50r2
i+15 10t'1"6-Glob.x Hiqh
'103?'6 :
I
I
t
I :fiv
: 9821.4
I
I .45^5
I
Thischartis currentrightnowandcontains the swinglevelsof the active1s
I monthEScontracts overthe period.
It is an EsignalES#F continuous
and was preparedby one of my TTWcolleagues,
chart
Yigit Balligilwho livesin
Turkey.We haveour own automated procedure to produceswing
for Esignal
I thesecharts.
Higherhighsand higherlows meanthe trend is UP.

I Lower highsand lower lows meanthe trend is DOWN.
I If you maintaina longer-term

gowrong.
trendyou can't
biastowardsthe medium-term
I
ContractRollover J I Section3: Chapter- 3
I
Swingswill be under-balancing
or over-balancing
andthe retracement
usethis information
as the trendunfolds.You
levelsof priorrangesasyourguide
I
to tradersentiment.
Theonlythingthat changes as the marketmovesforwardis the DEGREE of

I
TREND.Largerdegreemovesbegetlargerdegree larger
corrections; degree
swingswill unfoldin 3 to 5 wavesof lesserdegreeswingsasa generalrule. I
I
I
I
I
I
llain ffiA?14 BE;W?4 E3BBBE trt0819 9369ff2 mAS16 t
Anothereducated colleagueof mine,SteveRifkinwhoyoushouldall knowby
I
now as Steveis runninghis own day tradingeducationprogramfor S&P
my own chaftto
traders,sent me a chartthis morning.I havereproduced
hispoint.
illustrate
I
pricesas a meansof identiffing
It refersto alsousingthe Globexcontinuous
geometry at importantswinghighsandlows.
t
Stevewasableto tie in the 1:1 geometryin the consecutive
an exact38.2 retracement of the entirerangeat the
corrections
1005^2low the
with
other
I
day.
I
I thinkthe pointStevewas makingto me, wasjust to saythat you should
examineeverypossible
one.
angleandthe answerwill betherein morewaysthan I
Thereis no doubtnowthat after yesterday's
mattershasseenthe relevance
buyingspreethat anyonewho
that we
of the 1005^2lowandwill consider
I
haveat the leastonemoreleg up in similardegree.Thisshouldat leastget
us upto the vicinityof the 1058/1060area. I
I
ContractRollover
I
I Tradingto WIN Course- Oneday at a time [c] Bryce Gilmore2004
I Anothercolleague
outto ourTTW
of ours,PaulBonanno
group
hasalreadypointed
from California
thatthe nextCASHINDEX1:1comesout at 1056.55 so
t betweenall of uswe havethe marketcovered.
I am very proudof theseguysthe way they havetakento the educationI

I haveprovidedandthe way they can nowwork it out for themselves
anyhelpfromme.
without
I WhenI retireI knowthat the effort I havemadewill be remembered

asthe wordspreads
forever
to thosefewwhocanlearnto thinkfor themselves.
I
Tuesday17u September2003:
I
I lffil.48
1428.A6
1031
1gz5.E0
I razz.g6
1A1s.00
I 1916.O0
ffi13.88
I 1S1B.40
LgB?.gg ES03Z-16
urh:15rh:16rh
Eg/L?/2g63
I Eg/oB B/99
I Anothersmallrangedaywith no purposeful guidance,

technical I watchedfor
a whileandwhenit couldn'ttest the old top at 1031I left it alone.Nowwe
I have only 1 more tradingday until the September/December
complete.
rolloveris
Tradersarewatchingnot onlythe ES-Zchaft,but alsothe SPX,the
SP-ZandSP-Uchartsandit is becoming confusing dueto the rolloverperiod.
I DickGrassohasresigned fromthe NYSE todayat the requestof the boardso
nowthat newsis out of the ainruaves.
I Anotherdistraction
rightnowis the hurricane
off the EastCoastof the USA.
I Stillin generaltermsthe marketshouldbe headingup.Thereis nothinggoing
on that saysit shouldn'tbe excepttechnicalsellingby the fundsand the
I commercials.
absorbed it.
Seehowthe OI went up on the riseyesterdayandthe buyers
I
I ContractRollover
Tradine to WIN Course - One day at a time [c] Bryce Gilmore2004
I
I
I
5P - 0I +8-'".
I
5P
Sep-03
Dec-03
Mar-04
871n1 246217 824181 I t
Jun-04
Sep-04
Dec-04
Mar-05
I
Jun-05
Total
I
I
Something else to think about:
I
Cgclefrader
11&EXERS
TLTI{E& PRICE ; G
a
I
I
r
rsl EBA3Z4 t
1552.8? I
e
t0 u
tzt azLBLg
?68.63
TII,IECYCLE
s
TT
I
n
I
dags S3B s
degree
mths
913
ueeks 13Z.tl
38.6
Uears Z,536 EXISTINI€ BE/4Ri,IARKET
a
z
k
I
RffHGE
[0uE 78'4.24
t
Sqrlld
58.5
Z.IB3 l
zaaaa324- zBmBsaB tHlhelp, [+]Scrsll, tEsclExit
As we get closerto this MAJOR time and priceconjunction we needto be

I
awareof its consequences- just in caseit turnsout to meananything.
Tjmewillbe"square" 2003:It couldbe impoftant.

38.2on 30hSeptember
I
Thenthereis anothermajortime fallingon the 23'dSeptember
couldalsobe importantit is hardto say just yet, but I am
2003:This
awarethat it is
I
something
recently.
I needto watchon the day if we are makinga higherhighthan
T
I
ContractRollover 40
I
I Cgclefrader S+P 5ffi CffSH This is onotheriechnicolopinionI hoveof

the morkot - I hovamentionedthis ogesogo G
HflRHENS a
ond why I thought ltliner & Plechier v.rere
I I5I EaA3Z4
L552.8?
ru
on lhe wrongtrock.
r
t
e
I
I
I a27 AZg?24
??5.6'8
TII,IEIYCLE
s
u
I
n
rlags 852 s
I derree
nths
RAHGE
trft
ueErs LzL.?
ZE.A
gears 2.325
BEARMARKET
U
z
k
t
ItouE 777.15
I 50.4
Sqr9rl ?ffi6
I Justbearin mindthat I am not makinga forecastjust warningthattheseare

the two biggestobstaclesin the pathof this marketin the nearterm. BTW
I Minerand Prechter werecallingthe marketDOWNall the way up fromApril
2003:it'sa sadindictment knowledge
of theirself-professed in myopinion.
I Oneshouldneverrelyon egoaloneandignorewhatthe marketis tellingyou!

Youknow,I can be the cruellestcriticknownto manbecauseI alsohaveto
thatcomesmyway.
I acceptanycriticism
Oneof the biggestobstacles in yourtradingcareeris goingto be deciphering

t whoknowswhattheyaretalkingaboutandwhocanproveit works.Manyof
the thingsI havetaughtyou in this courseare not originalin any way
whatsoever,it is just the way I combinethem that makesthem the most
I tradingtoolsyouwilleverlearn.
effective
comeout with.Or
The marketdoesnot listento the thingsMineror Prechter
I for that matterArchCrawfordthe Astro
on aswell.
"Guru"he wasbadlywrongfromApril
I Justgo backandreadwhatI wrotein S2:C4:P39

on July2nd2003:
I Pleasenote:
AlthoughI am mentioning thesefuturetimingdatesand pricepricelevels
I thereis no reasonto believethey will actuallybecomefact.The dateswill
comeandgo andthe marketwill dowhateverit wantsto at the time.
I guidelines
Theyaretechnical to beawareof that is all.
Whenthe time comesthe marketwill showits handin a varietyof ways

I whichwe will be ableto identifywithandactaccordingly.
I
I ContractRollover 41
t
Thurcday18h September2003: IASTTRADINGDAYES-U I
Todayyou will seethe reasonfor takingeachdayas it comesandnottrying
to forecastmorethanonedayin advance. I
Qcharts CS$
1848.80
LA44.AB
f,sa3z-15
ONE bAY AT A TI,l,\E

High todoy
1038^4
I
tB4g.Eg
1436.BB
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18ih
+16^2
t
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I
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I
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g9/LB/?gtrJ
Bg/95 69/49 gg/tl 09/15 gg/t? gg/18
I
Todaythe marketwent exactlythe oppositeof what the average"Joe Blow"
in the street expected.Maybethe triple witchingwas what we neededto I
breakthe overhead resistance
the marketwasup against.
Nowall thosepeoplewho havebeencallingthe September 8s Highthe final

I
highfrom Marchhaveto eat Crow.Theymustbe gettingusedto it by now,
the flavourof CrowI mean.But you knowthe stupidthing?The lazypublic
andadvice,followthemand losetheir
will continueto buytheir newsletters
I
hardearnedmoney.
Thismarketrallyfrom Marchhastarnishedmanyreputations sinceit began,

I
but if you studywhatI havebeenwritingoverall thesemonthsyou will see
that it wasn'tveryhardto stayon trackandkeepmakingmoneyallthe way. I
All you haveto do is takeit ONEDAYATA TIMEandforgetaboutforecasting
whatwill happento far out. I
To makemoneyall you haveto do is just tradefrom levelto levelin the
just keepaddingup. It is easierto make5
smallerpictureandall the pennies
I
to 10 pointsa daythan hit a homerfor 50 or 100pointson a mediumterm
trendfollowingposition.
either up or down if
Therewill be dayswhereyou catchthe volatileruns
you keepenteringpositionswhen the opportunityis
t
signalled,
thesearethe bonusdays.
of makingmoneyas a job and always

Youjust haveto treat this business
I
remember the basics.
I
t
I Section 4! chaptert:
I The PsychologicalAspectsof Trading to WIN:

I Perhapsthe mostimpofiantadviceI cangiveyouto assistyou in becoming a
winningtraderin the futuresmarkets,is sayto you to only concentrate
on
t onemarketandspecialise in it totally.
Youneedto developa specialinterestin the marketyou selectto tradeand

I youneedto understand
its habits.
Eachindividualmarkethasa hardcoreof specialists who maketheir living

I tradingonlythe onething.Youcan'tbe a
none"andbe successful.
"Jackof all tradesanda masterof
I Fromtimeto timethroughout my tradingcareerI havemovedfromonething

to another.I first begantradingSilverandthenmovedontoGold.Whenthe
I Goldmarketwentintothe doldrumsI begantradingindividual After
equities.
sometimeI movedintoequityfuturesandthe localSharePriceIndexfutures
as the volumesincreased. I havetradedUST-Bondswhen it was an 8olo
I couponbut droppedit whentheychanged
couponcontract.I tradednumerous
to a 60/o
the contractspecification
overthe yearsbut foundthat
currencies
whenI wasspreading myselfaroundovermorethanonecomplexI wasless
I effectivein keepingon top of anyof them.Youwill seeby my writingsover
the yearsthat I havefollowedandtradeda widerangeof marketsand my
techniques canbe appliedto mostof them.
I Fora time I hada loveaffairwith the Soybean marketbut whenI couldsee
platformsbecame
I the increasinginterestin the
I madeit my newhome.
available
S&P500 after electronic
I On a week-to-week basisI often lookto seewhat someof my old favourites

aredoingjust out of interest.Butfor tradingpurposes
I do not strayfromthe
S&Pnowdays.
I I haveseriously studiedthe habitsof the S&Pplayers;this givesme a clear
advantage.It is not the professionalsyou makemoneyfrom, it is by going
I withthemoverthe top of the inexperienced thatmakesyoueasymoney.
TheS&Psuitsme because I getthroughthe Bloomberg

the information News
I seruiceis all I need to stay informed.Professionals
technical's,
Bloombergprovides constant
interuiewswith
act on news and
prominenttraders.
I Youcannottradeeffectively
newfundamentalnewsmayquicklychangethe professional
the pointis
unlessyou havecurrentinformation,
tradersthinking.
t
I Psychological
Aspects
I
not just the
It's no joke believeme and it appliesto all tradingoccupations
futuresmarkets.
I
Psychologically whenyoutakea tradein a marketwhereyouareawareof all
the outsideinfluences,you take the trade basedon knowledgeof the
t
technicalpositionand your personalbeliefin how the tradershaveacted
undersimilarcircumstancesin the past.Thisgivesyou a massiveedgeover I
the restof the field.
As longas you understandthat you havethe edgeyou are morelikelyto

t
handlethe managementof the tradea lot betterthanif you wereworkingin
thedark. I
If youcanjust understand
thismuchyoucanlift yourtradingresults10fold.
I
STAYFOCUSED:
Marketconditionsare alwayschangingand if you are not preparedto adjust

t
withthe marketyouwill nevermakea consistentsuccess of trading.
I
You alwaysneedto havea clearopinionon whichdirectionthe marketis
mostlikelyto go. If you don'tthenyou are betteroff to standaside. I
I'll giveyou an idea- I didn'ttradetoday,I did on Tuesdayand hada good
day but the way the marketbehavedtowardsthe end of Tuesdaywas very
mixed,sotodayI tookthe dayoff. Therehavebeenno neweconomicreports
I
the pasttwo daysand the next are due tomorrow.Thereappearsto be a
perception in the marketthat manystocksare overualued
no followthroughto the downside. The3-dayswing is
but therehasbeen
stilldownbut we have
I
just hadtwo insidedaysin a row.The marketis poisedto go one-wayor the
otherandI am not surewhichway.Themarketis yet to tell me. t
993.A0
Q2 Eorningsreporting seoson{SECONb WEEK)
iAonday Wednesdoy
I
, Lexmsrk& i High todoy is a l:l
gg1. B9
98S.60
Merckcome
outwith
, of lwger degree.
disappointingQusayidUday
: No porticulor
goodor.
, bad newstodoybut .
1stdownthen
I
H u s s e ikni l l e d
ss?.Bg
I
figures.
in Norfi Iroq
985.A0 fuels golly.
s83.86
s81.S0
s?9.Eg
I
g??.BB
9?5.89 ESA3U-s
Todoyis o bOJI doy .
of indecision
/rtrork I
87/Z3/ZBaA
Hair-r E7/18 w/23 a?/23
I
PsychologicalAspects Section4: Chapter- 1
I
I Therestof the weekwasno differentto the start- down,up,down,up.
I Weaks Troding Ronge- 25 poinis

Motrday Tuesdcy Wednesdoy Thursdoy Fridoy
I 1886.A0
LAEZ.BE
T sg8.68
g94.AB
I s96.BS
S86.BB
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I 9?8.04
s?4-ag
I 67/a5/ZgtrJ
Hain g7/Lfr g7lzl g7/22 tr7/23 W/24 87/25
If you v,rereto look ot o vreeklychort you would think nothinghoshoppened.
t As I saidsomewhere 3 weeksagothe marketcouldgo sideways in the 1015

- 960rangefor sometime beforewe havea clear-cutoutcometo the Elliott
I WaveCountI put fonruard backat S2:C4:P38. Sofar my ElliottWaveopinion
is intactunless960comesout on a dailyclose.
I The mostpositivethingI cansayaboutthis marketrightnowis that the 3-
dayswinghasturnedup again;so anybreakabovethisweekshighandI will
J bea buyeragain.
I showsthe 3-dayswingssincethe 12hMarchlow.

ThisCHART
w3
I S&PsBB
High
Lou
1414.88
788.54
I Bge ZZE.38
I
I a:a
I Themostlikelyreasonwe havebeenexperiencing choppyconditions

that manyanalystsbelievethat the highI havelabelledW3 is a
of lateis
major bear
marketrallyhigh.It maywellbe but untilthe marketcanbreak960I am not
I in thatcamp,althoughI mustadmitI ambeginning to wonderrightnow.
I Psychological
Aspects
I
Tuesday29b July 2003: I
You know it is becomingincreasinglymoredifficultto makeany senseof
wherethis marketis headingin the future.The past6 dayswe havebeen
stuckin a 27-pointtradingrange.Notwithstanding
therehavebeensomevery
I
good PATTERN tradesbut the
havebeensadlymissing.
geometricratiosI am accustomedto seeing
I
All I seein thistradingpatternis CONFUSION!
l
I
tlrhart'; [5U f,sg3U-t3
rF1?.08
rs13.9g
tE89.Bg
r8U5. Bg
ieBt "[B
9:17.88
I
It5t, u6
gng_nB
:IE5-EE
t
g[1,06
s??,ffs
E.-?/21/2g,tr3
:1it i rl
t
The marketseemsto rallyon the flimsiestpieceof newsor rumourandthen
I
whenrealitystrikeshomeby wayof somefactualeconomic newsthe market
takesa dive. I
With the ConsumerConfidenceback down at a four month low and
unemploymentfor Juneon a nineyearhighit makesyoubeginto wonder. T
Commentators keepinsistingthe USeconomyis in recoverymodebut you
can't see anythingreallypositiveto agreewith their forecasts.OK some I
companyEPSare improvingbut the stocksthat are showingearnings
improvements havealreadybeenbidwayup on thisexpectation. I
Alsosincethe Junet6tr nighthe BONDMARKET has beenon a consistent
downtrend.Usuallythere is an acceptedbeliefthat moneymovesbetween
the BONDMARKET and the STOCKMARKET. An old beliefis if bondsare
I
goingup the stockmarketwill go downandviceversa.
Contrary to popularbeliefthe stockmarkethasbeentotallyindifferent to this

I
accepted beliefin recenttimes. As far as I am concerned
onlyoldwivestalescirculated by brokersto get
beliefslikethisare
morebusiness.
In my opinion I
it is goodto remember this so you don'tfall for the psychological
trapsthat
thesefalsebeliefswill causeyou.The samegoesfor any othertwo markets
that peoplelike to makethe samecomparison.Eachindividualmarket t
marches to its ownbeatandshouldn'tbeassociated withanother.
T
Section4: Chapter- I
PsychologicalAspects
I
I ffi3.88
I 1e1.m
1ts.ffi
I lt7.m
115.ffi
113.m
I 111.W
18S.ffi
I 1S?.m
gvlzgtffia3
ll'r ! li 87/11
I
I THES&P?
IN ALLOFTHIS REGARDING
WHAT'STHEMESSAGE
Whatdoyoudo whensituations
occurlikewe arein now?
I PSYCHOLOGICALLY
YOUCOULD
BECOME
CONFUSED!
I PATTERN SIGNALS WITHTIGHTSTOPS.
andtradeoff the
Wellthe onlythingto do is be awareof the newsreleases
I Todaywhenthe Consumer Confidence and Unemployment was released at

10:00amon badfiguresthe marketbrokesuppoftand droppedlikea rock.
I Thena rumourstartedin the pit thatSaddam
rumourturnedout to haveno substance
Husseinhadbeencaptured,
andaftera doubletop with the
the
early
morninghighthe themeof the dayturnedbackto the economic reports.
I
I Qcharts CSU
1883.BB
1881.flB
ESEgI-5
houbla Tnp
\rj rlh Ftgf n ing
I sgs. BB Hlt.H
sit?. EB
995.09
I ss3.sE
991. BE
I s8g.0E
9S?.BB
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I 983.88
9fl1. EB
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PUEELY 0r'l FATTER]'|
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Capturcdl
I 6?/Z& A?r?fr E7/2fr 67r'u;|] E7/Vg ATW
I Psychological
Aspects
Tradineto WIN Course- One day at a time [c] Bryce Gilmore2004
t
Wednesday30u July 2003: I
Todaydidn'tclearthe currentpictureup at all. The Fed'sBeigeBookrepoft
wasreleasedat 2:00pmETandheldnothingin it to inspirethe market. I
[charts CSU
99?.58
I
ss6.B0
ss4.5B Some6EOfiIETRY for youl I
9S3.BB
ss1.5g
sgo.68
I
988.58
SB?.BB
I
s65.58
984.88 I
s8z.58
g7/3B,/aEE3
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The only thing constructiveabout today was the way the GEOMETRY
unfoldedin a seriesof 1:1 reversals.
Thetechnicians maybe returningfrom I
theirsummerholidays. ThePATTERN is stillpointing
down.
Alsodailynegativenewsis comingout of IRAQas the USoccupation forces I

are continuallycomingunderisolatedattacksby survivingloyalistsof the
SaddamHusseinregime.The whole thing is getting boggeddown and
causingsomepoliticalunrestas moreand moredeathsof US personalare
I
repofted.No weaponsof massdestruction havebeenfoundand politically
this wasthe reasonfor the war, evenif the coalitionforceshaveremoveda
dangerous dictatorfromthe worldstage.
I
Briefingdot comrepoftedtoday:
16:20 ET Dow -4.41 at 9200.05 Nasdaq-9.42 at 1721.95 S&P -1.63 at
I
987.65: [BRIEFING.COMJ How long does it take to get to nowhere?
Apparently,six and a half hours- at leastthats how long it took todayas the I
Dowand the S&P500 spentthe entiretyof the sessionuacillatingright below
the unchanged line and closedthe sessionwithslightlosses.
Wth regardto today'seconomicnewq the Fed'sBeigeBookwasreleasedat I
1400 4 but did not have an effed on the market.. Thereport indiated
that the economy"increaseda notch'!over the past coupleof months,but
that capibl expendituresremained "weak'. The market is marking time
T
waitingfor an abundanceof economicrepoftsdue to be releasedon Friday.
at just over
AnotherAchillesheelfor the marketrightnow is the OIL PRICE
t
US$30a barrel.
I
I
I Tradins to WIN Course- One day at a time [c] BryceGiknore2004
I Thursday31"tJuly 2003:
Positiveeconomicrepoftsor you couldsay more positivethan previous

I economic databuoyedthe earlymorningsession. Neverthelessendof month
profittakingtook its toll on the earliergainsand by the endof the daythe
I S&Pwasbackto whereit closedyesterday.
,orl@--l] p-l
tntenoal F Atsessions
I Price 0.00
Datr6 07Bt/03
Tirne 15:35:00
Open 99125
I
High 99125
Low 34725
Close 99t25
Csr% 0.0
t tsars37
I
I
I
I
I 141?.BB
I 1013.BE
10gg.BB
NOTHTNg
/I,TEAhIs
It's octinglike o ship
v.rithoulo rudderl
I 1965.49
IEBL.bB
74?/o Rclrqcatrrent
9g?. BB
I sg3. B0
g8s.68
I 985.68
s81.08
9T?.gg
I E?/31/?;0/9.3
f'{ain E'l/11 g7/18 WlZL E7/24 B7/29 B7/3I
I Todaywasanothersoliddayfor the daytraders,yet nothingfor the position

traders.The buyerscannotholdany gainsand the longerthis goeson the
weakerthey are becoming. Daytradersare prepared to buy the marketbut
I they won't hold it. Psychologically
progressivelymoreandmorefrustrated.
the longer-termplayersare getting
It is periodslikethesethat makeyou
I realisethe advantages
of takingit onedayat a time.
I PsychologicalAspects
Tradineto WIN Course- One dav at a time [c] Bryce Gilmore2004
I
Fridayl"t August 2003: I
The manyeconomicrepoftsreleased
todaywereat besta'tmixedbag"but
the unemploymenttrend continuedto increaseeven if the overall
ratediddropdueto manypeopleleavingthe worKorce.
unemployment
I
spu03l10l - s&P 500 LAST: 97€ v 9.70
CHANGE: HIGH:gg3.OO LoW:gr/.oo 8Jll2O03
I
I
1010.00
,1000-o0
s90.00
s80.00
.E 2g Tradinq Days
g70.og
s60.o0
s5o'oo
I
Increasing
Uncartainiy
s30.o0
e20.00
910.O0
I
t
Whichever wayyou lookat it the marketdidnt like it andthe bestdirection
for the daytraderswasto sell.The3-dayswinghasturneddownagainbut it
t
pattern.The currentsupportpointis still
meansvery littlein this congestion
960 beforeI woulddeclarethe trendhasdefinitelybrokendown.It ceftainly I
lookslike the marketnow wantsto test the 960 levelbeforeit decidesone
wayor the other.
I
Practically
speaking the markethasbeentrappedin a tradingrangefor two
monthsandall the longer-term havebeenmarching
investors time.Overthis
pasttwo monthsmassivecapitalinflowsbackinto investmentfunds have
I
suppoftedthismarketso it remains
to beseenif thisinflowtrendcontinues.
Wellright now I wouldnot bet on it andjust proceedone day at a time as

I
this is the bestcourse.Theonlythingbetweenhereanda 50 pointdeclineis
973and960. I
As I saidyesterday
weakness
the chartpatternis lookingmoreandmorevulnerable
1015to provideanysustainable
to
right now and it wouldrequirea "giantrally"and a breakabove I
strengthin the mediumterm.
It is goingto be interesting pointof

to seethe finaloutcomefroma technical I
view as we havebeenworkingalongwith this unfoldingmarketfor some
monthsnow. I
Personally I don'tcarewhatthe outcomeis froma tradingviewpointbecause
all I haveto do is tradewhat I seeand not what I maychooseto forecast.I
learntthat muchyearsandyearsagowhenthingswouldunfolddifferently to
I
whatI hadat firstimagined. Youhaveto learnto tradeonlywhatyousee.
I
I
I The past 4 days:
I 1886.BB
LBig3.AE
Tuasdoy w--edry$gy-."...... --......,-.....
..Il':ri:y*-......-......-.1-::i*y-.
I 1600.BB
ss?.04
ss4.a0
I ssl. sB
sB8.89
I s85. A6
sBz.g6
I 9?9.BB
g8,/BL/z:B/8.3
Fia i lr
I Monday4s August 2003:

I TheMarketcameout of the chutetodayon a downerandevenwith a good
factoryordersrepoftat 10:00amdid notstopfallinguntil10:30am.
I Qcharts ESU ESA3U-5
t 1888.BB
1804.BB
1804.B0
1004
I gs6.Bs
9gz.Ba
I 988.88
s84.89
gga. BB
I 9?6. Bg
g7?.EA
I 968.BB
g8,/a,4/zga3
g?aa
t Butby the endof the day it hadrecoveredto closeslightlyabovethe Friday

of the past3 daysrange.Basically
closeaftertestingthe 50 retracement all
I you can say until we get more evidenceis that we just got backto the
BALANCE POINTof the recentmarketactivity.But tomorrowwill offer some
moreopportunity I amsure.
I - Dayto Daychecksif youwant
I havewrittenmoreabouttodayin S3:C1:P7
to makereference
to it.
I
Tradinsto WIN Course- One day at a time [c] BryceGilmore2004
I
Tuesday5s August 2003: I
-10:so nowI amgoingto review
I havecovered the daysactivityin S3:C1:P9
the big pictureas todaythe 960 low I havebeenhingingthe bullargument
on cameout andthe futuresclosedon its lowat 959.4,a bearish
I
sign.
I
s&P504
date 83961?
hi 1B14.BB
lst l$onih Futuras DoublaTop
I
t
GgcleTrader
I
It is iimas lilte now where you hoveto
beliave in whot you scc and not rnhat
I
you ar€ hopingfor...........--..
I
I
llain
Mythoughtsare:The bucketis leakingandwe couldexpectit to get worse.

The S&Pmarkethas not displayeda lot of strengthlately(typicalWave4
behaviour).Butif the currentdeclinecontinues therearea lot of peopleready
t
to bailoutas lastyearis stillveryfreshin theirminds.
t
IEZA.Eg 1014,75 6O rrinutE bors from iha JunE 17fh High
1008.BE
998. BB
.'rlilllh
l l ': 1h
DoubleTop AAAJOR
WEAKNESS
in patiern
I
'l t W :
9S4.00
s?z.gg
I
1:1fails -:>>
I
960. B0
s48. BB Next 1:1
. 945,75
936. Bg ES03U-68
f _ _ _ i l _ _ _ , , , , _ r r r r r { r l i l r l i l |
gE/13 g7/93 B?/tE A?/6 EB/ffi I
At timeslikenowit is worthrecalling
the doubletop in Marchof 2002as the
I
conditionsare vaguelysimilarin termsof investorexpectation. Moneyhas
recentlycomeintothe marketat an unprecedented
havebecomecomfoftable
paceasthe earlystaters
thatthe worstis over.Wellwhoknows?I don'tbut
I
the signsaresayingto me- don'tbe an investorrightnow!
I
Psychological
Aspects l0 Section4: Chapter- 1
I
I ANOTHERPROBLEMON THE HORIZON:
I Companies with self-funded

currentpaymentcommitments
suchlowlevelsandthe
retirement
income
plansarefindingdifficultymeetingthe
from fund profitsas the interestratesare at
streamintotheirfundsareat verylowlevels.
I Theirtraditionalassetsto backtheir fundshavelost billionsand billionsof
dollarsoverthe pastfew yearsandrightnowtheyareshowinglittlehopeof
recovery.
I It is saidthat companies withtheseplanswill haveto dip intotheiroperating
profitsto top up the outgoingson the currentcommitments.
I Anotherthing about the incomestream of the retired sectionof the
communityis that they no longerenjoythe benefitsof the high interest
I regimeandtheirdisposableincomes
flowthroughto the consumer
Thisphenomenon
arefallingrapidly. will
demandsideof the marketandstagnatesales
I andbusinessincomes
Thisfactorincluded
fuftherin the future.
with the increasing unemployment equationleadsoneto

I believethat the economic conditionswe are experiencing
usfor a Iongtimeto come.TheUSGovernment
nowcouldbe with
hasrunup an unprecedented
deficitthis time aroundand if they do not curbthe overspending habitthey
I havefallenintothe futurewill be mortgaged
Futuregenerations
policies
by the stimulus of today.
will have difficultieswhen it comesto socialseruices
entitlements on the currentpath.
I that thingscan only
You don't needto be a Rhodesscholarto understand
improveif people
havemoneyto spendto spurbusinessalong.
I Frommy part all I am spendingmoneyon right now is livingand business
such as boozeand cigarettes.I
I expenses, enteftainment
I go anywhere.
and indulgences
andI will be compensated
don'tneedto travelunlessit is on business
I haveno debtandI havea considerable
for it if
incomebut I have
I no reasonto go out andspendmoneyfor no reason.
Theremustbe plentyof peoplein my positionbutthe majorityof peoplewho

I want to spend do so by borrowing;the private debt level is at an
highlevel.Sowheredo we go next?
unprecedented
I Notto far fromhomeI suggest.

is no reasonto stickyour
Withterroristthreatsall overthe worldthere
neckout if youlivein a safeenvironment.
I Anotherthing the occupation

nightmare
of Iraq is provingto becomeanotherpolitical
as it dragsout andwith the priceof oil on the riseit addsanother
I negative
to costof an expandingeconomy.
theseare onlysomeof the thingswe shouldgivesomethoughtto

Anyrruay
I whenwe thinkaboutwherethe marketcanfindanyextrabuyingimpetus.
I Psychological
Aspects tl
I
It seemsto methatthe stockmarketis runningon emptythe waythe indices
havebehaved overthe pastmonth.
I
Stillit paysto be optimistic. I
Therealestatemarketshouldbe slowingdownby nowandlet'sfaceit, it has
beenoverextendedmorethanI haveeverwitnessedin the past.Evenif your I
apparentwealthhas increasedin valuewith the explosionin real estate
asyou havenowhereto go exceptto
valuesyou areno betteroff realistically
borrowagainstyour assetand plonkthe moneyinto someother form of
I
investment.The only onesgainingare the governmentdepaftments who
haveraisedthe landtaxesbecause of it. I bet halfthe reasonthe stockshave
beenbid up so stronglyin the past4 monthsis throughborrowingagainst
I
real estateand investingthe moneyin the market.Now if the alternative
investmentsdont peformthenit is cuftainsfor thosepunters. I
If you reallywantto seethe stateof the nationyoushouldgo visita CASINO,
wellyou don'treallyneedto just havea lookat howthe dailyvolumeon the I
E-Minihasgrownin the pasttwo years.Thegamblers areall movingontoour
tuf thesedaysandit is asclearasthe noseon yourface.
I
Thetrendnowin investment
circlesis to learnhowto sellshort.
I am alreadyan expeftat it so wheredo the peoplecomefromto buyadvice

I
from me. I can see it in the salesof the booksI havewrittenoverthe past
two yearsor so. I
The worldis an amazingplacethe way it goesfrom brickwallto brickwall
andthenmakesmoreheadway. I
Whatreallyamazesme is howpeoplefind me as I don'tadvertise exceptfor
my web site and overthe pastcoupleof yearsI am sendingout booK to
placesI haveneverevenheardof. Oncethe majorityof my bookswent to
I
Australia,USA,HongKongand Singapore whichthey still do, but nowthere
numbersgoingto Sweden,Germany,Poland,Greece,Spain,
are increasing I
UnitedKingdom,
Italy,SwiEerland, Ireland,Turkey,IndiaandevenRussia.
Neveftheless the pointI am makingis that thereis an increasingWorldWide

I
trendto tradefutureswhere you canSELL before you BUY if you wantto take
advantage of a fallingmarket. I
andyou haveto considerif that is
Peoplewantto learnhowto tradePAPER
PRODUCilVE? Maybeit doesnot matterso muchas the oneswho canlearn
will onlybe a smallpercentage
to do it effectively of the worldmarketsin any
I
case.Butthe trendappears to be for moreand morepeopleto takematters
intotheirown handsratherthanleaveit in the handsof the institutions
havebeenon a summerholidayallthese years.
who t
I
PsychologicalAspects t2 Section4: Chapter- 1
I
I Wellyou mightwonderwhy I persistin teachingpeopleto understand

markets,
the players
andthe mechanicsthatthe smaftplayers
the
with.
identiff
I It's reallyprettysimple!
I I liketo seepeopleWINandtheypaymeverywellfor teaching

It's reallya WIN-WINsituationin my mind.
themto WIN.
T Youknowoverthe yearsI havewrittenmanybookson tradinganalysis

as I havegottencloserandcloserto retirement
but
I havealwaysfelt I wouldlike
to leavethe very best on the tablethat evena high schoolleavercould
I understandandfollow.
- I neverhavebeen.I havealwaysbeen
I am not partof the establishment
I my ownman.Beingan independent
to answerto anyonemostof the time.
personsuitsmy lifestyleas I don'thave
I As moreandmoretime passes
systemas it standstoday.
of the futilityof the
reminded
I am continually
I The education systemhaschangedso muchsinceI wasa kid at school.In

my daysif the teacherthoughtyou wereout of orderyou stoodin lineand
I took a belting.Todaythe kidsare not allowedto be hit for any reasonand
astheydont havea cluewhatthe
is to saythe leasthopeless
theirdiscipline
real worldis all aboutuntil they haveto get out and suppottthemselves.
I Theyonlylearnwhentheyhaveto getout andfendfor themselves.
The systemtodayteachesthemto cheatas besttheycanand not worklike

I the olddaystaughtyou.The moderndaysystemis notteachingpeopleto be
boundby their word anymore.The new deal today is to get awaywith
whateveryou canandhideyourmistakes. It's a realdilemmawhenyou have
I companies
foxholes
taking in universitygraduatesand makingthem specialise
andnot knowwhateverelsegoeson outsideof them.
in
I In normalbusiness todaya persongoesout andgetsa job and is taughtto

do onespecificthingwithoutknowingthe effectof theirjob on the scaleof
I the wholeoperation.It's a patheticsituationin my mindandit extendsto all
thingstodayin regularbusiness.
I Youknowwhenyou go to the supermarkettodaythe kidson the registers

can'tevendo mentalarithmetic,they just swipethe bar codeswith their
machinesandwhenthe totalcomesup they punchin how muchmoneyyou
I gavethemandthe machine tellsthemwhatchangeto giveyou back.
Butthis is the newera andwe just haveto workwith it. I thinkthe longerit
I goeson the greaterthe advantage thereis to the personwho canbecomea
masterof all the facetsof the realworld.All it takesis an understanding
of
I the competition youaredealingwith.
I PsychologicalAspects 13 Section4:Chapter-I
t
I mightappearto be veeringoff trackat this pointbut psychologically
a perceptionthat we havebeengoingthrougha massive
I have
changein accepted
I
valuesthroughoutthe past 20 years.The internethas made a major
to the way business
difference is transacted is
as this sourceof information I
to everyonein the safetyof theirown home.Thingshappenmuch
available
fasterasa resultof it.
I
IN THEMARKETS:
You know that in the daily marketactivitywe have lots of optionsand

I
to taketradesthat havea highprobability
oppoftunities of success.
Sometimes I am not surewho believesme andwho doesn'twhenI declare

I
rightat the timethat the marketis a sellor a buy.I do it liveon my training
sitetime in andtime out. Butto my mindit seemsto me it is onlywofththe
education valuewhenthe markethasrunits courseandmy calleitherwonor
I
lost.
I
AnythingI say in the heatof the marketcouldpossiblybe seenas purelya
guess.But I shouldassureyou it is not a guesson my paft, my callsare
froma wellfoundedbeliefthat I havethe oddsin my favour.I know
inspired t
(prettywell mostof the time) what the otherplayerswill do underceftain
technical
situationsandI go for it. I
I am prepared
Psychologically to act on technicalsituations whenthey seem
so clearto me. This is the one aspectof trading
learnt.If youseeit andit look realgo for it.
that all goodtradershave I
If youarein doubtleaveit go. I
I am probably repeating myselfoverandoveragainas I writethis manualbut
it is importantthat you get the message. canonlyhelpin the long
Repetition I
run.
Overthe yearsI haveseenmanyotherpeopletry andteachstudents to trade I

I
and the resultshavebeenfar from satisfactory.just don't think they can
explainthemselves to anyoneother than anotherprofessional
to understand
alreadyhasthe experience
traderwho
whattheyaretalkingabout.
I
WhatI amtryingto do is provideenoughinformation
ways that even if you miss the point in one
in manydifferentvaried
place you may pick it up
I
somewhere elsein thistext.
Youknowsomething, whenI first studiedGann& Elliottworkyearsago,way

I
backin the early80's.I hadto readand re-readmanythingsoverandover
again,pageby page,to get their ideasinto my mindandtry to understand I
whattheseguyswereon about.It wasn'texactlysimpleby anymeans.
I
PsychologicalAspects t4 Section4: Chapter- 1
I
I Wednesday6thAugust 2003:
I Howthingscanchangein oneday!
Evenwith all the bearishsignalsapparent fromyesterday the marketopened
goingto fall overbut
anddisplayed somestrength.At first I thoughtit was
I whenthe impliedresistance at 8 pointsup on a 1:1withyesterdays
cameout it wasobviousthe markethada fair bit moreupside.
correction
I 9S0.BA Wadnesday6th August 2OO3:
I s87. BB
984. BA
Today storted off with me looking
to sall but as foon ali 966.25 come
s81. O0 out I reversad inio a buyar.
I 978.84
9?5.04
I S?Z.EE
969.80
966.BB 966.?5 ->>
I 983.80
968.99
I EE/816/?0/8'3
!f61.?5 g6e.Z5 959.25 961.00 gB/W
I The highfor the dayterminated on the 61.8retracement

the reversalpointit unfoldedas a 1:1, this behaviour
andas it went into
is straightout of the
text book.ThemarkethasnowclosedbackdownnearMondays lowandback
I below50o/o of the daysrange.
The one thing that standsout to me abouttoday is the resilience

after
I breaking the 960 Iow.In my mindthereshouldhavebeenmassive
sellingfromthe jump todaybut it didn'tappear.
technical
I s&P58S
date Glg617
I hi 1aL4.8g
I CgcleTrader
I The nexi AITAJOR GEOIIIIETRIClcvels

thot could oet os orpport in a fur{fier
I
I llain
I PsychologicalAspects Section4:Chapter- 1
Thursday7s August 2003: INSIDEDAY t
Thb Weeks Cirl+ndrrr
I
G? 5.7% 3.5%
Aug07 08:30Productivity-Frel
Aug07 08:30InilialClaims B8/il2390K 40CIK
Aug07 10:80Wholesale Jun 0.0% 0.2%
4.0o/o
3g5K
u.0%
2.1o/o1.9%
393K 3BBK
-0.4%-0.3%
I
lnventories
Aug07 15:00Consumer CreditJun -$0.48$5.58 $6.08 $ 8 . 1 8$ 7 . 3 8 I
The marketbeganthe day on a weakernotefor the first 15 minutesand
foundsupporton a 78.6retracementof the previousimpoftantrange.Bythe
I
endof the dayit hadworkeditswayallthe waybackto a doubletop.
t
s?6.Eg
g?4.68
s?z.ss
I
S?8.BB
s68.BB
I
I
966.00
964.68
962.Ba
s66. BA
9/8,/97/ZAB3
:165.75 S6?.64 964.25 SEs.BE Bi8,/97
I
88/95 Ag:38
Withthe absenceof any badnewsandreasonably goodeconomicrepoftsthe I

marketaimlessly
trendedup throughout the day.Thepatternfor the daywas
mixedto say the leastbut at this point in time the markethas remained
abovethe 960breakfromtwo daysback.
I
It lookslikeeachrallyup as.itunfoldedhadthe daytraderssellingintoit. The
lackof followthroughon eachdeclineindicatestherewasverylittleconcefted
I
conviction by the bears.Todayalsowasan insidedaywith a 13 pointrange
andthe time up fromthe low is two daysnowwith a rangeof L7 points,not
an inspiringexample either.
of buyingconviction
t
Thefactswe havegoingintoFridayarethese: I
1 . The3 daytrendis downandto turn up the markethasto tradeabove
982andeffectively 985to lookconvincing.
I
2 . Todayis onlythe seconddaywe havebeencorrecting fromthe 958.25
if the lowis impoftantin the biggerpicture.
lowso it is stilldebatable
3 . Thecurrentmarketpositionis on a doubletop witha 61.8retracement
I
labelattachedto it.
t
Psychological
Aspects Section4;Chapter- 1
I
I 4. If the marketbre.aks
largerdegree38.2a littlehigherandthena 1:1 at 979a 50o/o
a
the 975.25doubletop it still hasto negotiate
at 981,
I a 3 dayhighat 982andthe sruing

5 . Buyersfacean abundance
highat
of technical
985.
levelsin the next10
resistance
pointsto the highside.Thecleargroundis onlyabove985.
I If the marketcanget above985I wouldhaveto takethe viewthatthe lowat
958.25has becomemajorsupport.If not then I am still basicallynegative
I aboutthe immediate
on probabilities
future.The wholebasisfor my outlookis basedpurely
go throughthesesameexercises
nothingmore.I religiously
onedayat a time and The marketwill tell us soonenoughwhatis
prepare.
I goingto happen.
geometry
At today'shigh and the BD doubletop we had someinteresting
I whichis worthrecordingbasismyX-ABCD approach.
I Current Bange
13.25
If fhcy orc Aoingto noke on
I prior ranges
cIl-EC 1. BB0
CII-RB B. ?86
clt-xft 8.508
effort to ssll this market down
this is tho plocefo do it.
Beuerse Eross
I RIFBC L.ZIZ
Insiile Gross
CII-RII B. ?88
0utside Eross
X 985
BI}-ffI] fi, EBB
I Ilouble Gross
HII-XC B.73S
Fetrace 2
cFxu 9.57?
AII-XR E, 836
I gg./8?lZAE3
H ai n 8?/39
I thingsI can seeat this stagefor the 958.25lowto be

The mostfavourable
aresometimingelements
imporLant buttheyareonlylesserdegree.
I
Friday8s August 2003:
I Todaythe marketopenedaboveyesterday'shigh on reportsof betterthan
normalretailssales,the highfor the daywas980 only 5 pointshigherthan
I the previous
close.
The whole days trading range was 7J5 points as the market rocked
I andforwardsall day,finallyclosingat 978.
backwards
I Goinginto Mondaywe have980 as the 3-dayswinghighwhichwasalsoa

major38.2of allthe declinedownfromthe doubletop at L4t4.75.
I on the marketpositionstillopen.
Theactiontodayleavesmy conclusion
Tradingto WIN Cowse- One day at a time [c] BryceGitnore 2004 I
Theonlythingthat couldbe importantif the marketis to reversebackdown
fromhereis the factthattoday'shighmarkeda 38.2retracement of thetotal
I
declinefrom the majordoubletop at t0t4.75. Normallythis wouldbe an
importantgeometricretracementlevel; but the way the whole pattern
evolvedfrom the doubletop leavesme wondering whatthe hellis goingon
I
here.
I
1s17.68 X to14,7n xs63u-68
1411.O0
1485.A0
I
sgg. BB
9S3.00 I
sE?.Eg
981.B0
s?5.09
I
s6g.06
sffi.aa Cb = 70.7 of AB
I
a'J/0i5,/z;B,0'3
E7/89 Bz/LE g7/ZZ g?/?fr Eg/94
t
Thepatternis full of overlaps
fromoneendof the chartto the otherandthe
currentleg up hasoverbalanced the prior20.25correction
on the way down
I
into the recentlow.Thishasthe hint of higherpricesbeingpossibleso you
canseemydilemma. I
hazyto me I just step
At timeslike thesewhenthingsbecometechnically
backandleavethe marketalonetill the
I can'tcomeup witha reasonably
picture
conclusion
becomes clear.I figurethat if
no oneelseis goingtoo be able
I
to either.
I
In anycaseI am off fishingfor 4 or 5 daysfromtodayso maybewhenI get
backI will havea clearersituation
to workwith.
I
s1.BA
s?s. o8
s??. B0
I
975.99
s?3.48
I
9?1.44
s6s.9s
96?.B0
s5.09
963.SB
il
I
W$B/Zw,3
EWBE ffilg? 0iE/A? aa/6a ffilffi E8,/tr8
I
I
I Monday, Tuesday 11th/12th August 2003:
I Qcharts ESU
Ilisplag
Bars
ESA3U-18
I$onduy Tuasday
za4
I PNICE,..
RRNGE
32.25
I
CHffHGE
3.378
SQN9
degrees
I 93
I
I
I didn'tmissmuchby takingsomedaysoff but the sell at 985 at the old
I swinghighwasa legitimate sellingpointand if you didn'tget that thenthe
breakbackthrough980 wasthe nextcaboff the rank.TuesdaylooK a bit
moredifficultbutthe worst-case
scenariowasa break-even day.
I The only resistance tomorrowof any majortechnicalimpoftance is nowthe
61.8 retracement (993)from 1014.75to 958.25,so goinginto Wednesday
I this hasto be my mainfocus.If this marketattractssellingat this levelI will
sell,if it breaKthroughI willbuyit.
I
I Qcharts 8SU
1AZ3.AA
101?.B0
ES93U-58
I 1S11.BS
1Ba5.aE
ggg.B6
I gs3.E0
S8?.BB
I 981.BB
s?5. g0
I s69.AB
s53.86
still!
Business
Ifuarr.y
BB/g5ragtrt
g8/lz
I g6/13 w/98
NowI am goingto catchup on the newsand see if the chaft lookslike it

I makessomesenseto me.Thetrendis up againby hookor by crook,
I PsychologicalAspects T9 Section4:Chapter-1
I
BeforeI go on to Wednesday
resistance
I shouldshow you why 985 was a solid
levelfor sellerson Monday.
I
I
g8g. gB
985. BB
Prior SwingHigh985
;26;:5- I
g81.Bg RevarseCross
S??.BB 2.000:1.OOO I
g?3. BB
gEg.BB I
965. BB
961. BB I
I
Wednesday13s August 2OO3:
I
Easymoneytodayfor thosein the know!Themarketopenedon it's highand
madethe 61.8(993)highfor the dayin the first2 minutesof trading.
I
Thisactionprovideda HOOKTHEOPENSELLtrade.Whenever the market I
openson a technical youcantakethe tradewithtotalrisk
levelof impoftance
controlas the stoplossfor thistradeonlyhadto be at 993.5.Thefirst burst
of selfingtook the marketbackto 987.25beforethe 10:00amBusiness
I
Inventories repoftwas releasedand then the marketmade986 on a spike
volumeburstbeforesomeconsolidation couldnot
set in. The consolidation
improveon a 50o/orecoveryand set up anotherSELLfor a 1:1 targetdown
I
onceagain.The first 2 hoursof the daywerehighlypredictable if you knew
the implications
of the technical
signals. I
9S4.50
gs3. BB
993 816 61.8
9i3lam
I
9S1.5S
999.9S .,,*n[ud
I
r
988.58
SS?.BB
985.59
I
984.04
982.50
E:E3IF1
lii l r r l r r r r rlrlill
I
ffi,/LS.ZBSS _
g8/lz Bg:31 Sn.sS Sxl.BA 9S2.0O g!U.ZS ffi/t3
I
PsychologicalAspects Section4: Chapter- I
I
I Tradins to WIN Course- One dav at a time [c] BryceGilmore2004
I Ocharts ESU
razS.aa
ESB3U-64 Wadnesdoy 13th August 2OO3
taLT.sg
I fill.8A
ffiBs.BA
1014.75
1004
Jr-lstas expected rigilrt
out of thc text book
I gsg. B0
ss3.ga
I s87.96
981. BA
9?5. BB
I 969. SB
963.6S
I EE/9,5/ZgB3
I Bythe endof the daythe retreatfromthe morninghighwascontained

a 13.25pointdeclinewhichcoincided
after
of the total
with a 38.2 retracement
I (a
moveup from 958.25 no-brainer
havebeentargeting).
technicalsuppoft level
everyonewould
I 993.06 51.8oftotol t0t4J5 / 958.?5
I 98!t.EB
985.06
ES93U-1S 3 Day SraingUP
981.68
I s??.aa
s?3.BA
' 9_79.75
supPorT
972.75 IlllOB'sare very

I s6s.00
s6s.BB
3 day low
clcar os we movs
along intoThursday
-13,25
I
s61.86
E8,/13/Zgg3
I As we headintoThursdaywe haveto go throughall our preparationsonce

I again.The differencetodaythoughis I needto checkthe time ryclesfor
todayas the 61.8 of higherdegreecouldbe very impoftantin the larger
degree.
I Justthe samethreethingsstillgivecredence higher.
to the marketcontinuing
1. 993 highis 34.75up from958.25andoverbalances the 30.5rallyof
I similardegree.
2. Supporttodaywason a 1:1anda 38.2retracement.
3. The3 Dayswingis stillUP.
I
I Psychological
Aspects 2l
Tradingto WIN Course- One day at a time [c] Bryce Gilrnore2004
I
of the 34.75pointrangeup
The3 day low is at 972.75andbeyond50o/o
fromthe 958.25low.
I
The earlywarningsignof a continuance downhingeson the 6.25point I
rallytoday.If the currentupswingcannotbreacha 1:1 of that
interlude
(986)andthe smallerdegree50thenthe lesserdegreetrendis down.
t
994.06
9gz.58
61,8 I
ss1.BB
s8s.50 I
s88.B0
986.59
Sffi.BB
I
s83-59
saz.E6
sffi.5s
I
gB/L3/Z@'3
BE/IZ BB/LZ g/8/T3 E8lI3 BE/L3 BB/T3 t
Youalwaysneedto understand that I dont carewhat the marketdoes
I
tomorrowas I am preparedonewayor the otherto readthe signsandact
levels.
on themat the appropriate I
I only play the probabilitiesday by day. As each day passesnew
probabilities
unfoldandthat is whatI needto keepabreastof. I
rgL?.89
TIME ??
ETBONACCI I
I
1S11.Bg
1Bg5.0B
99S. SB
!H3.90
SB?.BB
ill
:; l ll -l- -
I
981. BS
$75.S4
g6s. a0
llr I
s3.06
s57.BA
15JunB3 ?6JunB3 BSJultrl 19JulB3 3lJul&l 13AugB3
8/13 = 0.618, 8/5 = 1.618soft of leavesroomto consider

the factthat I
sometradersusingthis technicalaspectcouldthinkthe time of this rally
hasexpired.Whoknowsjust yet anyway- betterto be prepared.
I
I
t Tradingto WIN Course- One day at a time [c] Bryce Gilmore2004
I Thursday14tr August 2O03:
I Themarketopenedjust belowthe 50 of yesterdays rangetestedthe 1:1and

lookedlikeit wasgoingto fall away.I tooka sellon the declinebackdownto
test the 38.2at yesterdayslow.Thiswasa goodtradeas I closedout just
t beforethe testof the 38.2andthentherewasa falsebreakreversal.
I E503U-5
9!t3.66 61.8= 993
s91.54
I gs6.BB
sE8.5A
I g8?. 86
s85.58 If fhis lineof support

onthe 50 lineholds
I !m4.68
982.56
g81.AA
there is o potentiolto
remoinup butthe
marketneedsto
I 9?9.54
BE/L4/2ffi3
FolseBreok of 3B.Z->>l
[,
aE/12 EB/IZ BB/13 88/13 A8/14 A8/14
I
The problemwith falsebreaksof this natureis that you canneverbe sureif
I the falsebreakis a signof moreweakness to comeor a reversalthat just
failedto holdthe levelit shouldhave.It doesnot becomeobviousuntilyou
haveretracedat least50o/oof the prior swing.I madeseveralothertrades
I bothon buysideandsellsideduringthe nexthourwhichresultedin a small
lossjust on transaction
costs.I felt I wasgettingout of stepwith the market
I whenit did not accelerate afterit brokebackthroughthe openingprice;so I
stoppedtradingfor the day.Lookingbackat whathappened afterthat it was
a wisemoveon my paft as the markettradedin a S-pointrangefor the rest
I of the day.
The line of supportthroughoutthe afternoonwhere you see the triple

t bottomsis at 986.5so this is our ls pointof reference
Outsideof that the 993 high and today'slow 979.25are
for Friday's
the
session.
resistance
and
supportMOB's. The50o/o levelof the 2-dayrangeliesat 986.
I Not muchto work with in my opinionuntil the directionis confirmed. The
is goingto comeif the marketwereto breakup
I bettertradingopportunity
throughthe 993levelasthat is whereallthe shoftstopswill besitting.
I NEWSFI-ASH: afterthe closethe marketwashit by PANICwhena massive

powerfailurestruckthe easterncoastof the USAencompassing NewYork
and surrounding areasall the way downfrom Canada.The first thoughts
I werea terroristattackbutthat hasnowbeendismissed.
I PsychologicalAspects Section4:Chapter-I
993.AB
/lAqjor pow€r shuidovlnson ihe Eqstern Seoboordofter the norket
closadfhe doy sessiontodoy - ot firsi they thoughr is wos tct'rorists
I
s91.58
99g.AB
988.50
.-- Doy SessionClose
I
987.BB
985.54
I
I
s84.46
g8z.s6
s81.64 PonicSallingon newsof

6LOBEX
9?9.50
a8,/L4/ZggA
g7g.?51' POWER.FAILURES
BB/14 16:45 97tl.Z5 gBA.5B 978.?5 !|?9.?5 A8,/L4

I
I
Anotherimpoftantlessonin the life of a traderas panicstrikesthe fragile
stateof the market. I
the currentcomplexion
Thiscomplicates of the marketas nowit is unsure
for the Fridaydaysession.
whetherbrokerswill befullyoperational I
Latestnewsis that a lighteningstrikeat a powerstationin NiagraFalls
tookoutthe powergrid. I
Lookat what happened the marketdivedand hassince
in the confusion,
bouncedback.At timesliketheseyou canappreciate
you
why you cansleep I
easywhen you area daytraderand don'thaveto worryaboutwhat
goeson whenyou are not in the market.Beinteresting
Globexis Fridaymorning.As far as I am concerned
to seewherethe
all tradingdecisions I
areon holdfor now.
I
lrternational Edition I lletscape.com
I
Lights coming back on
across blackoutarea I
I
. Power slowly comingback afier massive blackout;rnetroNew
York could have power by 1 a.fi.
. Officials not sure what caused outsge across 9,300 square rniles
trom Detroitto New York to Canada
. Canadianofficials say fire at a power plant in NiagarsFalls,New
York, is suspecled cause
. New York Gov. Patakisays half of state affected
I
I
. Video: * New Yorkers react I Mavor: Normalbv mornino
lhe Empire Stde &rildng remaire dark * oths . Galler iesr Suotes I lmasesI Blackout oreo: Map I Elgllg
buildir€s are lit bybackup gensdors. . Conlrolledchaos as liqhts oo out in New York
I
Aspects
Psychological 24 Section4: Chapter- I
I
I FALSEBREAKS:
I I'll just put this in hereuntil I decidewhereit needsto go in the contextof

the coursebut it mayjust end up stayingherein the end, psychologically
thesesituations aredifficultto dealwith mostof the time.
I Thefirstthingwe needto defineis whatconstitutes
a falsebreak?
I 1. Is it just a breakof a priorlowor highor doubletop or bottomby 1 to

3 ticks?
2. Is it a breakof a mathematical levelof extremeimportance,
I 61.8or 38.2 by 1 to 3 ticks?
3. How far is far enoughto considera legitimatebreakand then a
saya 50,
I reversalnotto be considered a falsebreak?

4. When is a false breaka failed signalthat makesit an important
reversal signal?
I Allthesequestionsneedto be answered in the contextof the currentmarket
action.
I of the guidelines
In consideration
whatwe consider
we needa planof howto actwhenwe see
to bea falsebreakout.
I Jlity DEF1NIl mctl,.O .A

,ilL E , BIEA
]
-'
I
i i'-.
/ tl
.,/
\
I / \
'I'
.Pl i l : i
|-QQ
l-r'l -i l
lle'e'
i,lir 9et
/ \
\ t il;c lr€o
..,:.:1.:.
I \ ..ffi /\, t I \t I '

\ {"
1
\ I \
I t:
[ '
i
I \
h 4,,Ft C ER AK rl I5. l F t LSt B,RT

A:K
I To my minda falsebreakoutcannotoccurwhilstthe priceis still strivingto
I geometric
reacha legitimate
achievable.
targetas that targetwasin my opinionalways
I But shouldthe targethavebeenpreviouslyachievedand then the market

makesthe "FALSEBREAK"and reversesalmost instantaneously it has
exceededthe geometrictargetandFAILED.
I Sothe questionis howdo we dealwith situations
likethis as theycanoccur
whenwe leastexpectthemto!
I
I
Psychological
Aspects
Let's staft with points #L and #22
Is it just a breakof a priorlow or highor doubletop or bottomby 1 to 3
I
ticks?
In the strictsenseanybreachof a priorlowor highby 1 to 3 ticksthat does

I
not proceedcouldbe seenas a false breakoutthat did not succeed.
reasonthey dont succeedis becausethere is no followthroughbuyingor
The
I
sellingpoweras the marketteststhe new level.This situationshouldbe
viewedas a sign!Themarketis talkingbackto youat the timeandif youare
listeningyoucantakeadvantage of the situation. I
But more importantlyif a false break occursat a level that would be
recognised by manyas an impoftantgeometric levelof resistance
or suppoft,
I
saya 50 levelor 38.2or evena 61.8and breaksit by 3 tickswith no follow
throughyou shouldimmediately
breakout tradeimmediately
view it as a FAILEDSIGNALand cut any
andlookto tradebackthe otherwayat the next
I
If you ignorethesesignsyou couldbe missing
signthe markethasreversed.
Youdon'thaveto givethemmorethan
a lot of low riskentryopportunities.
oneshotbecause theyshouldbe definitiveif theyareworkingotherwise you
I
just takea smalllossandstandaside.
I
Therearenumerous whereyouwill encounter
instances thesesituations on a
dayto daybasisbutthe betteronesarewhenthe markethasbeenmovingin
reasonable ranges(larger:say 8 pointsor more)priorto their occurrence. I
Falsebreaksin a 5 pointrangearenotwofththe botherbut if youget a false
breakreversalwhentheyoccuraftera 10 or 15 pointrangeor greaterthey
havea lot moreriskrewardfor youto trade.
I
YearsagowhenI wasstudyingthe GanncoursematerialGannusedto refer
to the phenomena he called"lostmotion".Thatwaswherethe markettraded
I
up or downslightlyaboveor belowthe geometric pricelevelthat technicians
like us wouldtarget.It did not seemto botherhim that the marketcould
breachlevelsslightlybut it took me a long time to cometo gripswith it
I
personally.
But as life goeson andyou becomemoremarketsawy you will
seethat you haveto dealwith thesesituationsall the time.Theyprobably I
occurbecause the marketis gettinghit with a lot of orders"at market"andit
driesupthe bidsor offerson the priceexactgeometric ticklevel.
t
Theoddsof a falsebreakat an impoftantgeometric
levelcouldbe as highas
50/50but they shouldneverexceed3 ticks.If you takethis possibility
into
accountyouareonlyriskingat maximum5-6ticksby tradingfor a reversalin
t
trend.Whenthesetradesdo workyou canoftenget a runnerbackthe other
wayfor a muchlargerreturnthanwhatyourIosses will everaddup to. I
Whenthe markettestsknownimportantgeometriclevelswhereit hasthe
potentialto reversedirectionremembera "failed signalis the strongest
signal".This meansif the breakoutfailsthe trendis goingto reversefor at
I
leasta temporaryperiodandmoneycanbe made.
I
Psychological
Aspects
I
I Points#3 and 4#:

breakandthen
a legitimate
#3: Howfar of a breakis far enoughto consider
I a reversal
notto be considered a falsebreak:
In my mindonceboththe ES& the SPbreaka levelby morethan1 full point

I thatgeometric
levelbecomesredundantto myfutureanalysis.
I #4: Whenis a falsebreaka failedsignalthat makesit an impoftantreversal

whenit falsebreakson a spikevolumeandis followedby a 5-
signal?Usually
minutereversalbar.
I Oncethe marketreverses backthroughthe originalbreakpointby morethan
barpatternit is givingyoua reversal
1 full pointon a reversal signal.
I barfollowingthe reversal
EachS-minute to confirmthe situation.
will continue
I Friday15h August 2003:

I Hereis a goodexampleof what I havebeentalkingabout.Righton the
10:00am5 minutebarwith no repoftsreleasedat the timethe marketbroke
t downthroughthe triplebottom
retracement
from
on a 1:1andrebounded
yesterday by 1 point,touchedthe 50%
backthe otherway.
I ss4.Ba
Fridoy 15fh '4ugust2O03
1 0 r 3 5h i g h
q9?,5
t 9S2.50
sg1.BB
98s.50
12,!up
7 POINT
RAN6E
I SBO.BB
9E6.sB
I s85.SS
9S3.56
g8e.6a
+'25 SpikaRavarsolon5o
drlwn
*d o t,t
AB:5.?5
OUTR,AgE
PER.IOb
1 3 : 4 5- 1 4 : 3 0
CD:5.25 9:30
I 989.5A
g8,/L5/z:0ig.3
g8,/L4
OPEN
wL4 EB/14 Bi8,/L5 BE/15 68/15
I The low was 985.5 and one of my novicestudentsmanagedto SELLat

985.75probablynot beingawareof the 50 there at the time. He sayshe
I closedout at 987.5for a lossof 3.5 pointson 2 contracts.
not reversing
His mistakewas
longwhenthe marketcamebackinsidethe break,if he did he
I got
wouldhave hislossbackandmademoney.
A seasonedtraderwouldhaveknownthe riskof the 50 and1:1 beforetaking

I thetradeandboughtwitha Stop& Reverseorderbelowthe 50 level;
I Psychological
Aspects
Tradineto WIN Course- One dav at a time [c] Bryce Gilmore2004 I
The 50o/oretracement
of any rangeand a coinciding 1:1 with the alternate
wavearethe basictoolsI havebeenteachingmy studentsto be awareof for
I
years.I wouldneverhavesoldthat breakif I hadseenall the impliedsuppoft
belowit. I
Whenyou considerthe situationin retrospect the buy signalwasa stronger
signalthanthe choiceto sellthe breakin the first placeandalsoa buyright I
at the 50 wasevenwarrantedor the sellshouldonly havebeenmadeon a
breakofthe 50 andnot before.
I
In any caseI havediscussed the matterwith him on the phoneandhe has
realisedthat he jumpedthe gun by only lookingat the triplebottomas his
signto takethe sell.My adviceto him wasto alwaysthinkonestepahead.
I
Askyourselfthe questionbeforetakingthe trade,"Whatwill I do nextif my
tradedoesnot workout?Andthentry to workout all the thingsthat cango
wrongbeforehand".
I
As for the day I was not tradingbecauseof the POWER
EasternSeaboard.
OUTMGEon the
Lookingbackoverthe day (afterthe close)my datafeed
I
showsan outrageor systemclosurefor 45 minutes.Everything
backto normalby Monday.
shouldbe
I
The closetodayat 990.75hasthe marketpoisedfor an assaulton the 993
(61.8high).Oneway or the otherthereis a tradingopportunityloomingas I
we go into nextweek.
THISWEEKEND I HAVEBEENWRITING- the WEEKTO WEEKchapter

I
the largerdegreepictureof wherethe marketpositionappears
whichexplains
to be.SeeS3:C2:.PL4 I
gg!t.86 6oing inlo the ltlondoy doy sessionthe overnighl
6lobax hod olreody brokcn through lhc 993
I
:tg?.5a
996.Bo
gtt4.5a
resistoncelevel:
I
gs3.a0
s91.sa
I
ssg.86
s80.50
9B?.BO
t
985.58
E8,/1g./Zgg3
g8/15 gE/Ls
, Globcx SessionSundoy17rh July
g8./17 g8/tg g8,/18

I
Priorto Monday'sday sessionopeningGlobexhadtradedabove993 - the
I
signsfor Monday
aresignalling dayat the veryleast.
a shortcovering
I
I
t Tradingto WIN Course- One day at a time [c] BryceGiknore2004
I Qcharts ESU
1401.04
9S?.9S
I s93. BB
98s.68
I g85.AA
s81.08
I s77.98
g73.BA
s6s.BB
I s65.BE
961.60
I gg/tlrzwS
v8/a4 a8/86 8S/68 gA/lZ ge/I4 B8l15
I Monday 18thAugust 2003:
I 1BBB.86 1000leveltraditionulncturolobstocle
g9g.BB
I 998.08
gs?.68
I 995. A6
9S5.0A
I sg4.o0
g!|3.BA
99Z.gE
Open
lsl
-3^6
I s91. AA
g}/tf,/7flPjs F______--__illulill
filondoy lSth ,Augusi?O03
B8l18 66/18 B8/1S B8l18 08/18 88/18
I The marketopened993.5 retestedthe 993 by 3 ticks to staft with then

signalleda HOOKbuy backthroughthe opening.Thisadvancedidnt attract
I the softof volumeI wouldhaveexpected andwhenit wasn'tgoinganywhere
I bailedthe positionfor a scratchtrade.Thesecondtest of the 993 breakout
t madeit backto 992 and couldnt go downany further.On the breakup
throughthe 993 the volumestaftedto rise a little and there were good
indicationsthat it wouldstayabovethe 993thistime.I didn'thangaroundto
I findout asthe breakouthadbeentoo sloppyfor my liking.It looked-like
coveringratherthan new buyingto me. As you can seefrom the 2 minute
short
chaftthe wholedaywasa grind.

I The reasonI didnt worryaboutit wasthe limitedpotentialbetween995and
my 999target.Untilthis marketcanbreakabove1015(if it can)the buyside
nowis goingto befairlyfragile.
I
I PsychologicalAspects 29
Tradineto WIN Course- One dav at a time [c] BryceGilmore2004
I
High 101.+. 75
1015
I
Lor,r 9 5 8 . 4 5 998,75close
I
1-<-
Hge 56.50
I-u+.
-r'E--gzgzi
S
P
n
E
R
Doily is heodinginfo
overboughttarritoryl
:100
I
i
T
I Averoge
n _ :75 boily
R Ronge
t4 Ronge
$ tevels
is fEr
Y
z
x
7 25
0
from
inspiring I
I
B3B7B1 838711 g3A72I B3B?34 B3A8B7
Thereis a timingfactorI cannotignoretoday.It maymeansomething and

then it may not but it is strongenoughto meansomethinguntil it proves I
othenrvise.
I
Time Cyclestodoy in Colendar& Solor
1.000
I
I
I
I
t
The more news I watchthere is a growingbullishsentimenton the US
markets,I tend to worry that they are talkingit up! Especially
when the
I
marketis struggling
alonglikea swimmerwitha rocktiedaroundits neck.
Factsarethe USmoneymarketsneedto attracta billionanda halfUS$a day

I
you lookthe European
fromoutsideof the countryand everywhere
seemto be stillin recession.
markets
I
Wellso it is, what'sit matteranywayif I just go alongone day at a time
settingmy guidelines
thing going
andmakingsureI dont overlook
into tomorrowandthat is I am goingto
anything.
give
I knowone
a test of 1004 a
t
SELLshotwitha tightstoploss anda breakbackthrough993getsit aswell.
I
I
I Tuesday19s August 2003:
I ESB3U_5
1885.BB
1083.08 l.lll .{sly.-=-1-9---o--{
flr:ierhish.
Tuesdoy19th Augusi 2OO3:
I 1881.OA
99S.OB
I ss?.08
sss.BB
ss3.aB
I ss1.66
IIBS.BB
I 98?.60
g8,/Lg,/ZEB3
08/15 B8l15 88/18 88/18 A8/19
I Theysoldit andthenthey boughtit. Afterthe strongfinishtodayall you can

sayis this rallyis resilientandkeepsmakingsomeheadway. Theold highat
I 1004is underattackonceagain.
I [charts CSU
LBLZ.W
ESB3U-15
140?.SB
I 1882.AO
S9?.BB
The plot thickensl 1003.5
I 99Z.AB
s0?.60
I
9SZ.Ag
g??.m
97Z.SA
I s6?.as
IIEZ.BB
t 87n1/z9/0.3
B?/Zg ge/EL ai8./ffi fiE/It
Thereis a bunchof technicalresistancesoverhead all the way up to 1015if

I the 1004highdoescomeout.The marketis clearlyoverbought
the dailychart.IMO this marketis grinding up right now and
rightnowon
until 1015
I for yesterday
to a sizableretracement
comesout it is susceptible down.The timingI had
a reversal
hasn'tlookedlikeit hassignalled sothe plotthickens.
I patternsincethe 17thJunehighneedsto be resolved

Thiswholeconsolidation
beforethe picturefinally clearsitself up. I wonder how all the other
professional
tradersandanalysts arefindingthe goingrightnow?
I
I Psychological
Aspects 31
I
BTW - 1004hasa 0.809retracement
it holdssomerelevance
with L0t4.75to 958.25so
relationship
in termsof ElliottWave.Afterthata 1:1withthe rally
I
backto the doubletop July1-14comesout at 1012.5just belowthe existing
doubletop. I
Wednesday20h August 2003: I
is nov.r11.5points - Avary compressed
3 DAy R./41'l6E situotion I
1Ba3.aB
1081.50 I
IBBB.OA
9s8.56
99?.BA
I
sss.50
ss4.as
R,AFI6E5
8.25 7.5 I
ggz.59
BB/Zfr.ZEE3
:
r--
BB/18
I I
08/18
t: I
00/19
| |
0Sl19
:t |
g0,/28
| ,r il t l t l l t t l
BA/ZB
I
Todaycameandwent prettymuchas it stafted.Thereweretradestodaybut
the opportunitieswerelimited.I managed a gainof 6.75grosspointson 6
I
tradesin the 7.5 pointrange,in fact the rangeI was in was lessbecauseI
didn'tbeginuntilthe doubletop. I couldhavedoneslightlybetterbut I made
a mistakeandmisseda shorttradein the lasthour.
I
Thetotal rangefor the past3 daysis downto 11.5pointswith the midpoint I
at 997.75- thls is somethingI haven'tseenfor a while.The tradersare all
focusingon the 1003.25high then the 1015areaand tryingto keepthe
marketabove1000. I
Anotherissueis that dailyvolumesin the EShavedroppedbackto halfthe
normalactivemarketlevels.Thiscanonlymeantwo thingsandthat is either
I
no one is homeor a lot of peoplehavelost moneyrecently.Not surprising
because veryfew peopleknowhowto tradein tight markets. t
Mythoughtsaftertodayarethat if the highat 1003.5doesnot get takenout
in the next day and the 1015 high within a week we couldbe in for a
All it is goingto takeis for somebig playersto recognise
pullback.
substantial
I
the opportunity
andcomein sellinghard.
I
This marketappearsto be hangingaroundjust waitingfor somegoodnews
to primeit up.If it doesn'tget it soonimpatience
amongthe bullscouldsetin
as the mediais now tellinginvestorseveryday that we are in a new bull
I
market.I wonderhowtheyareso sure?
I
PsychologicalAspects Section4: Chapter- I
I
I Thursday21* August2OO3:
I flcharts GSU ES03U-3S

LgL?.gE
30-2
tBa?.gB Nlotquitc o 1:1
I rgaz.6a
ss?.Ba
ssz.98
I 98?.BB
g8z. a6
I 97?.BB
s?z.gE This is thE closest geometry
I con sce for todoy thot is
96?.EB
I 962.BB
Bi8,/ZtlZgE3
onyihingcloseio morkingo
tn*s g8./94 1B:66 1008.50 1AA5.56 1066.50 tggT-a5 g8,/21
I
Themarketopenedat 1004.5andretested1003.25slightlybeforemakinga
I andsoldoff. Aftera rumourhit the pit sometime
highof 1009.5at 10:08am
laterthatsomebrokerhadsold30,000E-Minis therewasa panicselloff back
t lowof yesterday
downto a doublebottomwiththe lateafternoon
Otherthana 73.3retracement backto 1006.5at 12:14pm

(998.25).
afterthe 12:00am
I releaseof the AugustPhiladelphia
22.L on a consensus
ManufacturingIndex (whichcamein at
of 10 and a prior of monthof 8.3) all the waves
followinghelda geometric as the marketrangescontracted
relationship until
I the end of the day. The closewas back belowthe open and belowthe
previoushigh 1003.5so it remainsto be seenwhethera highof impoftance
wasmadetoday.A declineof over 13.75pointsfromtoday'shighis required
l to overbalancethe waveseriesin forceto date.Volumewasgreatlyimproved
todayalthoughthe marketwasspookedprettyeasilyon the rumourandan
interuiewwith a floortradershowedthat they didn'thavea cluewhat was
I goingon. It wasalsoprettyclearfromthe priceactivity.
I Qcharts f,SU
1418.68
ESB3TFl Bf, = 0.618Xd
CD = 0,786 BC d 0,486XA d 0.667AB
AD I BC INSIDE REVERsECRO55
I 1BB8.58
LgE?.W
sA
1AA5.
I 1084.gB
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1861.08
I g9g.5s
a8,/21/z8/a3
I
I Psychological
Aspects JJ
Tradine to WIN Course - One day at a time [c] BryceGilmore2004
I
Friday22ndAugust2003: I
WELLIT HADTO HAPPEN!!!
The marketwent into Fridaywith a strongrallyto new highsvia the Globex
session
not longbeforethe daysession openedin NewYork.
t
The reasonwasa pre-market announcementby INTELthat they hadrevised I
for Q3andthiswasthe newsallthe"blind
theirturnoverandprofitestimates
Freddie's"werewaitingfor. Theproblemthey hadto encounter
whenthe marketwas showingsignsof exhaustion
wasit came
and approachingheavy
I
technical levels.
resistance
I
6AP Outsidc Reversol
S&P5AB
High
Lor,t
nge
1414.m
958.5B
56.34
4 I'tR1
sgs.18
:LB na;i:a
385 E.q
13.41
!
I
OVERBOUGHT sroctl
1BB
75
t
I
TX
tIl
25
s
t
I recognisedit for what it was worth immediatelyand had it in mind earlier
this weekthat 1012.5(a lowerhigh than the doubletops) was goingto be
t
the linch-pinthat would hangthe bulls.Well they coppedit from the open
and couldn'trecoverall day. I
Qcharts CSU
1413. Sg tot?^2
t
t
1811. AB
ffias.Ea
1BB?.gB
1885. BB
ffia3.BB I
1881. SB
99S.68
s97. B0
I
I
gg5. Ba
993. B8
EBr'-ZZ/Zgg3
Lau.:s 88/19 Bg:38 1811.58 tgIa.zs 1889.?5 1:A1:O.6 AB/ZZ
t
PsychologicalAspects 34 1
Section4:Chapter-
I
I Qcharts CSU
Todoyv,roso perfoci exompleof the things I hovabeen
teochingyou in this TRl4DIl.lG To Wllrl Course.
I
Curent Xarrye
4.25
prior ranges 6AP OUTSIDE REVERSAL
3.25 1.388 SELL Rctge 2O.5 poinis
?.aB 8.687
I z.?5 1.545
z.?5 1.545
2.75 1.545
6.56 8.654
3.BA L.4L7
l'fo corrcction exceoded3.25pts
t 3.25 1.388
3.8 1.388
4.?s 8.895
3.8 1.388
9.BB 8.472
2.75 1.5f15
I ESB3U-Z
B8/2?.rz:0o3
Fiair
I The way the day startedand the obvioustreatmentit got by the localsas
theydigestedthe INTELnewsandfiguredit wasnot goingto be enoughto
I breakthe marketup abovethe 1015level.INTELitselfwastradingat a PE
ratioof 35/1alreadyandthat wasthe cueto just SELL,SELL,andSELLevery
time the marketcouldnot breakbackmorethan 3.25 pointson any rally.
T Therewasno moreconstructive newsto comeout throughthe dayandbeing
a Fridayit wasalmostcertainas the dayworeon that no onewantedto go
homewitha longposition.
I
I 38.BB
z8.aE
IHTC-II
up r25e6 --l-$2e
---*"---------t--"-
26.80
t z4.aa
zz.Bg
I zg.aa
18.84
ffi.aB
I 14.88
, r r r r r
E/13
l l l
Wl/16
l f i
86119
| n l
g8,/ZZ
l l
I
In one sessionwe haveturnedthe 3-dayswingbackdown, had a GAP
I OUTSIDE REVERSAL DAYandclosedon the lowfor the day.Anyonewhotook
weekend.
the dayoff andis stilllongwill be havinga sleepless
I Well anotherFridayhas passedso we mustdo our weeklyreviews. See

53:C2:P22.
I The next thing to do is to calculatethe next day'sMakeor Breaklevels,
I Balance
PointsandPriceRetracement Levels.
3s Section4: Chapter- I
I
to finishoff thatchapter
I havedonethisin 53:C1:P12
happensin the comingweekor so to complete
andwillgo overwhat
this chapter.I wouldhateto
I
if you are studyingthis manualin yearsto
leaveany readersin suspense
come. I
Oneweek on: I
Qcharts CSU
1815.BB
L0LZ.Bg
ls83u-18
I
ridoy ; tltrondoy , Tuesdoy ' Wadresdoy, Thursdoy
1609.BB
1886.BB I
18S3.BB
raBg.gs
99?.AB
2
I
sg4.0B
ssl. B0
s88.EB
I
1185.
BB
0,8,/ZZ/Zgg3
, Only Tvlo doys down
I
Thedeclinefrom L0t2.25onlylastedtwo daysandthe markethaseffectively
beenrecovering for threedaysat this time. Economicrepoftsreleasedthis
I
weekhavebeenfavourable overallwiththe exception is not
thatthe recovery
producing new jobs. We havea holidayon Mondayandthe marketwill be
closedso Fridaycouldbe a mixedbagastraderstakethe dayoff.
I
Friday29thAugust 2OO3: T
The day beganin a mixedmoodand aftera goodrepoftat 10:00amthen
whipsaweda little.The 1005^6highwasmadeon the 10:25ambarandthe I
1000^2lowonthe 12:50pm bar.
Qcharts CSU
TALZ.EB
nsmu-s Lost troding doy of fhe rtdonth
I
I
+9
I.ALA.SE Thur;sdoy Fridoy Lgog.?5
m88.AB
ffi05.84
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I
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I
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Lobor Doy Holidoy tltlondoy
ssz.BB ,IJ\AR,KET
CLOSED
sgo.zlL-lY,-'sifft st
aa/za 8/8/28
I
PsychologicalAspects 36
I
t At the end of the daywe are onlypointsawayfrom a test of lastweeK high

andthen a test of the 1014^6majordoubletopsfrom JuneandJuly.The
hightodayhasbrokenabovea largerdegree1:1 andthe 3-dayswingis up
I sothereis no reasonwhyan attemptat the old highsshouldnot be made.
I Todaywasa very lowvolumeday,whichwasto be expected,

DRESSERS
the WINDOW
had an easy day for the end of the monthpaddingup their
portfolios.
t sincethe 990^2 low is 5^4 so that nowbecomes
The largestcorrection the
first benchmark
followedby the 9^4 yesterday.
So long as the 9^4 doesnot
I overbalancethe upwardtrendis stillintact.
Thisweekwe hadsomegoodfiguresreleased regardingthe economywhich

I has everyonetalking of a better than expectedrecovery,all we needto
happenis for it to translateintostockbuying.Thenon the otherhandmaybe
I the marketanticipated
largerdegreerectangle
this and it is all factoredin rightnow.Myviewis the
bullishcaseoverallneedsto be confirmed
that has
with a breakout of 1015andthe
beencontaining thismarket.
I Thissideways movement hasbeengoingon sincethe lune 17urhighandthe
markethas beentrappedin a 54-pointrange.It is alwayspossibleit could
I stayin the rangefor a whilelongerbut not realylikelynow.
Onlytime will tell, so as I havesaidso manytimesbeforelet'stakeit ONE

l DAYATA TIME.
But nowwe havea chanceto proveall the bearishpunditswrongand have

I themrunningintohibernation.
I Tuesday2ndSeptember2OO3: Hello!Wave5 begins..,....
I Qcharts f,SU
1026.68
LEZZ.g6
ES63U-5 For myElliottWnveCount
Referto 52:C4:P38
W5 confiruned
I 1018.OB
161{.0A
W3 high from Mqrch 12ih
t0t4.75 Doubls To_p--_......._..*.____.._
-->
CleorBneokout
1016.OB
I IBBE.EA
I9|BZ.BE
Tuesdoy
I ss8.00
s94.BB
Todayslowretroced38.2 in the
CurrentImpulseonddid not over
990.28 balancethe previous9.5 correction,
I ssa.B0
s8E.8B New odvoncebeoon8/26
a/9/gz/Zgg3
ffi/25
Psychological
Aspects
I
I havewrittena repofton today'spriceactionin S1:C18:P110
interesting
day.
as it wasan I
The focal point of today'slow was the attemptto breakthe 38.2 and
overbalancethe currentwaveseriesthat begana weekago,this failedand
I
the marketwasgoingto attemptto go higher.
indicated
I
Withthe breakoutto newhighsabovethe 1014.75Wave3 highswe havea
confirmationthat we are in a Wave 5 of largerdegree.This is pretty
importantstuff now becausethe bearshavebeenkickedin the teethby the
I
bulls.
the bearsare goingto haveto rethinktheir position.They

Psychologically
I
went into todayfully committedaftersellinginto the rallyall lastweek.The
net shortpositionof the fundsand the commercials is somewhat
whereit wasbackin midMarchwhenthe S&Pwas230pointslower.
similarto I
The nexttimezoneof any impoftance I canseeaheadwill be 1800fromthe
March12frLowand that is right on the contractrollover.I haveto write a
I
chapteron the contractrolloverperiodfor this courseso I will coverwhat
happensfromnowon in this newchapter. Thiswill be chapterS3:C3. !
By goingbackover and over this chapteryou shouldbe ableto learnthe
correctapplicationof my methodologiesas eachdaypasses. It is not difficult I
to remainflexibleandfollow
but it doesrequirea discipline your rulesall the
time. If you do thesethingsthe marketwill continueto tell you what it is
doingandthenall you haveto do is isolatethe pointswhereyou caninitiate
T
lowrisktradesto be a winner.
WednesdaylOthSeptember2003:
T
I just hadto showyouthis patternwe experienced
at the highon Monday. t
Qcharts CSU
1035.B0
1831.68
I just hod lo showyou this.....
1032^6 I
1826.9B
razl.Eb
I
1418.gA
1411.EB
1066.BB
Old DoubleT
t
1001.a9
gs6.68
This lop pallern nrds(1sign of ihings to
I
s91.BB
s86.60
come.When cmorkel sfarts overboloncing
prior correclions ond mokingfolsa
breokouls the nedr lefft trend is chcnging. I
gg/Ig/zBg34
Flairr
l
PsychologicalAspects 38
I
I A breakout which failed to go on. The markethad been experiencing

weakness from Wednesday of last week and madea final gaspto forge
t ahead,it just couldn'tdo it. Thisis whatI calla failureof largerdegree.
You mustseewherethe low todayfinishedas it leavesa solidfootprintto

I workoff tomorrow.
ffi35.A€
I 1832.BB
IBZS.Ag
I 1826.B0
LAZS.gB
lAeA.O0
I 1617.04
1814.AA
l 1811.08
gg/EE/zgg3
Eg/95 Bg/BE Bg/08 Bg/Bg 6g/tg
69,/tg ag/lg
I El perfecto!
Thisis onceagainlivingproofof the methodologies you.

I havebeenteaching
I Youmustalwaysremember the geometrykeepstellingthe storybecause this
is all the tradershaveto guidethem,all they havebeentaughtto do in the
I last100yearsis to tradeoff the geometric levels.If you knowthisyouwill be
ableto predicthowtheywill act next.Longasthereareenoughof themlying
in waitat the obviousretracement levelsthe marketwillturn.
I I supposeif therewasevera placeto enda chaptersuchasthisoneit would
be now.Duringthe pastmonthI havebeenwritingthesepageson a day-to-
I day basis.I have explainedin reasonable
psychological
detail the technicaland the
tradingplan.If I havenot
that are paft of my personal
aspects
I mademy innerthoughtsknownoverthis time then it wouldbe impossible
thatI evercould.
I I thinkthat you shouldalwaysremember this chapteras a phasein my life

where I didn't know what the marketwas possibleof doing, but as I
approached it on a dayto daybasisit wasnot that difficultto stayin frontof
t the crowd.
Eachday is a new day and with the newsand the currentactionsof the
I on howyou shouldhandleit. Youwatch,you
playersyou will be influenced
plan,andyoukeepyourdailyandweeklyanalysis up to date.Dothisandyou
I get
cannever intotroubleif
Pleaseremember
you thatyou understand.
onlytradesituations
this is the realthing,makethe

life is not a dressrehearsal
t mostof it. It canbea lot of fun whenyouhavethe moneyto spend.
CHECKLIST YOU CAN PREPAREEACHDAY:

INDICATOR
Readino Overbouqht Oversold Neutral
Daily
Stochastic
DailvDMI
High Low 50% Level Swing

uP/down
3 DavRanoe
2 DayRanqe
1 DavRanoe
DailvRanqe Yesterdav Davbefore Avq 10 days Risinq/Fallinq
DailyPattern UP Down Reversal

? Trendinq?
Yesterdav
1:1 MOB's Lesser Higher Major

Deqree
RetracementsLesser Medium Maior

38.2
s0
61.8
Siqnificant Pattern Levelsof note Suppoft Resistance

MOB1
MOB2
MOB3
REPORTS ForTodav Tme released
Notes:
I adviseyou to checkall thesethingseachdayandyou will educateyourself

to get prepared! secondnatureto you.
Overtimethesethingswill become
t Tradineto WIN Course- One dav at a time [c] BryceGilrnore2004
I A little stoly for you on my trading psychology:
I I was at the golf club for a few cooloneslast night and nearlyeveryonehad left exceptfor a
coupleof closedrinkingmatesandthe barmanwho is alsoa friend.
Peterone of the guysI playgolf with is an air traffic controllerwho I knowwell and enjoy his
I companyand he was quizzingme aboutthe markets,andhow to take advantageof them.
Mattieis the bar managerand Johnworksfor the GoldCoastCityCounciland managesSouth
I StradbrokeIsland(A resoftislandnot far from here).
Well unbeknownto me my reply shockedthem becauseI started off talking about just
I playingpoker with the other tradersand trying to read their minds in so far as what they
were likelyto do next with the chartthey had in front of them.
This at first didn't make a lot of senseto John but Peter works as a traffic controllerat
I BrisbaneAirport and saw the rationale.That is what he has to do every day when he is
watchinghis screens.He has to work out if the pilotsare followinginstructionsor havethey
missedthe plot!
I Anywayafter a while of e:<plaining

the mechanicsof how I makea decisionto buy or sell at
the time I impressedon them that every positionwas neverany good if it didn't go in your
I favourimmediately.
Petersaw immediatelywhat I was sayingbut Johnjust rambledalongtotally confusedand

drank some more, but they kept askingquestionsand wouldn't let me go home.They just
I keptbuyingmoredrinks.
In the end John said well what about all that stuff you wrote in the DT&PAMTbooksyou
t gaveme someyearsago.
I said,John that is informationon the theory of marketsthat traders use to makedecisions

from and that is all. They have beentaught all this stuff in ohe form or anotherfor over 70
I yearsor more.They know nothingelse and they are obligatedto use it for whateverresult
they canget from it.
t BUT,What I do know becauseof it is what they are supposedto do and I just go with the
flow. If the stuff fails to work I just go the other way becauseit is not working.
I THATIS WHYI CALLIT POKER.Nowdo you seemy F..,.........point?
The deckis dealinga new handall the time and you haveto readit for what it is.
I Peter understood.John was confusedand Mattie the barman had no bloody idea, all he
knowsis how to hit a golf ball!
I I hopeyou get this messageas it is importantto realisethat the guys trading againstyou
only have at best the same tools we do, and if they are not working you discardthem
immediatelybecausesomethingelseis goingon.
I Whenthe theory is workingyou embraceit and playthe samegame.
That is why you must cut any lossesvery quicklyif you wish to be consistentlyprofitable.If
I you don't the loserswill eventuallyoutweighthe winnersbecausepsychologically
to holda loserthan a winner.
it is easier
t Truefact :-))))
I PsychologicalAspects 4I Section4: Chapter- I

I
My thoughts on how you should approach
t
this businessof trading: I
Moneymanagement is everythingif you wantto succeed.
Youcannotafford
to playthisgamefrombehind.Youhaveto leadfromthe beginning andkeep I
kickinggoalsor it is betterto leavethe field.
The firct rule of businessis to presentecapital: I

No matterhow manycontracts you tradeat a time if you end up down(5)
S&Ppointson anysingledayyou shouldquit.Quitbecause a lossof 5 points
is easyto recoverthe next day,what you don'twant to do is dig a holefor
I
yourselfthatyoucan'tget out of easily.
You will makeyour biggestmistakesin this businesswhen you become

I
It isjust notworthputtingyourselfin that position.
greedyor desperate.
Theret an old saying known only to experiencedtraders.

I
*Better to loseyour opinion than loseyour money!" I
The secondrule of businessis to take only what you know you can t
getr
Remember that smallbiteswill add up to a meal.Only trade the regular
patternsI haveoutlinedfor you that havea greatchanceof success.Don't
I
try andreinventthe wheel.
Dont setyourgoalsto high,it is muchbetterto aimfor 5 pointsprofita day

I
andmake10or 20 acceptit as a bonus.To manytraders
but if you get luclqy
try and get everylastdropout of a positionandend up givingprofitsback.
Takewhatyou knowyou canget fromthe marketandbackoff. If the market
I
is tradingin largerrangesexpectlargerprofitsfrom your trades.If the
marketis movingin smallrangesthentradefor scalps. T
lust thinkaboutit.
Thereare 250tradingdaysin a yearandif you onlytraded100of themand I
you madean averageof only4 net ESpointsperdaypercontractovera year
trade10
that is 400 pointsor $20,000.Trade5 lotsandthen it is $100,000,
lotsandit comesto $200,000, 50 lotsandyoucouldmakea $1,000,000.
I
If you studythe patternsI havegivenyou in this courseandonlypickedon
the mostreliableonesto tradethe resultswill astoundyou.
I
I
My Private Thoughts Section4: Chapter- 2
I
I The third rule of businessis to never enter a trade unlessyou have

two very good reasons:
I If you makea killingearlyin the day,myadviceis to takethe moneyandrun.

Letsomeone elsehavethe restandneverbeconcerned abouthowmuchwas
I lefton the table.Onceyou havewhatyouwantget up andleave.
I Timesof the day to trade:

Setyourselfa planto tradeonly whenthe marketis active.Youcan often
trade betweenthe openand 10:00amand makegoodprofitsif thereis a
I at 10:00am.
repoftsto be released
trendin forceandsignificant
Stayflat whenreporGareaboutto be released andwait untilthe markethas

I absorbed them.Therewill be
allthe news.
plentyof timeto takea positiononceyou have
I I wouldrathertrade eitherthe morningsessioninto 12:00middayor the

session
afternoon from 1:30pmETon.
I Thesmartmoneyaswe knowit oftensetspositions earlyin the dayandexits
in the laterstagesof the day.Volumesin the morningwill usuallybe the
I highestfor the day.Theywill taperoff between12:00and2:00pmandpick
up in the last2 hoursof the day.Usuallyby 3:00pmyou will seeif thereis
goingto be potential movein the lasthourof trading.
for a significant
I Therearealwaysgoingto be dayswhenyoucannotworkout whatthe smart
moneyis doing(maybeon thosedaystheyjust don'tevenknowthemselves).
I In caseswhereyou feel likethis it is betterto quit for the day.Neverpushit
if it is notgoingyourway.
I In lots of wayssuccessful day tradingis the equivalentof a job as a top

jockey.Firstyou studythe form, then the field and selectyour ride.The
I staftinggateopensand the fieldjumps,it is eithera goodstaft or a false
break.If the raceis on you manageyourrideuntilyouseethe winningpost.
I Figureout whattheyareup to andyoucant miss.
CONGESTIONS:
I Whenever
moreit
the marketgetsinto a congestion
givesthe players
phasethat lastsfor an houror
time to thinkandthey will staftto planwhatthey
aregoingto do if it breaksout eitherway.
I Thisresultsin a buildup of stopson eithersideof the congested range.Your
job is to figureout if theyaregoingto buythe lowerendof the congestion or
I sellit andpushit down.Conversely
result in sellingor them buying
the highendof a congestion
if it breaks to the upside.
phasecould
Usuallythe
I preceding activitybeforethe congestion will beyourbestguide.
Section4:Chapter-2
I My PrivateThoughts
I
SIGNIFICANTSUPPORT OR RESISTANCE LEVELS:
Thesecouldbe priormarketreversalpointswherea doubleor tripletop or
I
bottomcouldform. If the marketis strugglinggoinginto them expectit to
whenit reaches
haltfor a correction rapidly
them.If the marketis advancing
goingintothemexpectit to breakthroughwithoutmuchtrouble.
I
Go backand reviewsomeof the dailypatternsI haveillustrated
in S1:C18 t
andyouwillseewhatI mean.
50o/oRETRACEMENT LEVELSfollowed by a higher low or a lower

I
high:
Thesearesituations
marketbecomes
that everyone
lling.
self-fulfi
andthe predictability
canrecognise of the I
RETESTS OFSIGNIFICANTBREAKOUT LEVELS:
Theseperhapsresultin someof the besttradesbecause whenthey don't
I
worktheygiveyouthe opportunity
to reversebackthe otherway.
I
GAPOPENINGS TO A NEWHIGHOR LOWfor the week:
If the marketopensto a newhighor lowfor the weekandthenimmediately
reverses backto fill the gap and breakbackinsidethe weekstradingrange T
highor lowit is tellingyouthat all the stopsaboveor belowthe previoushigh
or lowhavebeentakenout andthatsideof the marketis exhausted.
Takethe appropriate actionimmediately as it will oftenresultin an excellent
I
trade.
STRONG ESTABLISHED TRENDS:

T
Buy or sell the breakoutsinto new territory if the correctionsare not
overbalancing.The trend shouldbe clear as a bell to everyoneso the
shouldsucceed.
breakouts
t
CHOPPYMARKETS:
As soonasyou recognise overlaps
a choppymarketby the continual andtight
I
rangesstoptradinguntilthe marketfindssomedirection.Betterto just take
the dayoff insteadof beatingyourselfup. I
GEOMETRY AT REVERSAL LEVELS:
Makesureyou alwaysinterrogate the marketwavesfor signsof significant
I
geometry wheneverit appears to be havingdifficultyaftermakinga newhigh
or low for the week.I can'tstressthis enoughbecause
reasons whythe markethasstopped going
onceyou knowthe
in the existingdirectionit makesit
t
easyfor youto adaptto whatwill happennext.
OVERBOUGHT & OVERSOTD MARKETS:

I
Alwaysmonitorthe positionof the marketrelativeto the indicators.
Although
marketscttn remainoversoldor overboughtfor long periodsof time the
RETRACEMENT LEVELhavean
I
chancesof a reversalat the next CARDINAL
highprobability.
extremely
I
My Private Thoughts Section4: Chafier -2
I
I SOMECLICHfS AND RULESTO NEVERFORGET:
I Thesearesomeold clich6sI useto keepmyselfon track:
1. Tradewith the trend.If the marketis goingup buy it, if it is going

I downsellit!
2. Oldresistance becomesnewsuppoft.
3. Oldsuppoftbecomes newresistance.
I 4. Everystrongmovewill be followedby a correction,
resultsin limitdownandviceversa.
limit up usually
5. Trend linesaremadeto be broken.

I 6. Nevergo to bedwitha losingposition.
7. Believe whatyouseeandnotwhatyouthink!
B. Whenin doubt,stayout.
I 9. Donottradeunlessyouhaveprepared.
10. Alwayshavetwo verygoodreasonsfor everytradeyoutake.
I 11.If the tradedoesnot moveimmediately
staftfromfresh
in your favourget out and
I Mark Douglasexplainsit beautifully.

"The market will never saveyour you haveto saveyounself".
I
I get out and start
If I entera positionand it is not workingimmediately
I again.Thereis no roomfor hopeI ameitherrightor wrongstraightaway.
You haveto learnthat the marketis an evolutionof fact. As the facts

I becomeclearertraderswill acton massandmovethe market.
patternsandthe
I Youcantell whenyou are on an easyday by the S-minute
to allthe thingsI havetaughtyou.
waythe marketis adhering
I If the signsare difficultto readthen standaside- no one is forcingyou to

trade.Nevertradeon emotionaloneyou mustalwayshavea cleartechnical
andfundamental reasonfor eachnewtrade.
t Expectthe unexpected!
t Stayout of the forecasting

business!
You have to think smaft to last a long time in this business.Trade

I for the "NOW" when everything appears clear and forget what is
possibletomorrow or next week.
I If you studythis courseand followthe advicecontainedhereinand you

cannotbecomea winnerthen get out of the businessbecauseit is not for
t you.
I My PrivateThoughts
BeforeI finish I just want to leaveyou with some words of wisdom
to consid€r..........
I
t
GAMBLING:
Theaveragegambleror non-professional
To startwith gamblingis a disease.
I
he knowsno better- heentersthe gameexpecting
is a loserbecause to lose.
gamblerscan win at the gamesthey know;only if they have

Professional
I
studied the odds and they continuallywork on the correct money
management. I
To win consistently
theycanrecognise.
on oppoftunities
gamblersshouldonly playthe odds
seriousprofessional
I
NOIll|...rrrrr, I
Mostnovicegamblerslosebecausetheydon'tplayit safeandcontinue
to bet
theyfanryjust because
on anything theylikethe IUICEOFIT. I
Alsoremember that if you betjust because
willeventually
lose.
you likethe threatof the riskyou
I
TOWIN:
t
You have to maintain a strict discipline, treat your I
gambleslike a repetitivejob in a way that it often
becomesvery boring.The point is it no longerbecomes I
fun.
I
If youwantto win youjust haveto learnto be a mechanic
and to get your fun elsewhere.Spending the rewardsis I
fun!
I have learnt these basic home truths over the years by watching
I
the faults of others. Continually remind youltselfof them if you get
on a losingstealgthen go back to squareone with the right attitude. I
Blyce Gilmore
18s January 2OO4
t
I
My PrivateThoughts
I
I Tradingto WIN Course - One day at a time [c] Bryce Gilmore2004
t Section 4: ctrapter
3:
I S&P500- SomeHistory:
I You know something? I have beenfollowingthe S&P500amongstother
thingsfor well on 20 yearsnow.I haveseenit go throughmanyphasesof
I evolution.
I rememberthe crashof 1987realwell.Whenit happened it cameaftera

I progressively
strongeractivebullmarketthat beganin 1982.TheS&Pfutures
begantradingin 1982andas the bullmarketunfoldedbecameprogressively
morepopularwith tradersandtradingfunds.In thosedaysthe pit contract
I was$500a handle(1 point).
It took the S&P500 indextwo yearsto recoverall its lossessufferedin the

I 1987crash.In all the time between1987and2000the marketreallynever
hadanylongperiodsin decline. Therewerea coupleof periodsof L2 months
I wherethe marketwentsideways
longerthan90 days.
but generally
anysharpdeclines did not last
I Theonethingthatsticksin my mindthroughout
2000is that all the way up therewere many
the bullmarketfrom1991to
famous namespredictinga top
everymonthor so. I wasoccasionally guiltymyselfbut whenI did I usually
I onlygot the top of a correction. the S&Pwasnot goingto
In 1994I realised
stopgoingup butasthe marketrosehigherit wouldbecomemorevolatile.
I llaue Trader 14OF{TFILV SEJlrlI-LOochort

1??8
I 1388
LE47
I aI?
638
t 4?8
3?1
zaL
t zLa
16tl
I LZB
109
H ai n 3BJulSZ 310ctBE 31Jan91 Z8ftpr95 3BJul!l!l
I At the endof 1999whenwe hadall softsof predictions

goingto confuseall the computers,
that the year2Kwas
and interestrateswere gettinghigher
I againI couldseethe writingon the wallandwarnedeveryone I knew.
I S&P Review
Tradingto WIN Course - One day at a time [c] BryceGiknore2004 I
The NasdaqIndexhadgonethroughan unprecedented bull marketandthe
publichad beenon a feedingfrenzybuyinginto everynewIPOavailable as
I
they cameto market. It was difficultfor any sanepersonto justiff the
astheyweresofar out of linewith reality.
valuations I
It wasno surpriseto mewhenthe marketrolledon its backandgoingdown
techstocK.
withthe biggestlossescomingfromthe overualued I
I thoughtbackto the crashof L987andhowthe goldstockshada goodrun
afterthe 87 crashandhowthe realestatemarketwentintoa boomperiodas
I
investorsmovedmoneymadefromthe stockmarketinto it.
the samephenomenon
or not so strangely
Strangely hasoccurred againand
I
nowwe arefacedwithan unprecedented boomin realestatevalues.
Have frader l4[F{THt? IIJIff SEMI-LO6 Chort
z0B0
I
11?48
?B7S
4eE5
I
2511
1513
I
I
891
53?
316
1S6
114
I
6?
46
Z9Jan15 310ct3Z 31Jul50
31Jul50 3Bffpr58 31Jan86 Z9IlecB3
I
It againsurprisesme now that so manyanalystsare comfoftable with the
andthat pensionfundsare buyingup everybit of paperfromthe
valuations
I
banksastheycontinue to advance existingloans.
fundsto refinance
I oftenask myselfwhereall the moneyis comingfrom. Butthe truth is the

I
moneyis createdout of freshair andthishasbeenso sincethe goldstandard
wasdroppedin the early70's. I
Nowthe first thingto remember
is that it represents
the combined
aboutstockmarketindiceslikethe S&P500
valueof the top 500companies listedon I
the NewYorkStockExchange. This meansthat stocks come and go as new
ones becomeworth more,as a resultthe downsideis prettywell limited
unlesseverything becomes ridiculously
over-valued as it did in year2000.
I
I remember
Wavecountthat he reckoned
jr. hadan Elliott
backin 1987afterthe crashthat RobeftPrechter
wouldtakethe Dowdownto a levelof 400.Its
I
previous
highhadbeen2746.Howhe dreamtthat up I don'tknow.
I
S&P Review
I
I thinkingin somecases.The
It just goesto showyou the lackof intelligent
DJIAis the top 30 INDUSTRIAL stocksin the USAso therehadto be another
the valueof the existingonesif theyfell out
I 100or morecapableof replacing
of favour.Weall knowthat business
investors havebidstockstoo high.
is notgoingto ceasejust because insane
I Soyou canaskyourselfthisquestion, indexgo to in

wheredoesthe S&P500
the future?
I It can only go one place,progressivelyup. Notwithstandingit will move
throughtrading rangesalongthe way as long as it reach
doesn't extremely
I over-valuedlevelsbasedon madnessonceagain.
Theaccepted benchmark in a healthyeconomy is to havethe S&Pcompanies

I tradingbetweena Priceto Earnings
get
Ratioof between15 and 25 to one.If
thingswereto ever as badas we assumed themto be a yearor so back
t lowerendcouldbea PEof 10-1.

the accepted
go up sotoo doesthe valueof the S&P500

Asearnings index,but it is hardto
I again.Maybeanythingis
a boomsimilarto the 1990'sin my lifetime
imaginewe will everexperience
possible
afterwhatwe haveseenrecently!
I In anycasewhatI am leadingup to is that in my opinionthe bearmarketin

S&P500 stocksmusthaveterminated in October2002whenthe valueof the
indexhaddeclined50o/o in valuefromits all time high.Nodoubtwheneverit
I doesget backto similarvaluations
newnameson board.
asthe March2000valueit will havemany
I Butrightnowwe areapproaching valuations in the upperendof the accepted

envelope.The only thing that can propelthe S&Pmuchfurther upwards
Thatdoesnot appearlogicalto happen
I wouldbe improvements
earningsestimates
in earnings.
overnight.So to my way of thinkingit will pay you to keepan eye on the
beingreleased for the S&P500 companiesas a guide.The
I of the FEDandtax cutset cetera,haveturnedthe economy
stimuluspolicies
aroundin 2003 and most of the largestcompaniesin the USA have
restructured
theiroperations to reflecton the bottomline.Buttheyhavedone
I aboutas much as they canto dateby cuttingstaff.
A goodplaceto monitorthesecompany is througha membership

earnings at:
I hftp:/ /www.briefinq.com
It's beenan interesting20 odd yearsfollowingthe risesand falls in the

I that hasbeenappliedby othersover
world'sstockmarketsandthe rationale
thistime.
I 2003:Therehavebeensome
As I am writingthis it is the 31* of December
continuingexamplesof bad newseveryso often mixedin with the good
I economic news.Butthe marketis stillclimbing.
I S&P Review
Unemployment andconsumer debtlevelsarestilla concern.
stilla bunchof legalclaims,prosecutions andbankruptcies
It seemsthereis
in the systemthat
I
There
needto be resolvedbeforewe can lookto the futurewith confidence.
still hasto be a few more hick upscomingout of the blue.I heard the
daythat UnitedAirlines,whichwasoncethe biggestairlinesin the world,is
other I
effectivelyworthlessand shareholders equityamountsto nothing.The same
fatecouldstillbe in storefor manyof the old highflyers. I
bearmarkethas
So rightnowit wouldseemthat the baseof the 2000-20A2
not yet been fully establishedand somewhereup towardsthe 50o/o
I
retracement bearmarketrangethe currentuptrendwill run
of the 2000-2002
intoobstacles. I
Wehaveexceeded somelevelswhicharemajorindustrydecisionpoints- the
38.2retraceof the entire2000-2002
levelaheadis the 50o/o
bearmarketin S&P,the nextmajorSPX
whichliesat 1161andjust belowa doubletop with
I
the lanuary2002high.This couldbe something technically importantthe
tradersmaytake into accountas a signto takeprofitsfrom the bull market
originating
in Marchof 2003.
I
Nevertheless, I am a realist.I adaptto the dailycurrent
I am not a forecaster I
marketconditions.
It's the onlywayto tradein my book.
Eachdaythe marketgivesme reasonsto form a planbasedon whatwent

I
before.I only needto knowif traderswill decideto buy and sell,nothing
moreand nothingless.As long as I continueto believethey will act in a
similarmannerto the way they have done before,when the signsare
t
obvious,I haveeverychanceto be profitable.
I knowall the patterns,I alsohavethe newsandas longas I knowhowto

I
preparefor eachnewdayin advanceI am so far aheadof the fieldyou cant
believeit untilyoudo it eachday,thenyouwill knowfor yourself. I
The majorityof marketplayersarejust a bunchof turkeysin my book.They
will neverknowwhatI know.My methodsarelikehavinga gunto shootthe I
feathersoff themeverydayI wishto if I makethe choice.
Tradingcorrectlyis just a matterof attitudewith me now and if you can

t
developmy mindsetyouwill succeed, andsucceedwell- with oneproviso-
you mustquit everytradeentrywith a minimumlossif it doesnot movein
yourfavourimmediately; this is my number#t rule.You betterbelieveme,
I
or youwill sufferthe consequencesandI don'twantthat.
SomeFinalthoughts:
I
Throughout the impor€nceof readingthe
writingthis courseI havestressed
motivesof the otherplayers.
I
I
S&P Review
I
I Tradins to WIN Course - One day at a time [c] BryceGilmore2004
I It is importantin this tradinggamefor you to havean ideawhat the big

playersaremostlikelyto do giventhe seriousness patterns
of the unfolding in
I the intra-daymarketmovements.
professional
I wouldliketo remindyou beforefinishingoff thatthe individual
I tradersare all doingthe samething.Theyknowonlyto wellthat the market
is madeup of so manytypesof tradersthattheycannotallowthemselves to
takea view and stickwith it whenthe patterns are tellingthem a different
I story.This allowsthem to remainflexibleand in tune with the market
movement.
I Thereare so manyfundsandCTA'stradingfuturesmarketswith very basic

modelsand thesedo causea lot of noisewhenthey havelargeordersto
execute.The primaryreasonwhy the marketruns when a suppoftor
I resistance is brokenis orderflow.Oncethe orders
levelof somesignificance
beginto flowintothe marketthe marketwill rununtiltheyareexhausted.
I Intra-dayreversalsoccur mainly becausethe market reachesa strong
technicallevel essentiallyin an overboughtor oversoldcondition.Those
I playerswith a winningpositionmaychooseto take profits,and unlessthere
are ordersto absorbtheir profittakingthe marketwill reverse.You must
alwaysremember a zerosumgame.
that the futuresmarketsare essentially
I Whena sharpmovein any directiontakesplaceit will havehalf the field
losingon it and the other half winningor retrievingprior losses.Human
natureis suchthat moveswill onlyextendwhenthe trendandnewsis fullyin
I agreement
causing
andlargepositionholdersareforcedto liquidatepositions
extremepain.
thatare
I thatwill propelthe marketfromonepricelevel

Beingawareof the mechanics
to your success.
to anotheris paramount The Stochastic and the Parabolic
I (SAR)aregoodwarningindicators
out of balance.
on a S-minute is
chaftthatthe equilibrium
I Youwill seewhatI am talkingaboutif youalsowatchthe volumebarswhen

areshowingpotentialreversal
indicators indications.
I Successful nothingmore
intra-daytradingis all aboutidentiffingopportunity,
or less.As the marketweavesalongthe signsof wherethe professional
playersare buyingor sellingbecomes fairlyobvious.Forinstanceif theyare
I buyinga correction levelandholdingthe marketin a rangeandcannotget it
to movetheywill eventually reversepositionandtakeit the otherwayalong
the line of leastresistance; Generally in the afternoonperiodwhen every
I pieceof newsfor the dayhasbeenevaluated.
I Eachday you mustpreparebeforeyou trade,andthen whenthe bell rings

you obserue
impoftance
signalsthat mayhavesome
the priceactionrelativeto technical
to the professional
players.
t
I S&P Review
Tradingto WIN Course - One day at a time [c] BryceGilmore2004
I
Whenthe technicalcluesdon'tappearto be workingyouthenhaveto resoft
to the moodor feelof the marketas yourbestguideandjust movewiththe
I
patterns.
in a tightrangeyouarebetterto waiton the sidelines

If the marketstagnates
I
for guidance
ratherthanto try andguesswhatit will do next.
I
Overa daythe marketwill providenumerous set-upsfor youto maketrades.
As longas you get straightout whenthey don'twork immediately
alwaysbe readyfor the nextone.
you will
I
Thereis an old saying,'The marketalwaysappearsto be climbinga wallof
worry".
I
Thisis true mostof the time because the puntersare neverconvinced how
far it can rise beforeother traderswill come in selling.And you must
I
remember thatthe professional
of weakness areprepared
sideof the marketrealisethisandat anysign
to sellto makequickprofits. I
Sellingat the correcttime in an up trendingmarketis an aft onlyknownto
professionalplayers,the publichavevery little knowledge of marketlevels I
andtendto enterpositions at anyold place,mostlywhenit fits closeto some
indicator
readingtheyhavespentmonthsstudying. I
The publicare basically whereasthe professionals
inconsistent areconsistent
and giveyou the leadmostof the time. Professionals useclosestops,the
publicandfundsusewidestops.The fundshavedeeppocketsand mostof
T
the timetheywill hangintoa positionuntiltheirmodelstell themto exit.This
is why on mostoccasions a reversalbaron a S-minutechaftcanbe marked
witha highvolumespikeasallthe ordersin the flowareexhausted.
I
Foranyfastmoveto continuethe volumemustkeeprisingas onesidekeeps
pushing
the otherthroughtheirpainlimits.
I
To be successfulday tradingyou haveto teachyourselfto onlyfocuson the
"Now"andforgeteverything
I
else.Youhaveto lookat whatis happening on
the dayor the hourandthinka few stepsahead.Youmustlookbackacross
yourchartand observepriorsuppoftand resistance levelsthat couldact as
I
futuresupportor resistanceandwhenthe marketteststhemact immediately
if theyholdor break. t
Don'twait untilthe marketgetsawayfromthe decisionpointbecause if you
do you cannotadequately
moneymanagement
controlyour stop loss and withoutthe correct
youwillfail.
I
If I wereyou I wouldreadtheselastpageseachdaypriorto tradingso when
you enterthe ringyou will havea clearandconciseviewof whatyourdaily
I
job is allabout.
I
S&P Review Section4: Chapter- 3
I
t AsI havesaidso manytimesbefore- Believe

thinkandtakeit onedayat a time.
whatyouseeandnotwhatyou
I Anywaythis is aboutall I haveto say right now,I can'tdo anymorethan I

havedoneto prepareyoufor a lifein the tradingarena.
t I wishyou well,I hopeyou succeed,
but it is still up to you to do it, nobody
elsecando it for you.
I Recently on December 14h I had a devastating experience whenI crashed
my car into a steelelectriclight poleandtotalledit, I wasin ICUfor 5 days
I andI was luclqyI didnt die but if I did it wouldhavebeenmy fault,I know
that much.Nowthat I am 90olorecovered andslowlygettingbetterI wantto
tellyouthat my long-term goalnowis to enjoymy life.
I I alsohaveothertradingtoolsI cansellyouto makeyourllfeeasierwiththe
process
I tradingdecision butyou mustbe a workerto usethemeffectively.
you learnmoreaboutthe marketsyou canalwayscomebackto me andask
me questions,
As
I mightbe onlyworking2 daysa weekin futurebut that will
I keepmy interestup.WhenI feellikea weekoff I willtakeit.
I hopeyouguyswho buythiscoursewill embraceit for its true meritandgo

I on to biggerandbetterthings.
I am sure you will if you follow my rules- if you don't well I can't be
I for youractions.
responsible
I BryceT. Gilmore.
Thisis the wreck:

I
I
I
I
I
Tradingto WIN Course - Oneday at a time [c] BryceGilrnore2004
I
Section 4= chapter
4r I
EsignalRoutines: I
It is nowthe 13hMarch2004andit hasbeennearlysix monthssinceI first
I
completed the originaldraftfor thiscourse.
of 2003the S&Pindex
Sincethe originaltext was completedin September
I
hashadsix monthsto forgeits way aheadsomemore,but rightnowit has
sincethe lowof
the staggersup asthisweekhasseenthe deepestcorrection I
a yearago.The futureshighlastweekcamein at 1163.5andthe SPXcash
high terminatedat 1163.23,the 50%oretracement
marketfrom2000-2002 to 1160.75.
calculated
levelof the SPXBear
I
Thisweekhasseena rangedownfromthe highon the futuresof 42.75 and
exceedsthe previouslargestcorrection
on the advance from March2003by I
5.25points.
Thisoverbalancing impliesat this timethat a top of somemajor
wavedegreesimilarto the June17h2003top is in place. I
Edtr+ O t D c O 1 € 5 O 6 0 e c E i r yO T i ( k
J E q u i n e s ' J o h s r l n F r e b -@ e s - c o N
S&P50fLbryini FqrurF - 6lobEx.W I
I
HIGH 5th frlarch
I
I
How
Volume
tlidc <<
!i1!9$!-o,ira11!9!-q-
!:!19:!99-cjl-!!-8*a-o*ru:
I
2mr
Jul seD lfov Jan
atr2
lttr ttrv Jul Sep l{ov Jao
2003
llar tlty JulAlq
@
ortNw Jan
zlot
llar
I
I havenowchangedmy livedataseruiceto ESIGNAL,
Incidentally
Lycosvery uncooperative when I Some
encountered
as I found
problems back in I
October2003.Theirrepresentative thoughthe wassmartbut nowthey will
Iosethousandsof dollarsof business because is sosweet.
of me.Revenge
I
Sincemovingentirelyto ESIGNAL we havedeveloped a formulaadd on to
work within ESIGNAL
geometric
live chartsso we can
price& trendanalysis.
save time each day on my
It is calledBryce'sX-ABCDsystem.
I
I
ESIGNAL 54 Section4: Chapter- 4
I
I S&P 5OO- lst Month Continuous PIT DAILY
I
+ J E q u i r i s s -J o h e r t n s y 6 b . G e s - c o l r @ l n c € r €s €)oo Qoaih €rict
'El't'+r""
,snp5flPtT.F.ltru8E$
,
I
I
I
I Volunle clt0.30 H:1tt8go l:ttold
{t 29 7 215 1529
I
I In six monthsthe net gain is aboutB0 pointsor about8olofrom a chartI
postedin S3:C3:P42whenwe rolledoverfromthe September 2003contract.
Fromthe beginningof January2004we arebasically at breakeven.
I Thisweekwe wentintothe rolloverfromMarch2004to June2004.
t EEf+ - . t E q u i t s s J- O h s r l f , b . G b . & ' e + C o l rO r , : €t SS EOo eoiify OTick
I ;
.
fbf,lf !-"..r-.qplq$.i9lFj!.$r!{
oflhl$ XC ranqc ar 1096-95
: Thiirougltly{pnBponilsros38.2
I .
'
:
i
froniftr388ldw al1m.5
lt it breut; 10{5 lba neri oppors

sill'Gqme frcfi ih8 958.5. 11635
range. | 47.04
I t0 , 54.30
;|{ll
aa-50
x
,0fr,i10
:
,51.00 The qrnem mow doh fiom fte high i.s exEeedrd the pwioG
I s{il
llsn
T '55.10
308 lrs orreclioD eas
Ard rle
of 3l polht*
the olheE ot5l
:
aDd 56
.Qi!lqr1q- "t!i1!.!qqQ,
-!:11.-0139.,q:,!!-i"-slg
I , 2 9 1621 7
Jun Jul
1219262 I
2004
I The only logicalconclusion

you can reachlookingat thesechartsis that the
S&Pis losingsteamandthe profittakersare movingin. Therewasa feeling
I all alongthat the professionals
only expectedthe S&Pto reach1170(the
levelsof the 2002highs)but with PE'shoveringin the 2511and higherzone
onthe Bluechipstheyarefindingit harderto findgrowthstocksto buy.
I
I
i'
Tradingto WIN Course - Onedayat a time [c] BryceGilmore2004

Il
ESMarch Day session- Hourlyover the past two months: Il
+ J E q u i i i B s -J o h 8 r l n s ? e b ' G , e s ' ; r u o l o e e t
2 - S8P 5m E-mini
xleco@
gs
960
3 Priyef.loI mqtl
2
ttst rt
gm'v €)t't
I
I
I
'ttrkr*ttraoxpiiinguaicn oini,"aori, *oniittt.
-,-"-- -- :--:-.*:---f
_
._-
r1:q:.r!::@l
tt045o - - - -'. -- - -" -'
I
Tberah6 b€en pl€nly of SIGHSro rsll b8ing LONGw6lryR0ncj
Volrmf, ,- _.-. gat ltdo -!iL€0!.4- -!:!q4g--r: I

@
I
Therehasreallybeenno excusefor not knowingwhatwas goingon lately'
The lasttwo breaKto a new highfailedwithoutgaininghardlyany.ground.
Thetop #2 onlymanaged 3.zs pointsabovetop #1 andwasfollowedup with
I
points
a seriesof triple tops] top #3 did a little better breakingout by-5
beforefailing.But look ai the sidewayshesitationafter the 1163.75high
beforeit fell out of bed.Themarketwassayingthe writingis on the wallthat
I
it couldn'tfindthe buyersto keepit goingup.
I
Nowthe onlyproblemcomingup is that we arein the rolloverperiodto June
and the priorswingpoints6n ine Junecharthavebeenmadeat different
levelson low voturie.But the SIGNSare all thereandthey weresayingto I
youLONG WASWRONG.Lookat the IUNEESbelow'
gs g0o
I
AEr+ J E q u i t j s 5 -J o t t s l n E r Y a b - g a " c c " Ot"t Ot
lli+2 'SEF
Bryce:eX
I
-t14.$Nr:(6*
8r€akofTr€nd Line
-t'J\ooAt
sll
t:1
I
s:l
'rt72;0 AA t:l6n
READ TIIE SIGNS

I
11JS
lre rhle period of th; mllNer I don't llkF mch-
t00m I
'U!rc,--[iCe--."":t-,- zt-,.1
I
O!r.d.ct@3d.nr
votuF; -;Ao H:ttro?t L.!ro,s c: tltryo.ffi
uBEhilbt ;36;i(;';il:;Gili:;;il
I
Section4: ChaPter- 4
ESTGNAL 56
I
I After evaluatingthe currentweeksactionand the reactionup on FridayI

havemappedout somelevelson the lune ESwherethe trendshouldconfirm
downagain.
I Wewouldhaveto go up for anothertwo daysfor meto thinkthatthisweek's
I downturnwasonlytemporary.
t Ef+ J E s u i r i s s .J o f B r l n t s r 7 6 b . @ E s { 3 N @ r o c @ r 6 s @eo e'ts,V OTic!
I " r riilX?;fdrt t'tr6r
Srcl
t5m
I fiot.25
30?l
fi000
5091Relrrcemenl t05m
I Thi$ iswhat I se at lhe moment

r00m
TRIilD tS DOS[{
I Vnf0be _o:J!g!!-o_ t!-rl!_3,?,3_ r119l$__!::lj !q.
I
:00ll:m t2:001U0 1410 15fl16fi 18t019fl 20fl Zl:Il0
puHishedby €sbn:l (www.si9nel.(om]
I Themaximum uppertargetlieson the 38.2at 1125.If it breaKabovethatI

wouldbeginto consider
buysignals again.
I EEf+ J E q u i r i s s -J o t t s r l n F v a b ' @ e s - c o l r O l D c O t 6s OEo eoairy Orict
I Brym'e XiBCO@
r1€f6tl8ll
I .......................:1131lgAr
11
I
$riri,ii \ . t:d )1t0 5l2l
,ta7t--
tryhllethe ES ls bal@ 1125lr
is ln a wsk DaCtion-
I soFF T.Oil OIIEOAYATA TIIIT
Volunn g;"1!q!,o tr:!!!3_lt !;-110-1@

!: r.r1B@
I ol/il 03.r't2 0f,'t3
I Alwaysmaintaina flexibleattitudejust in caseyour technicalopinionturns

outto bewrong.It hasbeenwrongmanytimesin the pastbefore.
I
ESIGNAL JI Section4: Chapter- 4
I
Tradingto WIN Course - One day at a time [c] Bryce Gilmore2004 I
Now for tomorrow: I
Whatyou mustrealiseis that the S&Pmarketis just an ongoingAUCTION,
whereeachday newbuyerscomealongto buyandold buyersor newsellers
comealongto sell.
I
The BIDquotesare buyersandthe ASKquotesare sellers.Eachsidehasa I
perceptionof their own positionstrengthsand weaknesses basedon
whatevervaluesthey useto guidethem.Theythen placeordersthey believe
to besuitableto theirownneeds.Theycouldbe rightaboutthe marketgoing I
upor downor theycouldbetotallywrong.
Aseachdaypassesthe marketmovesalongwithinlevelsthat satisfywhatwe

I
FACILITATION.
referto as MARKET
MARKET FACILITATION is a fanry namefor the willingnessof buyersand

I
sellersto meetat a pricethat satisfiesbothsides.
If the buyersare not willingto paythe currentpricesellersare asking,the

I
pricewill go down,as sellerswill haveto reducethe LEVEL
PRICE to makesales.On the otherhandwhenbuyersare
of theirASKING
keen to buy and I
thereare limitedsellersOFFERING, the buyershaveto BID up the priceto
meetthe sellers.Thereforethe marketis alwayscontrolled
the willingor not so willingSELLERS. In otherwordsit comes
by the actionsof
downto this,if I
the SELLERS are URGENT to quit positions
the marketdeclines. If they are
not urgentto sellthe marketit eitherstayswhereit is or it risesasthe buyers
areprepared to payhigherprices.
I
In the futuresmarketthere is a differencethat needsto be considered,
you don't haveto own anythingto be a seller.Youjust haveto havethe
as I
perception that if yousellnowwhenthereareno apparent buyersthe market
will go down,andthenyou will be ableto buy backlaterandmakea profit.
This is probablythe main reasonmost downwardmovesare usuallyfast
I
affairsandendabruptlyasthe phantomsellerscoverpositions
profits.Yet in a sustained
to collecttheir
wherethe sellingis comingmorefrom
downtrend I
the ownersof stockit won'tfindthe samesuppottin a hurry.
If you understand that causethe sellersto take action,and

the conditions I
wherethe sellingis comingfrom or not comingfrom,thenyou will havean
ideaof howlonga downward trendcouldendurefor. I
the S&Phasrecovered
Currently 50%in valuefromits bearmarketlowsand
asa resultholdersof stockwhohaveriddenout the declines
arenowrecouping theirbooklossesencountered overthe
of 2000to 2002
pastseveralyears.
I
Myopinionis that it wouldbecome
I'm sureyou canunderstand

for themto sellout now.
attractive
why anyonewho hasheldstockthrougha two

t
yearbearmarketfeelsrightnowwhentheymaybecloseto breakeven.
I
ESIGNAL
I
I Trading to WIN Course - One day at a time [c] BryceGiknore2004
I AlthoughI am goingto reviewthe nextfew daystradingas it unfoldsin the

S&Pyou will neverbe ableto understand what happenshourto hourunless
I youwerethereto experience
what I seehappening
learnfromit.
it. I will try andgiveyou an accurate of
account
overthis comingperiodandthen you maybe ableto
I No matterwhatdoeshappenyou hadbetterunderstand that I am goinginto

thiscomingweek with a biasfrom my prepared Thethree-day
analysis. trend
I is downandFridayappears to be onlya shortcoveringrally.Yetif something
changesand the marketdoes not flow with the trend, I will changemy
opinionveryquicklyif certainpricelevelsareexceeded.
I My mainpointrightnowbeforewe seewhathappensis that to convince me
we havelongliquidation in this S&Pmarketand not just speculator
selling,
I this marketwill haveto stay belowthe 38.2 retracement
Thatlevelis around1125.
decline.
of last weeK
I I havea clearlydefinedplanin mindandI havecontrivedit aroundthe logicI

understand to motivatemarkettrends.
I Thechances of a prolongedLONGLIQUIDATION from theselevelsarequite
realin my mind,yet onlytimewill tell.The lynchpinto me at the momentis
I the 1100level.If it breaK, the immediate
ratherbleakandattractmoreselling.
futurefor the bullswouldlook
I Cgclefrader
u63.5S
HIGH
I G
a
r
t
I
Low to High : $75
I
e
I
s
1!
I
i
n
s
u
z
I k
L0l.l
?88.58 aEA3B3tZ
This is hou.rI leod ii froro lha Morch 2OO3 low
I Thisis the pictureeverytechnical traderhasof the S&P500 positionas we

transitthe weekend.Forthe first time in twelvemonthsthe movedownlast
I weekhasexceeded all priorcorrections amount.Thiscoupled
by a significant
with a breakof the uptrendline is signalling weakness. Thereis no other
youcancometo.
I conclusion
Onlya rallybackabove1125wouldgivethe bullsone morechanceto get

I out,andthe logicalthingfor themto do is takeit.
I ESIGNAL Section4: Clnpter - 4

Tradingto WIN Course - One day at a time [c] Bryce Gilmore2004 I
My longer-term Elliott Wave perspective: I
Way backin June 2003when I was writingChapter3: Section2 of this
on mythinkingof the ElliottWaveposition.
manualI outlineda proposition I
Nowthat the SPXhasmadethis March5h highof 1163.25it is puttingit to
the test.The percentage
declineinto July 2002w?s 50o/odownfromthe top
up fromtheJuly2002low.The1163.5highis also
andthislatesthighis 50o/o
I
590daysfromthe July2002low- that is 1.618years.
I
In Gann& Elliotttermsthiswouldbea terminalsignal.
I just wantedto pointit out to you at this time, becauseit is thereand it

I
makesplentyof technical senseto me.
I
I
CpleTrader S+F 5BB EffSH 5PX
PRITE CYCLE
tfft BBa3z4
Pr 1552.fi?
TB] AZB7Z4
Fr ??5.68
fR-j ?-/?lrl
tz, 5a.8zl
T
TfiETtrTTilF_
i[]
Pr
TT]
Fr
gzg?24
??5. SS
B4B3B5
1163.ZE
I
tR"s 3Br,sfl
17,
ETiTi_
Pr
58.Bz
6.58S
I
I
irr B.4SS
X
z
L.WE
s.ss8 i50% declinefrom /rfiorch2000
T
Whetherit will meananythingto youjust yet remainsto be seenbut if the
marketcontinues in the currentweakstateit is in it will meansomething
to
I
youin the future.
Thereasonwhy I favourthiswavecountis because the lowin October2002

I
"false
wasa breakaffair".Thedayof the lowthe marketmadea gapopening
wentto the new lowfor only minutesandthen madean outsidereversalon
the day.
t
Nowyou can seethe detailI havegoneto with my analysis of the current I
marketposition.This is what it takesto remainin controlof your personal
destination I doubtveryfew peoplewouldtakethetroubleor
in thisbusiness.
for that matterevenknowhowto go aboutit. I
If you want to makea success you needto learnthe thingsI am teaching
you,you mustlearnto analysethe marketwith a fine toothcomb. I always
I
-
strivefor perfection nothinglessis satisfactory
in my book.
I
I
I Monday15fr March 2OO4:
I Thedaybeganwithan openingprintof 1115andmadea highof 1116from

thereon the marketjust beganto slipaway.Throughoutthe morningsession
thereweremanyinteruiews on Bloombergwithanalystspredominatelysaying
I the marketwasa sellat theselevels.
The only ray of hopefor the bullscameafter the marketdoublebottomed

I withthe daysessionlowof Fridayandralliedback38.2o/oof the 16.25point
legdown.Therewasno clearindication to sellthe firsttimethe marketcame
backto 1110buton the second it was a sellwhenit reversed at 1110.25.
I EEf+
test
JEquiries- JofisrrnrFTab- @€scoN @loc O1 g5 e60 gDsil,y erick
I Thc d8y rianed silh I sll fron
I
thii.iipuiiing piinl"
I
I
I 0t:00 0?:00lDf, olln l[i:00 S:00 0rtr001trO02fr 03:000l:00 05:00l]6il0 0tfr01fl 02:80Ol:00Da:ttrDSlXl06fl 07:lD
03,/l2,IIt mfi'il O3".t6i't
03fi6 Itr00
I Therewereseveraleasysellsto be hadfromthe openingprintrightup until

the 1103.5reversallevelat X on this chaft,as the corrections
on the way
I downwere3.25and 3 pointsrespectivelyandthe wavesdown went 8.5, B
and6 intothe doublebottom.Another2 pointsdownwouldhavegot it to the
1101Globexdoublebottomand madeit a and8.5 - 8 - B or 8.5 downso
I therewasnowayit wasgoingto break1101on the firstattempt.
I
I
I Shortll14 Out1118' il
Shonll09 Out11ll7^6r1^2
Shortllqt Out1llx4t, +3^4
52t tt0{.00
?50 fr03.75
6l Section4: Chapter- 4
I
The low for the day was 1101.5forminga doublebottomwith the 1101
Globexlow from earlytradingon Friday.Thislowwasmadeverylatein the
I
afternoon intact
anda shortcoveringrallyfinishedoff the day. 1100remains
once again and today was effectivelyan insideday with the trend still
pointing
down.
I
Aftertodayand the staft to the weekthe bullswill be nervouscominginto I
tomorrowas we havean FOMCannouncement fromChairman Greenspan to
be released. is, theywon'traiseratesbut thenwe alreadyknow
Speculation
they won't lowerthem anymoreeither.Therecouldbe a surprisecoming, I
whoknows?
Tuesday16h March2OO4:
I
The marketopenedup and went to the 61.8 retracement of LLL9.75and
1101.5at 1113,madea doubletop over 20 minutesand startedto go
I
sideways. Sofar I havemade5 trades.Theresultswere+1, scratch,-L, -^4
and+1^6. I shouldhavejust soldthe 61.8andput a stopaboveit andwent
to bed.Greenspan is not speaking until2:15pmETso the chances thisthing
I
will do muchuntilthenis remotenow.Withthe established
suppofton the downside
patternsofar the
lieson the 1:1 at 1108^2if the 1109.25double
bottomcomesout so there is no valuein sellingit to gain half a point.It
t
wouldneedto breakbelow1108to confirma sell now.The other pointis
50%of 1101.5 to 1113liesat 5.75downfrom1113or 1L07.25 so thereis I
verylittleroomto movebefore1107is takenout.
Edtr+ J E q u i n s s -J D b $ r n t c . ? e b . € r E s - c o N
OlDr O1€s Ci60 OoaiF Ortt
I
8di0"x a
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Itm
Srfr/AsKDfFTII
6t.s
5;11rrru-oo
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out tt09i$ ..t^6
lZolt
I
I
s-oFF TOlt I
*r|ow *[!r!s--13_
c.r.dr.@itt;i.r
Volume
:
250
-.=- -1
I
l..ir
-7--tr
I
&
6{?tr'10'25i
}5: ttro,on l
I
Published by esignal (www.6igml,com]
I
The biasis definitely
downin my opinionbut the oppoftunity
untilwe get below1101.I won'tbe bothering
is limitednow
to tradeagainbefore1101is
T
is
broken,that the all clearsignfor meto get backintoit. Somedaysyoucan
knowwhatit is doingbut it is difficultto maketradeswith a potential
just
to run I
far andyou haveto keepscalping.
I
I
I 12:15pm ET
I E8F+ J E q u i i j s s .J o f t $ t n E r . / 6 b ' @ e s - c o l r@ D c O r 6s O o o @ c \ r i t yO T i t k
t20ttr
t18m
I fl6m
fi{m
I Ir?00
t10ttr
togn
I
I
fo2 lt0&.50
717 lt0625
I
02:00 03{0 0{:00
Thefirst breakof 1109.25wasarrestedat 1108with a rallybackto 1109.75

t beforethissnapwastakenwith the markettestingthe new61.8at 1105.75.
I haventtradedanythingsincethe 1109.25doublebottomon this move
because I recognise
that I shouldhavebeenshortfrom 1112.5whereI took
I myfirsttradeandjust heldit all day.It just showsyouafterthe factthatyou
don'tneedto havefeathersto be a goose.
t E6+ JEquitisr- JOh€rinB./ab.
IESIt4-2 . StP SlXlE-mini Futur€r
Bryce!x{AC!@
BID/ASKD€PTHJEI
@ e S . C c t ' te D i
Dynamic,O:0024110
01 e5 O60 Ooaitr OTick
I t6m
14tr!
I iztn
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10m
€:l
I 51107.594n1,'.618
61tl r0600
t04m
I Y'
*,75
,rorr5iT65l o2r roToo
I tjo 1196.z5
t fft:00 06fr 07
PuHislrcdby e9rgnal(www*igmkm)
I 12:30ET and the GAPhas beenfilled- that'sa buy signfor floor traders
especiallyin the luncheonperiod.Yetthe trendis definitelydownon the day
and it doesn'tseemto be havingany troublebreakingshort-termtechnical
I supports in thisperiodleadingup to the FOMC
nowis if the FEDcomesout withsomething
announcement. Myconclusion
the marketis notexpectingit will
fallapaftsoa breakof 1100willbea goodtrade.
I
ESIGNAL Section4: Chapter- 4
I 63
Trading to WIN Course - One day at a time [c] Bryce Gilrnore2004
I
1:3opmET: I
It neverceasesto amazeme.The marketcomesand goesthroughoutthe
day.Someminutesago it cameright backup to the 50o/oretracement
coincidedwiththe 1109.25breakout to the downsideearliertoday.I let it go
and t
thenbut nowit is a betterchanceto reverseheresinceall the suppoftswere
negatedearlier.Astheysayin the classics you arealwaysa chanceif yougo I
to a dance.The potentialhereif I don't get stoppedout is 7.75 downto
1101.5 - we willsee,I thinkit is a chancebutI willonlyholdit if it is winning
untiljustbeforethe FOMC announcement. I
Edtr+ - - i r q u i u e s ' J o h s l n E r a B - @ e c . : o i . l€ 1 r c O r €s Ooo ODaiF OrEk
liJ0pm Stongll00.s
tam
nStr!
I
fi{[ I
il200
fltm
I
llow Hldc << -_ >> I 7orrro8.25
m
I
I
Volume
03r't6[{ mfl7,ll{
I scratchedthat tradefor breakevenbeforethe FOMCannouncement. The

went
I
announcement at 2:15 ETcameout as UNCHANGED and the market
crazy,havea lookat this andjust remember what can happenon dayslike
today.It rocketedto a dailydoubletop and then fell like a brickto neara t
dailydoublebottomin the spaceof 5 minutes,thenwentbackthe otherway
again.Someone madesomemoney- butwho? I
6Er+ J E q u i r t s s .J o h s r l n B ' / a b - @ r g c o r . r@ l D c @ l € s O o o @ o e l r y@ r i c t
8rycebX
BID/ASK
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FEOHAtt. [O $tAr6E
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\Y I 1116?5110rrl
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I
I 2:4opm ETBusinessas usual:
I Now the feathersfrom the Turkeyshavesettledit is time to get on with

businessas usual.Thetrendwasdownso I soldit andit just plunged,
it was
goodfor a quick5 pointsbackto the 1101area.
I EEF+ J E q u i r i s ! -J o h s r t n B € b ' @ s s - c o l t OIoc {D1 gs S 6 0 E o a i r , rO r i q l
Lo_b" .Sg{e!o be il|re ir'! Sl Patrlek3 day.!o.tlgl.q!y-
EryeeisxIscoEl
I B|D/ASKDfpTltlE|
FEDNATE. IIO CHIIJ{GE

fi800
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fi12.t6
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lU:00 05fl
llw
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03fi7 B9:il5
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I Amazingday reallybut it couldgo backwards

breaks
below1100.
and forwardshere unlessit
t THECLOSEOFTHEDAY:
I EEF+ J E q u r u s - J o h s r t n B y a b - @ E s - c o rO' rl D a O 1 € 5
- Globsx,S)
O € 0 O o a r y€ r i c r
tlou do yoo flgu{e lils out ln advase?
I
rBut I gd a llece of 1t...-.---.
f€0 ftATE.llo O'lAfiSt arys rt 1l:

tfiagg
tr.J0 7112.75 ttr200
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crrl?51&i11
lsd.>>
:fl!&tt m titr6t8
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t101.&
I
q**>>-"-i ttit"oo I oo00
I o o.oo
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02t[ o]{0 01fr
Puilished by e5Qnal(wwwcigml.com)
Wellanother
dayis overandwhatdidyoulearn?
I It paysto take everyday one at a time is what I think, that is the best
approach.
I
I 65
Tradinsto WIN Course- Onedav at a time [c] Bryce Gilmore2004 I
Wednesday L76 March 2OO4tSt Patrick's Day t
Howdo youevaluate yesterdaygoingintotoday?I'm not exactlysurebutone
thingfor ceftainis thatthe 1100levelis the support.1113andthen1125is
the upperresistance. Thisat leastleavesus a lot of optionsandthat is all we
I
needto knowto workeffectively.
I
tomorrow?I don't.
Whocareswhathappens
is just a Merry-goRound.The
Youwill reatiseaftera whilethat this business I
contesteachday is to readthe tapecorrectlyandoutwitthe otherplayersas
the daygoeson. I
You shouldgive this somethoughtif you want to succeed;it is the best
adviceI cangiveyou. I
In thiscourseI havegivenyouthe meansto outwitthe otherplayers, but it is
stillupto youto do it. I cando it so nowthereis no excusefor you. I
for usto
Eachdaythe marketopensanddoeswhatever,but it leavesSIGNS
of. Whatmoredo youwantin life?
takeadvantage t
6Etr+ J E q u i t i s s .J o f i s . l n s ' / a b ' @ e s + o l t g l D : O 1 E 5 O , 5 0 O o d i l , Y
OTjck
_----_ _ __:rgoll!rol ts 5c 6x aDlo
I
ll?-45rlu5 tlahr 38, - SELL tmf -|:iJ :r: r{ r 7 rf,l1
n,lt m
S{ppo.t 7-one
I
I
stLt_
I
Eqq-[!{c---_ <<_ -ii- -i
I +rs fi21.00
726 r1m.75 I
I
The marketgot off to a goodstarttodayopeningabovethe 1113resistance
from yesterday. The old high at 1119.75heralded a pausein the rallyas
I
sellersmovedin for a while.This1119.75 levelnowbecomes the hypothetical
suppoft. Mytargetfor todayis 1125maximum,
session
nowwe are2 hoursintothe
we haveteena highof It22.75,whichhassomeratio.I wouldstill
I
liketo seeit hit something solidlikethe 38.2andgivea reversal
I sellit. If it doesn'tmakeit to 1125it will haveto come back
signalbefore
throughthe I
support zoneto signala sell.
t
I
I Tradingto WIN Course- Oneday at a time [c] BryceGilrnore2004
t 1:15pm ET:
EgF+ OlDc @1 gs
reb- @Es-coN
JEquir,Bs'JobsrrnE O 6 0 @ c u i pQ r r r t
I 1i21.5/11?5lllrlor38J - Sell
'{il
I
tm75 Suppod Zotre
Er"t
Omn
t.50
ir.*
I -1,t5
It iEvqrking 10 3 poiot qlflsgtionr
I soFF R{}N
_!log- llidG i <<
3.0O I
>> I I 2m il20"50
rllt tt20r5
I ,1, I I '
rltt'1,1,
ll,r.u,,.
r
PuHirhedby eSignal(www.esigml.com)
I Thismarketis a buy rightnowoff the 1119.75 Potentially

supports. it could
goto the38.2at tt24.5 fromhere.
I Obseruethe 3 pointcorrectionson the way up. Alsothe 1119.5highthis
morningwas 1 tick fromthe old highof 1119.75and 2 ticksshortof a 1:1
t (1lx11)up.
A breakbackthrough1119.5wouldsignala sell.A breakbackthroughthe

I lowis at 1116.5andthat is a definitesellpoint.
nextlowercorrection
t 3:45pmET.
EEF+ J E q u i t j s s -J o h s r r n r r v s b ' @ e s - c o l l O I D J O 1 E i
IESU{-2 . SIP 500E-mini Futur8 - Glob.ro
BID/ASKDEPTH1!lI
Dinamicll:oo2a
060 gcs'ry OTi(k
8tuetIIECO|EI
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To be sa€ -lo be sre P8lflc*
sFt.l
Aeumulatloni'l
I Open
I
h bwortlng to 3 poinl mrEctlons
I s4rF RoH 3.00 I

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puHishedby esrqnal(www.aigndrom)
I Nowthis is the momentof truth, only problemis that we are gettingreal

closeto theendof the dayandwe groundourwayup hereon lowvolume.
Makes mewonder,butI soldit andputa stopon at 1125^2.
I
I
4:15pm ET:Closeof Day Session.
EEtr+ - r E s u i t i B sJ- o h e r l n s v a b ' @ e + c o n O D c O r €: Ooo @oriF @rier
I
I
AIDIASKD
1 la5/11fi Uajot 38? - Sell

lo ts srre "lo bs srfB Ptlricl
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I
The tradewas there but the latenessof the day killedit. Still I shouldn't
- neverlooka gift horsein the mouth.Thereis something
I
complain elseto
be learnthereas you couldhavebeenthinking,
1:1withthe previous
"what if the marketwentup
6.25pointmove?"Theanswerto that oneis the larger
I
degreeretracement levelstakeprecedenceoverthe minordegreewaves.
Wellwe will haveto waitandseewon'twe?

Nowwhatabouttomorrow?
I
Buttomorrowis the lasttradingdayfor the MarchEScontractandwe have
the triplewitchingwith the optionsexpiry.Therecouldbe a war breakout
I
betweenthe bullsandthe bears. OnethingI do knowgoingintotomorrow
for sure,"for surePatrick"is thatabove1125is a buyandanythingelselower
is a sell.
I
@Esccil €tcc O 1 g5
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I
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IESrSF- SEP5m E-niol FuturB - 6lobEx.60lDynaDic,oflin$
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I
I
t Tradine to WIN Course - One dav at a time [c] BryceGilmore2004
I I sawsomewhere somehowthat the sharingof knowledge wasa gift - then

the phonerangandgot meoff trackso my originalthoughtwaslost.
I Thursday18s March 2004: Last trading day MarchSP& ES:
I + -lEquiriss- JDh€rliEtr./ab- @eS":Clt €lO3
38.2 ldrgat dcBree

(.41 €5 (960 EOait" €)rict
r500 t12&A{
c
I
l_osT t$oTloN EnEAI{
not ll.e.kJB2 | A
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4.00 I
I U{s hidc _ <<-,__a:*l

IURIITD IHTOA WIID DT\Y
t :000tO0 02110 03:00 lH:{t0

PuHkhed by eSir3nal(wwsigml.com)
Turnedout likeI figured,a battlebetweenthe bullsandthe bears!

t Theearlymorningeconomic indicatorsreleased at B:30amhadthe Globexon
I the run and set the marketup for a slidein the day session.It wasn'tuntil
12:00thatthe Philadelphia
in muchlowerthanforecast.
Fedmanufacturing indexwasreleased,
The marketdroppedsuddenly, then
andcame
rallied,
then
I graduallyproceeded downbreaking throughthe 50o/o (1113)retracement
of the range1101up to the 38.2 highat 1125.The tradingthroughthis
periodwason relatively
low
lowvolume.
I SP
+ JEquirjss- JOhstnHrab- @ E S - C O H@ m @r €S OAO @Cs'U Orirt
I brye'sxleco@
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I SP PIT COIITRACT
tl&tr
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tarlyvatning
tfr er ihe whlplsd!-
6ign ol ! rcvecrl
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I
Tradingto WIN Course - Onedayat a time [c] Bryce Gilmore2004 I
At 12:30ETfroma lowat 1111.5,withoutanygeometrythe marketstarting
movingup on newsthat a chiefal-Qaeda aideof Osamabin Ladenhadbeen
t
troops.As this newsbecamemorewidelyknownit
corneredby Pakistani
fuelledmorebuying.Thebreakbackthroughthe 50o/o
low wasthe first signof a strongrallybrewing.The
(1113.25)
12:50bar,
retracement
which broke
I
backthroughthe 12:00Otlockhighsat 1116wasmadeon extremely
volumeindicating a BUY.It didn'ttakelongas the frenzycontinuedto
high
run all I
the way backup to 1125wherethe SPstoppeddeadin its tracK, but the ES
brokethroughto 1126.5on lostmotion.Thenin the following4 minutesthe
marketwhiplashedbackdownwipingout mostof the gains. I
The markethadgonefrom newsdrivenandthen backto technical sellingas
profittakersmovedin. I
It's funnyhowthesethingshappenbut youcanguessthattherewasa WALL
OF SELLordersthat went marketat the doubletop of 1125basedon the
resistance38.2retracement Therealsowouldhavebeenplenty
of yesterday.
I
above1125for a breakout, but whenthe SPnevertook
of ordersto buy just
out the doubletop theywouldhavebeencancelled
this happenit reinforces on youthe importance
quickly.Whenthingslike
of the ratioswe useandalso
t
thefragilityof the ELECTRONIC
ONEMINUTEBARS
H(ECLIflONSYSTEM usedat the CME.
I
Eotr+ . e + c c l t€ 1 c , 3 S 1 C 5 0 6 0 e o t i h O T i ( t
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Show
I
Volume
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t
031t0
Theguysthatwerecaughtlongat the top hadto scramble to get out andthis

wouldhaveaddedto the floodof sellingoverthosenext minutes.It wasas
if the marketwascaughtin a downdraft.
4 I
Nowthe markethasclosedat LL22.75
one of my studentscommented
onlyonetickfromyesterdays
-
close.As
after the close anyonenot followingthe
I
marketcloselyduringthe day,and who loggedon afterthe closeto check
howtheir401'sweregoing,wouldhavethoughtthatthe marketdid nothing I
ontheday!O
t
I
I Trading to WIN Cowse - One day at a time [c] BryceGilmore2004
I Far from it, fortuneschangedhands.Now we can ask ourselves

question.Wheredoesthe marketgo ontotomorrow?
the next
I havethe sameanswer
I to thatoneI hadyesterday- just prepareproperlyandseewhathappens.
So here is the preparation:

I SPChaft
JEquitjss- JOfiBrlntsrtdb.@ES{CN ('DC
6+ Or €s OOO 6Oait' Orict
I Frlure3,SlDtmamic.DfrJ4lL
TriplE lop
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lfffi 9o bac* to toda/s naln srlnge
yoo €o se thal ll25 ls the obstacle
I
Etri 1ltl l$ the $upport-
.6J
6t,8 1tl6:5
finBl
I lleve.theles lherc le r qood chrree

it 1!25 hm@ lops teCed rhe lth rlne
wlllslh€rfAlt o, ffitA( THROUGF:
Th€y donl t.ppsD wry often but it
fl2m
fifin
flEa7
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qttr CTrgltr?E 'fp ilyt!! lgll q€ :.hg.q
r0800
9r-111S!ff:firu 5-rrrit C:rtao nlm- 106u,

07:00 01fl ut{10 (Ftr tt7tro
0311&,Ot
I The1125levelis the RESISTANCE, butat the sametimeit couldbe brokenas

PuHishedby eSignal(www.eignal.com)
t all the bearsknowthat, that is theirvulnerablepointor theirAchillesheel

rightnow.Thethree-dayswingis UPandthe marketis in a two-dayposition
so that if it takes out 1125 it signalsmore upside.To makethe bears
I comfortable
myfeelings
the marketneedsto go below1121first andthen 1116.That's
for tomorrowandI willworkaroundthem.
I Friday19h March2004: Settlementof MarchOptionsand Futures.

EEf+ J E q u i t i B s -J o h s r l n B . / a b - @ E s - c c i lO t o c @ 1 € 5 O 6 0 6 o a i v O r i *
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I Globsx S6ion SP
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l|?s fIl.2j in lhe Globex ffiion.
I don'l thlok llret rneans muclr w$ah li happe.B

on low volumc.
I O:r1A X;1124 L:ltGJD
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I
ESIGNAL Section 4: Chapter - 4
I
71
Trading to WIN Course - One day at a time [c] Bryce Gilnore 2004 I
One of the questionsI am regularly asked is how do I deal with the
Globex session when it makes a higher high than the day session
I
and appearcto negatethe geometry in force at the time?
above1125whichwe
madea highof tI27.2 breaking
In today'scaseGIobex
I
haveasan important38.2fromearlierin the week.
I
My view is that the SPX(CashIndex)overrulesthe futureswhenit comes
downto assessing picture.
the largerdegreetechnical
I
sPx
EEf+ J E g u i t i s s -J D h s t l n F v a b . @ E S { o N g l D : @ r € s
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I
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Publishedby esrgnallwww I
the fact that we weregoinginto QuadrupleWitchingtherewas
Considering
boundto be an effort by vestedintereststo rampup the priceon one side
andfor othersto try andpushit down.
I
Whenthe daysession openedthe marketwasbackdownbelowthe 1125so I I
still wouldhavefiguredthat to be my decisionpointto confirmthe market
was goinghigher.Whenyou look backat the earlierpaft of the weekthe
marketfoundsuppoftjust abovethe psychological 1100but couldnot rally I
abovethe 38.2of the priortwo-weekdecline.
Thetalkall weekhasbeenof concerns on the employment front.TechstocK

I
aresaidto be overvaluedandhavebeenin decline.AsI pointedout a couple
of weeK ago the insidershavebeenbuildingsizeableshoft positions.
fundsarefindingit considerably
The
moredifficultto find growthstocKthatthey
I
Theoverallmarkethasbasically
caninvestin for the longer-term. beenrange
boundsincethe beginning of February. I
Andthe mostimportanttechnical informationwe haveto go on is the market
retreatover the last few weeK is comingfrom a 50o/oretracement to the I
entirebearmarketof 2000-2002.
I
I
t Tradingto WIN Course - One day at a time [c] Bryce Gilmore2004
I Friday's
trading:
I I wentout for dinnerand didn'tcomeinto my officeuntil5:00am(2:00pm

ED.
t My thoughtsas I studiedmy chartswerethat the marketwasexhausted to

the upside,andas it was late Fridaythe bullswouldwantto bailout before
the weekendclose.It wassnowingin NewYor( so manyof the WallStreet
I traderswouldleaveto go homeearly. Therewasno newsleft to comefor
the weeksothe marketwouldworkitselfto the technicalsignals.
I At 2:30pmthe marketreversedon a 50o/oretracement of the daysrange

givingthe 2ndSIGNit couldgo downfromthere.The lst SIGNwasthe falae
breakof suppottat 1115. I just figurethat anyotherprofessional
traderwho
I wasthinkingalongthe samelinesas myselfwouldsellthe 50o/oretracement
andas the lowsfor the daywereon shakygroundit wouldn'ttakeanyeffort
I for themto break.
Nevertheless
the safesellwason a breakof 1115,as that wouldbe a good
t that the bulls had given up on the day. The next technical
confirmation
suppoftbelow1115was at a doublebottom1111.5and a 1:1 downfrom
1118.5- pretfysimpleto work out. If afterthat if 1111.5cameout the
I marketwouldjust slidefor the restof the afternoon.
ES
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t1{00
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I 02:00 0:l:00 lxfttl lIi:00
by eSignal(ww,sigml.rm)
Published
I Whenyou seewhat happened after this it will explainto you why LOGIC
playssuchan importantpartin yourtrade
togetherwith technicalknowledge
process.
selection
I Onceyou know how the moneyplayersthink on mass,tradingto WIN
becomes
easy.
I
I
t3
Tradingto WIN Course - Onedayat a time [c] BryceGilmore2004 I
1111.5-Target
E5dl+
r{r-4
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Afterachievingthe 1111.5targetI hadthe marketstabilizedfor a shorttime I
and rallieda smalldistancebackup. The signswerestill pointingdownand
by now it was3:38pmETandgettinglate.Therewasvery littlechancethe
buyersweregoingto comebacknow.
I
1111.5- BREAI(S:
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<r<<- THF 50* nETRACEIIEilT
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Pubahhsl bY eslgnal (wm
I
Thebullshadpackedtheirbagsandso it wenton downintothe closemaking
lowerlowsand lowerhighs.It neverlookedlikerallyingitselfout of trouble,
I
asit hadto rallymorethan3.5 pointsto overbalance
the 50o/oretracement.
I
Nowwe will havea coupleof daysbreak,refreshour minds,andthencome
backMonday andkeepon doingthe sameoldthingswe do eachday. I
Nothing it isjusta disciplined
changes game.
I
I
I Tradingto WIN Course - Oneday at a time [c] BryceGilmore2004
I Stafting point for Monday:
SP
I EEf+ J E g u i r i B i . J D h e r l n t - r ' / i k t . @ e g + c u@ t o c S r
(SPHl|{-2- StF sDDFutu.€s.l5l DFamiE.Dfl:4fl
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{Deloyed}
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fp{.80
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xt
I
1r11.70
Grirlelinw tor lloodiry

TREIIDN OOwlI
I s.r.rEs*!!.,r,9--uj9rys -q]llEclllllll
I PublGhed by esignd lwwsigml{m,
I I'll be usingthe SP levelsfrom the day only tradingas my guideto the

technical signals.Noticehowthe marketwhenit camedownFridayhadno
obvioussupportat the 50 and61.8retracement levels.I thinkthe reasonfor
I thiswouldhavebeenthat mostof us werenot confidentwith the 1125high
whenthe ESday and SPGlobextradedhigherintermittently as the market
wastestingits highsthroughoutthe latterpaftof the week.
I The thing one has to rememberas we go into next week is that all the
of the expiringcontractsand optioncontractswill be out of the
distractions
I way.The largerplayerswill haveto assesstheir longer-term
renewbuilding up positionsin thatdirection.
positionand
I Personally
beforehand
longer-term.
I don't know what will happeneachday or in the
Butas new information becomes availableeachday I will know
I howto handleit. If youfollowmy approach
it.
youwill alsoknowhowto handle
I Thetruth is it takesworkand if you don'twatch and listen to the market

youwill nevermakea success. Youcouldsaythat understanding the market
is notunlikeunderstandinga highmaintenance wife,predictableat timesand
I most
totallyunpredictable of
an unpredictable
the time.When you find the marketis actingin
manneryouonlyhaveto standasideuntilyoucanget back
in stepwithit. Themarketis onlya bunchof peopleactingin a rationalor an
I manneron masswhenit is allsaidanddone.
irrational
I The moreyou studythe marketactioneachdayandseewhattheydo when

signalslineup you will havea passpott
all the technical
longasyouapproach
or keyto WIN.As
the marketeachdaywitha clearheadyouwillbeOK.
I
I
Tradingto WIN Course - One day at a time [c] Bryce Gilmore2004 T
From Briefing dot Com
Weekly Wrap March L9,2OO4
I
If you didn't count Mondayand Friday, it would have been a pretty good week for
the market. However,when those two days are thrown into the mix, the balance
of power quickly shifts back in favor of the bears. On those two days alone, the
t
Dow, Nasdaq and S&P were down approximately 250, 70, and 30 points,
respectively. I
The retreat on Monday was attributed to concerns over al-Qaeda's reported
responsibilityfor the Madrid bombings. Meanwhile,the retreat on Friday, which
was a quadruple witching options expiration day, occurred largely in the
afternoon trade. Presumably,the expiration activity contributed to the late sell-
t
off, along with some frustration on the part of speculative accounts that were
banking on confirmation that Osama bin Laden's right-hand man, Ayman al-
Zawahri, had been captured. Reports on Thursday indicated that it was likely
I
that al-Zawahri had been corneredby Pakistanitroops.
Whateverthe motivation might have been, Friday'spullbackensured yet another

I
down week for the market. The losseswere most pronouncedamong the big-cap
technology issues and small-cap stocks. With the market in corrective mode,
their underperformancestands to reasonas they had the biggest gains last year,
and thus, have greater vulnerabilityto profit taking activity.
I
Comparativelyspeaking,the Dow fared the best among the major indicesfor the
week as it declinedjust 0.5olo.Gainsin 3M (MMM79.76), which increasedits Q1
I
and FY04 guidance,Caterpillar(CAT 76.30), AT&T (T 19.65), and SBC Comm.
(SBC 24.62) underpinnedthe blue chip average. Microsoft(MSFT24.63) was a
notable drag, though, as it withered in the wake of reports that it failed to reach
an agreement in settlement talks with the EU. Shares of MSFTnow stand just a
I
little more than a dollar above their 52-wk low.
From an industry perspective,the employment services,Internet software, steel,

I
home entertainment,gold, householdappliances,machihery,footwear, managed
health care, and oil & gas equipment were your relative strength leaders. On the
other end of the spectrum, the department store, systems software, computer &
I
electronics, health care equipment, home furnishings, commercial printing,
semiconductor,and semiconductorequipmentgroups were the notable laggards.
Semis were particularlyweak, as evidencedby the 4.5olodecline in the SOX Index
and the utterly disappointingIPO of SemiconductorManufacturingInternational,
t
which fell L7o/ofrom its offering price.
Commodities,once again, had a strong showing as the CRB Index was up 3.2o/o
I
for the week, driven by ongoing supply concerns. Oil prices, which are the most
watched of any commodity, tacked on another 5.2o/oand ended the week at
$38.08/bbl. Gold prices,meanwhile,postedtheir biggestweekly gain this year,
shooting up 4.3o/o to $4L2.7O/oz on persistent safe-haven buying interest
I
followingthe Madridbombings.
The yen was a star performer on the week, too, as it gained 3.7o/oagainst the
t
dollar with Japan making waves with its declarationthat it will be backing off its
interventionefforts to weaken its currency.
The Treasury market was pretty much flat for the week with the yield on the 10-
I
yr note at 3.77o/oby Friday'sclose. That was off its best closing level of 3.680lo
earlier in the week as traders booked some profits from the overbought market.
A stronger than expectedPPI report for Januaryfacilitatedtheir efforts as did the
I
speculationthat al-Zawahrimight soon be captured.
I
ESIGNAL 76
I
I The FOMCmeeting on Tuesdaywas largely a non-event as the fed funds rate was
maintained at 1.00o/owhile the directive repeatedthe stance that the Fed can be
I patient with its accommodativepolicy. Some added attention was given to the
slight change in wording of the directive with respectto the lag in hiring activity,
but for all intents and purposes, there was little that was new in the Fed's
stance. Economic data this week was mixed, but generallysupportive of a
I reboundingeconomy.
There was nothing in the way of substantiveearnings warnings and the earnings
I news itself was solid with Lehman Bros. (LEH 85.19), Bear Stearns(BSC 36.86)
and MorganStanley (MWD 59.61) highlightingthe action with blowout reports.
General Electric (GE 30.14) announced it was acquiring InVision,but more
I importantly,indicatedQ1 and Q2 earningsshould be at the high end of its target

ranges.
The encouragingtrend in earnings is a major factor for why Briefing.combelieves
I the market's recent struggles are nothing more than a normal correctionwithin a
bull market. That correction arguably has more room to run, but even so, we
remain grounded in our moderately bullish long-term outlook and forecast for a
I mid- single digit gain in the market this year.-- PatrickJ. O'Hare Briefing.com
I
r
DJIA
E 10240.08
@ 10186.89 -53.19
E -0.5 Yo -2.6Yo
Nasdaq 1984.73 1940.47 44.26 -2.2% -3.1%
-10.79
I
s&P 500 t120.57 1109.78 -1.0 Yo -0.20h
Russell2000 582.84 570.69 -12.15 -2.10 2.5 Yo
I
What's in store for us ne)Gweek...,...
I EcononricCalendirr
Week of March22 - March27 D a t e s a n d f o r c a s t s o f u p c o m i n ge c o n o m i c r e l e a s e s .
I Oate ET
ar22 00:00
Release r4ctlal Erieffng.rom Cons*nsus
Feb DATETBA 0,1% NA

Frior
0.3%
Rer
Revised Fronr
I Mar24 0 8 : 3 0 D u r a h l eO r d e r s
Mar24 1 0 : 0 0 N E WH o m eS a l e s F e b
Mar25 0 8 : 3 0 I n i t i aCl l a i m s
Feb
03/20
2.5%
1130K
340K
1.296
1100K
NA
-2.3%
1106K
336K
I Mar25 0 8 : 3 0 G D P - F i n a l
Mar25 10:00 Help-Wanted Index Feb

A4
Mar25 0 8 : 3 0 C h a i nD e f l a t o r - F i n aGl 4
4.1%
1.2%
39
41%
1.?%
39
4.1%
1.2%
38
I Mar25 1 0 : 0 0 E x i s t i nH q o m eS a l e s F e b
Mar26 0 8 : 3 0 F e r s o n al ln c o m e F e b
Mar26 0 8 : 3 0 P e r s o n aSl p e n d i n f l F e b
6.25M
0.3%
0.5%
6.20M
0.3%
0.5%
8.04M
8.2%
0.4%
Mar26 09:45 fr''lich
I s4.0 s4.1
SentimenfRev. Mar 94.1
Be prepared.
I Nextweekis the Marchequinoxandthe 4h anniversaryof the March2000
S&Phigh.Thereare a coupleof otherimportantanniversarydatesas well
I wheretheS&Pmadeimpoftant sentimentswingsin 2001and2002.

I
Therewas somethingelse I meant to tell you: I
Backbeforethe S&P500 finallymadeits recenthightherewasevidence
timeryde in USstocKwaspresent.
the DJIAthatan important
from
I
Thepicturesaysit all.
I
CgcleTrailer Dov.rJones Industriol Index
T II1E CYILE
tR]
TB]
BBB118
BZLBTB
I
daqs SSE
degs
ueeks
gears
S?S.5
742.3
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in volue
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icl
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ueeks 71.8
gedrs t,378
I
ZAAEA1IA - ZBB4A3 LS Commanils... tHlhelp, [*]Scroll, tEscIExit
I
50o/oof the time downwouldhavebeen498 daysup - the recenthighon the
DOWwas497 daysup from the October2002low. I
The DOWincreasedin valuefrom the Octoberlow 50.3oloin this time period.
Here we are now:

I
IIJIfl
date B40Z1g
hi 1B7S5.BB
Feb 19
I
I
Cgclefrader I
€oing info next v.raekthe psychologicol
t
la
daie
support hEsto be the IO,OOOlavel.
I
t'lai 848116 MMBZ. A4AZLA a4a3B3 A4trtlg
I
I guessmy mainpointin showingyouthisis to saythat if 10,000DJIAbreaks
downand 1100SPbreaksdown- we couldassumethiscorrection
takesometime
phasewill
to resolveitself.If notwe maybejust stuckin a tradingrange.
I
I1ltellyouwhathappens beforeI publishthiseditionof the course.O
I
I
I Trading to WIN Course - One day at a time [c] BryceGihnore2004
I Week ending 26b March 2OO4:
This week developedinto a mixed bag - first down and then up, finishing
I backnearlywherewe closedon the previousFriday.
I SEf+ --Lfuinsr-Johwrns.€b. @es-ccru

OtDc Or €s Oco @DsihOri*
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I
I
I
I Agr laf Jtrn Jol Auq Sep Oci llw Dec 2|ltt Feb llat
Published by eSignal (rucsigml.com)
I Mondaystaftedoff with a gapdownto testthe 1101lowsandpromptlybroke

down.Tuesdaythe marketmadeseveralattemptsto get backthroughthe
I 1100andfailedon eachoccasion,
day.Wednesday
this resultedin a hugeselloff latein the
after someto andfro the marketreverseddirectionbackup
froma majordegree38.2retracement level.Bythe endof the day,evenafter
I a sharprallyit closeddownon the day.Thursday's tradingbeganwith a gap
up openingwhichthey couldn'tfill and finishedthe day abovethe 1101
resistance.
Thismoreor lessvalidated the 38.2reversal as a changein trend.
t Fridaythe marketwasgenerally up most of the day,but in the lasttwo hours
or so cameback8.75off the dayshighclosingunchanged on the day and
unchanged for the week.
I Therallyhighon Fridayreached within2 ticK of a 38.2retracement
backup
of the Lt62.75highand t084.75low range.Butthe rallyexceeded a 1:1 of
I the previouscorrection
lastweekby 3.75. 29.25versus25.50
I I wasthinkingon Fridaythatthe 1:1(1110.25)
notoverbalance the previous

wouldhavebeenan excellent
shoftandit did looklikea chancefor a while.Butin the endthe marketcould
smallercorrections
it hadmadeon the rallyup.
I I havea friendfromGermany
questions.
visitingwith meandhe is continually
askingme
Onething I havebeentryingto explainto him this weekis that
t you canonly be guidedby whatthe marketactuallydoesandthat is why it
doesn'tpayto forecast.It is alwaysbetterto just takeit onedayat a time.
I
I
Tradingto WIN Course - One day at a time [c] BryceGilmore2004 T
EEf+ J E q u i r i s s .J D $ s t n F v d b . @ e s c o l t @ r o c @ 1 e 5 O60 @cvih Oriq*
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I
I
I
I
I
03Ol 03,t15 0l,ll9 0]Jl1 03r'13 O3t17
Publishedby eSign:l (w,esignel'com)

t
As we go into next weekwe now havethe marketsittingabove1100but
undera 38.2 retracement of the currentdecline.But we havealso been
I
rallyingfroma majordegree38.2retracementandexceeded the 1:1Alt.
Whowantsto makea forecast?

I
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@
05$l
I
OnthischartX, A, B & C areestablished.
is 8.75downfromC. AB= 11.5.
ThepointD
D is subjectto change.
I
Soa 1:1Alternate WaveCDof ABliesat 1102.50
There's
A 50o/o
a 38.2of XCat 1102.75
retracementof XC(3 dayrange)is at 1099.50
I
Andthe psychologicalor naturalsupportis 1100
it is not.
If the marketbreaksbelow1099it wouldlookbearishotherwise
I
I
I
I Tradingto WIN Course- Oneday at a time [c] BryceGihnore2004
I Week ending 2ndApril 2OO4=
I This week the marketopenedat 1112.5on a gap (low for the week) and
finishedat tt42 after makinga highof 1145on Friday.
I DAILY ESCONTINUOUS
(€S iF - SIP 5lE E-m!!i FuluE
b.vft! XIBCD e1-59
- @E$coil @nc @r Os O60 Eoeir Orirt
EEtr + J Equitis. J grhsrinFv!'5
- Globex,Dl DyDlmic,o 18:lS9
lhe mlrket mldr sms oood gri6 th-6w$k,
I
tglto
I sppr$ in ! w|lr it% isEhoially prs.li(i!bls,
q.tl?_l?€ 1 !l!!0,o, ,!i-!-!,49. -!.i r!3!9- m Yol se arc up In rhin air again. :
I II
I
I 4275
n
. . .----!o..i-d-?flr-qq9)-
I
- -*.* r
tt0t.00 friday fte good neBwaeiobs
6 3l$,000 rcw jobs in $Elch

The m.tat wenl out oo a bullbh nole
t
I a76.4(2x38.2)retracement
1145represents range.
of the 1163.75-1084.75
Throughout this weekthe marketcontinued to feedon the bullishsentiment

I that abounded. Therewere no negativeeconomic
on Fridaythe Marchemployment
reportsto talk aboutand
reportcamein with an increaseof 308,000
jobs for the period.This repoftwas releasedat B:30amETandthe Globex
I marketralliedstronglymakingthe 1145highin advanceof the day session
opening.
I tradingrangewasa mixedaffairwitha lO-pointrange- down- up-

Friday's
downandthen up to finishthe day.As we cameintothe last90 minutesof
t tradersboughtthe marketoff a doublebottomon the day.There

the session
werenota lot of traderswhowantedto be shortoverthe weekend.
I If you look back on the week you will see that the upwardtrend was
confirmed eachstepof the way.Firstoff on Mondayit tookout the 38.2,then
aftera pauseat the 50 brokethroughTuesday. The nextresistance wasthe
I old 1126.5highthat heldup progress
the 61.8 it went
for a while.Thursday
straightthroughbut did reversea little
whenit tested
then it went
higher,
sideways for the restof the day.Fridaywe knowaboutalready.
I Aswe go into Mondaywe are left with supportat L134.75(Ihursday'shigh)
low).Theactionon Fridayhaslefta gapto befilled.
and1135(Friday's
I
ESIGNAL 8l Section4: Chapter- 4
I
Tradingto WIN Course - One day at a time [c] BryceGilrnore2004 T
Bdtr+ J E q u t i B : . J o f i B ' l n h t r r e b - @ E s { o uO i D c ' 3 l g s
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nm lo anlirm uny rigoiliorl dosnsido in progtw
Nv€r brol€ b€lw ilre

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r'rijriio
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t@ttr
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Published by esignal (wM.elignd.com]
t
I've markedthe followingsupportsLL34.75,1128and 1125that wouldneed
to be brokento indicatea reversalof this upwardtrend that has beenin
progressfor overa weeknow.Onthe highsidewe havethe LL63.75 highnot
I
got
if
far awaywhichwouldceftainlyattractselling we there.
AsI havesaidso manytimesbeforeI am not makinga forecast.Neveftheless

I
the jobs repofton Friday(if it is correct)giveshopeto a continuing
in the US economy.Employment
past
recovery
numbershas long beenthe subjectof I
discussion for the year. Just the samethe US economystill needsto
create3,000,000 morejobsto get backto whereit waswhenPresident
waselected.Sotherecouldbe a few disappointments
Bush
in
in storefor investors I
the monthsahead.I alwaystakethe viewthat it is betternot to countyour
chickens untiltheyhatch. I
doesin anycase.Justso long
It won'treallymatterwhatthe S&Peventually
as eachday it continuesto go up and down and createregulartrading
oppoftunities.Somethingsdon't changeand eachday it just offersthe
t
chanceof makingeasymoney.
: n0.00
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I
Publishedby eSignal(www,esignal,com)
I
I
I Dow JonesIndustrials Index to replace3 stocks by April 8h:

EEtr+ JEquitgr- Jo$ertnkrvsb- @gs+ou gID( e1 Es 6oo €oaiy Orrt
{illlDlJ - DowJonn lndusial Ay€rrgE,D) Dfm.miclltro:{tro t0753.61
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t
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|
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fiogz4l
0ow JoDBs Indudrill

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2llh ililch
f0007,49
Avsr.ls
On llu 1l Alril ?004 - ll wffr 6ntr6loed thsl 3 5luclq arc to
I bc rapll4d ort Dt th. :It on thc 0th ,lpril ZlN,{
IiIDFX tUl{DS dn tsue to adlEil||eh po,ifoliB
I etzB
Sep
t52?Z'6 t3?0
Oct ilN Dec
a $22r'.,5
2001
12il262
feb
I 1723t
fiar
8 t5?Z:9
Apr
PqblisH by e5ignal (ww,esignd,com)
I The NYSEadvisedon the 1s Aprilthat it wouldbe replacing 3 stocksin the

DJIAindex.Thenewstocksenteringthe DJIAindexnowhavea muchgreater
capitalisationvaluethan thosestocK beingremovedfrom the index. It is
I hardto say how muchthis wouldaffectthe valueof the indexunlessthey
adjustit to fit the changes.Nevertheless,INDH(FUNDS will haveto adjust
I theirportfolios by buyingthe newstocksand
couldhavea bullishimplication
sellingout of the old ones.This
for the DJIAoverthe nextweekor so.
T Backabouttwo weeksago,on page25 of this appendix,

just
I did mentionthat
the DJIAwastrading abovethe 10,000levelwhenwe werein the recent
decline.The 10,000-level wasthenviewedasa psychological supportof some
I The DIIAdid not tradebelow10,000beforethiscurrentrallywe
significance.
areexperiencing so it hasto beviewedas an importantlevelin the future.By
that I mean,if the DJIAwereto breakbelow10,000it wouldbe perceived as
I a bearishsignalfor the longer-term position
holders.Sofor nowwe canuse
thisasa guideto the currentstateof strengthor weakness.
I Week Ending86 April 2OO4- EasterHolidays:
I Thisweekstartedwith a rallyto a new highof L149.75,then sidewaysfor

two days.Thursdaythe marketopenedon a doubletop with a highof 1150
I aftersomegoodprofitreportswerereleased andno reallynegativeeconomic
news.Butthen it just tradeddownon low volumefor mostof the day in a
controlled
technical
manner.
I as it onlygoesto reiterate
Youshouldstudythe 5 minutechaftfor Thursday
you
allthethingsI havebeenteaching in thiscourse.
t
I
Tradingto WIN Course- Onedayat a time [c] BryceGilmore2004 I
Thursday8s April 2OO4tEasterThursday
EEF+ - J E q u i t i a s -J D t f i s r l n b v a b - @ e s g u
GS iln-2 . StP 500Eiiriii Fulliea - Globr{5|
@roc @r Os @oo €oei'r @ri:t
I
bryce'sX{BCD di5
Wanl to llay lhir GAIIF

It i$ olqt
I
I
I
Fills Gap
I
I
V J;1-t1o.5l
I
.10-50
01fl
Today'sselloff beginsfrom a doubletop with Mondayandfills the gap left

from the closeof Wednesday. A weakrally backup to whereit brokethe
I
prior way downfollowedby anotherselloff. I
supportfromthe highon the
couldn'tsee a lot of reasonsfor the supportat 1139.5but the rally that
followedstoppeddeadat the 38.2o/o retracementof the daysrangeto date
I
offeringa clearcut sellingopportunity.
forming a RECTANGLE
Whatfollowedwasa sideways market
on low volume and setting up anotherselling I
opportunity. The initial
break of the rectangletestedthe priorlowfor the day
at 1139.5andtheyboughtit backto retestthe breakout.
get it backinsidethe rectangle it becamea clear-cut
sell
Whentheycouldn't
once againandthey I
hammered it downto newIowsfor the day.Therewasanothershottcovering
rallyof 2.75pointsthat didn'tmakea lot of sensebut the targethadto be
10.5downfrom the 38.2pointat 1143.5and as it turnedout the decline
I
terminated exactlyat 1133settingolf a rallythat lastedfor the restof the
afternoon. I
Asfor the weekwe finishedonly2 pointsdownfromlastFriday's closewith a
rangeof t7 pointsfor the week.We certainlyhaven'tseenany sign of
weakness to speakaboutthisweek.Butthenwe haven'tseenmuchstrength
t
either.As I saidlastweekwhat'sit matteranyway,just so longas it goesup
anddownfor useachday. I
technicalpicture
I wastryingto roundoff this coursewith clearlonger-term
of the US stockmarketbut it seemsto me that we are stuckin a trading I
rangerightnow.I seethisweekthatthe perennial bearRobertMinerwasat
1125and tI47 in a "B"

two weeksago the S&Pwouldtop out between
it againwith a prediction
waveof majordegree.Oneof hissubscribers joined I
myTTWgroupthisweekandwantedto knowmyopinion.
I
I
I
I Tradingto WIN Course - Oneday at a time [c] BryceGilmore2004
I Well,for all the goodit will do anyoneI am teachingto day trade,doesit

matter?It reallydoesn'tmatterto me whatthe marketdoeslong-term. Just
I as longas it staysopenwill begoodenoughfor me.

E6+ JEquili4. Johsrinhr'/ab- GEg,X|N OrDc S1 €s €oo oai.r@ri:r
I rm00
t({It0
t
I : :
.
:
_
rl
-/&50
C :
t0f5.00
l@5 (@ tto:
I
Ylu rBwr:knw blt|'lis markBl could hE torming
i.htq.q.a!{-:h9g!!qr1-!or. :
I
I apt
21245 n'B262 I
mary Jun Jul Arq sep o8' tlov 'ec 20lH Feb 'Lron"iii,
*-"ar(ww,signar.roml
I You neverknowbut this marketmaybeforminga headand shoulders

patternor it couldbe settingitselfup for anotheradvance.
top
Two thingsare
I obvious.
1. The high at 1163.75is a 50o/oretracement
marketfrom2000-2002.
of the completedbear
I 2. The low at 1085is a 38.2o/o

advance
retracement
that beganin Augustof 2003.
of all the gainsfrom the
I ThebestadviceI couldgiveanyoneis to just takeit ONEDAYATA TIME.
Followmy rulesand applymy logicto the marketandyou will be fine.As

t soonas you learnto do your own workandforgetaboutwhatthe so-called
"Guru's"are sayingthe sooneryou will be ableto makeconsistent
money
t trading.
Tradingis just a job to me now,well maybeit is morethan that - it has
I becomea way of life. I feel that by havingwrittenthis bookI am giving

something to the futureI can be proudof. I hopeall thosepeoplewho buy
thisbookgetoutof it whatI intended.
I Goodluckwith it.
I BryceT. Gilmore
10bApril2OO4
I
I
l
Epilogue: I
Nowthat I havecompleted this manualto the beststandardI canrelateto I
I
wouldliketo mentiona fewthingsI amgratefulfor.
Overall the yearsI havebeeninvolvedin this businessof tradingI owemy

I
continued success to the peopleI havemet alongthe waywho encouraged
meto think.Tradingcommodity
in theWorldis a thinkingman's
futuresandmixingit withthe smartest
business.
minds I
somehavebeen
Mystudentshavecomefroma widevarietyof occupations, I
tradersbut manyhavejust beennormalpeoplewhowantedto learnhowto
tradeandaskedmeto helpthem. I
In the processof them askingme questionsall the time on the various
aspectsof my trading approachthey also helped me understandthe
difficulties havewhentheytry to entera newprofession.
newcomers
I
Severalyearsback,when I first promotedan Internetsite "Club L44" for
studentsof my soft\/areandbooks,peoplewhowantedto learnandneeded
I
a teacher.I attracteda new breedof students.Frommy interactionwith
thesestudentsI soonbecameawarehowotherswereoverlooking
thesimplestof thingsI wasusingto makemoney.
someof I
Manyof the thingsI haveexplained in this text are not new.Manyof them I
are taken for grantedtoday by professional traders.Nevertheless I have
developedsomerefinements to give mea better
mainthingI havedoneis to prioritise
edge in the
an orderin myapproach.
longrun.But the
I
ThecommonproblemI havefoundwith mostnewcomers
faultfor complicating
everything.
wastheirinherent I
Tradingis not a complicated occupation! Tradingis a simplematterof
and takingit. If it workslike it shouldyou make
identiffingan opportunity
I
money.If it doesnotworkyoutakea smallloss,getout andstartagain.
Onceyou canunderstand thereareceftainsituationsthat openup a window

t
andofferyou a chanceto profityoutakethemandas soonas
of oppoftunity
the windowclosesyou get out andgo backto the drawingboard;thenyou
willbeTradingto WIN.
I
Thereis no roomfor fear, hopeor greed,or what mighthavebeenrn my I
equation.Eachday is a new day and you just take it as it comes.To do
will onlyleadyouintobadhabitsandunprofitable
othennrise trading. t
BryceT. Gilmore.
I
Epilogue
I

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Bryce Gilmore - Trading To Win Course

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w

In 1981whileI was in Londona traderfriendof minetook me into his

I WhenI returnedto AustraliaI openeda commodity

It has beena pastimeof mineto teachpeopleto trade from my earlydaysin

I Analysisbook (2002), anyonewho is willing to put in the hard work will

I Formoreinformation on my profileyou shouldvisit my web site:

Market Mechanics- howfuturesmarketsoperate 15

9 Shoft Term Trend Indicators 39

16 NewsEvents/ Repofts/ EconomicIndicators. 87

1B Daily RangePatterns 106

I Section2: Dynamic - tradingtools

I Alternate Waves& RetracementLevels

Weekly Check List t4

Contract Rollover - 1"t Month 26

I Marketsare livingthingsand reactto currenteventsas well as technical

I My way is all about technicalpreparation,studyingthe fundamentals,

To trade profitably in real time only requiresyou to identify low risk

I in the S&Pare often presented

I On top of this the intra-daymarketmovementis constantlyinfluenced

I In times of indecisionthe S&Pmarketwill go throughaccumulation and

I TTW Course lntroduction

Eachand every market correctionor suddenrevensalof trend due to

why you needto havea fingeron the pulse

Successful tradingis all abouttradeselectionat the pointof leastrisk,getting

I Makingdecisions to entera positionrequiresa currentopinionof wherethe

I The noviceneverseemsto understand theseprincipals of tradingand as a

I Themarketis not likeanythingelsein life,it goesbackwards

I To be profitableyou haveto learnhowto dealwith the marketon a day-to-

Notonlythat, you haveto learnhowto dealwith the marketon a weekto

In a seasonaltrend the market will move through phasesthat are

To becomea successful the overallpictureand

During the day-to-dayactivity the market will move from oversoldto

I TTW Cowse Introduction

In 2002I saidtherewouldbe no needfor me to write anymore,but that

I It is very important for you to understandwhat can motivate other

I If you understandthe basic premiseof WAVESOF SIMII.ARDEGREE

thingsI will teachyouthat helpyouto pickreversal

I I reckonthat whenthe technicallevelsare moreobviousto the crowdthey

Alwaysbearthis rulein mindwhenyouarein corrective

Thethree-daybalancepointis the mid pointof the last3 daystradingrange.

I 3.DAY SWING HIGHS & LOWS:

I The3-dayswinghighor Iowevenif it is froman intra-daychartis the fastest

I Normally if the 3-dayswinghighor lowis takenout it is a signof a reversal,

Givingthe marketroomto makeup its mindis not partof my vocabulary.

It is betterto take L or 2 smalllossesand be sureyou are the rightway I

To staftwiththe marketcanonlydo 3 things:-

I Thereis no second-guessinga breakouttradeas it will be provenrightor

I If youget a REVERSAL youto takethe

Tradingto WIN is aboutgettinginto a positionthat will workwith the least

I So let'sjust get thistacticfirmlyin yourmindbeforewe go anywhere

t Whensellinginto strength(marketis goingup in a correction)

t point.The 1^4 is probablybetterbecause

The samethingappliesin reversewhenyou are buyinga RETMCEMENT

If you everhaveany doubtsin futurewhy you are not winningthen come

You can only be a consistentwinnerif you controllosses.You mustnever

A winneris a grinner- a loseris all but pasthistory.If you are in between

CloseStops Sectionl: Chapter- I

Nowthe realissueis in locatingthe levelto placeyoursellor buyordersand

In any caseas we work alongyou will see how the logicalsuppoftsand

I Onceyou can understand how to read the patternand the logicallevels

I But believeme nevergive the marketanymoreroomthan two points(B

I THINGSYOU NEEDTO LEARNTO BEA PROFESSIONAL

I Youhaveto understand that it doesnot matterwhatyouthinkthe marketwill