Traders World

THE OFFICIAL MAGAZINE OF TECHNICAL ANALYSIS

TRADERSWORLD www.tradersworld.com | Sep/Oct/Dec 2014

Issue #58

Financial Markets as a Deterministic SystemMathematical Proof of the Order behind the Markets The Power of Strategic Leveraging How to Generate Higher Returns with Leverage Linked to System Performance Three Tactics to Time & Profit from the SP500 Bust, Malaise or Boom Realizations of an Elliott Wave Analyst

The Cycle of Kings 70-Year Cycles Converge in 2014--2018

The Sonata Trading Computer William Delbert Gann Finding the Bottoms and Tops of the Bollinger Band

Day Trading Psychology Using Candle Sticks For Precision Trades The Courage to be a Trade Trading Truths You Need to Know Market Snapshot: The Importance of Dominant Sentiment Cycles Trading Institutional Supply and Demand Patterns Market Profile(tm) and Auction Market Principles

Traders World Online Expo #16 Learn from 40 Top Traders

Oct 27th - Nov 21st

How to Build and Trade Non-Linear Predictive Cycle Indicators

www.tradersworld.com Sep/Oct/Nov 2014

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Advertisers Sep/Oct/Nov 2014 Issue #58 World Cup Advisor 03 World Cup Advisor 04 2014 World Cup Campionships 05 Robbins Trading Company 06 Mikula Forecasting Service 08 Sacred Science 09 Traders World Expo 13 Sacred Science 14 Sacred Science 15 OddsTraderApps.com 16 Mikula Forecasting Service 17 SacredScience 18 Traders World Expo 19 Dan Zanger’s Chart Pattern 20 Sacred Science 26 AlgoTrades 27 Merriman MTA 33 AlgoTrades 34 Traders World Expo 41 Traders World Expo 51 Traders World Magazine 52 Traders World Magazine 75 NeverLossTrading 76 Odds Trader Apps 84 Traders World Magazine 97

Editor-in-Chief Larry Jacobs - Winner of the World Cup Trading Championship for stocks in 2001. BS, MS in Business and author of 6 trading books. Office - 2508 W. Grayrock Dr., Springfield, MO 65810 Contact Information - 417-882-9697,800-288-4266, publisher@ tradersworld.com Copyright 2014 Halliker’s, Inc. All rights reserved. Information in this publication must not be reproduced in any form without written permission from the publisher. Traders World™ (ISSN 1045-7690) is published quarterly - 4 issues, (may run late due to content creation) for $15.96 per year by Halliker’s, Inc., 2508 W. Grayrock Dr., Springfield, MO 65810. Created in the U.S.A. is prepared from information believed to be reliable but not guaranteed us without further verification and does not purport to be complete. Futures and options trading are speculative and involves risk of loss. Opinions expressed are subject to revision without further notification. We are not offering to buy or sell securities or commodities discussed. Halliker’s Inc., one or more of its officers, and/or authors may have a position in the securities or commodities discussed herein. Any article that shows hypothetical or stimulated performance results have certain inherent limitations, unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not already been executed, the results may have under - or over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designated with the benefits of hindsight. No representation is being made that any account will or is likely to achieve profits or losses similar to those shown. The names of products and services presented in this magazine are used only in editorial fashion and to the benefit of the trademark owner with no intention of infringing on trademark rights. Products and services in the Traders World Catalog are subject to availability and prices are subject to change without notice.

U.S. Government Required Disclaimer - Commodity Futures Trading Commissions Futures and Options trading has large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Do not trade with money you cannot afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, options or ANY sort of chartable instrument. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDEROR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. Use of any of this information is entirely at your own risk, for which Halliker’s, Inc. dba Traders World its affiliates, employees or owners will not be liable. Neither we nor any third parties provide any warranty or guarantee as to the accuracy, timeliness, performance, completeness, or suitability of the information and content found or offered in the material for any particular purpose. You acknowledge that such information and materials may contain inaccuracies or errors and we expressly exclude liability for any such inaccuracies or errors to the fullest extent permitted by law. All information exists for nothing other than entertainment and general educational purposes. We are not registered trading advisors.

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Contents

Scanning for Profits by George Krum 85 Market Profile(tm) and Auction Market Principles

Sep/Oct/Nov 2014 Issue #58 Financial Markets as a Deterministic System Mathematical Proof of the Order behind the Markets by William Bradstreet Stewart 10 The Power of Strategic Leveraging How to Generate Higher Returns with Leverage Linked to System Performance by William Bradstreet Stewart 16 WILLIAM DELBERT GANN by Jacob Singer 21 Three Tactics to Time & Profit from the SP500 by Chris Vermeulen 28 The Cycle of Kings 70-Year Cycles Converge in 2014-2018 by Eric S. Hadik 35 Bust, Malaise or Boom Realizations of an Elliott Wave Analyst

by Tom ALexander 90 Finding the Bottoms and Tops of the Bollinger Band by Gilbert Steele 95 Power Up your Trading System and Example with Andrews Babson Techniques by Ron Jaenisch 98 How to Build and Trade Non-Linear Predictive Cycle Indicators by Lars von Thienen 103 Decoding the Hidden Market Rhythm Part 2: Metonic Cycles by Lars von Thienen 108 The Sonata Silent Trading Computer by Larry Jacobs 110 Download your free book on Great Tips on Buying the Right Trading Computer, go to: www.SonataTradingComputers.com

by Jim Forte 42 Day Trading Psychology Using Candle Sticks For Precision Trades by David Hackbart 53 The Courage to be a Trade by Adrienne Toghraie 62 Trading Truths You Need to Know by Roger Felton 66 Market Snapshot: The Importance of Dominant Sentiment Cycles by Lars von Thiene 71 Trading Institutional Supply and Demand Patterns by Thomas Barmann 77 www.tradersworld.com Sep/Oct/Nov 2014

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NEW FORECASTS AVAILABLE FOR 2014!

THE INSTITUTE OF COSMOLOGICAL ECONOMICS CYCLE FORECAST REPORTS ADVANCED CYCLE FORECASTS IDENTIFYING THE MOST POWERFUL MOVES EACH YEAR IN 20 MARKETS! PRICE REDUCED EACH QUARTER!

12 KEY TURNING POINTS IN EACH OF 20 DIFFERENT MARKETS - 75% ACCURACY! AVAILABLE FOR THE FOLLOWING MARKETS: STOCK INDEXES: S&P500 – NASDAQ – AORD FOREX: EURO/US$ - POUND/US$ – YEN/US$ SWISS FRANC/US$ AUSTRALIAN$/US$ STOCKS: APPLE – AMAZON – J.P.M. FUTURES: GOLD - SILVER– COPPER - T-BONDS – CRUDE - COFFEE – SOYBEANS – CORN – OJ

STATEMENT OF INTENT

The intent of the ICE REPORTS is to identify the 2-4 Major, and 8-10 Secondary MOST POWERFUL CYCLE IMPULSE POINTS throughout the year, in each market, giving the highest possible returns thru giving the exact timing of the dominant cyclic influences during the year and trading those HIGH PROBABILITY positions which lead to profitable THE ICE REPORTS, represent the output of more than 25 years intermediate term runs or significant major trends. of dedicated research into advanced cycle theory and Gann  IDENTIFY & POSITION TRADE ONLY THE analysis. In 15 years of development, these techniques have been STRONGEST MOVES IN EACH MARKET integrated into a software-based proprietary analysis and  PROPRIETARY DYNAMIC, EXPANDING AND forecasting system which employs a complex array of CONTRACTING CYCLES sophisticated analysis algorithms at a development cost in  5-10 YEARS OF DOCUMENTED HISTORICAL excess of $1,000,000! The timing methodologies developed in TESTING DONE IN REAL TIME this system move far beyond standard cyclical modeling and  5-10 YEARS OF HISTORY! projection techniques to the fractal and proportional nature of  75% ACCURACY RATE! SEE 2013 RESULTS! market movements. WWW.SACREDSCIENCE.COM/ICE/ICEREPORT.HTM FOR A DETAILED WRITE-UP ON

WALKER’S

COURSE INCLUDING CONTENTS, SAMPLE TEXT

&

WWW.SACREDSCIENCE.COM/WALKER/HOWTOTRADELIKEWDGANN.HTM

HOW TO TRADE LIKE W. D. GANN An Exploration of the Mechanical Trading Lesson on U. S. Steel BY TIMOTHY WALKER

FEEDBACK SEE:

STATEMENT OF INTENT This course presents a detailed analysis of the entire sequence of 322 trades from 1915-1931 presented in WD Gann’s US Steel trading course. The specifics of these trades and of Gann’s Mechanical Method provide profound insights into the mind of one of the greatest traders of history.

2 VOLUMES - TEXT & CHARTS BLACK SUEDE HARDCOVERS ONLY $595.00

With detailed charts accompanying the analysis, the reader will discover great insights in reading market action and learn to understand the specific rules and triggers that Gann used to manage an account through every phase of market activity.

GANN’S MECHANICAL METHOD TRADING SYSTEM APPLIED TO THE CURRENT S&P500 FROM JAN-MARCH 2014 PRODUCED A 570% RETURN ON ONLY A $5000 E-MINI POSITION!

This course shows how Gann could turn a $3000 account into over $6 million in 15 years. But it also shows extraordinary returns in shorter trading periods. For instance, from his initial investment of $3000 in February 1915 until October 21 of the same year, Gann produced a 1,337% return increasing the account to $40,123.

SACRED SCIENCE INSTITUTE Ө

WWW.SACREDSCIENCE.COM

EMAIL: [email protected] Ө US TOLL FREE: 800-756-6141 INTERNATIONAL 951-659-8181 Ө SEE OUR WEBSITE FOR OUR FULL CATALOG OF COURSES! www.tradersworld.com Sep/Oct/Nov 2014

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Financial Markets

as a

Deterministic System

Mathematical Proof of the Order behind the Markets By William Bradstreet Stewart

The search for order within chaos is a quest that stretches back to the earliest reaches of human thought. Since ancient man’s first development of science and philosophy, two fundamental positions have vied for dominance. One claims randomness to be the underlying factor of the universe, while the other argues that order pervades this entire cosmos, and that the perception of randomness is merely an artifact of an ignorance yet to be penetrated. As humanity advances from one scientific revolution to the next, from Renaissance to Enlightenment, through Einstein’s Relativity to high energy particle physics, pushing ever forward into sciences of greater order like Chaos and Complexity Theory, Superstring Theory, and M Theory, one thing is forever assured, that where once chaos reigned, now order dominates! Yet still we see the argument of these random theorists persist within fields that their limited viewpoints are incapable of penetrating, arguing with all the passion of the religious fundamentalist, that the claim of order in some complex systems is even anti-scientific, when in reality, such discovery represents the epitome of scientific method. So too does the modern financial analyst, who believes in Random Walk Theory, fail to perceive the subtle designs behind the complex system of the financial markets, denying even the possibility of order because his limited tools are incapable of measuring it. And belief this is, for when order is proven to exist where before there was

only randomness, the light of knowledge illuminates the Truth, and no logical mind will again bend to such false interpretations, once this truth has been revealed. Only the irrationality of indoctrinated belief can hold something to be random which the tools of science and mathematics have proven to be ordered. There are modern schools of financial analysis that have been able to successfully shed the light of science into the chaos of randomness, and to prove, without question, that order does reign in the financial markets, and that Random Walk Theory is merely the residual belief of an ignorant past incapable of penetrating the complexities of this abstract system. This science is not new… In fact, its application was first demonstrated over a century ago by the legendary trader, W. D. Gann, in his 1909 interview with Richard Wyckoff in The Ticker & Investment Digest, a precursor to the Wall Street Journal. For this famous interview, Gann was first audited by an accountant for the paper who monitored his trading over a 25 day period, where out of 286 trades, 264 were profitable with only 22 losses, a 92% success rate, producing a 1000% return on his initial margin, one of the greatest documented trading records in the history of the markets. In this article, Gann elaborated some general foundational principles which formed the basis of his system, saying, “Science teaches that an original impulse of any kind finally resolves itself into periodic or rhythmical www.tradersworld.com Sep/Oct/Nov 2014

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motion, just as the pendulum returns again in its swing, so do the properties of the elements periodically recur as the weight of the atoms rises. Stocks, like atoms, are really centers of energies, therefore they are controlled, mathematically. Stocks create their own field of action and power; power to attract and repel…” He further explained, “This led me to conclude that natural law was the basis of market movements. After exhaustive researches and investigations of the known sciences, I discovered that the Law of Vibration enabled me to accurately determine the exact points to which stocks or commodities should rise and fall within a given time. The working out of this law determines the cause and predicts the effect long before the Street is aware of either. Most speculators can testify to the fact that it is looking at the effect and ignoring the cause that has produced their losses.” After these brief comments providing some initial hints into the nature of his system, Gann continued a 45 year career, during which he is rumored to have extracted $50 million from the markets in the early 20th century. Over these years, he published a series of 7 books and dozens of advanced courses of private instruction, which seemingly presented only the more general principles of technical analysis and trading. However, through all of this output, the underlying mechanics of his system were never openly revealed, thus leaving the scientific proof of the mathematical determinism behind market action a tightly held secret, which is thought to have accompanied him to the grave. However, bits and pieces of Gann’s real system were subtly hidden amongst these more exoteric writings, or were secretly passed along through private hands over the

decades, leaving a trail of clues for future seekers to pursue. The first known researcher to have successfully followed this trail of clues to its conclusion was Dr. Jerome Baumring of the Investment Centre, an iconoclastic savant, who after years of grueling research, managed to resynthesize Gann’s complete system, and to extend it into new fields of science unknown to Gann in his time. Dr. Baumring presented this system in a complex course on Gann analysis in the 1980’s called Gann Harmony: The Law of Vibration, quantifying its application through advanced mathematics and expanding it into new fields like multi-dimensional molecular market modeling, DNA coding and Chaos Theory. However, much like his predecessor, Dr. Baumring refused to openly document the mechanics of the system, considering it too valuable to reveal to the general public. He did, however, leave an intricate trail through a labyrinth of resources that only the most dedicated researcher, willing to do this most difficult research himself, could follow to the goal, thereby assuring that the essence of the science would be accessible while remaining carefully hidden. The only documented modern researcher to have successfully followed the trail of these predecessors deeply into the essence of Gann’s long hidden science is Catalin Plapcianu. His recently released course, THE SQUARE: Quantitative Analysis of Financial Price Structure, provides breakthrough insights into the foundational core of this natural science so vaguely elaborated by Gann. The principles developed by Plapcianu deal directly with the theory of the financial markets as energetic phenomena governed by the strict laws of physics and mathematics, operating within the domain of space and time. This phenomenon is not limited to the www.tradersworld.com Sep/Oct/Nov 2014

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nature of the financial markets alone, but rather extends to the mechanical laws which manifest all order across the universe. For the inherent laws of mathematics are pervasive throughout all fields of reality simultaneously, and the same vibratory phenomena that define the permutations of market structure, similarly define the permutations of all function and form, all physics and metaphysics, structuring the very core of reality itself. Price/Time and Space/Time are actually the same, since the exact same mathematical laws control all energetic formation within this vast multidimensional Cosmos. Therefore, this system is not restricted merely to the limited fields of economics and finance, but is better defined as the essence of Cosmology itself, the system of mathematical order which permeates the fabric of the entire universe. The intent of Plapcianu’s new course is to present, for the first time, the true mechanics of this ordering system through the Squaring of Price & Time. Price/Time on a financial chart is defined by Cartesian Coordinates, providing an n-dimensional map of Space/ Time. Upon this map, all market movement can be categorized into only 9 possible binary cases that will exist in any type of vibrational chart. Because “pivot” points in the market have 3 bars composing them, these 9 types will then be intersected with each other, resulting in only 81 possible cases, represented in a 9x9 grid called the Universal Swing Chart, which logically orders and defines every possible variation of market action. This chart provides an objective mathematical determination of the exact nature of price swings and pivot points, allowing the energetic balancing of price and time to be calculated through the Law of Conservation of Energy. Once swings and turning points are

thus mathematically defined, they can be identified as conical transformations of the circle, and the calculation of acceleration and deceleration rates for each swing becomes possible. This results in the projection of hyperbolic acceleration/deceleration curves, which dynamically mold the curvature of future market action. These hyperbolic curves consistently identify and capture large tradable segments of sequential swings in any market, on any time frame, from minute to monthly. Plapcianu distills this scientific methodology into mathematical trading algorithms. The principle of hyperbolic growth and decay curves provides the basis for his first algorithm, the Hyperbolic, an automated trend following system which generates (unleveraged) annualized returns in the 100-300% range with exceptional consistency. His second algorithm, the Circular, uses mathematically defined pivot points to derive geometrical price/time relationships which, when converted through a mathematical growth sequence, square Price and Time, thereby projecting a sequence of future tradable pivot points. This algorithm produces a secondary trading methodology based upon the projection of these squared turning points, where high probability trades can be placed using increased leverage, due to the specificity of the squared projections. In his course, Plapcianu mathematically defines these algorithms in full detail, allowing them to be applied manually or to be programmed. Accompanying the course, or available separately, are a set of subscription indicators based upon these algorithms, which generate powerful automated trading signals, and provide full backtesting capabilities complete with detailed statistical analysis. By adjusting account leverage based upon statistical backtest results, significantly www.tradersworld.com Sep/Oct/Nov 2014

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higher returns can be generated than those above, which far exceed the returns produced by most professional traders or automated systems. This course is the first volume of a three part series, wherein the author will systematically document the mathematical foundations of the core element of Gann and Baumring’s insight, revealing with irrefutable clarity approximately 40% of the science behind Gann’s system. Within this series, not only will core of this system be documented and quantified theoretically, it will also be quantified mechanically, through the series of programmed algorithms which will be progressively developed through the Trilogy, until a set of Master Algorithms is provided in Volume 3, which will produce results that outlie all known standards of trading performance. This series will, for the first time, provide the undeniable proof that the financial markets are governed by the inalienable laws of nature, and are therefore predictable, within certain parameters, as are all other natural phenomena. It opens a new era of technical analysis, because it fundamentally defines every possible variant of pattern and swing in the market, mathematically demonstrating that the financial markets are in fact, an Absolute Deterministic System. William Bradstreet Stewart Institute of Cosmological Economics www.sacredscience.com [email protected] (800) 756-6141 or (951) 659-8181

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NOW AVAILABLE FOR 2014! PRANDELLI 2014 FORECAST BULLETINS

AN ANNUAL TIME & PRICE FORECAST FOR THE S&P, SOYBEANS, CORN & GOLD INCLUDING MONTHLY UPADATES OF KEY PRICE LEVELS

BY DANIELE PRANDELLI

IN 2013 PRANDELLI MADE 653 POINTS IN SOYBEANS, 175 POINTS IN CORN, & DID 58% IN Q3 ALONE! Each Bulletin includes a PFS TIME Forecasting Model giving the swing turning points & push impulses for the year, combined with specific Key Price Levels determined by his proprietary Planetary Longitude Lines. Subscription includes ongoing updates of analysis and Key Price Levels thru the year! $195.00 PDF FOR DETAILS & 2013 RESULTS SEE: WWW.SACREDSCIENCE.COM/PRANDELLI/PFS-FORECAST-BULLETIN.HTM

THE LAW OF CAUSE & EFFECT CREATING A PLANETARY PRICE-TIME MAP OF MARKET ACTION THROUGH SYMPATHETIC RESONANACE BY DANIELE PRANDELLI The Law of Cause & Effect unravels the correct application of KNOW IN ADVANCE! WD Gann’s Planetary Longitude Lines. This course explains why most analysts have failed to use these lines! There is a  EXPLAINS MISSING CALIBRATION FACTOR WHICH missing conversion factor or calibration rate which must be FITS PLANETARY LINES TO ANY CHART! used to adjust the planetary relationships to the scale and  DETERMINE IMPORTANT ENERGY LEVELS USING vibration of the market at any particular price level. This PRECISE MATHEMATICAL RULES book CRACKS the conversion factor and makes Planetary  KEY PRICES TO TAKE TRADING POSITIONS Lines one of the most valuable tools you’ll have in your  FORECAST CLEAR TARGET EXIT LEVELS toolbox. These lines determine both price and time movements! They  KNOW IMPORTANT TIME TURNING POINTS THRU are one of the easiest but most powerful of all Gann tools. CONFLUENCE OF PLANETARY LINES Once you see them, you will NEVER stop using these lines for  DETERMINE THE SLOPE OF THE EXPECTED TREND trading! MOST POPULAR TRADING COURSE! FOR A DETAILED WRITEUP INCLUDING CONTENTS, SAMPLE TEXT

& CHARTS, FEEDBACK &

WWW.SACREDSCIENCE.COM/PRANDELLI/LAWOFCAUSEANDEFFECT.HTM

MORE SEE:

Prandelli’s Polarity Factor System forecasting model is based upon the powerful insights of the great market master, W. D. Gann, and particularly AN INTEGRATED FORECASTING & TRADING STRATEGY upon his Master Time Factor, presented in one of his rarest and most secret courses. Prandelli has INSPIRED BY W. D. GANN’S MASTER TIME FACTOR redeveloped Gann’s Master Time Factor and created proprietary software to create yearly forecasts BY DANIELE PRANDELLI of the market with an accuracy similar to that BLACK SUEDE HARDCOVER 242 PAGES & SOFTWARE produced by Gann in his Supply and Demand Letter, almost 100 years ago. This PFS timing technique CREATE DIRECTIONAL TIME FORECASTS forecasts market tops and bottoms with a high degree LIKE WD GANN’S IN MULTIPLE MARKETS of accuracy, giving clear directional indications. It S&P, CORN, WHEAT also includes a sophisticated risk management system FOR A DETAILED WRITEUP & EXAMPLES SEE: and strategy to trade the forecast, which Prandelli WWW.SACREDSCIENCE.COM/PRANDELLI/PRANDELLIuses for his own trading. Integrates seamlessly with POLARITY-FACTOR-SYSTEM.HTM the Planetary Longitude lines from his first course.

PRANDELLI’S NEW TRADING COURSE! THE POLARITY FACTOR SYSTEM



EMAIL: [email protected] Ө US TOLL FREE: 800-756-6141 INTERNATIONAL 951-659-8181 Ө SEE OUR WEBSITE FOR OUR FULL CATALOG OF COURSES! www.tradersworld.com Sep/Oct/Nov 2014

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FERRERA’S FIRST NEW COURSE

IN

7 YEARS!

ECONOMIC & STOCK MARKET FORECASTING W. D. GANN’S SCIENCE OF CYCLICAL PERIODICITY SEQUENCING BY DANIEL T. FERRERA HOW

TO

PRODUCE

A

FORECAST LIKE W. D. GANN & DAN FERRERA!

"Mathematical science, which is the only real science that the entire civilized world has agreed upon, furnishes unmistakable proof of history repeating itself, and shows that the cycle theory, or harmonic analysis, is the only thing that we can rely upon to ascertain the future. My calculations are based on the cycle theory and on MATHEMATICAL SEQUENCES. History repeats itself.” -- W. D. Gann

INTENT OF THIS COURSE

The intent of Ferrera’s new course is to present the logic and application of Gann’s science of Mathematical Sequences of periodic market patterns. Ferrera teaches how to use this Mathematical Sequencing in conjunction with Gann’s “cycle theory” in order to forecast the general economy, stock market, or individual stocks, by identifying the expected periodic WHAT THIS COURSE WILL TEACH YOU:  GANNS SECRET SCIENCE OF PERIODICITY SEQUENCING sequences of market action coming in both the immediate and long-term future. Ferrera also  THE DIFFERENCE BETWEEN CYCLES & PERIODICITY provides a Key Options Strategy which generates  HOW LONG TERM CYCLES INTERACT TOGETHER high yield returns with extremely limited risk,  USES 200 YEARS OF DOW DATA TO FORECAST FUTURE allowing traders to take advantage of these forecasts for both intermediate-term and long-term trading.  MOST SOHPISTICATED STUDY OF GANN’S CYCLES The course presents new material and a  INTERPRETING GANN’S SYMBOL SHOWN ABOVE breakthrough insight into one of Gann’s very  HOW TO USE GANN’S PERMANENT CHART deepest levels of analysis, which to our knowledge,  SOPHISTICATED HIGH YEILD OPTIONS STRATEGY has never been clearly explained before this course. FOR A DETAILED WRITEUP ON THIS COURSE INCLUDING FULL CONTENTS, AND FOR DETAILS ON FERRERA’S OUTLOOK FOR 2014, SEE: WWW.SACREDSCIENCE.COM/FERRERA

FERRERA CALLED EVERY TREND IN 2013!

FERRERA OUTLOOK FOR 2014

  

FERRERA FORECAST A SEP 22,

   

HE CALL FOR A 10% REACTION, IT WAS 8%!

2012 TOP

FOLLOWED BY A MID-NOV CYCLE LOW FOLLOWED BY AN EXPLOSIVE UPTREND INTO SPRING, & HIT THE MAY TOP BY 1 DAY! HE THEN INDICATED A JULY 18 HIGH FOLLOWED BY A SEP 1 LOW HE PREDICTED A STONG YEAR-END RALLY!

OUTLOOKS FOR 2009, 2010, 2011, 2012 & 2013 - 50.00! THE FERRERA OUTLLOK FOR 2014 IS $360.00 50P. PDF WWW.SACREDSCIENCE.COM/FERRERA/ OUTLOOK2014.HTM

SACRED SCIENCE INSTITUTE Ө WWW.SACREDSCIENCE.COM EMAIL: [email protected] Ө US TOLL FREE: 800-756-6141 www.tradersworld.com Sep/Oct/Nov 2014

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The Power of Strategic Leveraging How to Generate Higher Returns with Leverage Linked to System Performance By William Bradstreet Stewart The importance of leveraging is not something that is fully understood by most traders as being a KEY component in the production of spectacular trading results or the development of a trading system capable of producing consistent returns like those demonstrated by W. D. Gann in his famous Ticker Interview. Richard Wyckoff summarizes Gann’s performance during their one month audit of his trading as follows: “During the month of October, 1909, in twenty-five market days, Mr. Gann made, in the presence of our representative, two hundred and eightysix transactions in various stocks, on both the long and short side of the market. Two hundred and sixty-four of these transactions resulted in profits, twenty-two in losses. The capital with which he operated was doubled ten times, so that at the end of the month he had one thousand percent on his original margin.” We see here that Gann produced a 1000% return in only 1 month during the Ticker audit, or a 12,000% annualized return if we stretch this same result out over an entire year, which most would consider to be a practically impossible challenge. At another point in the same article Gann’s associate, William Gilley stated: “He has taken half a million dollars out of the market in the past few years. I once saw him take $130, and in less than one month run it up to over $12,000. He can compound money faster

than any man I ever met.” In this example, if true, Gann has now increased his monthly return rate by over 12 times the 1000% return done in the Ticker Interview. Annualized this would be 144,000% return, which even for Gann would be unrealistic to imagine could be achieved with any kind of consistency. But the question that must be asked here, which is often overlooked entirely, is how these sorts of percentage returns could ever be attained at all? It should be clear there is NO market that is capable of moving 12,000% in one month. In fact, if you calculate the complete movement of every swing that occurs in the market, it will be found that, on average, most markets move approximately 70% per month. Certainly, some markets do significantly exceed this average when highly volatile or when exponential moves are being made, but this is a rare opportunity, probably the like of which Mr. Gilley is referring to when Gann produced 12,000% in one month. However, in normal ongoing circumstances, when consistently trading one market over time, if you caught every swing in the market, the maximum you could make would be only approximately 70% per month, using no leverage. Since few people are able to capture every complete swing, let’s say one captured half of each swing, then this would produce only a 35% return, unleveraged. What this demonstrates is that the ONLY way that that such huge returns as www.tradersworld.com Sep/Oct/Nov 2014

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Gann produced can be generated is by using significant leverage. The capacity to compound money at rates of 12,500% return in ONE month, or even at 1000% in one month cannot be achieved (not easily at least) even by capturing multiple explosive moves in that short time, simply because it is too hard to find that many markets which will move so much in such a short period. This proves the fact that something else must be at play in producing such huge returns, and the only thing this can be is leverage. There are two common approaches to creating leverage, the first using options strategies to created leveraged positions, which is something that we know Gann did do, since he wrote a small course called How to Make Profits Trading Puts & Calls. We will not address options here, as it is another complex topic, and our general point is not so much based upon the leverage strategy as the degree of leverage used, which is better expressed through our second approach, trading on margin. Using margin in a trading account is the most common method of leveraging positions, and can be done on different scales, say 2 times, 5 times, 10 times, or more, of the base capital in the account. So, 10 times margin would mean that you hold 10% of the trading capital in the account as the cost of the trade, as the “margin” on the trade. We know Gann was trading on margin, because Wyckoff says so in the quote above, “at the end of the month he had one thousand percent on his original margin.” The danger of trading on margin is that if the trade goes against you, every point that it moves is multiplied by the degree of margin that you are using. Hence margin trading can be very dangerous and land a trader in debt by losing more money than he even has in his account, and it should

only be used by experienced traders with a clear strategy. The fundamental element that either the options or margin approach have in common is that the ability to create or successfully use higher degrees of leverage is based almost solely upon the degree of accuracy of the predictions or signals generated by a trader’s analysis or system. In order to use extreme leverage, a trader must be able to take positions with precise accuracy and incredibly limited risk. When trading on margin and using extreme leverage, if one’s projections are not precise, then the stop losses, even when very tightly placed, would be so large that only a few losses would quickly drain an account, or even run it into a negative balance. Therefore, a fundamental element in the development of a trading system capable of producing returns in the 100’s to 1000’s of percent is the proper strategic use of leverage in one’s trading. And the degree of leverage is, by necessity, dependent upon the accuracy and precision of the signals or projections generated by the trading system. A system that generates less accurate signals, say within a 10-20% range of the price or time of an expected turning point must limit its risk by using little to no leverage. However, a methodology that produces highly accurate projections in both price and time, down to minutes and cents, will allow increasing levels of leverage in accordance to the percentage of accuracy of the system. The importance of these factors in the development of a high yield trading system have taken a major focus in the work of Catalin Plapcianu and the development of his advanced trading algorithms, the Hyperbolic and the Circular. In working with an automated system it is critical to evaluate past statistical performance and, in particular, the maximum www.tradersworld.com Sep/Oct/Nov 2014

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PROFITABILITY ENHANCEMENT USING LEVERAGE 2, 5 AND 10 RANGE SECURITY BAR INTERVAL (MONTHS) GOOG US EQUITY 15 MIN 2.0 USDJPY CURRENCY 60 MIN 3.0 WHEAT COMMODITY 30 MIN 3.0 VIX INDEX 30 MIN 3.0 FB US EQUITY DAILY 23.0

P/L WITHOUT USING LEVERAGE 32.4 7.1 29.3 48.7 210.8

AVERAGE MONTHLY RETURN 16.2 2.4 9.8 16.2 9.2

% P/L USING LEVERAGE 2 73.3 14.6 63.6 108.1 538.3

AVERAGE MONTHLY RETURN 36.7 4.9 21.2 36.0 23.4

% P/L USING LEVERAGE 5 264.4 39.4 195.5 318.0 -100.0

AVERAGE MONTHLY RETURN 132.2 13.1 65.2 106.0 N/A

% P/L USING LEVERAGE 10 944.6 89.0 469.2 408.5 -100.0

AVERAGE MONTHLY RETURN 472.3 29.7 156.4 136.2 N/A

percentage drawdown produced by a system over an extended period of time. Once one knows these variables, one can balance the degree of margin with the risk parameters of the trading account. The detailed statistical analysis features provided with the Hyperbolic and Circular subscription Apps contribute to this leverage evaluation, since it is possible to determine specific risk parameters in different markets on different timeframes through backtesting, thereby allowing various appropriate degrees of leverage to be applied in different situations according to the statistical performance of the system. To understand the potential returns in different markets and time frames that can be accomplished using different leverage margins, Plapcianu ran a leverage analysis, selecting 5 markets with different time frames and demonstrating the results of the Hyperbolic algorithm when run through 2 times, 5 times and 10 times leverage using the same trading signals. It can be seen from these results that when the statistical analysis allows for a higher degree of leverage, impressive returns into the multiple 100’s of percent per month can be produced with great consistency, generating annualized returns in the 1000’s of percent. (To read the full Leverage Study, see the following link: http://www.sacredscience.com/Plapcianu/ The-Square-Strategic-Leveraging.htm ) However, these results which generate 100’s of percent per month are still not in the range of Gann’s spectacular returns. This is not surprising because the Hyperbolic 1 algorithm used in the above study is only Plapcianu’s Level 1 algorithm. When one advances to his third course and his Level 3 algorithms, the returns multiply exponentially. For example, his Circular 3 algorithm, the most advanced tool presented in his series, is specifically designed to project very accurate turning points in both price and time. It is so exact that 3 out of 10 times it hits BOTH price and time EXACTLY! When it is not exact, another 4 of 10 times it is within 5% of the turning point in price and time. The final 3 occurrences fall farther outside these parameters and are considered misses. When the Circular 3 algorithm performs with this level of accuracy, the leverage can be jacked up to extreme levels, much like those probably used by W. D. Gann to produce the returns that he is so famous for. In a 5 month real-time test documented by trading records (see the following link to view the actual Saxobank trading records: http://www.sacredscience.com/Plapcianu/The-Square-Trading-Records.htm ) an account which began with a 1000 Swiss Franc value, was traded using 100 times leverage! Because of the precise accuracy of the Circular 3 projections, this massive leverage could be applied, using a stop loss in the currency markets of only 1 pip. Using this strategy, www.tradersworld.com Sep/Oct/Nov 2014

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the Circular 3, which was not automated at that time, but was being calculated and traded manually, was able to produce a 1732% return in 5 months, turning a 1000 CHF account into 18,324.38 CHF, a 4156.8% Annualized Return! This is a beautiful example demonstrating the power of Plapcianu’s Hyperbolic & Circular algorithms when taken to their more advanced levels. While not producing the equivalent of Gann’s highest returns, they are getting closer than most traders are able to accomplish. And the value of these tools is that they do not require a legendary trader like Gann to do the analysis and place all the trades. These results come from a fully automated Application (App) that is available by monthly subscription to anyone who wants to trade them. And for those who do not want to just trade them, but also want to understand the knowledge and science behind the algorithms, Plapcianu’s course series, beginning with THE SQUARE: Quantitative Analysis of Financial Market Structure, lays out, with precise clarity, the mathematics and geometry upon which they and the deepest part of W. D. Gann’s system is based. For more details on this course and the subscription algorithms, see the following link: http://www.sacredscience.com/Plapcianu/ The-Square.htm William Bradstreet Stewart Institute of Cosmological Economics www.sacredscience.com [email protected] (800) 756-6141 or (951) 659-8181






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WILLIAM DELBERT GANN By Jacob Singer William Delbert Gann died June 14th 1955. If you are a chartist, then you know who he was. If you are a technical analyst, you will be using his Gann Angles in your analysis. You will also know that he supposedly made a fortune trading the stock market, but what analytical technique did he use to forecast the market? Was it his Gann angles, or was it his belief in astronomy, astrology, or ancient mathematics. No one knows for sure. When he died his wife opened his study to the highest bidder. A friend of mine, Jerry Ezekial went to have a look at it. He spent a whole day looking through everything that was in the study. He told me that there were so many books; papers with codes and various charts lying around, that he simply could not discover the strategy Gann used to make his fortune

Figure 1 www.tradersworld.com Sep/Oct/Nov 2014

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trading the market. Jerry offered a bid for the contents of the study but it was not accepted. So what did Gann use to predict the market and make his fortune? When, in the late 1970’s, I studied his work with a friend I had recently made, Franco du Toit, we looked at everything we believed that he used in what we felt was his analysis. Because Franco was very astrological orientated, we first looked at the astrology charts to see if that was where the secret lay. Franco, a weather man, had spent two years on Marion Island, a weather forecasting station in Antarctica. Isolated from the world, and with time on his hands, he played the Johannesburg stock market using Gann’s astrological suggestions and made millions of Rand in profits. However, two years later when he returned to mainland South Africa, and married, for some or other reason his trading techniques stopped working. That is when we met each other and started working together, analysing Gann’s methods, looking for the secret to his trading success. Our research taught us that Gann believed that human emotions were affected by gravity. He wrote that if the tides of the Ocean are caused by the gravity of the moon as it circled the earth, then the emotions of man must also be affected by the gravity of the moon and the planets, as they circled the earth because man’s body is 90% water. The chart in Figure 1 shows the planetary positions relative to the earth in the year 2000, at the time of the market crash. Note the concentration of planets in Taurus with no planets except Pluto, a small planet


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with a low gravity on the right hand side of the Universe, in Sagittarius. Also note how the planets were on the side of the sun relative to the earth. Was it this concentration of gravity that caused the market crash? Gann, had he been alive, would have believed so and would probably have moved into cash. See Figure 1. Planet and sun position at the year 2000. Figure 2 shows the alignment of the sun and the planets to the earth in 2008. Note how the planets and sun are concentrated in Pisces, Aquarius and Capricorn with Saturn and Mars being the only planets opposing the gravitational concentration. Saturn was also in retrograde another factor influencing emotions? Was it this concentration of planets/gravity that caused the bank crash of 2008?


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Figure 2. Planet and sun position at the year 2000. Moving away from astrology, we found that in order to understand the manner in which the stock market or individual securities moved in price over time, Gann looked for an overbalance of price and time. He concluded that one dollar in price was the equivalent to one period in time. He kept monthly, weekly and daily charts as well as a few yearly charts. He found that certain fixed angles had a very significant relationship to price movement. The basis for the angles he chose came from the 360 degree circle, with the 90 degrees, one quarter of the circle, the foundation for the angles. He then looked at the 45 degree angle, a 50% division of the 90 degree square and finally he looked at dividing the circle by thirds, with the degrees of 120, 240 and 360. This is all shown in Figure 3. Figure 3. The basic Gann Fan.


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The Fan shown in the chart in Figure 3 when drawn from significant highs or lows are an indication of the price in a linear fashion. 90 degrees in days is 90 days. 90 degrees in weeks is 13 weeks and 90 degrees of a year in months is 3 months. Gann as we all know would place his angle at a major low or high. Depending on which angle the stock rose or fell would give him an indication of the strength or weakness of the stock. Everyone familiar with a Gann square, knows these rules. Franco and I found the Gann square a very powerful forecasting tool and we used it to forecast future trends and turning points. Computers today allow one to draw a Gann angle from a low to a high in a share price. However we found that sticking to the Gann figures that he used, namely 1, 2, 5, 10, 20, 50, and 100 to be more accurate. We found that drawing a Gann angle from a high or a low and checking where the angle crossed the horizontal from a previous high or low gave one a good indication of a cyclical turning point. This can be seen in Figure 4 a monthly chart of the Dow Jones, where the Gann fan drawn from the low of April 2009 suggests a major cyclical turning point in December 2017. Figure 4. A Gann Fan applied to a monthly chart of the Dow Jones suggesting a major cyclical turning point.

a computer is a very attractive possibility, because the square of nine was used by astrologers to predict events in time. We never tested it but our simple experimentation with it in predicting a share’s price was not as accurate as we hoped. We also looked the time sequences, 11, 22, 33, 45, 56, 67, 90, with 101 and 112 known as the ‘Death Zone’ being something to keep an eye on. We checked the time sequence 13, 26 39 45 58 71 and 90 but we found it not regular enough for us. Further research taught us that looking at weekly or monthly stocks for a trade using Gann analysis was far better than trading on a daily chart. So, out of all the articles published on Gann theories, we decided that much of what Gann himself published was for show. That his actual trades were based on weekly or monthly analysis, and were far less than what he publicised. So, out of all the publicity WD Gann received, and trying to discover what he used to make his millions, our research showed only two things that worked to our satisfaction, astrology and Gann fans on a weekly or monthly chart. Astrological Charts. The Planets Today.com Charts. Advanced GET. Jacob Singer is author of The SENSIBLE APPROACH to FINANCIAL FREEDOM [Kindle Edition] available on Amazon.com

Franco and I looked at every other chart and suggestion that we believed Gann may have used to forecast the market. We looked at the square of nine, but we found that it did not help us as much as we hoped it would. This could be because of computer trading. In today’s world. Computers make the buy and sell decisions, and computers are nonemotional. Programing the square of nine into www.tradersworld.com Sep/Oct/Nov 2014

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THE MOST ADVANCED WORK ON FINANCIAL ASTROLOGY!

SECRETS OF THE CHRONOCRATORS BY DR. ALEXANDER GOULDEN A DISTILLATION OF THE ASTROLOGICAL SYSTEMS OF THE ANCIENTS APPLIED TO MAREKT FORECASTING & TRADING PROJECT KEY TURNING POINTS & TREND LENGTHS!

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§ The Septenary division of significators. § The relationship between the lunar cycle, the ASTROLOGICAL PRINCIPLES WHICH UNDERPIN THE moment of birth and the timing of major events. MOVEMENT OF FINANCIAL MARKETS. § The pre-natal Syzygy chart and how to use it. IT OFFERS A CONTEMPORARY PRESENTATION OF THE SUPERIOR ASTROLOGICAL TECHNIQUES DERIVED BY THE § The nature of the biquintile aspect. MASTERS OF ANTIQUITY. § The significance of the rotary interaction between A CORE COMPONENT OF THIS ADVANCED SYSTEM IS THE the Moon, the North Node and the lunar SCIENCE OF CHRONOCRATORS (TIME LORDS), WITHOUT counterparts by progression and direction. WHICH FORECASTING BECOMES INEFFECTIVE. § Metaphysics of Part of Fortune & Arabic Parts. THOSE WITH A SERIOUS INTEREST IN HEAVYWEIGHT § An Arabic Part of great power and utility which is ASTROLOGY & MARKET SCIENCE WILL GAIN IMPORTANT little known and little used today. INSIGHTS AVAILABLE FROM NO OTHER SOURCE! § Secrets concerning the rotary coordinates of price. THE COURSE INCLUDES UNIQUE REVISIONS OF AN ANCIENT § Ancient Chronocrator (Time Lords) systems, METHOD BY WHICH TO RECTIFY A NATIVITY. revealing the inner and outer holograms of trend. IT EXPLAINS THE ASTROLOGICAL FACTORS WHICH § Chronocrators & astrological dynamics of trend. REGULATE THE TIMING OF PIVOTS & DIRECTION OF TREND. IT ALSO REVEALS CERTAIN ASTROLOGICAL SECRETS WHICH § The convergence of Chronocrators as a signal for culmination of trend. Forecasting trend lengths! DETERMINE PRICE. § Time keys and simplified directions. MOST IMPORTANTLY IT EXPLAINS HOW TO ISOLATE THE § The Science of Rectification - based on ancient ASTROLOGICAL SIGNALS WHICH ARE "LIVE" AT ANY GIVEN techniques, including a rectification of S&P500! POINT, AND WHICH WILL HAVE AN EFFECT UPON A MARKET.

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AN APPLIED TRADING COURSE USING ADVANCED PRICE/TIME TECHNIQUES TO PROJECT FUTURE TURNING POINTS...

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DR. GOULDEN PRODUCED 7 FORECASTS IN 7 DIFFERENT MARKETS. HIS RESULTS WERE IMPRESSIVE, 7 OUT OF 7, YIELDING 3,161 POINTS IN 7 DAYS, WITH 7 TRADES, IN 7 DIFFERENT MARKETS!

The techniques developed by Dr. Goulden will teach traders how to identify future pivot points following which profitable market moves ensue. All of the timing tools needed to forecast these pivot points and the geometric tools used to identify price entry and exit points, and to determine the nature of the ensuing trend are demonstrated in the Course. Based upon a deep level of metaphysical and cosmological insight, these techniques identify PRICE LEVELS, TIME TURNING POINTS, AND TRENDS, though proprietary HARMONIC, ASTRONOMICAL & GEOMETRICAL techniques developed by a Cambridge scholar.

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Three Tactics to Time & Profit from the SP500 By Chris Vermeulen

I am going to show you what the best and most simple way to trade the SP500 is. This is not complicated, it’s just common sense stuff that has worked extremely well for me since 2006 and continues to work just as well.

Tactic #1 - Only Price Pays As a trader looking to pull money out of the market on a regular basis the only thing you are really looking for is for the price of the investment you bought or sold short to move in your favor. So common sense tells us that “Only Price Pays”. If the price does not move then you do not make any money, it’s that simple. If price movement is what pays us then it’s only logical that we focus mainly on the price. Remember, most indicators are based off price, so they lag the last traded price for an investment. The key to selecting the proper indicators and tools is to find what has been working best for a specific investment and its time frame which you are trading and most importantly has worked for 10+ years. It is important to use indicators that

represent different types of analysis (trends, cycles, and volatility) so you do not have any overlap. This creates a synergy of confirming indicators that will increases your accuracy of a pending price movement in the near future while removing the noise and mixed signals from using multiple indicators based on the same analysis type. A couple of interesting points you should know is that the stock market only trends 2030% of the time. And according to J.M Hurst the market oscillates (cycles) 20-30% of the time. What does this mean? It means at best only 60% of the time the market provides tradable price action for us to make money. Why is this important? Because it tells you that even when the market is performing well we will still be sitting on our hands 40% of the time. If you want to trade with the best odds possible then you must have all the major bases covered in terms of analysis. Each indicator that we use analyzes the market in a different way so when several of your analysis tools are saying it’s time to enter or exit a position then you know there is a high www.tradersworld.com Sep/Oct/Nov 2014

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probability of a price movement in your favor and you can take the proper course of action.

The Problem with Technical Analysis There are a plethora (hundreds) of ‘technical analysis’ indicators and tools available and many come standard on charting websites and platforms. It is easy to get caught up in the INDICATORS looking for the holy grail combination so you can make your fortune trading. The issue we use too many indicators and tools which give mixed signals. Some are saying buy, others say sell at the same time. And with most indicators lagging the market, meaning they are using data that is several bars, days or even weeks old you end up with analysis paralysis and poorly timed trades.

So How Do You Know What to Use? The good news is that I’m going to show you exactly what indicators, analysis and tools are needed and how to use them. Nothing I do is complex. Using a few specific indicators and tools which have the least amount of lag time and a couple which actually forecast price gives us a huge edge when trading the market. In short, it puts the odds greatly in our favor so we can make more money with less risk, and stress. A simple, well thought out trading strategy will likely feel slow and boring. This is actually what trading to feel like. Because you have all the possible scenarios figured out through your strategy rules (analysis, timing, position size, stops, profit taking levels etc...) you have created a system. Systems are easy to follow, repeatable, and are proven to work.

“Rule Based Strategy = Repeatable = Mastery = Boring = Profits”

Tactic #2 - Identifying Trends through Moving Averages & Cycles There are only three directions the market can move. Think about it. In financial lingo a bull market is an uptrend, a bear market is a down trend and consolidation is a sideways trend. Each of these trend types requires a different trading strategy in order to consistently pull profits from the market. See Chart #1.

Trading With the Moving Average & Cycles Recognizing the direction of the trend will be crucial to your success. Moving averages are both an effective smoothing filter of the overall price trend, AND for providing a great early warning to a changing trend. Combining a smoothed average with cycle analysis, we can get a clear perspective of the overall market direction. The synergy that both moving averages and cycle analysis creates will give you the confidence to remain on the right side of the market. As a general rule for trading the SP500 index: When the 20SMA average is pointing up, we can hold long positions in the market. When price dips to the 20 SMA, we can use that to add to our long positions. Going the other way; when the average is pointing down, it is time to exit long positions, and short the market using each rally back to the 20SMA as a short entry point. See Chart #2. To the untrained investor these seemingly random explosive moves in the market are actually predictable. They tend to occur when multiple cycles from multiple time frames converge forming a significant low or high at the same time increasing the probability of price reversing direction and with a lot of power behind it. The combined force of each www.tradersworld.com Sep/Oct/Nov 2014

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creates an price movement that takes most market participants by surprise.

What Creates Stock Market Cycles? The flow and periodic price motion for the stock market can be caused by: Economic Data can cause large waves to money to flow in our out of stocks, sectors or indexes as a whole. Quarterly earnings reports can affect the perception of a stock’s potential going forward and can trigger a wave of buying or selling from the anticipation, or release of the results. Seasonal sales causing an increased interest in the sector or stock, frequently seen in the retail sector before or after holidays. Stock options expirations on a regular

basis, and is used by traders to hedge positions that cause extra buying or selling after expiration. Bi-monthly fund contributions whose members deposit money with each paycheck. Herd/Mob psychology known as Market Sentiment Traders move in sync like a school of fish when extreme fear or greed is surging through their veins.

Tactic #3 - Measuring Volatility Standard Deviation Standard deviation is a statistical term which measures the amount of variability or dispersion around a security’s average price. Standard deviation is a measure of volatility. Using both volatility and standard deviation together will paint a clear picture of near

Chart #1 www.tradersworld.com Sep/Oct/Nov 2014

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term price support and resistance (oversold & overbought) levels on the price chart along with how quickly price is expected to move.

Hybrid Analysis Tool: Trend + Standard Deviations This is an indicator I developed, and use for timing entries, profit taking, and to exit positions. This tool generates overbought and oversold arrows on the chart based on the current volatility level and specific standard deviation criteria for the SP500 index. It also overlays the 20 day moving average to identify the market trend. The type of results you get when combining just the moving average for trend direction and standard deviations is astounding. Simply put, when price surges or dips

beyond specific standard deviation levels the odds favor a reversal in price back to the average allowing us to forecast an imminent trend change. With that being said, it is crucial that you always trade in the direction of the underlying trend. For example you would only be focusing on buying the dips with green arrows and locking in partial profits and tightening your protective stop once a red overbought arrow has been reached during an up trending market. Essentially, what we are doing is watching for securities to be pulled down or pushed up to extreme levels which we know are not sustainable in the current market environment, then we enter a position expecting the security to move back within its normal trading range.


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Hybrid Analysis Chart Below is the daily chart showing how you can catch 1-2% price moves on a regular basis using only volatility and the moving average. As you can see this is not rocket science. It actually so easy, that almost everyone overlooks simple strategies like this and focus on making something complex to pull money from the market. See Chart #3. In conclusion, identifying the current market trend, active cycles, and standard deviation ranges, you will be equipped with the tools and timing to successfully navigate the financial market. Treat it like a business, and invest your time and energy into understanding these facets of technical analysis. You will have to

spend time and money to succeed, just as you would anything else that’s important to you but I can help speed this process up for you. Recently I completed building an automated trading system called AlgoTrades which analyzes everything I talked about here and much more. It trades directly into your brokerage account for a 100% hands-free investing experience if that is something that fits your needs and available time. Remember, you are either taking someone’s else’s money, or they are taking yours : Clarity, Focus & Execution are the key to your success. Chris Vermeulen www.AlgoTrades.net


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INVESTORS, YOU HAVE TWO CHOICES... Which of these two investors would you rather be? TRADER 1

TRADER 2

Sitting at a desk all day long, waiting for signals to trigger a trade, hoping the market starts to move before it puts you to sleep, reading complicated books about trading, taking expensive trading courses, stressing about positions, trying to beat the pros and institutions that eat traders like you for breakfast...

Playing with the kids, taking your Acura for detailing, planning a ten-day getaway to Hawaii with the family, �nishing up that best-seller you started yesterday, watching the rest of season three of Game of Thrones...

IF YOU CHOSE TRADER 1, YOU MAY SKIP THIS ARTICLE NOW. However, if like Trader 2, you would rather live your "dream life" instead of struggling as a typical "do-it-yourself" trader, now you have a choice. It's not for everybody - in order to accomplish this you must be able to fund a $35K margin account at least. But if you can do that without breaking the bank, you can now hook up a trading account to an advanced algorithmic trading system that executes all your trades for you.

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It's so hard to know what's for real and what isn't. Chris Vermeulen's AlgoTrades automated investing system is for real. I'm seeing it work in real-time, in my real account, right now.

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Sheldon Krasner

Boca Raton, Florida

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The Cycle of Kings 70-Year Cycles Converge in 2014--2018 by Eric S. Hadik including 17-Year & 34-Year Cycles and 25, 50 & 100-Year Cycles.] The following is just a very small excerpt from the 40-Year Cycle analysis that has already been published on this topic. That cycle has provided a roadmap of what to expect in the coming years… and the outlook is not pretty. [Much more 40-Year Cycle analysis can be found at www.40YearCycle. com.]

The Ultimate ‘Test’

For a good part of the last decade, focus has been kept on an uncanny convergence of financial cycles in 2013--2017. The primary conclusion was - and still is - that the US Dollar would go through a dramatic shift during that period… and all the financial markets (and many commodities) would undergo violent reactions. When it is all said and done, the financial landscape could look a lot different. One of the most intriguing cycles incorporated into that analysis - is the 40-Year Cycle***. It is a cycle that has governed the US and her currency (even before it was the Dollar) since her founding. At a very precise and consistent 40-year interval, from 1773-1776 all the way to 1973--1976, the US currency has undergone a series of ‘attacks’ - each time seeking to undermine its stability and reliability. 2013--2016 was projected to repeat this sinister pattern… a forecast that has already been validated multiple times. [***There were - and are - many other cycles,

The 40-Year Cycle is a cycle that is often correlated with a period of ‘testing’ or ‘preparation’ before a major event or transition. This cycle is recounted in ancient writings and throughout the Bible. [This is not a religious topic, but rather a historical one - with religious implications. It is also a mathematical one.] Some of the most salient examples occurred about 3,000 years ago when the 40-year cycle governed the rise and fall of the Jewish ‘kingdom’ - during the reigns of Saul, David & Solomon - each lasting 40 years and each preparing for the ensuing cycle. That cycle also impacted the ultimate demise and scattering of that kingdom - in 30 AD--70 AD (a 40-year period that timed the span between when a ‘revolutionary’ Jewish individual forecast the destruction of the Jewish temple… and when that prophecy came to fruition). And, the same 40-year cycle has governed the entire existence of a modern ‘kingdom’ - the United States of America - and the ultimate reflection of its integrity & stability, the currency. Here is a recap: www.tradersworld.com Sep/Oct/Nov 2014

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1773 - Tea Act issued; leads to the Boston Tea Party (battle over taxation - an easy way to devalue a currency). The Tea Act of 1773 ushered in a tumultuous 3-5 year period culminating in 1775--1776 with the American Revolution & Declaration of Independence. This set the pattern for the ensuing 240 years…

continued to play out until 1861 - when the US suspended payment in Gold AND Silver, eliminating the push for a Silver standard. In the midst of this debacle was the Panic of 1857 - a financial and economic crash. (Note the bigger 7--8 year cycle that extends these crises into the following ‘1’ year - 1821 & 1861.)

40 years later…

40 years later…

1813 - Battle over the re-chartering of the 2nd Bank of the US (BUS) - a financial ‘revolutionary’ war. Thomas Jefferson was spearheading this battle - over the control of America’s currency - and famously wrote “A private central bank issuing the public currency is a greater menace to the liberties of the people than a standing army.” Jefferson lost this battle as the BUS was re-chartered in 1816. Again, it was a tumultuous 3-5 year period (1813--1816 was a parallel to/from 1773--1776) that had major ramifications on America’s currency both then AND in the future. The Panic of 1819 - the first major depression in America was the ultimate result, triggering a financial crisis until 1821. In a pattern that would be repeated many times in the ensuing 200 years, the BUS first issued paper currency like it was going out of style (can anyone say ‘quantitative easing’?) and then abruptly shut off the spigot in 1818. (Can anyone say ‘taper’?) Guess what followed?

1893 - Silver collapses, when government support was abruptly withdrawn. Government price manipulation caused a boom-and-bust cycle in the Gold/Silver/Dollar relationship a pattern that was reminiscent of the 1810’s and one that would be repeated in the century to follow. The Panic of 1893 triggered a run on Gold and ushered in the worst depression in America’s history… up to that point. The Election of 1896 revolved around Gold, with William Jennings Bryan (the loser) arguing to end the Gold Standard (“…you shall not crucify mankind upon a cross of gold…”)… That debate - and his loss - led to the ultimate enactment of the Gold Standard in 1900.

40 years later… 1853 marked another watershed attack against America’s currency. In 1853, the U.S. reduced the weight of Silver in coins, effectively devaluing the currency and ultimately leading to the suspension of payment in Silver in 1857 (another tumultuous, 3-5 year period from 1853--1857). The ramifications of that

40 years later… 1933 witnessed - again in precise lockstep with this 40-Year Cycle - a fatal blow against the integrity of the U.S. Dollar. Its substitute had already been created in 1913 - at the precise midpoint of the previous 40-Year Cycle - and was called the Federal Reserve Note (the events of 1913 came an exact 40Year Cycle from the Coinage Act of 1873 that reaffirmed the Gold Standard). The Dollar was no longer backed by Gold, Gold coinage went out of production, & U.S. citizens were banned from holding Gold. (Emergency Banking Act & Executive Order 6102 in 1933 & Gold Reserve Act of 1934). www.tradersworld.com Sep/Oct/Nov 2014

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Shortly after, Executive Order 6814 - or Silver Purchase Act - was issued in 1934. The decisions and government actions of the early-1930’s are sometimes blamed for the second stock market ‘crash’ and resulting recession - that took place in 1937 (money supply dramatically expanded from 1933-1937, at which time the Fed clamped down in 1936--1937… is there a pattern??). The economic ramifications were felt until 1941 America’s entry into WWII.

40 years later (after 1933)… 1973 rocked the financial and Forex world with the collapse of the Bretton Woods System. This collapse was presaged by Nixon shutting the Gold window in August 1971. That event - with the ubiquitous 40-Year Cycle - helped pinpoint the Major top in Gold in August 2011 (see 2011 Date with Destiny Reports at www. insiidetrack.com). Gold began a new life in August 1971 (no longer locked into $35/oz price tag) and moved progressively higher into the precise 40-Year Anniversary of that event in August 2011! The 40-Year Cycle is so intertwined with Gold that it is hard to view them independently… and it reveals some intriguing possibilities for 2014--2021. 1973--1975 also saw a stock market crash (just like in almost every other phase of this 40-Year Cycle) and a major Middle East event - the agreement to price oil in Dollars, effectively backing the US Dollar with oil. The events of 1973 paved the way for 1976 and the implementation of the Jamaica Accord - an agreement to de-link Gold from the Dollar & allow a floating exchange rate. This was the final nail-in-the-coffin for Bretton Woods. Those events ushered in the largest surge in Gold (and corresponding collapse in the US

Dollar, when viewed from the perspective of Gold) - from 1973 into 1980. Don’t look now, but the latest 40-Year Cycle is unfolding. There is an unbelievable amount of corroborating analysis, information and cycles reinforcing this focus on 2013-2017. And decisive, Dollar-dismantling events - in March 2013 & July 2014 - have powerfully validated it. But that is only one cycle projecting the same thing as MANY others… “Our days may come to seventy years, or eighty, if our strength endures...” Psalm 90:10a “At that time, Tyre will be forgotten for seventy years, the span of a king’s life.” Isaiah 23:15 “This whole country will become a desolate wasteland, and these nations will serve the king of Babylon seventy years.” Jeremiah 25:11 “...I, Daniel, understood from the Scriptures, according to the word of the Lord given to Jeremiah the prophet, that the desolation of Jerusalem would last seventy years.” Daniel 9:2


37

The Cycle of Kings There is another equally prominent cycle that is ALSO projecting Major changes in 2014-2018! One of the most intriguing applications of this cycle focuses on 2018 - a time frame that portends decisive unification events around the globe (see June--August 2014 INSIIDE Tracks for details). King David stated - over 3,000 years ago - that “Our days may come to seventy years, or eighty, if our strength endures...” (Psalm 90:10). While he was referring to the average life of a human (which has barely changed since then), there are multiple applications of a cycle observation like this. In fact, if you simply combine David’s conclusion with Isaiah’s cyclic observation that 70 years is ‘the span of a king’s life’, you begin to see the connection between this cycle and an important national or governing cycle. The point is that this 70-Year Cycle governs man… and man’s government. And, since man’s government is dramatically impacted by economics, the 70Year Cycle impacts ’kings’ on many levels. In 1999, I wrote some articles detailing the 70-year connection between the 1929-1932 Stock Market collapse and an expected 2000--2002 bear market. Stock Indices did not disappoint and experienced their sharpest decline in decades, with the Nasdaq 100 crashing similarly to the 1929 crash. It topped 70 years from the 1929 top and bottomed 70 years from the 1932 bottom. Not surprisingly, the 1929 market peak & crash came exactly 70 years after the 1859 economic trough that followed the Panic of 1857 - often recognized as the first global financial crisis. In fact, the 70-Year Cycle has timed diverse economic swings - often from deflationary troughs to inflationary peaks overlapping similar swings timed by the 40-

Year Cycle. The time to REALLY stand up and take notice is when the two of these multidecade cycles converge. 2014--2017 is a rare example of that!

Inflation: Phase I While much of the discussion on inflation surrounds the 1970’s, that decade actually ushered in a sort of ‘3’ wave advance in inflation - the Elliott Wave distinction for a second impulse wave (the move that unfolds in the same direction as the major, overarching trend whereas corrective waves move against that prevailing trend). In Elliott terminology, the ‘3’ wave is usually the most dynamic one and involves the most accelerated move. From the perspective of commodity price inflation (and Gold/Silver, etc.), the 1970’s filled that bill. If that conclusion is accurate, it means that a ‘1’ wave advance (and a ‘2’ wave correction) must have preceded it. And that is certainly true… The end of World War II in 1945 - and the beginning of a period of economic expansion and prosperity in America - brought with it a period of significant price inflation, much of it spurred by demand. One of the markets that best represented this growing-demand-driven surge in prices has been a topic of ongoing discussion since 2009 - as it accelerates toward a Major cycle high in 2014 (or, at the latest, 2015). It is the Cattle market, which has had major upside price targets aligning at ~160--162/LC & ~225.0/FC - price targets that are linked to most of the major highs & lows of the past 40 years. [More details on this analysis can be found in the INSIIDE Track: 40-Year Cycle Cattle 2014 Report.]

The Running of the Bulls As would be expected, Cattle has risen and www.tradersworld.com Sep/Oct/Nov 2014

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fallen along with economic prosperity and/ or the stock market. One of its strongest surges was from 2002 (when Stock Indices bottomed) into 2008, when the economic meltdown took hold. (That is the 6-year cycle that projects an ensuing high - a low-highhigh Cycle Progression - for 2014.) Since bottoming in 2009 - along with Stock Indices - Live Cattle has nearly doubled in price, the result of economic stimulus AND multiple supply strains. However, it is the relationship between these multi-year moves in Cattle with those in Stock Indices again reinforcing the inflationary Stock Index advance that has unfolded for 40 years… both of which reach fruition in 2014 & 2015! 2015 is also the culmination of a 30-Year period/cycle from the 1985 Plaza Accord that triggered a massive, multi-decade decline in the US Dollar… another key inflationary factor. Could a similar decline be triggered in 2015? The bottom line is that these cycles in Live Cattle, Lean Hogs and Feeder Cattle are all corroborating the potential for a major inflationary crescendo in 2014/2015… and more serious trouble soon after.

The Cycle of Life 70 years is a ‘life cycle’. It represents the (average) life of an individual… of a king… of a leader. As just discussed, 70 years ‘govern’s man… and man’s government.’ When you consider that control of money & finances is the ultimate power over a population - nationally or globally - the governance of currencies is linked to all these 70-Year Cycles (humans, kings, nations, governments, etc.). So, is it any surprise that in July 2014 - exactly 70 years from the Bretton Woods Agreement of July 1944 - a new agreement and a new global, financial entity emerged on the scene?! The ‘opening’ of the New

Development Bank was announced - an entity planned and developed since it was first announced in March 2013 - right on precise schedule.

Dollar Dismantling... BRIC by BRIC It does not take a rocket scientist to see where the fate of the US Dollar is heading… or who is pushing hardest to get it there. America’s two largest competitors (for global supremacy and super-power status) have teamed up in the fight to replace the Dollar as the world’s reserve currency. From a cycle perspective, it is eerie how closely the events of this century have paralleled those of the early-1900’s - a perfect, 100-Year Cycle… and there are unique parallels to the 1800’s & 1810’s as well… not to mention the 1710’s in England (South Sea Bubble, etc.).

Jekyll Island Redux 2010 ushered in a dramatic shift when Russia & China agreed to allow their currencies trade against each other, thereby facilitating bilateral trade - in currencies other than the US Dollar - between these two world powers. No longer would each nation have to buy Dollars before purchasing goods from the other. At the same time, there were credible reports that several nations had met to discuss the ultimate ‘overthrow’ of the US Dollar as the globe’s kingpin. In another intriguing application of cycles, this event came 100 years after a very similar (precursor?) event... In late-November 1910, two powerful US politicians (Sen. Nelson Aldridge & US Treasury Sec’y A. Piatt Andrew) - along with five leading financiers - met at Jekyll Island (off the coast of Georgia) and paved the way www.tradersworld.com Sep/Oct/Nov 2014

39

for a dramatic shift in the course for the US Dollar. In fact, it was a plan for a replacement of the US Dollar (with Federal Reserve Notes). They laid out the plan for the Federal Reserve, which would ultimately assume control of the US currency - taking it away from Congress as mandated in the US Constitution. That 1913 decision paved the way for 100 years of steady inflation in the US… and the steady degradation & deterioration of the US Dollar… or whatever we want to call the US currency. Exactly 100 years later, in late-November 2010, two powerful global politicians (President Medvedev of Russia & Premier Wen Jiabao of China) met outside of Moscow and paved the way for a ‘global reserve’ that would ultimately replace the US Federal Reserve and the global Dollar reserve (status)… a much grander ‘dollar replacement’ strategy. It was like kicking in the ‘after burners’ - to accelerate the ultimate demise of the Dollar. [Note: Both of these major currency shifts were precipitated by major financial crises, panics & collapses. In October 1907, a failed attempt at cornering a stock - of United Copper - led to the Panic of 1907 and a 50+% drop in the stock market in less than two years. 100 years later, in Oct. 2007, the stock market peaked and again ushered in a bear market with the DJIA & other major Indices losing over 50% in less than two years. The global repercussions of that crash - and the ensuing monetary policy - played a pivotal role in the development of the BRICS’ New Development Bank. Coincidence? Or Cycles??] Rather than five individual financiers (as in 1910), the 2010 agreement was ultimately backed by five national financiers (the BRICS nations - Brazil, Russia, India, China & South Africa). At the same time, there were

repeated rumors of other nations signing on to the same idea and pushing for a basket of currencies as the global reserve. They were building a powerful fortress around the US Dollar (to rein it in & ultimately imprison it), BRIC by BRIC. Momentum continued to build into July 2014, when the BRICS initiated the formation of the New Development Bank - a quasi-World Bank that was first agreed to on March 27, 2013. This new global entity will attempt to offset the influence of the IMF & World Bank, and increase the influence of China & Russia in world economic affairs. 1973--1976 - when first Saudi Arabia and eventually all of OPEC - agreed to price oil in Dollars (and when the Dollar was ultimately de-linked from Gold via the Jamaica Accord) - ushered in an inflationary bonanza for the US Dollar, the result of its reserve currency status. From that point forward, America was able to print Dollars with reckless abandon and frequently inflate its way out of debt… at least to a certain degree. This was another textbook example of a pivotal 40-year period of testing. In many cases, that period of testing is a final opportunity to turn away (’repent’) from destructive actions - whether they be moral, social, financial… or all of the above. In the majority of those cases recorded, little or no changes were enacted. Instead, the ’infected’ society accelerated headfirst into a destructive date with destiny. 2013--2016/2017 is the culmination of that 40-Year Cycle for America and her currency. And, it is the next phase of a 25- & 50-Year Cycle for the US currency. And, it is the culmination of the 70-Year Cycle for the US currency. And, it is the culmination of the 100-Year Cycle for the US currency. Just as the move towards Dollar reserve status took a www.tradersworld.com Sep/Oct/Nov 2014

40

few years to reach fruition, the move toward replacing the Dollar as the world’s reserve currency is also likely to take a few years… at least until 2016 or 2017… and possibly until 2021. However, it is VERY unlikely to be a slow, smooth transition. Once the masses recognize the inevitability of this shift, it could be like someone yelling ‘fire’ in a crowded theatre. In synch with this expectation, Stock Indices complete a 40-Year Cycle of inflationary growth in late-2014. It began in late-1974 and has continued since then. The DJIA keeps reinforcing a MAJOR upside price target that is still expected to be tested in 4Q 2014. Once that level is reached, the floor could drop out at any time, thereafter. Meanwhile, the Dollar Index has given some revealing trading signals that corroborate this analysis. The fourth quarter of 2014 is setting up to trigger and/or confirm a wide array of momentous trends & signals in the markets. Gold & Silver are corroborating that and have a powerful indicator focusing attention on August 25--29th to trigger a new move (it reinforces - and builds on - intermediate cycle lows in late-May and intermediate cycle highs on July 9--11th). Is the Dollar seeing the proverbial ‘handwriting on the wall’? Has it been weighed… and found wanting?? 2015--2016 could seal its fate! Eric S. Hadik is President of INSIIDE Track Trading and can be e-mailed at INSIIDE@ aol.com. INSIIDE Track’s website is at www. insiidetrack.com. More information on the 40Year Cycle can be found at www.40YearCycle. com.






41

Bust, Malaise or Boom Realizations of an Elliott Wave Analyst by Jim Forte Bust, malaise or boom represent three very

am

making

my

current

technical

analysis

different scenarios an analyst must contend with

assessment.

when observing the global economic landscape

this review, I think you will be persuaded by its

and the various associated technical market

simplicity and providence.

By the time you finish reading

interpretations. My personal bias is that we are

Markets do their best over time to defeat you

facing a necessary transition from a paradigm of

or at least frustrate you and undermine your

unsustainable and largely unmanageable growth

confidence. I initially found my confidence over

to one of ecological and economic homeostasis.

the weekend before the 1987 crash. I managed

How we make the transition is the question at

to calculate the crash low to the exact point. I

hand.

confess, it was a bit of a “religious” experience

This article however, is intended to revisit the

that led me to dedicate myself to this arcane

market model I developed in 1998 that called

art we know as “technical analysis”. After that

for the major top in the U.S and other global

1987 crash, I found myself in agreement with

markets in 2008. In 2007, I wrote two articles

the predominant EWT (Elliott Wave Theory)

based on this model. They were published in

view that the Grand Supercycle Top was in.

TradersWorld, issue #43 and #44. They offer

As the market exceeded the 1987 high, most

a more detailed philosophical view of the

EWT aficionados targeted 1995 as their final

challenges we faced before the great unraveling

“B” wave refuge for the SuperCycle top. As the

of 2008 and which remain largely unresolved

market proceeded higher into 1996, I concluded

in 2014.

The second article written in early

something else was in force, but it wasn’t until

November concluded that that a Top of major

the Spring of 1998 that the big picture wave

magnitude was most likely made in October

structure became insightfully clear to me.

2007 and would herald the end of the global

As

someone

who

developed

his

world

growth paradigm as represented by the U.S

view through the multi-faceted discipline of

stock market. I postulated that a Secular Bear

anthropology, I witnessed in the 1970’s the

would ensue for a Fibonacci 13 years. However,

emergence of the notion of “limits to growth”

in 2013 as the market powered beyond its 2007

and

highs, this assumption and all that went with it

awakening.

came into question. It wasn’t until early May

economic,

of 2014 that the model’s technical soundness

prophetic

was rediscovered. I revisit it here to establish

lend real world perspective to this mostly

the validity of the foundation from which I

technical analysis. Some of this more macro-

the

“so-called”

spiritual

consciousness

I could offer you a host of demographic, correlational

ecological

insights

that

and would


42

fundamental perspective was explored in the

that has much less to do with how much wealth

original 2007 articles. The market however is a

we accumulate for its own sake and more to do

discounting mechanism and ultimately reflects

with our content of character, integrity of service

the implications of the larger working reality.

and what we do with our wealth and power. We

Perhaps as a follow up, I can begin a needed

need major changes in the industries of finance,

broader discussion as to how we got here and

energy, health care and agriculture (i.e. the

some ideas about how to move us toward

food economy) into something more broadly

a healthy, sustainable national and global

beneficial and sustainable. The prospect of this

homeostasis.

kind of major change seems highly unlikely.

I call them sustainable, ethical,

Vested interests are hard pressed to embrace

equitable, solutions. Before I get technical, I would like to offer

change, even if it is for the greater good. Even

In the aftermath of

if it were to occur, the radical transition would

the 1929 excess, our country went through a

not be without wide spread disruptions and

severe wash out. We were able to releverage

pain.

our economy in a global eco-system that was

likely to lend themselves to adjustments that

still pretty much intact. Now, with our planet

will be reactive and anti-democratic rather than

on the verge of wide spread ecocide, I am hard

wisely planned and smartly engineered.

this one worldly insight.

Instead, a crisis or series of crises are

pressed to see how we can once again releverage

OK, so let’s get technical: The two charts

in the old global growth paradigm which we

below were offered in 2007 in the articles

have stretched beyond its natural limits.

We

published in Traders World magazine and in

need a new way of thinking about our self-worth

the Technical Securities Analysts’ Association


43

This Elliott

was higher on a currency adjusted basis than

Wave model, while not the predominant view,

2007. So what is a good EWT analyst supposed

provided the basis for a profoundly accurate call

to do? The idea that we were actually in a bull

for the large degree market TOP that occurred in

market during the Carter administration when

October of 2007 (2008). For our purposes here,

the nation was going through a catharsis of self-

it is not necessary to study these two charts

loathing after Nixon seems ludicrous. The rally

in detail.

I submit them mostly to validate

off the bottom in 1974 was in three waves, not in

the underpinnings of my larger wave structure

an “impulsive” five wave pattern. Additionally,

analysis I believe to be now in force. (See Chart

1974 to 2000 was 26 years and could not be

#1 and Chart #2)

claimed to have run for a Fibonacci number

newsletter and public meetings.

Chart #3 labeling displayed just above was based on a view that the final Cycle degree

of years as did all other major moves in the twentieth century.

fifth wave began in August of 1982 after Paul

The predominant EWT view is that 2000 was

Volcker finally succeeded in breaking the back of

the big top. When using the year 2000 as the

inflation under the Reagan administration. This

Top, trying to determine an EW count into June

is contrary to the predominant EWT view that

2014 that doesn’t make your head spin is next

the Cycle 5 bull market began in 1974 during

to impossible. So I would like for you to revisit

the Carter administration.

On an inflation or

the model I developed in the late nineties which

currency adjusted basis, 1982 was actually

I then put together for publication in 2007.

lower than 1974, but conversely, the 2000 top

From the bottom in 1982 to the top in 1987 was


44

within a day of a Fibonacci five years. The third

from the 1974 price low.

One of the most

wave was an extended 13 years from 1987 to consistent forces in play with all major market 2000. When the 3rd wave is extended, then the moves throughout the 20th century, both bullish 1st and 5th waves tend to be equal. The 5th wave and bearish were that they ran for a period of from the 2002 low to the 2007 top was “equal” Fibonacci years, e.g. 1,2,3,5,8,13,21,34 and in time to the 1st wave, i.e. within one day of so on.

The top I projected to come in 2008

five years. While on a currency adjusted basis

(which arrived a few months early in Oct 2007)

2007 was not a higher high, it did have wave

represented a 34 year count from the 1974

1 (1982-1987) equality, and it was in a clear price low. The year 2000 did not represent a 5 waves with 2 and 4 alternating in structure.

Fibonacci year count. (Chart #3 illustrates)

The model as I applied it worked perfectly. So

Here is the key point for understanding

pick your fudge. Either accept that the move

what the big picture wave count is likely to

off the 1974 low was in three waves and that be. Let’s revisit the assumption based on my its run into the year 2000 did not represent a

2007 treatise that the Big Top occurred (not in

Fibonacci year count, or accept that the 2007 2000, but) in October 2007 which I reiterate top on a currency adjusted basis was lower than was the end of an extended 5th wave of Cycle the 2000 high.

I have come to renew my view degree that began in August of 1982. One of

that the 5 wave of cycle degree from the 1932 the associated rules and guidelines in EWT is th

SuperCycle low began in 1982 and culminated that when the 5th wave is the extended wave, in late 2007 (2008), roughly 34 Fibonacci years then the “B” wave to follow will often extend


45

beyond the 5th wave high as a result of the large

old paradigm growth. Then he handed off the

degree of momentum built up in the extended

baton as the Berlin Wall came down, the Soviet

5 wave. Think about this on a civilization basis.

Union collapsed and China all jumped on the

Our economy developed an unprecedented

global growth band wagon.

extension as a result of a powerful combination

now her ecosystems are severely threatened

of demographics, extreme financial engineering,

and exhibiting clear signs of rebellion and

and technological prowess all coming together in

exhaustion.

th

Gaia yielded, but

a “perfect storm” old paradigm blow off! After

Chart #’s 3 and 4 show a simple, clear and

the orthodox 5th wave Cycle degree top in late

clean large degree wave structure that illustrates

2007 (2008), we severely unraveled into the

the technical points being made here.

2009 low as an “A” wave.

From this low, we

#4 also shows the Elliott Wave structure and

then mustered all of our empire’s resources in a

Fibonacci targets that I believe are in play as

last ditch attempt to preserve this vested global

we approach a very large degree top in the U.S.

paradigm.

and world stock markets. (See Charts #3 & #4)

What we’ve enjoyed is a super-

Elliott

sized “B” wave fueled by this momentum and built up in our extended Cycle degree 5

th

wave

a

Wave

profound

and

method

Fibonacci of

Chart

analysis

projecting

is

price

from 1982 to the 2007. Ronald Reagan initiated

movements. Technical analysis however, offers

and heralded in this new, yet final thrust of

a bevy of methods for price projection.


The

46

Point and Figure method is one developed about

Against all odds and an unreceptive technical

a century ago and became more popular in the community (including my own skepticism) at the 1930s and 40s. It uses a series of up and down dismal bottom of late 2008 and 2009, Dr. Pruden price action columns of X’s and O’s. The vertical was very bullish. He postulated based on the columns are then counted and evaluated to P&F count formed by the price action from late form a price range projection for a liquid stock 2008 into early 2009 that the Dow would rise or the market. The idea is that the chart base to a price target of somewhere between 17,100 formation provides a kind of fuel tank for the and 19,500.

The price chart below illustrates

move, and the size of the tank (base) can be his work which was later corroborated by Fraser used to project the size of the breakout move. and Bogomazov. (See Chart #5 and Chart #6) In addition, the subsequent consolidations at

A very key point of observation here of

higher price points often provide a confirming, these P&F price targets in the 17,000 area and but smaller projection to the same price range the 19,000 area is that they coincide with the area that was established from the larger base extended “B” wave Fibonacci targets of 17,150 count.

The Wyckoff method that is currently and 19,000 shown in Chart #4! This reinforcing

taught by my colleagues Dr. Henry Pruden, evidence is to be significantly noted. Bruce Fraser and Roman Bogomazov at Golden

In 2007, the crumbling of the mortgage

Gate University in San Francisco employs these market became more evident along with the counts quite successfully in its approach.

massive over leveraging in the banking system.


47

In addition, the spending wave of the huge

Depression era.

We successfully (if perhaps

population of “baby boomers” was peaking. It

temporarily) put the “patient” on life support.

could have also been argued that the foundations

However for the most part, we have not changed

of the computer technology revolution that

our unsustainable ways. In global coordination,

entered the culture in the 1970s had been well

we transferred the mass of private debt in the

adopted and perhaps had peaked with the bust

banking systems to the governments of the

in the NASDAQ beginning in late 2000.

The

world to preserve an unsustainable system.

looming 2007/2008 top in the broader market

Central banks are providing unprecedented

model I had adopted appeared to coincide with

support to the market place and boosting world

these macro-economic developments and added

markets as a result.

gravitas to the idea that at least a decade long

boom that imploded after the year 2000 proved

secular top would be posted.

to be only a shakeout in a larger “S” curve. What

The internet technology

An unsustainable financial system appeared

has followed is a series of digital technology

to be having a “heart attack” and it seemed

breakthroughs that has helped to provide the

doubtful we could return to our business as

promise and the momentum for new businesses.

usual affairs. What ensued was on the order of

The vision of what is possible with this digital

a miracle in financial engineering. In advance

revolution is perhaps now only maturing in the

of the crisis, we brought in Dr. Bernanke who

final stages of “S” curve adoption. While there

just happened to be an expert on the Great

are pockets of earth friendly developments


48

being deployed around the world, the pressure technical case can and is being made by some on the environment appears to be continuing ardent bulls who argue that after a large ABC for the most part unabated. Powers entrenched correction from the 2000 top to the 2009 low, in the old global growth paradigm show little we are in a new secular bull market that will sign of yielding, yet as a country and a world, carry on for years. The underpinnings of this, we need to be reaching for “Higher Ground” (by they argue, are in a continuing new technologies Stevie Wonder). revolution that will transform the way that we The next two charts show two different work and live. (See Chart #7 and Chart #8) technical reads of the Dow’s progression OK, so the case that has been emphasized from the 1920s to 2014. Chart #7 shows an here is admittedly a very bearish one, i.e. interpretation which identifies the big picture a Bust. So let us at least consider the two bull Top in 2007 being followed by an initial other longer term scenarios I titled with, i.e. Cycle “A” wave decline and then an ending Malaise and Boom. Beginning in 1989, Japan Cycle degree momentum extended “B” wave. experienced a stock market bust, a real estate If this interpretation is correct, then what is to bust and demographic rollover. Yet Japan follow is a bear decline of a magnitude most of has managed to muddle through. It did so us are not prepared for. Chart #8 also reflects

however in an economic world that was still

an interpretation that is bearish, but to a lesser growing. Its indebtedness was primarily to extent than the interpretation in Chart #7. A its own homogenous population. It has been


49

Abe’s more recent

growth cycle, presumably built on a more nature

three pronged effort (monetary, fiscal and

friendly and holistically attuned foundation.

institutional) has managed to weaken Japan’s

The technical picture of the market in such a

currency by 25%, seriously increase its inter-

scenario is likely to mean a continuance of the

generational indebtedness, but has done little

very wide banded trading range in play since

to undermine the stranglehold of its vested

the 2000 peak. This would also be reminiscent

institutions.

of the 1970’s wide swinging trading range.

in a 2 ½ decade malaise.

Since few can see under the hood of China’s

Let’s consider the last of our three scenarios,

now fading economic boom, China may be able

i.e. a new Boom built on new technologies

to sustain its charade indefinitely. The largest

that propels us in a new growth cycle beyond

developed economies of Europe and the U.S. are

our indebtedness and to a new economic

still seriously over leveraged, but perhaps the

foundation.

new experimental feats of financial engineering

are in a continuing new technologies revolution

can hold the system together while standards

that will transform the way that we work and

of living deteriorate over time and stagflation is

live. While this would be the best of the three

the order of the decade. We managed a version

scenarios, it seems to me to be the least likely.

of this nationally in the 1970s. Can we manage

Can the monetary and fiscal authorities keep

this process globally now? This muddle through

the ship afloat while new technologies gradually

approach would be a less painful process albeit

transform the landscape?

a longer one before our nation and large parts

of revolutionary technologies is infatuating,

of the world would emerge in a new healthier

powerful vested interests resist and sometimes

Again, the underpinnings of this

While the promise


50

squash them.

In addition, new technologies

tend to move faster than our institutions’ and population’s ability to keep up with them. The most recent example is the “Uber” car service threatening to displace the many thousands of taxi and limo drivers.

The various and many

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examples of this kind of displacement would be too numerous to mention. The dramatic changes needed in our economic landscape are highly unlikely to be implemented, given the vested interests in the major industries of health care, food production and distribution, energy and the banking system.

Fracking, while holding

some promise for our balance of payments, has yet to overcome concerns about its long term prospects and environmental impact. In addition, wide spread cognitive dissonance in all populations, who are vested economically and culturally is likely to stand in the way of rapid consciousness transformation, despite some hopeful visions. So the two more likely scenarios of Bust or Malaise (i.e. muddling through) both imply significant adjustments.

I have thought long

and hard about these avenues. A Bust would be more deflationary, while by comparison some degree of inflation would result if a longer term and more gradual dissipation of our problems were manageable. Do not be fooled however, a

larger

backdrop

of

global

deleveraging

and economic deflation will likely be in force. America, while one nation, is a diverse society. The Eurozone is made up of various nation states with many distinct languages and histories. If all of a sudden, our economies were to suffer severe shocks, the social upheaval would be tumultuous.

So it is likely that sovereign

authorities will do everything possible including the

continued

installation

of

police

state

apparatus to hold the status-quo together. Make

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no mistake, the growing blight of inequality in

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51

term growth. What are various long term charts showing us? The 30 year U.S. Treasury bond is still holding above its 200 month and 200 week moving averages. It has also resumed trending above its 50 day moving average.

Bonds respond

primarily to perceptions of inflation and credit quality.

So

deflation remains the guiding

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Sale

light here. Gold, since 2011 has fallen precipitously and is trading below its 200 week and 200 day moving averages.

57 Back Issues

Similarly, this decline more

generally reflects an absence of inflation fears. Conversely, the U.S. dollar has lost about 40% of its value from 2000 to 2008! Who and what might we consider responsible for that? Deflationists argue that the dollar is in a basing process and believe it will gain strength in a hard pressed world. Bitcoin is a wild card. Commodities are a mixed bag, with weather, new mining technologies and the vagaries

.

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of developing countries making commodities very hard to forecast.

Some analysts believe

commodities will enter a longer term bull market as tangible assets gain favor against paper assets.

Global deflationists will beg to differ.

The currencies of commodity countries have been under pressure in the last year from the threat of a China slow down. To me, the most important commodities to watch are gold, the U.S. dollar and U.S treasuries. They hold I think the best clues to the deflation vs inflation scenarios. If the market or the economy show signs of serious decline or disruption, the monetary and fiscal authorities will likely attempt strong counter measures? The initial response in gold and the dollar are likely

to be inflationary, but sustaining these trends will depend upon the willingness of businesses and consumers to go along for the ride.


52

Day Trading Psychology Using Candle Sticks For Precision Trades By David Hackbart

Day trading successfully means you are able to correctly predict direction of a trading instrument with consistent accuracy, if that means Oil, natural gas, Wheat, Corn or a multitude of stocks and stock options. Many people talk about being able to control your emotions as a key to your day trading success, even more important is being able to see when the fear and greed of others is showing itself on the charts. To do this you need to understand candle sticks and what they are telling you about the emotions of other traders. Bottom line: to trade effectively you must understand that you are not trading the market; you are trading people and their emotions. One of the most significant goals of technical analysis is to identify changes in direction of price action. Candlesticks give visual insight into the market psychology.

trends relatively easy. It is difficult to sort out what direction any market index, instrument or individual stock will do when listening to the so-called “market experts.” Watching the financial news stations will always provide a multitude of opinions of where the market is going. Using Japanese Candlestick signals will circumvent all that noise. The #1 factor built into Candlestick patterns is that they are formed by the collective knowledge of all the investor input, the buying and selling, of a trading instrument or entity, during a certain time period. No matter what you hear elsewhere, the Candlestick patterns tell you exactly what investor sentiment is doing. Candlestick analysis allows investors to project trend reversals of the stock market indexes with a relatively high degree of accuracy.

One often heard comment about learning Candlestick patterns is that there are too many of them to learn. You can rest easy, of the 50 or 60 Candlestick patterns; there are only about Understanding the psychology behind the 12 signals that you need to learn for the vast candlestick is far more important than the pattern majority of trades: Knowing these signals alone itself because in reality, when you’re trading live will dramatically improve your analysis of trend at the right hand edge of the chart, the patterns reversals and make learning Candlestick analysis are not so easy to see. They never quite look as much easier. picture perfect as they do in the textbooks. Once a trader understands the psychology Candlestick analysis is not rocket science. of the candlestick and the correlation of the It is simple investment philosophies put into a candlestick with other enlightening indicators you visual graphic. The 400 years of actual investment will find yourself in profit with most of your trades. results from Japanese rice traders have provided The Japanese traders say “let the market high probability signal results. tell you what the market is going to do.” The Understanding the psychology of how the utilization of Candlestick signals makes analyzing the direction of the stock market indexes and signals are formed provides investors with www.tradersworld.com Sep/Oct/Nov 2014

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better foresight into where to have positions placed. Having this analysis capability in one’s mental arsenal allows the Candlestick investor to have their portfolio positioned so you can trade with momentum. The Candlestick signals are simply the graphic depiction of investor sentiment. Candlestick signals were not discovered and tested by computer back testing simulations. Candlestick signals are the result of centuries of analyzing how human emotions affect a price trend. The signals, occurring over and over at specific points in a trend reversal, provide a statistically proven trading platform. If you understand how they are formed, you’ll understand what makes prices move. Human emotion, when it comes to investing funds, will always have the same ingredients. The Candlestick signals illustrate the investor sentiment mostly defined as fear and greed. When learning to day trade or swing trade, an investor wants a proven investment technique. Understanding the Candlestick patterns gives you a very strong foundation. The candlestick signals have proven themselves to work over and over. The question is not whether they work or not, the question is whether somebody can learn how to use them correctly. Safe Day Trading and the Trading Institute take candlestick charting and individual candlestick patterns and reduce the information down to the basic easy to understand elements. When each pattern is dissected and studied, the information that the candlestick conveys will become a powerful investment tool for the rest of your life. The knowledge gained by learning Candlestick psychology makes learning to trade stocks, options, futures, commodities, or any other trading market, much easier to understand.

Each candlestick pattern provides you an immense amount of information. Learning to invest in the stock market can be a difficult process. There are multitudes of sources that will give their opinions on how to trade. For the person that is just learning to trade, the massive amount of information can be overwhelming. Becoming a profitable trader can be boiled down to one basic premise. What investment strategies and system should I utilize that make me profitable with the majority of my trading and fit my risk factors? Learning to trade the market not only includes finding a proven system that works and that fits ones investment nature, but also finding a system that produces the results an investor expects. Utilizing candlestick signals makes learning to invest in the market much easier to understand. The candlestick analysis not only reveal high probability reversal situations but understanding the psychology that formed those signals makes understanding why reversals occur much easier to comprehend. One of the fastest and easiest processes for learning to invest in the stock market is learning the candlestick patterns. You will find that each candlestick pattern provides an immense amount of information. There are many candle stick patterns that are taught within Safe Day Trading and the Trading institute but today we are going to focus on some of the most profound. Please understand to be a consistently profitable trader candlestick analysis must be combined with other forms of technical analysis to really be useful. For example, when you see one of these patterns on the daily chart, move down to the hourly chart. Does the hourly chart agree with your expectations www.tradersworld.com Sep/Oct/Nov 2014

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on the daily chart? If so, then the odds of a reversal increase. The following patterns are divided into two parts: Bullish patterns and bearish patterns. These are reversal patterns that show up after a pullback (bullish patterns) or a rally (bearish patterns).

Bullish candlestick patterns

Ok, let’s begin with the first one... Engulfing

This is one of my all-time favorite candlestick patterns. This pattern consists of two candles. The first candle is a narrow range candle that closes down for the time period open. The sellers are still in control of the stock but because it is a narrow range candle and if volatility is low even better this signifies the sellers are not very aggressive. The second candle is a wide range candle that “engulfs” the body of the first candle and closes near the top of the range. The buyers have overwhelmed the sellers (demand is greater than supply). Buyers are ready to take control of this instrument! Description The Engulfing pattern is a major reversal pattern comprised of two opposite colored bodies. The Bullish Engulfing Pattern formed after a downtrend. It opens lower that the previous day’s close and closes higher than the previous day’s open. Thus, the positive candle completely engulfs the previous day’s negative candle. Standards 1. The body of the second day completely engulfs the body of the first day. 2. Prices have been in a definable down trend, even if it has been short term. 3. The body of the second candle is opposite color of the first candle, the first candle being the color of the previous trend. Enhancements www.tradersworld.com Sep/Oct/Nov 2014

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1. A large body engulfing a small body. The previous candle shows the trend was running out of steam. The large body shows that the new direction has started with good force. 2. The greater the open gaps down from the previous close, the greater the probability of a strong reversal. Hammer

3. There should be no upper tail or a very small upper tail. Enhancements 1. The longer the lower shadow, the higher the potential of a reversal occurring. 2. A gap down from the previous candle’s close sets up for a stronger reversal move provided the candle after the Hammer signal goes higher. 3. Large volume on the Hammer candle increases the chances of a longer move. Harami

One of the most visually compelling signals is the Hammer signal. The hammer signal is easily recognized by the lower tail protruding to the downside after an extended downtrend. At some point the sellers take control of the stock and push it lower. By the end of the time period, the buyers won and had enough strength to close the stock at the top of the range. Hammers can develop after a cluster of stop loss orders are hit. That’s when professional traders come in to grab shares at a lower price. Description The Hammer is comprised of one candle. It is easily identified by the presence of a small body with a shadow at least two times greater than the body. Found at the bottom of a downtrend, this shows evidence that the bulls started to step in. The color of the small body is not important but a black or green candle has slightly more bullish implications than the red body. A positive candle after the hammer confirms the change of trend.

Standards 1. The lower shadow should be at least two times the length of the body.

The Harami is considered one of the major patterns. The Bullish Harami is a two formation pattern. The first formation is usually a large red or negative candle appearing at the end of a downtrend. The end of a downtrend is represented by stochastic being in the oversold area. The Bullish Harami is formed by the second candle opening above the previous candle’s close and closing below the previous candle’s open. In Japanese, Harami means pregnant woman. As you see in the illustration, the red candle is the woman’s body; the black candle is her belly sticking out. When you see this pattern the first thing that comes to mind is that the momentum preceding it has stopped. Note: Do not confuse this pattern with the engulfing pattern. The candles are opposite! Standards

2. The real body is at the upper end of the trading range.

1. The body of the first candle is red, the body of the second candle is black. www.tradersworld.com Sep/Oct/Nov 2014

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2. The downtrend has been evident for a good period. A long red candle occurs at the end of the trend. 3. The Harami candle opens higher than the close of the previous candle and closes lower than the open of the prior candle. Enhancements 1. The longer the red candle and the black candle, the more forceful the reversal. 2. The higher the black candle closes up on the red candle, the more convincing that a reversal is occurring. Doji

The Doji signal is comprised of one candle. It is formed when the open and the close occur at the same level or very close to the same level in a specific timeframe. In candlestick charting, this essentially creates a cross formation. The Doji is probably the most popular candlestick pattern. The stock opens up and goes nowhere throughout the time period and closes right at or near the opening price. Quite simply, it represents indecision and causes traders to question the current trend. This can often trigger reversals in the opposite direction. The Doji tells you that the previous momentum has stalled. You can make this pattern work for you. Here’s how. The first thing that you need to know is that a doji is only significant after an extended move to the upside (for a short setup) or an extended move to the downside (for a long setup). Also, the doji should be at a support or resistance area. The Psychology: The Bulls and the Bears are conflicting. This is an alert to investors to take heed for possible trend reversal. Enhancements The Japanese say that “whenever a Doji appears, always take notice. A well-founded rule of Candlestick charts followers is that when a Doji appears at the top of a trend, in an overbought area, sell immediately. Conversely, a Doji seen at the bottom of an extended downtrend requires buying signals with the next candle to confirm the reversal. Otherwise, the weight of the market could take the trend lower.”


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Bearish candlestick patterns

You’ll notice that all of these bearish patterns are the opposite of the bullish patterns. These patterns come after a rally and signify a possible reversal just like the bullish patterns. Ok, now it’s your turn! I’ll let you figure out what is happening in each of the patterns above to cause these to be considered bearish. Look at each candle and try to get into the minds of the traders involved in the candle. SHOOTING STAR The shooting star is also known as the inverted hammer. As you can see it is the opposite of the hammer we discussed above. This candlestick marks a potential trend reversal, but requires confirmation before action.

Description: One candle pattern appearing in an uptrend. The tail should be at least two times the length of the body. The color of the body is not important, although a black body has slightly more Bearish indications. Pattern Psychology: After a strong uptrend the Bulls appear to still be in control with price opening higher, but by the end of the day the Bears step in and take the price back down to the lower end of the trading range. Lower trading the next day reinforces the probability of a pullback. The Shooting Star is a bearish reversal. A Shooting Star can mark a potential trend reversal or resistance level. The candlestick forms when prices gap higher, advance, and then close well below in the same time period. The resulting candlestick has a long upper tail and small black or red body. After a large advance, the ability of the bears to force prices down raises the yellow flag. To indicate a substantial reversal, the upper shadow should be relatively long - at least 2 times the length of the body. Bearish confirmation is required after the Shooting Star and can take the form of a gap down or long red candlestick on heavy volume. www.tradersworld.com Sep/Oct/Nov 2014

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Dark Cloud Cover

that the sellers took over the control of the market. It signifies that the top reversal of the uptrend is impending.

Learning a Systematic Approach to Candlesticks Promotes Your Profits It is a reversal candlestick pattern which is bearish in nature and appears at the end of an up-trend. It is a complex pattern made of two candlesticks. The first candle is bullish in nature and the second is bearish in nature.

What is the element that is different between somebody using a trading technique successfully and somebody else using the technique unsuccessfully? Emotions!

Being taught the mechanics of a successDescription: It has its name because of its re- ful trading program is fairly easy. Unfortunately, semblance to a cloud covering. Dark denotes the underlying pessimism. It is one of the important this education usually assumes investors will aupatterns, when it appears you should not ignore it. tomatically implement the program based upon controlling their own emotions. The bearish dark cloud cover can be used as Most investment training programs do not an indication of the end of an upward trend, and therefore can be used as both a trade entry and address this very important element of investa trade exit pattern (i.e. an exit from a long trade, ing. Why? Because most investors want to hear and/or an entry into a short trade). how easy it is for them to make money with a The more the penetration of the second candle’s new trading technique. They do not want to hear close into the range of the previous candle’s black about the difficulties they will run into when utilizreal body, the more the bearish the signal. Some ing any trading method. technicians insist that the penetration of second Learning how to trade successfully is a twocandle’s close should be at least 50% into the range of the previous candle’s black real body. part process. Implementing the correct executions based upon the information provided from Psychology: On the second time period the price opens above the high of the previous bullish can- your trading program and controlling your emodlestick. New buyers are enthusiastic. Old buyers tions while the trade is proceeding. are adding to their position. But the smart money Learning how to use candlestick analysis is starts selling to these buyers. As the supply increases the momentum decreases and the prices easy. Learning to control your investment emostarts falling. As the prices falls the bulls are happy tions becomes much easier when using candleto buy more thinking that it is a value buy. This fa- stick signals correctly. cilitates bears to sell at higher level. Safe Day Trading and the Trading Institute The supply continues to increase more than spend as much time as needed showing investhe demand, pulling the price down. As the new tors not only why and how candlestick analysis buyers are in loss, they also start selling out of is profitable but also demonstrating what each fear to cover their long positions. The old buyers investor needs to know about their own emotions start booking profits by selling their positions. As to make investing successful. the bears continue to increase their short position, the price falls further and at the end of the session the price closes below the opening. This results in the formation of bearish red candlestick. The dark cloud cover signal becomes more valid if the close has penetrated well in to the previous white candle’s real body. It is obvious with Dark Cloud Cover pattern www.tradersworld.com Sep/Oct/Nov 2014

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I highly advise you to take advantage of our VIP Guest opportunity to watch a LIVE 2 hour trading session. Go to www.TIEdemo.com to register today. Candlestick analysis as taught by the trading institute and Safe day Trading is the proven investment technique that puts the probabilities of being in profitable trades in the investors favor. This does not necessarily mean the results are in a consistent style of return. It merely places your investment funds into situations where the probabilities are likely to produce a profit. This is why using a consistent complete trading system is important. Not every trade is going to work out as expected. There will be losses. However, based upon the results that candlestick signals have produced over the past 400 years, when all aspects of candlestick signals are in alignment, the total results should be a strong positive return. Learn how to use candlestick signals correctly. The proper use of money management and emotional control produces a much greater potential result than any other trading program available. Candlestick analysis will help you eliminate emotional reactions. Human emotion is what tends to lose investors’ money… Learning the psychology of candlesticks converts emotions into profitable advantages. No more wondering and hoping that your positions will make a profit. Candlestick analysis puts you in total control of your investment results. It identifies panic selling and exuberant buying, allowing you to extract huge profits from the markets. Learn to invest like the seasoned investor. Whether you are a beginning investor or a professional trader, understanding Candlestick analysis will improve your returns immensely. Make yours a profitable day,





Dr. David Hackbart www.SafeDayTrading.org


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Trading on Target Free Newsletter

Adrienne Togharie, Trader’s Success Coach

Visit TradingOnTarget.com to receive a free newsletter on Discipline for Traders Adrienne Toghraie, Trader’s Success Coach, writes articles that are dedicated to those of you who have mere minutes a day to absord helpful ideas and creative solutions to nagging problems about discipline in trading. Visit TradingOnTarget.com to receive a free newsletter on Discipline for Traders


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The Courage to be a Trader By Adrienne Toghraie, Trader’s Success Coach TradingOnTarget.com [email protected] to be a trader, let’s take the trader’s journey and examine the hurdles he must overcome.

Innocence Lost The first time a trader walks into a trading room and feels the excitement welling up inside, he wants to shout, “I’ve found it! I found my destiny!” He rushes to the nearest bookstore to buy a book called Trading for Dummies, and as soon as he reads it, he places his ten thousand dollars in life savings in a brokerage account and proceeds to lose it all. Our trader has learned his first big lesson and paid his first rite of passage. Each step along the path will require him to pay for his rite of passage with another show of courage. Trading is not sympathetic to the meek and the mild. Few professions require as much courage as trading does. Most traders do battle from the time they come into the profession until the time they retire. From the initial educational phase, to fighting the negativity of significant people in their life, through the challenge of finding a methodology that works, there always seems to be another hurdle to face. Then, the difficulties of environmental issues, psychological issues and the everchanging markets must be added to the mix. Each new step that must be taken and each new issue that must be addressed requires courage. The rewards of money, excitement and conquering personal demons are what motivate traders to conquer the next challenge and summon up the requisite bravery. To understand how much courage it takes

So, You are Going to be a Gambler… Our trader’s first big loss has knocked him off his horse. Once he dusts himself off and gets back up on the horse, he will have left behind all of the traders who cried “Uncle” and gave up. The next obstacle to confront is all of those wonderful, supportive people in his life who suddenly stop being supportive and fill the air with messages of fear and negativity: “Are you nuts? Do you want to be a gambler like your Uncle Lenny?” They will tell him stories about other sorry fools who took the same path and lost everything. They will urge him to reconsider his career choice for his own sake and for the sake of his wife and children. Many traders do not have the courage to stand up to this orchestrated barrage of naysayers. Trying to convince well-meaning loved ones who do not understand that trading is a www.tradersworld.com Sep/Oct/Nov 2014

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viable profession is especially difficult if you do not approach trading as a businessman yourself. Until our trader takes the steps needed to be a professional trader, he will have to proceed without the support of the important people in his life. To gain their support, he will have to demonstrate to them that he has more than the desire to be a trader. He must also have the education, training and experience to succeed.

“Reading, Riting and Rithmatic” Now, our trader will take his first step on the path of the warrior trader. That first step is education. Not until he takes that first step will he be able to call himself a professional trader. The chances are, however, that at this point, he will realize that he does not have the fortitude to face the hurdles of this dynamic profession. After all, trading books can be very intimidating to the novice and can scare him off. However, he will successfully complete this step if he starts off reading books that are simple and builds on them with progressively more challenging ones. And yes, our trader must hit the books and read everything he can find about trading and the markets. Without a good foundation in understanding the markets beyond “books for dummies,” our trader has nothing to fall back on in the ever-changing markets. If he wants to be a long-term, consistently good moneymaker, he must have an understanding of how to handle anything that the markets will do. Many programs, seminars and coaches are available to the trading public. However, the majority of a trader’s education has to come from his own hard-earned experience. It is important to note that this part of the journey never stops. While the educational part of the journey becomes less of a hurdle the more he reads, our trader can be caught

unaware if he does not continue to educate himself throughout his career.

Why do I Need a Plan? It’s Just Trading. Once our trader has built a foundation in knowledge, the next hurdle is putting it all together in a business plan. After twelve years as a Traders’ Coach, it is still amazing to learn how many so-called professional traders do not have a written business plan. And it must be written down. Our trader will find that by doing so he will organize his business and find the flaws in his methodology. This effort will save him from learning a lot of lessons through losses. Many traders do not want to fill out a business plan because they want to trade by the seat of their pants. They find it boring and stifling to trade by written rules. In my experience, the best traders are those who are discretionary, using an intuitive indicator. Until our trader has a method that he can write down with definitive rules, he cannot rely on his method. And, yes, intuition can be quantifiable and reliable when monitored over a period of time. In fact, I believe it is the most reliable indicator a trader has as long as he has put his physical, emotional and mental states into balance.

Testing, Testing and More Testing Within our trader’s business plan is his methodology. While the past does not equal the future, he needs the confidence that comes from believing that he can achieve a successful outcome in order to reach his goals. The best way to build that confidence is to test his methodology. As he tests his system using several different methods, it is likely that he will discover that his method is not reliable. So, he adjusts the parameters to fit the current state of the market and his methodology works fine until the market www.tradersworld.com Sep/Oct/Nov 2014

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changes. Suddenly, his system is telling him that he is wrong. The stress resulting from each adjustment leads to emotional upheaval. Our trader finds himself throwing tantrums out of frustration, fear and anger. Once again, our trader faces another rite of passage. Not only is his methodology being tested but his own courage to succeed is being tested as well. At this point, he either works through his temper tantrums or he abandons trading. Suddenly, he realizes that tantrums or rather the lack of them separates the diehard trader from the traders who cannot make the grade.

triumph to be counted among those traders who are just average. They may be average traders, but they are certainly not average people. It is a tremendous accomplishment to have conquered the obstacles in the path to becoming a trader.

Begging, Borrowing and Saving

> his computer dies for no apparent reason

Just as our trader has begun to believe that he can now be a money-making machine, he is faced with another hurdle to overcome. He discovers that he should have been accumulating monetary resources specifically for his trading capital. His trading money can only represent a very small part of his family’s savings, because he does not want to make himself vulnerable to financial ruin on the way to becoming a trader. Using family savings will add stress to him and his family. If he does not have enough money to be in the trading business, he should only trade part-time until he can trade free of the stress of financial pressure. Starting and maintaining a trading business requires capital beyond the money our trader needs to trade. The average good trader earns 20% on a consistent basis. If our trader calculates his living expenses, his cost of doing business and what capital he has to trade, the sum is a good indicator of his readiness to enter the profession on a full-time basis. While there are those exceptional traders who earn very high percentages, the majority of traders do not. Our trader can consider it a

Computer and Trench Warfare The big day has arrived for our trader who is ready to take his first trade as a professional. He thinks he has acquired excellent equipment, a good data service, and fast connections through his local cable company. However, obstacles are still lying in wait along the way:

> his computer is running but he has data service outages > has trouble getting stock splits in a timely way in the data base > it takes days for his operation to get back into full service Does our trader continue to beat on his computer and rant at anyone who will listen, or has he learned to live with the frustrations like most traders? Even when everything goes smoothly, he still faces the problems of getting fast fills with little slippage. As a professional trader, all these things encompass his trading environment. If he is surrounded by these problems, he can get upset to the point of not being able to function for the rest of the day. Or he can have the emotional fortitude necessary to learn to take the day-to-day obstacles in stride as part of trading and be stress free and ready to trade when all systems are functioning.


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Can’t Follow the Rules By now our trader has learned that throwing the computer out of the window creates more delays and that yelling at people just upsets him. Once he is able to work within the framework of what he can do, he must face the biggest obstacle of all: he cannot follow his rules, he cannot pull the trigger, and when he does pull the trigger, he does not exit at the right time. What our trader forgot to include in his foundation was the psychology of trading. Yes, the psychology of trading exists. Even if a trader is currently making money in his trading, he will sabotage his results if he is not willing to handle his psychological issues. The traders who understand the importance of handling psychological problems before they start trading have a head start on those traders who find out about their issues when they sabotage their trading results. The most common reason that traders avoid dealing with their psychological issues is fear. It takes courage to overcome this trading obstacle.

The Changing Markets Our trader has finally handled many of his psychological issues and is now a steady, good trader. In the process, he has mastered the flow and rhythm of the market so that he can count on putting money in the bank every month. His parents regard him with pride and call him, “My son the trader.” Then, the markets do a flip-flop and the big trends disappear. Now the Bear reigns, but he is still the Bull trader. So, he returns to the drawing board to adjust and accommodate because he is a professional trader who has not lost his passion. As he fights to recover his control, he recognizes the fact that part of being a successful trader is the ability to adapt to these adjustments by learning how to handle stress. The world changes and he must, too.

Yet, for a professional trader, these changes are part of the excitement that keeps him going.

Conclusion Successful, long-term trading is not for the faint of heart. Each step along the way provides challenges to your grit, stamina, flexibility and character: frustrations are an every day event, change is always around the corner, and your own psychology may be sabotaging all of your efforts. Surviving as a professional trader requires the courage to see these obstacles as merely the elements of the game, so that you can play your hand to win. ADRIENNE TOGHRAIE, a Trader’s Success Coach, is an internationally recognized authority in the field of human development for the financial community. Her 13 books on the psychology of trading including, The Winning Edge series 1-4 and Traders’ Secrets, have been highly praised by financial magazines. Adrienne’s latest book published by Wiley, Trading on Target, is available at Amazon.com. Adrienne’s public seminars and private coaching have achieved a wide level of recognition and popularity, as well as her television appearances and keynote addresses at major industry conferences. Adrienne@ TradingOnTarget.com


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Trading Truths You Need to Know By Roger Felton When a trading instructor and mentor has been teaching for as long as I have surprises are few. Trader troubles I hear are familiar words I’ve heard many times before from hundreds of traders I’ve worked with. The pain and anguish of seeing their trading dream melt away with every losing day is real. So are the years of effort and small fortunes spent on indicators, courses and, of course, money lost in the market. This article is intended to help traders lift the fog of confusion and frustration and begin to understand what’s really been holding them back. Only then will they be able to effectively begin to turn things around. After all, you can’t fix what you don’t understand. I’ll also share some simple but effective tips that any trader can use immediately. People decide to become traders for a variety of reasons. Some just want to enjoy the lifestyle and personal freedom it can provide. Some decide to become a trader because they feel it’s the only option left. Some just want the big bucks and some just love the thrill of trading. The ones that have the toughest time are the ones who are trapped in desperation and panic. These by far are the most difficult to help because they almost always lack the essential characteristics that traders must have such as focus, discipline, patience and confidence. None of these elements can ever exist in a negative mindset. Before I mentor a trader-student, I first get to know them on a personal level in a few one-on-one conversations. This tells me a lot about that individual and how to approach their trading issues most effectively. Mainly, I need to know if their difficulty is based on a lack of market mastery or a lack of mental

mastery, or both. All the mechanical training in the world will be lost on a trader who desperately needs help on the psychological side first. So, for now, let’s assume that you are not a desperate trader and you have a true passion for trading. You also don’t have knocking knees and sweaty palms every time you enter a trade. You understand the trading game, paid your dues and still found consistent success to be as elusive as truth in politics. I matters not what courses you took, what books you read or what indicators you use because we’re also assuming that whatever you are doing isn’t working to your expectations, right? The question is “Why isn’t it working when it’s working for Bob, Fred, Patty and Susan?” This is one of the biggest mysteries in trading and answering that question is one of the main goals of this article. Maybe you can relate to what I commonly hear from traders who trade systems that work for others but not for them. First they feel confused, then frustrated, then angry and, finally, they just feel stupid. Although these feelings and emotions are human, they are also completely unnecessary and wrong. The best way to understand the dynamics here is to use an analogy that most people can relate to. John is 30 years old, in good shape and has a passion to play golf on a professional level. He practices almost every weekend. Once in a while his score breaks 100 but then goes back in the 120’s. He’s never had a lesson or an instructor. He’s convinced he can recognize his faults and figure out a way to correct them. After watching hours and www.tradersworld.com Sep/Oct/Nov 2014

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hours of Tiger Woods videos, he sells his clubs and invests thousands of dollars on the exact clubs Tiger uses. Eagerly, he drives to the golf course and plays two full 18 holes trying to mimic his idol, TW. Later, he sits in his car in disbelief that he just played his worst golf in years. John was scheduled to play in a team tournament with his golf buddies the following weekend. How do you think he did? John made some really classic mistakes. First, he thought if he studied a pro golfer and did the exact same thing they did he’d surely be ready for the US Open in no time. To make sure, he spent a fortune on a set of clubs that he wasn’t used to yet and thought he’d set new course records with them. When we try to master a skill such as golf, or trading, and radically change what we’ve been doing, it rarely goes well. Trying to find success trying to copy the actions of someone else nearly always ends in failure. Nearly every pro golfer and pro trader had extensive professional help at some point in their career…an instructor, a mentor… to work with them who could spot their weaknesses and help correct them while building on their strengths to keep them on track. But John chose to go it alone. He’ll waste thousands and fail but not one dime spent on that which could him the most good. Mentorship is crucial when trying to master any difficult skill. When we attempt to take any skill to a professional level, the one common element that is absolutely necessary is the thing we call “Confidence”. No destructive negative human emotion can exist in the presence of confidence. Every champion, every pro in any field has it. You can’t hope or wish your way to achieving confidence. When you enter a trade, do you have rock-solid unshakable confidence even if the trade loses? If the answer is “No”, then we have work to do.

Professional traders know that they will be taking thousands of trades in their career and the outcome of any particular trade is irrelevant and statistically insignificant as long as they do their job. As humans, we want all trades to win yet we know that’s impossible. The difference between the pro and the novice is, once a trade is entered, the outcome is of little concern because they have the confidence in knowing that their goals will be achieved regardless the outcome of any trade or series of trades. How do we begin to develop extreme confidence? First, you have to find a trading system that not only works, but it works for you. “Wait”, you say, “If a system works then why would it not work for me?” Well, what if the system works but the drawdowns are brutal on most trades? Sweating through big potential losses isn’t fun and sure doesn’t breed confidence. What if the system is just too darn complicated? After a few trades you are so mentally drained that you need a nap. Would that work for you even though the system showed itself to be profitable on paper? Your system has to fit your personality and style like a fine tailored glove or you will never totally trust it and confidence will be impossible. Getting emotionally involved in any trade is wasted energy. Trading is a numbers game and the sooner you realize and believe that to your core the sooner your trading will start to improve. When you are trading and you start to worry about a trade not working or past trades that lost, QUIT TRADING! Any trader in a negative, worried frame of mind cannot win because that trader cannot think clearly and they trade with tunnel vision. Confidence turns to panic and desperation and a losing day turns into a disastrous day. In addition to mental mastery, confidence www.tradersworld.com Sep/Oct/Nov 2014

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building requires two vital things. First, you must have extensive market knowledge. You have to know what makes markets tick, pardon the pun. Now there are a lot of books, articles, web info and trading courses available at your fingertips. One of the biggest mistakes traders make is thinking it’s all valuable and true. Unfortunately, much of it is total bunk and traders end up paying dearly in the market trying to make it work. And, likewise, there are some extremely expensive trading courses that haven’t made a dime for anyone including the hucksters selling it. The lesson here is never make a quick decision when it comes to your trading tools and NEVER believe for a moment that any trading system exists that you can buy and make money immediately with no time and effort investment in knowledge and training. It’s not going to happen, folks.

If you only get one thing out of this article, I hope it’s this: The only way you will ever trade consistently successful for the long haul is to learn to trade for yourself. A Trading System is never any better than the trader behind it pushing the buttons. 90% of all traders don’t believe that and 90% of all traders fail. It’s no coincidence. Ok, enough with the preliminaries, let’s have some fun with some simple techniques that require only rudimentary knowledge of market behavior. These two setups are ones I use every day and have an amazing degree of success. As I mentioned earlier, no trading system will work consistently without knowledge of market behavior. Market Rule #1: All moving markets have a memory and hate sudden moves. When one occurs, the market will invariably


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try to gain it back. The market will be 100% successful only 40% of the time, but it will get half of it back 90% of the time. So play the odds and go for the high percentage target. Yes, you could scale out of the trade but experience has proven to me that it’s less profitable overall. Before we look at a chart, let me warn you that I don’t use charts most traders are familiar with and I will probably never use those again. I use a modified Renko Bar that we developed about 3 or 4 years ago and nothing I’ve found compares to it. We’re now seeing numerous other trading companies and chart/platform providers finally seeing the light and offering their similar version of the FT Renko Supreme bar that we use. We take that as a huge compliment and hope that more traders will use them. These modified Renko Bars are extremely

geometric and have a strong natural ability to filter market noise that is so evident in time-based and tick charts just to name a few. Moreover, this unique bar type offers powerful signal entries that are invisible to other traders not using them. That’s a huge advantage. Hardly a week goes by that I don’t discover something new and valuable using the FT Renko. Let’s take a look at the following chart and see the relatively large moves long and then short on Crude Oil. These are marked with a Green arrow up and a Red arrow down. If you look closely you will see two small red-dotted and green-dotted lines that are “extended” with a yellow horizontal line for each. That is your 50% target. Before entering a trade, you must wait for a signal. I have identified over a dozen powerful entries using these FT Renkos but in this example we


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see entries produced by the HD, BD and TS signals. From the left, you see the string of Blue Bars running up (green arrow) and then the yellow label HD signal appears with lots of warning for us to get ready to go short by placing a Limit Order at what will be the closing price of the red Trigger Bar (at red HD signal arrow). Price immediately and steadily drops in a series of red bars each one adding 10 ticks of profit to the trade for a total profit of about 34 ticks. The small yellow arrows are your target exit points where you will place your Buy Limit Order to exit. Trading just 2 contracts, this would equate to a profit of $680. Another entry short could also have been taken on the yellow label BD signal for a profit of about $200. The next day we see a nice long drop in Crude (CL) for nearly 150 ticks. But our target is 50% of the retrace which happens twice…once on the yellow label TS long good for over 40 ticks and again on the magenta BD long good for 30 ticks. Again, trading two contracts here would yield about $1400 profit. Stops are always placed one tick outside of the “tail” of the trigger (entry) bar. Knowing exactly when the market will move and in what direction is a big help but traders must also know precisely where to place the stop and exactly when to exit each trade. This knowledge is mandatory. With more trading knowledge, greater profits can often be made but the advantage here is simplicity and, as you can see, excellent profit can be taken several times each day. Note also that the FT Renko Bars can easily be scaled to any size to fit any trader’s style and account size. These signals occur on any Renko timeframe. Market Rule #2: Markets hate being pinned down in congestion, even highly directional,

and will eventually break out, often with a vengeance. Let’s examine that rule by studying another chart below for a high probability trade I call the “Swing Channel Breakout”. When a market is in good healthy volatility the SignalPro code kicks in and draws channels at the swing points. When these channels are broken, entry is taken at the close of the entry Trigger Bar shown in the 3 green ovals. SignalPro also shows me where the strong Support and Resistance levels are and I usually use those for targets as seen in the example below. Standard entries and stops to S&R targets had a total profit potential here of about $2200 if a trader had placed just 2 contracts on each trade. Want to Learn More? Knowledge is everything in every demanding difficult skill such as trading and there’s a lot more to learn, for sure. Teaching by text is tough so we suggest visiting the live market Felton Trading Room for lots of great tips and trading info. Visit our website, www.FeltonTrading. com, to register and put “30 Day Trial” in the registration box to receive a full month access to the room. It’s interactive so ask lots of questions. Bonus: If you’d like to experience the power and accuracy of precision code, you can get SignalPro Trial Version completely free, no obligation. You’ll automatically get free personal access to me if you need assistance or mentorship. Email Beverly@FeltonTrading. com and she can get you all set up. Enjoy SignalPro and let us know if you think our course and program is for you. If you have any questions concerning Felton Trading or this article, please feel free to contact me anytime at Roger@FeltonTrading. com . Roger Felton - President, Felton Trading www.tradersworld.com Sep/Oct/Nov 2014

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Market Snapshot: The Importance of Dominant Sentiment Cycles By Lars von Thienen Understanding the sentiment cycles in financial stress is critical to generating returns in the current market environment. Sentiment cycles influence the movement of financial markets and are directly related to people’s moods. Getting a handle on sentiment cycles in the market would substantially improve one’s trading ability. The present report demonstrates the power and importance of sentiment cycles. In this report, we highlight the importance of detecting cycles in sentiment to spot turning points in financial data. The following case study exemplifies the importance of sentiment cycles and the predictive power of the Dynamic

Cycle Explorer (DCE). The Dynamic Cycle Explorer works on the assumption that cycles are not static over time. Static cycles are misleading for trading purposes. Dominant cycles morph over time because of the inherent nature of the parameters of length and phase. Typically, one dominant cycle will remain active for a longer period and vary around the core parameters compared to other cycles. As real cyclic motions are not perfectly even, the period varies slightly from one cycle to the next because of changing physical environmental factors. This dynamic behavior is valid for financial market cycles as well.


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How does the approach work? Every time a new bar appears on the chart, the Dynamic Cycle Explorer reassesses the state of the current dominant cycle in terms of length, strength, and phasing. Subsequently, it updates this cycle by plotting it onto future projections. However, a trader will focus only on the next expected turning point, which is what a market analyst is interested in. The DCE is not used to predict a complete static cycle far into the future. We are interested in determining and monitoring the next turning point based on the detected dominant carrier wave phasing, which is the point in time where we expect the market to turn. As we move forward in time, every bar signifies an update of the expected turning point by a reassessment of the current state of the dominant cycle length and phase. This dynamic forecast based on the actual state of the dominant cycle provides information about the time and direction of the next turning point. We obtain real-time information about when to expect the next major turning point in the market as we continuously reassess the parameters of the dominant carrier wave. This information is updated every time a new bar appears. This technique was used in the following market report that was published on 8 June 2014 in the publicly available WhenToTrade magazine section. The St. Louis Fed Financial Stress Index (STLFSI) is a vehicle that can be used to analyze sentiment data. It is created using principal component analysis, a statistical method for extracting the factors responsible for the correlation of a set of variables. Financial stress has been identified as the chief factor influencing the co-movement of its designated market variables; extracting this factor allows St. Louis Fed to create an interpretable index. The index is constructed using weekly data series for a variety of interest rate, credit spread, and


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volatility measures. We can apply our dynamic cycle tools to this dataset and see if we can detect important dominant cycles that forecast financial stress extremes. This exercise was performed on 8 June with the DCE. This tool can automatically detect the current active dominant cycle and track the current phasing to forecast the next expected turn. The approach is described in detail in the book Decoding The Hidden Market Rhythm- Part 1: Dynamic Cycles. Chart 1: St. Louis Fed Financial Stress Index with Detected Dominant Cycle—78 weeks/ cycle low (8 June 2014) The cycle explorer detected an active “financial stress” cycle with a length of 78 weeks that tracked the latest major market movements. This is shown in the lower panel of the chart where the cycle analysis on the FRED data took place. The source data was accessed via the free Quandl data feed through the symbol FRED/STLFSI and was analyzed with the Dynamic Cycle Explorer in the WhenToTrade platform. The blue cycle shows the automatically detected dominant cycle; the major turns are indicated with red and green arrows on the price chart to show the correlation with the Dow Jones Index. The integrated, dynamic phasing analysis projected a current extreme low in the financial stress index at the point of the analysis (8 June). An extreme low in the financial stress index correlates to market highs. The current low in the financial stress index is also spotted as an


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expected major low of the current dominant “stress” cycle. Therefore, the DCE pointed to a possible market high at the time of the analysis. As is often discussed in our articles, one should always crosscheck for other dominant cycles, especially in other timeframes/vehicles. Another sentiment vehicle that is commonly referred to is the Volatility Index (VIX)—often called the “fear” index. A dominant cycle analysis on the VIX showed another sentiment extreme on the daily timeframe. The daily dominant cycle, which was automatically detected with a length of 152 bars, projected a daily sentiment “fear” low on 8 June. Fear index lows also correlate to market highs. Chart 2: VIX with Detected Dominant Cycle—152 days/cycle low (8 June 2014) The VIX and the dominant cycle are shown in the lower chart panel of Chart 2. The green cycle was detected automatically by the DCE on the daily data. This cycle (blue line), together with the long-term weekly cycle from the financial stress index (fuchsia line), were mapped to the price chart in the upper window. At the time of the analysis (on 8 June 2014), these two cycles were in perfect alignment, which is a very important cycles-within-cycles alignment. The interesting point is that we have two different dominant sentiment cycles from different datasets and different timeframes coming into alignment, and both dominant cycles project a current market high. This analysis together with the forecast of a current market high was posted on 8 June 2014 in the public magazine on whentotrade.com. This real-time cycle analysis that forecast


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the market high is available at https://www. whentotrade.com/financial-stress-low-low-low-lowlow/. Today, on 8 August 2014, a review of the blue chip indexes reveals that the high occurred the very next day after the forecast was published, on 9 June 2014. Both markets registered a sharp decline after the cycle analysis was published. Chart 3: Drop of -10% in European Blue Chips (Euro Stoxx 50) After Cycles Signal on 8 June 2014 International Blue chips registered in Europe dropped by 10% (Chart 3) and the US blue chips of the Major Market Index (Chart 4) dropped over 5% after the cycles signal in the sentiment vehicles. Chart 4: Drop of over 5% in US Major Market Index (MXI) After Cycles Signal on 8 June 2014 This example not only proves the ability of the DCE to predict sentiment cycles ahead of time but also emphasizes the importance of analyzing dominant sentiment cycles as leading indicators of market turns. Additional examples and real-time forecasts based on this technique are included in the book Decoding the Hidden Market Rhythm– Part 1: Dynamic Cycles. WhenToTrade.com Lars von Thienen





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Trading Institutional Supply and Demand Patterns By Thomas Barmann from NeverLossTrading

If trading was easy, nobody would ever go to work again… Just listen to CNBC: Depending where the S&P 500 index stands in relation to the 50-day or 200-day moving average, you know how to go long or short in the markets. Simple, isn’t it? This trading algorithm can be programmed and put on your chart in 15 minutes – set and done. How comes that the vast majority of traders and investors fail when it comes to achieving their financial goals? Conventional technical analysis is a lagging the real market action and produces high risk, low reward, low probability trading and investing setups. By the time those indicators tell you to buy or sell, the low risk, high reward opportunity has passed and the typical circle of doom starts: Small win, small win, big loss. How to prevent this? First of all: Understand who drives the financial markets: Institutional Investors. Who are institutional investors and what is their core focus? Table 1: Key Institutional Investors and Focus


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Table-1 shows: “Prop Traders” also act as “Liquidity Providers”: On one hand, some institutions trade their own money and on the other hand, they are providing liquidity. Hence, if a core “Prop Trading Company” wants to accumulate or dispose assets, they have to bypass their key competitors. Even so, they try to hide their actions; the other market forces spot what is going on and trade along or against the developing market action. With the right preparation, you can spot price moves initiated by institutional investors and you do the most ingenious, you are just following the leaders. You might ask: Where is the edge in a follower strategy? Our answer: As a private investor you can open and close entire positions all at once, without distorting the market. Institutions, cannot do this: By the size of their holdings, they have to scale in and out of positions and this is where you can beat them: By speed, achieving better price averages on the in- and out of a position. Does that account for all financial markets? Our answer: Even so financial markets differentiate by their core focus, Prop Trading Institutional Investors are the key drivers, speculating for price changes, acting as- or trading through liquidity providers: Market Makers. Table 2: Financial Markets and Institutional Focus

Spot and follow supply and demand patterns of institutional investors To allow fast market transactions, all buy and sell orders go through market makers. They recognize a higher demand or supply and change their price offering immediately. This is where you want to pick up your trade: Spotting price points where the supply and demand levels indicate the first level of an initiated price move. www.tradersworld.com Sep/Oct/Nov 2014

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What happens then? The crowd follows the leader: When more market participants enter with buy or sell orders, driving the price past the set threshold, this is when you want to trade, specifically when you can approximate how far the market pressure can carry the price of the underlying asset. We use what we call the SPU (Speed Unit) measure for this exercise or a key price gravitation line (calculated supply/demand level); giving you defined trade entry and exit prices at the beginning of every trade. Chart-1: Alternating Price Moves Initiated by Institutional Supply and Demand Patterns

Chart-1 shows the following from left to right: Buy Signals: Institutions were willing to pay more on the next incremental order to participate in an up-move Sell Signals: Institutional investors were willing to sell at incremental lower prices to deplete their inventory of the asset held. How to find your stop level? Measure the natural price distribution range for the asset observed and place the stop or trade adjustment level slightly outside of its natural price distribution range. By this, you allow the asset price to move to target without triggering the stop or trade adjustment level. On the following chart example, you will find those price levels marked by a red line: NLT Double Decker Line. www.tradersworld.com Sep/Oct/Nov 2014

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There are various ways to spot and follow institutional price action, let us share the NeverLossTrading pricing or decision making model: Spot and Follow Institutional Money Moves with NeverLossTrading Algorithms

When to enter a trade? When the set price threshold is surpassed in the next candle and only when the odds are in your favor! A simple calculation tells you if the odds are on our favor: Golden Rule for Odds > 1.5: Probability of the Trade Setup (past performance) x Reward/ (Risk x Probability of Failing) > 1.5 Example-1: Probability for success of the trade setup (from history): 65%, with a risk of $1 and a reward of $1. The calculated factor comes to 1.94; thus, it is above 1.5 and tells you that you found a trade setup where the odds in your favor according to our Golden Rule. Example-2: Probability for the trade setup: 58%, with a risk of $1 and a reward of $1. The calculated factor comes to 1.38 and is below 1.5 telling you that the odds of the trade setup evaluated are NOT in your favor. Unfortunately, many private investors never consider this Golden Rule of long-term profitability. If your current trading system does not support a reliable odds calculation and you are not making the desired income, you might want to be up for a change of trading systems. Depending on the time and frequency you can dedicate to trading or investing, NeverLossTrading offers various programs for day trading, swing trading and long-term investing; helping you to spot and follow institutional money moves, trading with the odds in your favor. Let us take some examples:


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According to the pricing model shown above, signals are only considered, when the next candle surpasses the set price threshold. In the upcoming examples, a market pressure model is used to calculate the minimum expected price move after confirmed institutional engagement was found. By this price level the first target is marked with a dot on the chart. In addition, the day trading example will show you how to use a quantitative analysis model for putting price ranges on the chart where institutional engagement is approximated: NLT Lime Lines. The upcoming charts show you how to consider a higher amount of complexity in your trading; however, it can be easily portrait and followed on the chart. Regardless of your level of private trading or investing, we encourage you to go beyond basic technical knowledge: Assuming that everybody can make money by using two moving averages sounds a bit too easy. Indicators like MACD, CCI, Bollinger Bands, and many others are in one way or the other moving average based and most likely will not get you where you want to be. Trading is not easy, cannot be learned in 1-hour and needs a lot of dedication and effort for every trader to master the road to profitability by understanding and following institutional supply and demand patters. Check our chart examples and spot and trade with institutional money moves spelled out by NLT-Indicators: Always with a clear reference to entries, exits and stops. Chart-1: Day Trading Crude Oil Futures at a 1-Hour Chart, where directional price move signals derive from NLT HF-Day Trading and NLT Top-Line

The chart above has multiple layers of information. You see from the left to the right: www.tradersworld.com Sep/Oct/Nov 2014

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Indication-1: Purple Zone: A special indicator showing ambiguity – institutional indecision. Usually after a zone of ambiguity a directional price move can be expected. Indication-2: Red signal to short Crude Oil (NLT Top-Line signal: Sell<$102.71). The signal was confirmed by the next candle surpassing the set price threshold and a directional price move concluded. Indication-3: Purple Signal (Sell<$102.40, confirmed). Again, a directional price moves got initiated and you either use the marked dot on the chart as target or the next NLT Lime Line (expanded target). NLT Lime-Lines derive from the Quant Theory and dynamically estimate price levels for institutional buy or sell patterns Indication-4: Light-Green NLT HF-Signal, indicating institutional engagement spotted by a volume differential algorithm. Indication-5: Pink NLT HF-Signal marking a potential turning point in supply/demand with an expanded target: NLT Lime Line. Indication-6: Blue NLT Top-Line Buy Signals (confirmed), with target at the blue dot or NLT LimeLine. Indication-7: Purple Signal (confirmed) with a target either at the dot or at the NLT Lime Line. To experience how those charts and indicators work live, we are happy to give you an online demonstration, where you call the symbols and time frames and we show you how the system performs, counting good trades and bad trades. Chart-2: Swing Trading with the Google Daily Chart; NLT Top-Line Signals

Chart Information Left to Right: www.tradersworld.com Sep/Oct/Nov 2014

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Indication-1: Blue Buy Signal (Buy>$561.40). The next candle surpasses the set price threshold and confirms the potential move. The price move is framed in blue (long signal), where the red line on the bottom helps you to define your stop- or trade adjustment level. Indication-2: Red Sell Signal (Sell<$574): By the next candle not reaching below $574, not trade was initiated. Indication-3: Purple Zone: Increased risk by indicating institutional indecision for the price direction. The Buy>$606.70 signal was not confirmed, by the price of the next candle staying below the set price threshold. Indication-4: Red Zone and Sell<$577.68. The price development in the next candle surpasses the set price threshold and initiates trade potential to the red dot marked on the chart. Indication-5: Buy>$586.13: Again, the price development of the next candle surpassed the price threshold and a directional price move was initiated and came to the set blue target price target. Those examples hopefully convince you how powerful you can trade when following institutional supply and demand patterns, rather than using lagging, moving average based indicators that are only good to explain the past, but do not help you to predict the future. Take the chance and test us live. Schedule a free consulting hour, where we get together online with you, share our screens and answer your questions: [email protected] Call: +1 866 455 4520 In case you are not yet subscribed to our free trading tips and market reports, sign up here: http://www.neverlosstrading.com/Reports/FreeReports.html Please always consider the risk of trading and that past performance cannot be taken indicative for future results. Good trading, Thomas Barmann NeverLossTrading A Division of Nobel Living, LLC 401 E. Las Olas Blvd. – Suite 1400 Fort Lauderdale, FL 33301 Disclaimer This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, financial advice, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Following the rules of the SEC (Security Exchange Commission), we advise all readers that it should not be assumed that present or future performance of applying NeverLossTrading (a division of Nobel Living, LLC) would be profitable or equal the performance of our examples. The reader should recognize that the risk of trading securities, stocks, options, futures can be substantial. Customers must consider all relevant risk factors, including their own personal financial situation before trading. In our teaching of NeverLossTrading, in our books, newsletters, webinars and our involvement in the Investment Clubs, neither NOBEL Living, LLC, the parent company of NeverLossTrading, nor any of the speakers, staff or members act as stockbrokers, broker dealers, or registered investment advisers. We worked out trading concepts we use on a daily basis and share them through education with our readers, members and clients.


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www.OddsTraderApps.com


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SCANNING FOR PROFITS by George Krum When we first introduced OT Signals to TradersWorld readers, we suggested regularly visiting our website to keep apprised of the many new features we are constantly adding to our programs. The newest additions are designed to help you save considerable time in making better and more profitable trading and investment decisions.

Market Scanning The newest feature of OT Signals is the inclusion of our powerful proprietary scanning tools. These scans highlight and help maximize the effectiveness of our unique indicators. The scanning tools include the Swing Scan,

Chart 1 www.tradersworld.com Sep/Oct/Nov 2014

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the Trending Scan, the Trending Percent Scan

indicator coincide, with little or no lag, with the

and the DJIA Step Scan. These scans are named

short-term price turns in the instrument being

after our popular indicators, and they scan for

examined. (See Chart 1)

long-term investment ideas and short-term swing-trading opportunities.

Further studies of the Swing Scan using the Swing Indicator, the Stop/Loss and Trailing

Unlike other scanning engines, which are

Stop/Loss, the Swing Bars, Swing Time Plus, the

often limited to stocks from a single country,

Swing Percent Indicator, and the Overbought/

many of our OT Signals scans cover stocks in

Oversold Oscillator demonstrate the excellent

several countries and regions such as the U.S.,

correlation between the Swing Scan results and

Canada, Europe (UK, Germany, France, Holland,

directional changes in prices.

Switzerland, Eurostoxx), Asia (Hong Kong, Singapore) and Australia.

categories depending on whether the stocks are starting a new upswing or downswing. We

The Swing Scan The

Swing

Scan

is

The Swing Scan results are divided into two

further subdivide these results by price ranges. based

on

our

Swing

After scanning, we calculate the ratio of stocks

Indicator. It alerts you to actionable swing

starting a downswing to stocks starting an

trading opportunities. As the name implies, the

upswing. By itself, this is an elegant and objective

indicator is particularly useful to traders trying

sentiment indicator. It is also a precise gauge of

to capture short-term price moves. Its ability to

the day’s market breadth. As one would expect,

identify the very early stages of a trend change

days when indices are advancing strongly are

can be seen by plotting the Swing Indicator on

usually accompanied by a high ratio of upswings

a price chart and examining how the indicator

(>90%). This is bullish at the beginning of a new

and price turns align. You will immediately

trend. However, a strong upswing ratio often

notice that directional changes signaled by the

signals exhaustion at the end of a prolonged bull


86

move. This was clearly illustrated not long ago, when on July 22

nd

the upswing ratio reached

The Trending Scan The Trending Scan is limited to U.S. stocks and

90%. The opposite analysis is true for days with

is built around the Swing Time Plus Indicator,

severe price declines.

which includes the Swing Time Ratio. The Swing

While the Swing Scan identifies stocks which

Time Plus Indicator keeps track of the time a

are starting a new up or down swing, Swing

stock spends in uptrends and downtrends,

Time identifies the top ten stocks in terms of

and calculates a ratio between the length of

swing duration.

upswings and the length of downswings. Stocks

The objective of the Swing

Time scan is twofold:

in an uptrend usually have a Swing Time Ratio

to alert you to new countertrend trades by

greater than one. Stocks in a downtrend usually

selecting the top 10 stocks with the longest

have a ratio less than one. Non-trending stocks

directional upswings in place, and

have a Swing Time Ratio close to one (chart 2).

to flag stocks in a secular uptrend which are excellent buys on pullbacks.

Using the Trending Scan, the ten symbols with the highest Swing Time Ratios can be

As of this writing (end of July), examples of

found under the heading “Trending Up.” The ten

stocks illustrating these two patterns are MON

with the lowest ratios appear under the heading

and WMB, respectively.

“Trending Down.” Symbols with Swing Time

Note that stocks that make up this scan

Ratios close to one are reported under “Trending

always appear in the Swing Scan up to 20, or

None.” Recent examples (as of the end of July)

even more days, beforehand. This clearly shows

from the three categories include the stocks

the effectiveness of the Swing Indicator!

AMP, ANR and FHN, respectively. (See Chart 2)

Stocks from the Swing Scan may be further examined using the Pivot Line, Stop/Loss, Hashi

The Trending Percent Scan

and OT MACD Indicators to complement the

The Trending Percent Scan is based on the

power of the Swing Scan results.

Swing Percent Indicator. It scans U.S. stocks based on their Swing Percent Ratios. The Swing Percent Ratio is the ratio of the percent gain/ loss of long/bull swings to the percent gain/loss of short/bear swings (Chart 1, above). The 10 symbols with the highest Swing Percent Ratios can be found under Trending Percent Up. Those with the lowest Swing Percent Ratios fall under Trending Percent Down. Symbols with Swing Percent Ratios close to one are reported under Trending Percent None. Recent examples from these three categories include LUV, FOSL and HIG, respectively. The

Stop/Loss,

Swing-Time

and

Swing

Percent Indicators, Hashi, and the Bull and Bear Trend Indicators will help you narrow down your lists of suitable trading candidates.

Chart 3

We’ve incorporated the results from the www.tradersworld.com Sep/Oct/Nov 2014

87

Swing Percent Indicator into the Swing Percent and select a recent high or low. The program will Target Indicator. As the name implies, the Swing

automatically plot the angle. You’ll be amazed

Percent Target Indicator will display bullish and at the results. Any break above or below the bearish price targets for any timeframe you plotted path will strongly suggest that a trend choose. To keep the chart uncluttered, we’ve reversal is in progress. limited the display range for this indicator to the last 10 bars only. (See Chart 3, symbol HIG)

The DJIA Step List

Due to the sensitive nature of this information we are releasing the data for the 30 DJIA components only. (See Chart 4) The second option is to allow the program

The DJIA Step List illustrates another extremely to do the work for you. Select the Swing Angle powerful trading application derived from Indicator and all the relevant 1 x 1 angles will our indicators.

For a given symbol, once we

be drawn automatically. This indicator allows

determine the duration of Swing Time and the you to apply harmonic angles as well. size of Swing Price move, the next logical step OT Signals recently added DJIA history data is to use that information to plot the symbol’s going back to 1885. The data is conveniently most likely swing trajectory and to map hidden

divided into 10 year segments under the symbols

areas of support and resistance.

DJ1885, DJ1895, etc. Our extensive database

One simple but efficient way to plot a gives you a rare and unprecedented opportunity symbol’s projected path is to chart the correct to perform historical studies dating back to the 1 x 1 angle along with price. (See Chart 4) You 19th century. These studies will enable you to see have two options for doing that: how certain cycles and ratios remain constant The first option is to select the Angle drawing

through the centuries!

tool, then plug in the corresponding step number


88

How to Profit from the Scans

Each app comes with its own unique scan

The scans provide timely long and short

engine. All have a Swing Time and a Buy/Sell

candidates. Short-term traders who devote

component. You can read more about these

considerable time to trading and who want to

features in the apps’ User Guide section. The

capture quick, profitable moves will love the

results from the end-of-day OT Scan can easily

Swing Scans. OT Signals’ Swing Scan Ratio and

be incorporated into a mobile app Watchlist

Overbought/Oversold Indicator greatly tilt the

where scans can be performed any time.

odds in their favor.

In summary, over the last few months we’ve

The Trending Scans provide investors with

added a complete suite of scans to our web and

strong candidates for long-term investments.

mobile apps. These powerful scans will save

Even those who feel uncertain about which

you considerable time in narrowing down your

way the markets are headed will find trading

investment and trading choices. These tools

opportunities among the non-trending stocks

provide a unique and invaluable perspective for

for various option and swing trading strategies.

targeting stocks with promising money-making

In addition to adding scanning capabilities

potential.

to OT Signals, we are including scanners in our mobile apps. While the OT Signals platform is

P.S.

We

are

giving

TradersWorld

readers

well-suited for scanning a large number of stocks

exclusive FREE access to OT Signals for 10 days

after the market closes, the mobile scanners

following the publication of this article in Traders

featured in OddsTrader, Gann 9, OT Fibonacci,

World magazine. Click on Login and enter the

OT Pairs and OddsTrader Free will scan your

following credentials:

Watchlists during the trading day and “on the

e-mail: [email protected]

go.”

password: free


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Market Profile(tm) and Auction Market Principles By Tom Alexander

This is an article about Market Profile(™) and Auction Market Principles. We will discuss what they are, what is unique about them and how to most effectively use them. We will also discuss what they are not. “Market Profile” has become the magic du jour of the Trading Education space. Magic sells, but magic is not real. To trade effectively you must have a basis that is consistent, objective and logical. We will discuss some of the questions traders have about “Market Profile” and how to apply it. We will introduce the concept of Auction Market Principles.

What is “Market Profile”? MP is a graphing format for market data. It is a unique way of visually organizing data that emphasizes the horizontal scale of a chart more than the vertical scale of the chart. It uses letters to designate a specific timeframe and to highlight the activity of that timeframe. For instance, the letter “A” might represent

the time frame from 9:30 to 10:00 AM, EST. The letter “B” would represent the next halfhour period from 10:00 to 10:30 and so on. Each letter forms a vertical bar. The letter for a designated time frame prints only once in that time frame no matter how many times price rotates through it during the specified time frame. The original chronological protocols suggested a thirty minute time frame for each period, or rotation. However, any time frame can be chosen to configure data this way. One can get a profile view of very long-term data, or of very short-term data. Let’s look at some common terms and their definitions.

TPO: “Time Price Opportunity” TPOs are the letters that are used to display when price hits a specific price within a specific time frame. Within each time frame a letter will only print one time regardless of how many times a transaction occurs at that www.tradersworld.com Sep/Oct/Nov 2014

90

Point of Control

specific price.

Value Area Price is regressive around a range of value (much more about “value” later). This fact creates a range of price that often forms the look of a typical normal statistical distribution (bell curve). The area in which 70% of trade activity occurs within this specific range has traditionally been referred to as the “Value Area”. This is nebulous information that provides no trading edge without much more context than the rote application in which it is typically used.

The POC is that price at which most transaction occur within that particular distribution. Above that price presumably the buyers are in control and below that price presumably the sellers are in control. It is not that simple, and there is never one single magic controlling price. Initial Balance Period The IBP was the first hour of trading in a day session in any market being analyzed. The idea was that important information including the ability to predict with an edge the direction of the remainder of the day could be derived when price exceeded either the high/low or the day. In fact, it cannot be.


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Day Type The initial MP concept revolved around the specific shape the day would take. There were six or seven day types and the concept was based on how closely a day would form to the typical Gaussian (bell curve) shape. This shape would be used to infer what the market was most likely to do the next day. This approach yielded random results then and still does. There are two reasons for this. Firstly, the concept was not valid even when there was much more chronological definition between trading sessions. The second reason is that the markets are now traded almost around the clock and you can’t take market activity and put it in a nice, neat chronological box. See Chart 1

Ok, so What DOES Work? In the introduction to this article we pointed out that Market Profile(™) is a graphing format. Bar charts, candlestick charts, point and figure charts, etc., etc. are all graphing formats. They are NOTHING more, NOTHING less. They are tools. A “tool” is designed to facilitate a certain task. What task do charts facilitate? They are designed to provide information about the market. What specific information do they provide? The only specific and objective information any charting format can provide is where price has been and where price is at the exact point in time one looks at a chart. All opinions about what a charting format may be “forecasting” are based on a


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hypothesis. These hypotheses include Elliott Wave, fibonacci, Gann, Astrology, candlestick analysis, point and figure analysis and the early Steidlmayer work on MP (which he has publicly stated for at least the past ten years is not helpful) that most continue to slavishly follow in spite of the evidence. Our worldview determines how we go through life and how we interpret things. Both fundamental analysts and technical analysts have a specific worldview of the market. It is very likely you have bought into one or more of these hypotheses and there are likely many of you that have tried all of them and several others. All of these techniques contain a common thread - a heavy dose of magic. When under scrutiny the disciples of these approaches resort to the “universal secret/

law” card to avoid the inconvenient exercise of using basic critical thinking to seriously question why and how these approaches are actually supposed to perform as advertised and believed to work. I would like to introduce a different hypothesis for you to consider. I strongly encourage you to question what I am about to share. Please let me know if, where, how and why I may be wrong, or missing something. Assume this does not work and prove it. Oh, it is probably a useful exercise to follow with the techniques you presently use.

Auction Market Principles The idea that all markets, in all time frames develop (trade) based on the concept of value as determined by the actions of market


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participants is the gist of Auction Market Principles (AMP).

The Concept of Participant Determined Value In AMP, value is determined solely by where and how much market participants trade. There is no guessing about future earnings, crop shortages, crop excess, central bank intervention, manipulation, insider trading etc., etc. There is no use of tools such as oscillators to determine “overbought” and “oversold”. A base and foundational tenet of AMP is that the purpose of the market is to facilitate trade. Trade is most easily facilitated when there is a general agreement on Value. When in general agreement on Value, trade takes place in a well defined range. The range will have an upper and lower extreme. At the lower extreme prices will become unfair to the seller, so trade will not be facilitated. At the upper extreme prices will become unfair to the buyer, so trade will not be facilitated. Both extremes represent “unfair” prices and price will tend to rotate back into the established range so buyers and sellers can agree on a generally “fair” price. This creates price rotation from the unfair highs to the unfair lows, and vice versa. It also creates, as a result of a natural pull to trade facilitation, an area that is obviously more attractive to both the buyer and seller that can be identified because there is more trade activity within that area. Price will stay in this range and continue to more or less rotate from one extreme to another as long as the consensus of Value is unchanged. Inevitably, this consensus of Value will change and either the buyers or the sellers will “take control” of the market and that market will trend strongly outside the established range. So, if we can determine where Value is, and where Value is not, and we know the inflection

points of the market from where that market is more likely than not to move sharply we might be able to derive a true edge. This is a methodology that focuses on identifying the specific areas from where markets are likely to move sharply rather than constantly guessing whether or not they are going up or down. The edge that can be derived from this methodology is in the quality of the entry and its location that yields a greater result than price based trading where the trader is basically trading 1:1 hoping for a high percentage of winning trades. This “worldview” when applied to the MP graph can have a dramatically positive effect on your trading. See Chart 2. The basic concept is to take trades when one has the risk of X with a multiple of X as a potential return. In the graph below a trade taken - long or short - from the red rectangles that highlight the Key Reference Areas of this market has an inherent positive expectancy. See Chart 3. This is just a broad overview of this remarkable robust methodology. The principles and concepts outlined here can be formulated in numerous ways to develop a Trade Plan with a true edge. Tom Alexander Alexandertrading.com


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Finding the Bottoms and Tops of the Bollinger Band by Gilbert Steele I would like to say, the MATH is altogether new to me. Note: I wrote this article over Time and left it for my readers. In short this article is about black vertical lines showing a pre-bottom and yellows or red colors vertical line at the pre-top GOING DOWN. Look at the wave form top or bottom. Then look are you at the top or bottom of the Bollinger Band. The big help comes when you are in the middle of the trading range. This is a trading chart of Intel Corp. I am showing two (2) vertical lines on this chart. One is on 5/5/2014 and the other is 5/16/2014. They can only occur when the black is above the red by the down arrows. They are showing the bottoms on the candle chart. This chart stops on 7/11/2014. The chart uses a standard Bollinger Band. The chart is made in MetaStock 10.1 Professional. The calendars for trading are made by producing a text file. July calendar is opened up to (July2). This being the second week of July.

The second chart leads the first chart in time with four black down arrows showing the bottom in the candlestick chart and also introduces the red arrow showing the pre-top. Pretop means 1 to 3 days BEFORE IT HAPPENS. The red arrow precedes the stochastic at the chart top on 1/14/2014. www.tradersworld.com Sep/Oct/Nov 2014

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To understand what I am doing you need to see my last article in the Traders World Magazine.

There are many things that can be added to this chart. In the Fibonacci World, you can add retrace lines and projection lines. Moving averages by many people are a must.


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You must pay close attention to the chart above, for a good understanding of the layout. Starting on the left looking at the top you’ll see the number four with the arrow pointing down. Halfway down you’ll see a four and it is labeled (4)wave form. At the bottom you’ll see A PRE-BOTTOM on the Bollinger Band where the projection line is looking up. And the projection on Intel Corp. is at 161%. Moving to the right at the top is three (yellow) vertical line coming down to waveform and gives you a pre-top. Moving to the right is a red number four pre-top coming down to the waveform. The waveform is saying it’s a lower top. Moving to the right is a black (7) arrow and it’s coming down to the waveform at number (7) low. Now showing a price low in the Bollinger Band. Moving to the right is a black eight arrow pointing down to a Bollinger Band price low. The bottom here marked for the number (1) in black is saying, it’s a prebottom, the stock will be moving up later. At the top a red (5) arrow pointing down to a red number (2) with a blue arrow showing you pricing outside the Bollinger band giving you a pre-high. At the top red (6) arrow going down at the lower waveform showing a pre-high. At the top is a (7) red arrow looking down showing a pre-top above the Bollinger band. The number sequences at the top are red and black numbers which were selected for convenience. They are put there to explain the chart. You can buy this stock, you can short the stock. You can write puts and calls with a fiveday expiration. This would be a terrific math process for trading the Tick. As with most of my studies showing a repeat math code over 12 to 15 years. This properly applied would give the pre-highs and pre-low's of various trading markets. Gilbert Steele [email protected] g





www.TradersWorld.com www.TradersWorldOnlineExpo.com www.tradersworld.com Sep/Oct/Nov 2014

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Power Up Your Trading System… an Example with Andrews Babson Techniques. By Ron Jaenisch The old saying is that markets go in a trend 20% of the time and pretty much sideways the rest of the time. In the gold chart #1, you can see that where the three lines are drawn on the data, there choppiness is decreasing and momentum is accelerating. One could say that they were the ideal times to be properly positioned in Gold as they gave a lot of favorable movement for the risk. This article will focus upon Andrews Babson techniques, but the general concepts can be tested with any methodology. When a family office asked us to build an Andrews/Babson based computerized trading system, it was the power up trades that we decided to focus upon. Andrews-Babson techniques are perfect for this type of approach because there are various times that one is in the market and lots of time when one is not. This makes them ideal. To increase our probability of success we focused upon the forex market. In this market there are lots of currency pairs going up and


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many going down. There are always some that are in a strong trend that would be favorable to participate in. We built various computerized systems using Andrews and tested them out. The ones with favorable results we used for our client. When we looked for favorable results, there were various criteria that was used. When we looked at the results of tests using these techniques individually, we focused upon Max system % drawdown and exposure. As you can see in the test run results,(See Chart 1), the profit was about six times the draw down. This is a useful ratio to look at, if the drawdown is acceptable to you. We found that we could tweak leverage and number of positions on at one time and keep down exposure and max system % drawdown.


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We put together various Andrews Babson systems to see what would happen, if they were all traded together. Then we turned on leverage a bit. In the forex test run (See Chart #3) the leverage was turned on a bit and the exposure went down because of the number of positions on at a given time, was reduced. This is something that will impact overall profits. There are times when out of 25 forex pairs there are positions in the market in five and lots of times when there is only a position in one. As a result there is a lot of free capital sitting in the account. This lower usage of the cash available in the account reduces the exposure numbers. The max drawdown is nearly 12% in the leveraged run, but the return was fifty fold the drawdown. For some investors this will be

Chart #3


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acceptable. After putting together various systems, which we knew would increase exposure to very high numbers, we did a test run. We included a leverage of twenty and were blown away by the test result numbers. (See Chart #4) The exposure was over Eighty. This was the maximum that we would shoot for. To our surprise the ratio of profit to max system drawdown was now over 100. What about stocks? Does this approach work there? We have just started our multi-year

Chart #4


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tests in the Russell 2K and are favorably impressed. With one system having an exposure of 31%, trading stocks, with no leverage and a 19% return, this is very encouraging. We can quickly fix the high trade drawdown by adding a max percentage loss exit. (See Chart #5) A question that comes up at this point is how many special situation patterns did Andrews teach? When including the ORE, one can easily find a half a dozen patterns that are worth exploring further. About the author …Ron learned the techniques from Dr. Alan Andrews at the Andrews kitchen table and seminars. He offers a web based course in the techniques with videos and a private email group at Andrewscourse.com.

Chart #5


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How to Build and Trade Non-Linear Predictive Cyclic Indicators by Lars von Thienen

Today, according to modern understanding, time is considered to progress in a linear manner. Many theories exist on the nature, origin, end and other matters related to time. Ancient societies also dwelled on questions related to time and formulated concepts and proposed various models to describe their naked eye observations and deductions based on logic. Most of the ancient societies believed that time progressed in a cyclical manner. They observed the cyclical nature of the day and night, witnessed similar repetitive patterns of seasons year after year, the monthly cycles of the moon and its changing shape, etc., and applied the same concept for larger time scales as well. In our “western thinking” and “left-brained” world, we always use the linear concept of time. It has become so “normal” in today’s world that no one questions it. However, awareness of the consequences can have a

tremendous impact when building technical indicators and trading systems.

LINEAR TIME

CYCLICAL TIME

“western thinking” start

middle

r Today and in every charting application, technical analysis is placed in the logic of linear time. r Technical analysis is based solely on the linear time concept. Every TA indicator or study uses the last n-bars period to judge the current condition and to derive trading rules and logics, e.g., RSI(13). The important question now is: Why don’t we use the last n-bars of several years ago instead of using present last n-bars to derive the current condition? (That would be cyclical logic) Why are the current last n-bars important for judging the current condition? Nobody questions this since we believe that

“ancient thinking” end

(linear) Technical Analysis: Take the linear last n-bars to rate the present bar.

(cyclical) Technical Analysis: Take the n-bars from the distant past based a chosen cycle to rate the present bar.

Figure 1: Linear vs. cyclical time in technical analysis (TA) www.tradersworld.com Sep/Oct/Nov 2014

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there is only one rule set for time: linear. Hence, all our indicators are based on the linear time concept of our “modern” world. However, perhaps the bars n-days/years in the past related to a given cycle are more important to rate the present condition than the current last n-bars. This would correspond to the cyclical concept of time. Unfortunately, this idea is not available in any technical analysis platform for building technical indicators. Figure 1 shows the different approaches to time transferred to the concept of technical analysis: Let’s now transfer the logic of cyclical time into our world of technical analysis, charting and trading systems.

Combination of linear and cyclical time to build predictive indicators We need to consider two key factors to be able to convert the idea of cyclical time into our “linear” time-based charting and trading logic: We are using a cyclical time concept for the technical analysis. This means that we will assess the current market condition based on the distant past and not on the current past. So, we are using the same indicator calculation, but are putting in bars from the past instead of from the current linear past. To do so, we need to define a point in time from when to use the data, e.g., 365 bars back instead of 1 bar back. To be able to use a forecast for trading and charting, we must re-convert the future projection back into a linear time-based forecast for the current next n-bars into the future. Trading in today’s world occurs on the right side of the chart in terms of linear time. Once we understand the basic concept and differences between linear and cyclical time and the impact on the calculation of technical

indicators, it will be easy to implement cyclical, non-linear indicators. I have already introduced 3 important cycles which reflect a recurring pattern that impacts life on Earth: The Metonic cycles introduced and explained in my book “Decoding The Hidden Market Rhyhtm - Part 2: Metonic Cycles”. ( Book Link: http://amzn. com/1499562594 ) The Metonic cycles represent a classical real example of cyclical time since they provide us with a cyclical pattern for the same position of the planets Earth, Moon and Sun before our stars. The scientific debate concerning the possibility that the position of the Sun and the Earth’s magnetosphere affect human behavior is in an early stage and is still ongoing. However, the most significant cycles that affect life on Earth are either geomagnetic or gravitational, and emerge as a result of interactions between the Sun, Moon, and Earth. These interactions influence the operation of our electrochemical nervous system which is linked to the limbic system which in the end controls our emotions. To rate the cyclic sentiment situation today – or to build the indicator score for today – we will use the bar 8 years, 11 years, and 19 years ago. Not the current last n-bars – they are completely useless if we follow the cyclical time concept. Based on this concept, we can already build the indicator into the future for as long as the shortest chosen cycle is. In this case, we can calculate the indicator 8 years into the future. To transfer this concept to an indicator calculation is quite easy. For example, to build a cyclic RSI indicator, we do the following: a) Calculate the linear-time indicator for the past: e.g., using a standard RSI(n); (n: length) www.tradersworld.com Sep/Oct/Nov 2014

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b) To build the cyclic-time indicator score, build another indicator that simply uses the outcome from the linear-time indicator and build a composite from the cycles used. For our Metonic RSI indicator, the pseudo code would look like this: RSI(n) |today, cyclic-time| = ( RSI(n)[6939] + RSI(n)[4016]+RSI(n)[2922] ) / 3 It takes 19 years (~6939 days) for a similar alignment of the Moon, Sun, and Earth to recur in the sky. The Metonic cycle is a particular approximate common multiple of the solar year and the synodic (lunar) month. There are also two sub-cycles at 11 (~4016 days) and 8 years (~2922 days). That’s the reason these values are used to reference the RSI indicator for our cyclic-time based calculation. Patterns and cycles other than Metonic cycles certainly exist. However, I have already outlined the strengths of Metonic cycles in my book. You can replace the RSI indicator with any one of your favorite indicators to be transformed into cyclical time based version. You have to make sure to you use calendar day charts and deactivate the holiday and weekend filtering. The following chart is a real-case example that was used in private trading seminars and represent one possible way to interpret a nonlinear indicator plot. In these instances, the PercentageR time-based indicator was used to build the cyclic model via the Metonic cycles pattern, keeping to the formula used in the pseudo code presented above. The indicator has been plotted in advance into the future. One possible way is to look for the maximum and minimum readings of the indicator plot to identify future areas of potential market highs and lows. As the indicator does not provide an

exact forecast each day, the first step would be to check the general extremes.

Example Crude oil futures contract – CL This example shows the crude oil futures contract at the end of 2011 with a full predictive non-linear indicator plot for the course of 2012. Extreme situations are marked with red and green arrows on the chart. The second chart illustrates how this forecast was able to predict the major turning points of crude oil for 2012 in advance.

Building trading systems with cyclical time-based indicators After witnessing the predictive power of this technique, you can use this concept to build mechanical trading rules based on the created cyclical time-based indicators. For further reading and concrete pseudo code details, I introduce different purely mechanical trading systems in the book “Decoding the Hidden Market Rhythm – Part2: Metonic Cycles” and compare the standard linear time-based model against the cyclical time-based one to demonstrate the predictive advantages of the new non-linear indicators.

Charting platform and the automatic creation of non-linear indicators No charting platform is able to build nonlinear cyclic indicators and transform them into cyclic time for plotting on a trading chart, as the West has a conceptual bias towards linear time. Opening our minds to the concept of cyclical time will present new possibilities and tools for technical analysis. This is part of why I have built the WhenToTrade charting platform, capable of building and plotting nonlinear indicators. A cyclic module for automating the www.tradersworld.com Sep/Oct/Nov 2014

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Figure 2a-2b: Crude oil non-linear indicator forecast (a) and results (b)


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transformation from linear into cyclical time based on any one of a full range of cycles and indicators is available in the WhenToTrade platform. This module will be the first charting platform able to build non-linear predictive indicators and mechanical trading systems. Not limited to daily bars, this concept of cyclic time can be applied to intraday charts, which feature many recurring patterns. Before transforming a linear indicator into its cyclic pendant, it is crucial to define the pattern to be used for the transformation; for example, an intraday sunrise/noon/sunset pattern might be used as a repetitive pattern during a trading day. There are many more possibilities. I hope I have helped broaden your view beyond the linear time concept; it is merely one of many ways to conceive of time, and I have attempted to show you concretely how to conceptualize others. Let’s finish with reference to a well-known work: “History repeats itself. In order to know and predict the future of anything you only have to look up what has happened in the past and get a correct base or starting point.” (W.D. Gann, TUNNEL THRU THE AIR, 1927, Chapter VII: Future Cycles, Page 75ff) It remains for you now to follow the path of cyclic time in both technical analyses and the stock market. Lars von Thienen, www.whentotrade.com





www.TradersWorld.com Figure 3: Integrated WhenToTrade module to build non-linear indicators

www.TradersWorldOnlineExpo.com www.tradersworld.com Sep/Oct/Nov 2014

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Decoding the Hidden Market Rhythm Part 2: Metonic Cycles by Lars von Thienen Review by Larry Jacobs This book is the 2nd book on cycles by the author. This book explores Dynamic Cycles, Metonic Cycles and Genetic Algorithm & Cycles. The author developed a charting program in 2012. This program gives cycle researchers a tool to test and trade various cycles in the markets explained in this book. The author explains that emotions cause cycles in the market. They swing from positive

to negative over time and the markets swing from high to low in response to these emotions. There is also a 2nd part to cycles and that is natural forces also drive emotions. These natural forces are due to the Earth’s magnetic field and the Sun’s energy cycles combined with the interaction of the moon can affect the motions of human beings. The cycle process that occurs on the Sun and the gravitation impact of the Moon’s movement around the


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Earth are accompanied by changes in the factors that affect the Earth’s atmosphere. The author explains in this book that the financial markets are driven by emotions that are influenced by the forces of the interactions of the Sun, Moon and Earth. The cyclic movements of the Sun, Moon and Earth repeat over time and this is the hidden rhythm of the market. If we know the hidden rhythm we can then measure the cycles and predict when the cycles occur over time. Also one needs to take into account their actual alignment in the sky/universe. For example one needs to determine the approximate common multiples of synodic lunar months, tropical lunar months and tropical solar years ending at the same time. That is the recurring energy pattern that influences gravitational and geomagnetic forces that drive our emotions and that is called the hidden rhythm. The author’s software program identifies this hidden rhythm in the market. It uses a routine to combine the detected cycles and build a master composite wave for the year in review. See Chart #1. When you have this composite wave model you can use it to forecast and trade the markets. You have a concrete map with precise days on when to expect the market trend to change. You also get whether to expect a high or low on these trading days. So this is a decoded model for trading the markets. There are various ways to trade it, but the easy way to do it is to just simply trade the decoded dates. You go long on a trough and go short when you are at the top of a cycle. The author also illustrates an automated trading system based on the theories and concepts elaborated in his book into one tool for use on the trading chart. It is a fully mechanical system. You just trade the turns of the superposition wave.

The author also explains that you can add rules to reduce the risk of the system. That means is the market is in a deep oversold condition and the next predicted trade is to go short then you would reduce the position side. Or if the market is deeply oversold and the next trade is to go long you would increase your position size. At the end of the book the author introduces a trading system “Metonic Sentiment Index” based technical analysis approach which identifies repeating sentiment patterns. It analyzes the market behavior from the distant past to predict future direction derived from the most important ancient cycles the Metonic cycles. It can isolate this cyclical sentiment pattern and analyzes past stock market developments to forecast future market direction. The book includes a TradeStation EasyLanguage Script code for this indicator and trade strategy. If you are interested in determining the cycles in the financial markets, I would recommend this book to you. It is available on Amazon at http://www.amazon.com/ D e c o d i n g -T h e - H i d d e n - M a r ke t- R hy t h m / dp/1499562594 For more information go to: www. WhenToTrade.com www.tradersworld.com Sep/Oct/Nov 2014

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The Sonata Silent Trading Computer by Larry Jacobs

The Sonata Trading computer is the highest rated trading computer today. It has the award winning Asus motherboard, the superfast Intel 4th generation CPUs, powerful Corsair Vengence Memory and the industry acclaimed nearly silent power supplies. It can be overclocked if you want up to around 4.5GHz. Faster than 99% of the computers out there. You can get an astounding benchmark of around 12,800, and the computer is nearly silent. That is because the case is sound insulated and has controlled quiet fans. The video cards have no fans and are silent. The computer can easily run 8 monitors. We also have a program where you can return your computer every 3-5 years and get it upgraded to the latest technology for much lest than an new computer. So see yourself using the best trading computer in the world, making profitable trades with the Sonata.

Just out our new book on the Great Tips on Buying the Right Trading Computer. From this book you will learn everything you need to know before you buy a new trading computer. What to configure it with. What components to order. All about cases, motherboards, CPU fans, power supplies, CPUs, Video Cards, Memory, SSDs and much more. Go to www.SonataTradingComputers.com to get your FREE copy.

www.SonataTradingComputers.com 417-882-9697 or 800-288-4266.


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Amazon Kindle Books Gann Masters Course by Larry Jacobs $9.95 As you know, W.D. Gann was a legendary trader. Some say he amassed a fortune in the the markets. He wrote several important books on trading as well as a commodity trading course and a stock market trading course. He charged $3000 to $5000 for the trading courses which included 6 months of personal instruction by phone. The Gann Masters Trading Course to help traders become successful. A Unique Approach to Forecasting by Ivan Sargent $32.95 This book is possibly one of most advanced books in technical analysis you will read regarding price and time reversals. Knowing the Price and time of a stocks reversal point is undeniably an important element for to successful trading. Unlike most trading books which use indicators, oscillators, and basic geometry to forecast the markets outcome; this technique uses a series of lines which when accurately placed can deliver reversal points with amazing accuracy. Trend lines, retracements lines, channels, fan lines, pivot points etc, all inspect a stock chart from the outside, which is more or less the obvious point of view. Patterns and Ellipses by Larry Jacobs $9.99 This book concerns itself with a highly technical subject, the subject of technical analysis of the financial market. This book specifically deals with ellipses and pattern formations used for trading the markets. It also covers many other technical analysis tools that can be used effectively by the trader. Gann’s Master Charts Unveiled by Larry Jacobs $9.99 We know that Gann used the Pythagorean Square because he was found carrying it with him into the trading pit all the time. This square was hidden in the palm of his hand. How did he use this square? Why did he not discuss the use of this square in his courses? There is only one page covering the Square of Nine in all of his books and courses. Was this square his most valuable tool? These and all the other squares Gann used will be discussed in detail in this book with many illustns and examples to prove how they work. Gann Trade Real Time by Larry Jacobs $9.99 When you opened this book you took the one step that will help you learn how to be successful at the most desirable, but hardest profession in the world. That profession is real time trading. This book is not going to give you an instant secret to day trading. It is going to give you the basics so that you might start the path to understanding how the markets work both short term and long term. You need to know and fully understand the markets and develop successful trading www.tradersworld.com Sep/Oct/Nov 2014

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strategies to become successful at this endeavor. Best Trading Strategies: Master Trading the Futures, Stocks, ETFs, Forex and Option Markets [Book Edition With Audio/ Video] (Traders World Online Expo Books) [Kindle Edition] $5.99 This is one of the most fascinating books that was ever written about trading because it is written by over thirty expert traders. These traders have many years of experience and they have learned how to turn technical analysis into profits in the markets. This is extremely difficult to do and if you have ever tried to trade the markets with technical analysis you would know what I mean. These writers have some of the best trading strategies they use and have the conviction and the discipline to act assertively and pull the buy or sell trigger regardless of pressures they have against them. They have presented these strategies at the Traders World Online Expo #14 in video presentations and in this book. What sets these traders apart from other traders? Many think that beating the markets has something to do with discovering and using some secret formula. The traders in this book have the right attitude and many employ a combination of fundamental analysis, technical analysis principles and formulas in their best trading strategies. Trading is one of the best ways to make a lot of money in the world if one does it right. One needs to find successful trading strategies and implement them in their own trading method. The purpose of this book is to present to you the best trading strategies of these traders so that you might be able to select those that fit you best and then implement them into your own trading. I wish to express my appreciation to all the writers in this book who made the book possible. They have spent many hours of their time and hard work in writing their section of the book and the putting together their video presentation for the online expo. Finding Your Trading Method (Traders World Online Expo Books) [Kindle Edition] Finding your trading method is the main problem you need to solve if you want to become a successful trader. You may be asking yourself, can I find my own trading method that will reflect my own personality toward trading? For example, do you have the patience to sit in front of a computer and trade all day? Do you prefer to swing trade from 3-5 days or do you like to hold positions for weeks and even months? www.tradersworld.com Sep/Oct/Nov 2014

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Every trader is different. You need to find your own trading method. Finding out your trading method is extremely important to produce a profitable benchmark that can be replicated in your live account. Perhaps the best way to find a successful trading method is to listen to many expert traders to understand what they have done to be successful. The best way to do that is to listen to the Traders World Online Expos presentations. This book duplicates what these experts have said in their presentations, which explains what they have done to find their own trading method. If you have a trading method that gives you a predictable profit, then that type of objectivity contributes to your trading edge. The problem with most traders is that being inconsistent will never allow them to have an edge. After you find your trading method that you feel comfortable with, you must have the following: An overall plan to: 1) Set your rule set and plan and then stick with it in all of your trading. 2) To give you a trading plan for every day. The trade plan then should: 1) Have an exact entry price 2) Have a stop price 3) Have a way to add positions 4) Tell you where to take profits 5) Have a way to protect your profits By reviewing all the methods given in this book by the expert traders, it will give, you the preliminary steps that you need to find your footing in finding your own trading method. Reading this book and by seeing the actual recorded presentations on the Traders World Online Expo site can act as a reference tool for selecting your method of trading, investment strategies and tactics. It took many of these expert traders in this book 15 – 30 years to finally come up and find the answers to find their trading method to make consistent profit. Finding your trading method could be then much easier when you read this book and incorporate the techniques that best fit your personality and style from these traders. This book will enable you to that fastest way to do that. So if you want help to find your own trading method to be successful in the markets then buy and read this book.


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Learn the Secrets of Successful Trading (Traders World Online Expo Books) [Kindle Edition] Learn specific trading strategies to improve your trading, learn trading ideas and tactics to be more profitable, better optimize your trading system, find the fatal flaws in your trading, understand and use Elliott Wave to strengthen your trading, position using correct sizing to trade more profitable, understand Mercury cycles in trading the S&P, get consistently profitable trade setups, reduce risk and increase profits using volume, detect and trade the hidden market cycles, short term trading by taking the money and running, develop your mind for trading, overcoming Fear in Trading, trade with the smart money following volume, understand and use the Ultimate Oscillator, use high power trading with geometry, get better entries, understand the three legs to trading, use technical analysis with NinjaTrader 7, use a breakout system with cycles for greater returns with less risk, use TurnSignal for better entries and exits, trade with an edge, use options profitably, learn to trade online, map supply and demand on charts, quantify and execute portfolio rotation for auto trading. Written by Many Expert Traders The book was written by a large group of 35 expert traders, with high qualifications, most of who trade professionally and/or offer trading services and expensive courses to their clients. Some of them charge thousands of dollars per day for personal trading! These expert traders give generally 45-minute presentations covering the same topics given in this book at the Traders World Online Expo #12. By combining their talents in this book, they introduce a new dimension to finding a profitable trading edge in the market. You can use ideas and techniques of this group of experts to leverage your ability to find an edge to successfully trade. Using a group of experts in this manner to insure your trading success is unprecedented. You’ll never find a book like this anywhere! This unique trading book will help you uncover the underlying reasons for your lack of consistency in trading and will help you overcome poor habits that cost you money in trading. It will help you to expose the myths of the market one by one teaching you the right way to trade and to understand the realities of risk and to be comfortable with trading with market. The book is priceless! Parallels to the Traders World Online Expo 12


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Trade the Markets with and Edge (Traders World Online Expo Books) This is an important book discussing the use of different strategies methods about trading. It was written by over 30 expert traders. The book was designed to help you develop your own trading edge in the markets to put you above others who don’t have an edge and just trade by the seat of their pants. 90% of traders actually lose in the markets and the main reason is simply that they don’t have an edge. All of the writers in this book are very experienced and knowledgeable of different ways. Each of them has their own expertise in trading the markets. What sets these traders apart from other traders? Many think that beating the markets has something to do with discovering and using some secret formula. The traders in this book have the right attitude and many employ a combination of fundamental analysis, technical analysis principles and formulas in their best trading strategies. This gives them a trading edge over other traders. If you want to be successful at trading, you too must have your edge. One needs to find successful trading strategies and implement them in their own trading method. The purpose of this book is to present to you the best trading strategies of these traders so that you might be able to select those that fit you best and then implement them into your own trading style. I wish to express my appreciation to all the writers in this book who made the book possible. They have spent many hours of their time and hard work in writing their section of the book and the putting together their video presentation for the online expo.


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