with Notebooks - Traders World Magazine

Transcription

THE OFFICIAL MAGAZINE OF TECHNICAL ANALYSIS
TRADERSWORLD
www.tradersworld.com | June/July 2011
Trading
Issue #49
with Notebooks
Lenovo w520, Docking Station, ViDock 4 Plus
Trading Indicators
Money Management
Market Forecast 2011
Notes on Day-Trading
High Probability Trading
Trading with Confirmation
Where is the Dollar Headed?
Advanced Computer Support
Interviews:
Joel Rensink
Plapcianu Catalin
WWW.TRADERSWORLD.COM June/July 2011
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Larry Jacobs - Winner of 2001 World Cup Championship of
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June/July 2011 Issue #49
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Fat Cat Trade
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Trading On Target
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Training For Traders
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Know Yourself Astrology Report
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Contents
June/July 2011 Issue #49
Interview with Plapcianu Catalin
7
Notes on Day Trading Part Two
by Leonard Novy
50
Market Forecast 2011
by Darrell Webster
11
Trading indicatorsA View Inside
by Jaime Johnson the Market Movement
15
High Reward-Risk Trade Setup
by Robert Miner
by Jim Shane
Money Management 20
by Bennett McDowell
Risk Control – the only
NinjaTrader
way to succeed!
by Raymond Stein
by Tony Beckwith
56
60
68
24
Advanced Computer Support
The Essence of High
for Serious Traders
Probability Trading
by Larry Jacobs
by Jeffrey A. Kilian
72
26
Trading with Notebooks
Darkest Before the Dawn
By Adrienne Toghraie by Larry Jacobs
74
32
ViDock 4 Plus adds and
Interview with Joel Rensink
36
accelerates Multiple
Monitors through
Fox is in the Henhouse as a
any Notebook Computer
Guard and all is Well
by Larry Jacobs
76
Sonata Trading Computer 78
by Gilbert Steele
42
by Steven Primo
46
5
A COMPENDIUM OF ASTRO-ECONOMIC
INFLUENCES PRACTICALLY APPLIED!
TO 110 YEAR ANALYSIS OF THE DOW JONES INDUSTRIAL AVERAGES
BY RICHARD SCOTT
TWO NEW FINANCIAL ASTROLOGY COURSES & TIME PROJECTION TOOLS!
This new course provides a direct and accessible doorway into the practical application of astro-economic theory for
trading. The difficulty that confronts most astro researchers is that there is too much contradictory material available,
which takes years to organize into a tradable methodology.
Richard Scott spent 8 years doing this research, by hand, watching the markets day after day, studying each change,
and then tracking down every influence and lead that he could find which would demonstrate to him the cause behind
market movements. He compiled 110 years of Dow Jones Industrial Average data, and, with his ephemeris in hand,
tracked down every instance of every influence. This course presents the results of that labor, summarized,
simplified, and clearly explained so that any trader can begin tracking and trading planetary influences in the markets
in a matter of weeks rather than years.
It further teaches how to determine the ongoing energetic background environment that the market is traveling
through at all times. This environment is defined by the summation of the underlying planetary energies at any time.
Any projection you have from any system can now be cross-checked with the Planetary Energy Background, and you
can affirm whether a turn will likely be a top or a bottom, or a trend will go up or down. This is very simple to
understand and to apply to your future charts, giving you an ongoing read on the energetic forces behind the market!
VOLUME 1 TEXT 240P. - VOLUME 2 CHARTS 90P. 170 IMAGES - BLACK SUEDE HARDCOVERS
TECHNICAL ANALYSIS & TIME PROJECTION
THE HARMONY OF MATHEMATICS & NATURE
BY CATALIN PLAPCIANU
ONE OF THE MOST POWERFUL & ACCURATE ASTRO-TIME PROJECTION TOOLS EVER DEVELOPED!
The Time Projection Technique presented in this course develops a new type of planetary time projection,
through the projecting of pairs or groups of planetary relationships into the future. The result of these
combinations is the projection of highly accurate future turning points with a false signal ratio of only 2
out of 10, or better. The time projections are highly accurate, generally occurring within a day of the actual
signal, even from points 30 years in the past. Specics of the projections can dene major turns, vs.
intermediate turns, vs. minor turns, and some combinations give very accurate projections of polarity,
whether a turn will be a bottom or a top. Using overlapping projections of multiple planetary
congurations serve as conrmations of important turning points, ltering out errors to less than even one
false signal in ten. The course also presents a detailed introduction to astrology, two diﬀerent systems to
project price, and a means to mathematically determine the SPEED of the market. There are numerous
trading examples given for long, intermediate and intraday trading.
See our website for more details!
BLACK SUEDE HARDCOVER 264 PAGES WITH 200 CHARTS & DIAGRAMS & PROGRAMED TIME TOOL
SACRED SCIENCE INSTITUTE Ө
WWW.SACREDSCIENCE.COM
EMAIL: [email protected] Ө US TOLL FREE: 800-756-6141
INTERNATIONAL 951-659-8181 Ө MAIL: P.O. BOX 3617, IDYLLWILD, CA 92549-3617
WWW.TRADERSWORLD.COMJanuary/February
June/July 2011 2011
26 6 WWW.TRADERSWORLD.COM
Interview with
Plapcianu Catalin
Larry: What is your background?
Plapcianu: My name is Plapcianu Catalin.
I am a trader, researcher and developer in the
field of technical analysis. My background is
engineering (civil construction engineer) with
a master’s degree in International Business in
Geneva, Switzerland.
Larry: How did you get started in technical
analysis of the market?
Plapcianu: I was introduced in the
markets by a professor in my Construction
University. He was all time talking about the
markets and the “whys” of them going either
up or down. It looked tempting first to enter
into such a domain because I thought it is not
a big deal to trade the markets. What is easier
than buy or sell? After loosing a good amount
of money, time proved to me that this is the
most sophisticated domain ever encountered
(by me at least), encompassing more than
5 different domains (music, astronomy,
physics, mathematics and technical analysis)
in which I am studying. First I started with the
fundamental analysis, which proved inefficient
because markets were progressing differently
than their P/E ratio and other fundamental
factors. After a short while I started into
technical analysis. After a short while of
testing the indicators (RSI, Stochastic, etc.)
I noticed their huge lag. Some indicators
were showing a hidden order in the market
(Fibonacci retracements, Fibonacci fans,
etc.), which sparkled my attention along with
Mr. W. D. Gann’s smashing trading record and
the controversy around it.
Larry: I know you have researched the
masters of trading, which masters do you like
and why do you like them?
Plapcianu: The last 3 years of my life
were completely devoted to the study of the
markets in the deeper sense. I found 5 other
people, which discovered the exact same law,
which W. D. Gann discovered. One of them
is undeniably George Bayer. His work is very
objective and gives a great deal of insight into
how the law of rhythmic balanced interchange
works. The applications in his “George
Wolsten” to the markets are very good. I
have discovered and unveiled his “Jiggle Line”
which I explained in my course. But not the
study of the works of the masters in particular
gave me the deeper insights. The correlation
of mathematics and physics with the markets
made me want to continue finding the order.
The effect of market movement, as well as
the “why”, can be explained through physics.
Markets can be perceived like systems with
different capacities of energy. By expanding
and contracting the total amount of energy in
the system the markets go higher or lower. By
expanding more energy on a move, a counter
balancing force will put the market back on its
track.
Larry: What is your opinion of W. D. Gann?
Plapcianu: I admire his devotement to
spend 10 years of life to study the “why” of
things. He understood that 7 basic colors can
make a rainbow, 26 letters in an alphabet can
make a language and with two opposing forces
(buy and sell) and a time factor you can make
a market. He was a man that encouraged
study of the law that governs us. He gave
WWW.TRADERSWORLD.COM
2011
7 2011
WWW.TRADERSWORLD.COMJune/July
January/February
even clues where to look for this law, for
there are times where this law is visible in
some domains and invisible in others, but
looking at the movement of the atom and
the electromagnetic effects gives the exact
principle of the working of the law.
Larry: Did he make $50 million in the
markets in your opinion?
Plapcianu: Without any doubt he did.
People close to the markets can testify that
by using leverage and getting into a trend,
huge amounts of money can be made. By
knowing the exact turning points of a market
can give unlimited possibilities to traders. In
fact, this is what everybody is in search for,
turning points.
Larry: Did he use astrology to trade with?
Plapcianu: To answer strictly to the
question, yes he did use celestial mechanics
to trade with. The study of celestial
mechanics is the study of a system. Markets
are systems, which move in a regular fashion
like planets do. Markets are a 2-dimensional
representation (on our charts) of a
3-dimensional movement.
Larry: In his article with the Ticker Digest
how do you think he traded the markets with
such accuracy?
Plapcianu: If we can measure a move
we can measure also its counterbalancing
move. If a move exceeds its limit, the counter
move will be in an exact opposite calculable
proportion to balance the energetic potential
level. Think of water waves. If you throw a
piece of wood you create waves with peaks
and troughs smaller than if you throw a
barrel. The market is formed of cycles of
different lengths. If there were no “barrels” or
“sticks” thrown, there would have been just
perfect harmonic cycles. I have discovered
that an impulse changes the length of a
8
harmonic cycle within a measurable extent.
Depending on the impulse comes the
measurable reaction in both time and price.
This phenomenon has the exact simile in
music: as frequency increases string length
decreases and as frequency decreases string
length increases. I think Mr. Gann had a very
good understanding of these phenomena
and their application into the markets.
Applying these rules on a daily basis is no
different in applying them on an hourly or
even a minute chart.
Larry: In today’s market tell us what
you are working on and how you think the
markets should be traded?
Plapcianu: Like Walter Gorn Old
(Sepharial), I devoted my time to
demonstrating that there is no such thing
as luck, and there is not. I have proved to
myself and to others using my knowledge
that markets are predictable and random
events do not have a place within anything
in the universe. For the moment I have
left the development side apart and I am
continuing my studies in the fields mentioned
above. Regarding markets, it is difficult to
say in a few words definite trading rules,
though in my course “TECHNICAL ANALYSIS
AND TIME PROJECTION THE HARMONY OF
MATHEMATICS & NATURE” i am giving direct
applications to the markets using market
equations, astrological time resistance
points and the last discovered tool, George
Bayer’s “Jiggle Line”.
THE LAW OF CAUSE & EFFECT
CREATING A PLANETARY PRICE-TIME MAP OF MARKET
ACTION THROUGH SYMPATHETIC RESONANACE
BREAKTHROUGHS
IN
GANN’S PRICE/TIME RELATIONSHIPS
BY DANIELE PRANDELLI
W. D. GANN’S PLANETARY LINES CRACKED USING CALIBRATION FACTOR!
This new course unravels the correct application of WD
KNOW IN ADVANCE!
Gann’s Planetary Longitude Lines. Gann used these
lines on his famous May Soybeans chart, but most
 EXPLAINS MISSING CALIBRATION FACTOR
people have never been able to figure out how to apply
WHICH FITS LINES TO ANY CHART!
them as effectively as Gann did. Until now!
 DETERMINE IMPORTANT ENERGY LEVELS
This new course explains why most analysts have failed
USING PRECISE MATHEMATICAL RULES
here! There is a missing conversion factor or calibration
rate which must be used to adjust the planetary
 KEY PRICES TO TAKE TRADING POSITIONS
relationships to the scale and vibration of the market at
any particular price level. This book CRACKS the
 FORECAST CLEAR TARGET EXIT LEVELS
conversion factor and makes Planetary Lines one of the
most valuable tools you’ll have in your toolbox.
 KNOW IMPORTANT TURNING POINTS THRU
CONFLUENCE OF PLANETARY LINES
Simple to apply with the proper software, which is easily
available, this powerful technique will give an added
 DETERMINE THE SLOPE OF THE EXPECTED
dimensional perspective to market action. These lines
TREND THROUGH PLANETARY ANGLES
call both price and time, and are one of the easiest but
most powerful of all Gann tools. Once you know them,
 LONG-TERM, INTERMEDIATE AND INTRADAY
you will NEVER stop using these lines to trade from!
FOR A DETAILED WRITEUP INCLUDING CONTENTS, SAMPLE TEXT
& CHARTS, FEEDBACK & MORE SEE:
WWW.SACREDSCIENCE.COM/PRANDELLI/LAWOFCAUSEANDEFFECT.HTM
SEE HOW LINES ON CHART CALL MOVES!
Notice how the market just bounces along
from one line to the next, and particularly
how it often turns exactly upon these lines.
Planetary price lines are Magnetic Attractor
Fields which draw the market to them, then
push them away again, giving a trader a map
of the geometric, electro-magnetic lattice that
the market is influenced by. In the same way
that electrons jump between orbital levels,
the market will vibrate between these zones
defined by planetary resonance.
BLACK SUEDE HARDCOVER 240 PAGES
28
9
BEHIND THE VEIL
A NEW APPLIED TRADING COURSE USING
ADVANCED PRICE/TIME TECHNIQUES TO
PROJECT FUTURE TURNING POINTS...
BY DR. ALEXANDER GOULDEN
PRESENTING POWERFUL GANN STYLE FORECASTING & TRADING TOOLS!
We are extremely happy to announce the release of a new and
deep Trading Course. Behind The Veil presents powerful
trading techniques based upon the deepest scientific and
metaphysical principles. It unveils many mysterious and difficult
theories and applications similar in approach to those of W.D.
Gann and shows a trader how to use these principles to
successfully forecast and trade the markets. DON’T MISS THIS
VALUABLE COURSE!
FORECASTING RECORDS
In August of 2009, 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!
Dr. Goulden, a Cambridge educated scholar, penetrated many of 
the hidden techniques used by Gann, and has developed
numerous new and original trading applications based upon
similar principles, leading him to the forecasting results in seen
here.
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 are
easily applicable, clearly presented and shown through numerous
chart examples in multiple markets, including stocks,
commodities & Forex, in all time frames, monthly to minute.
Wouldn’t you like to forecast like this?
T-Notes 20-22 August. Result - a pivot low on 21
August, followed by a rally of 241 points to 2 Sept.
 Soybeans 17-20 August. Result - a pivot low on 17
August, followed by a 710 point rally in 6 days.
 Gold 17- 20 August. Result - a pivot low on 17 August,
followed by a 780 point rally to 8 Sept.
 Platinum - 23/4 August. Result - a pivot high on 24
August, followed by a 607 point drop in 7 days.
 NY Cocoa 21-24 August. Result - a pivot high on 25
August, followed by a 257 point drop in 4 days.
 NY Cotton 21- 24 August. Result - a pivot low on 26
August, followed by a 426 point rally in 7 days.
 German Bund 21-24 August. Result - a spike low on
24 August, followed by a 140 point rally in 7 days.
FOR A DETAILED WRITEUP ON THIS COURSE INCLUDING CONTENTS, SAMPLE TEXT
WWW.SACREDSCIENCE.COM/GOULDEN/BEHINDTHEVEIL.HTM
& FEEDBACK SEE:
NOW AVAILABLE! FERRERA OUTLOOK FOR 2011
IN HIS BREAKTHROUGH CYCLES ANALYSIS BOOK, WHEELS WITHIN
WHEELS, FINANCIAL MARKET ANALYST AND EDUCATOR DANIEL T.
FERRERA PRESENTES A 100+ YEAR FORECAST FOR THE STOCK
MARKET OUT TO 2108. AS YOU CAN SEE IN THE CHART ABOVE,
HIS MODEL CALLED THE MAJOR TURNS OF THE MARKET FROM
2002 UNTIL 2008 WITH ALMOST PERFECT ACCURACY. HERE YOU
CAN SEE HIS FORECAST OF THE S&P 500 GOING OUT TO 2036. IF
THIS MODEL IS CORRECT, WE ARE APPROACHING MUCH HARDER
TIMES THAN WE HAVE SEEN SO FAR, ONLY WITH OCCASIONAL
SPIKES ALONG THE WAY. IF YOU WOULD LIKE TO KNOW WHEN
THESE MOVES WILL HAPPEN, THEN FERRERA’S YEARLY OUTLOOKS
GIVE THE MARKET PERSPECTIVE FOR THE UPCOMING YEAR.
THE 2008 OUTLOOK IS NOW FREE ON OUR WEBSITE
& THE 2009 & 2010 OUTLOOKS ARE NOW ONLY 50.00!
FERRERA OUTLLOK FOR 2011 IS $250.00.
30
10
Market
Forecast 2011
by Darrell Webster
T
he major Market indices have all been
in a strong bull-run since the lows in
March 2009. The question is when will
the cycle end. To know when the end of major
cycles are going to occur is a very valuable
resource. This article will show some simple
techniques for calculating where the end of a
major cycle may be. The Australian SPI index
used in this article is the main futures contract
for the Australian stock market.
It is important to know what angle the
market is running at. The angle, at which the
market is running, is obtained by putting the
number of points over the number of days.
The SPI made its low on the 10th March
2009 at a price of 3111. From the 10th March
low the SPI made a very strong run to the 15th
April 2010 to a price of 5036. This was a run
of 1925 points in just 401 days. Making the
angle to the 15th April 4.8 points per day: a
very strong angle over that amount of time.
From the top on the 15th April the SPI fell
82 days into a low on the 6th July 2010 at a
price of 4163. This was a range in price of
873 points. Again, if you put 873 over 82
you have an angle of 10.6 points per day;
meaning the fall out of April was a little over
twice as steep as the run into April.
Using standard technical analyses, you look
at the big picture, to see the big picture. Going
back to the start of the previous major bullrun, 13th March 2003 for the SPI and the low
of the day was 2679. From here the SPI made
it’s biggest bull-run in its history, running to a
final high on the 1st November 2007 at a price
of
6880.
This
was
a run of
1694 days
and 4201
points.
A g a i n ,
you want
to
know
the angle,
which is 2.479929; we don’t have to be too
pedantic 2.48 points per day will do. This is
close to half of the angle that the market ran
from March 2009 to April 2010 and a quarter
of the 10.6 points per day, which the market
made in the fall from the 15th April to the low
on the 6th July.
Fifty percent is the most important fraction
of any range in time or price. So we have to
halve the run from 2003 to 2007 in both time
and price. Lets do time first: half of 1694 days
is 847 days. Price range 4201 half is 2100.5.
Projecting these time and price ranges out
from the low 10th March 2009 price 3111:
equals 5th July 2011 at a price of 5211. This
means the same angle as the previous bullrun (2.48) will be repeated.
Another technique is to use the ranges of
the two axes of the chart, the horizontal and
the vertical as the same. The 16th of August
2007 price 5535 was a major low, then the SPI
rallied to the final high on the 1st November
2007 to a price of 6880 making a range of
1345 points, this is on the vertical axis (price).
Projecting 1345 on the horizontal axis (time
scale); 1345 days from the 1st November
2007 comes to the 8th July 2011.
Doing the same again, using the horizontal
axis or time frame, from the low on the
13th March 2003 it ran 1694 days to the 1st
November 2007. Projecting 1694 on the
vertical axis (price) off the high price of 6880
11
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12
on the 1st November equals 5186; this was the
high on the 2nd September 2008; a pressure
point.
These techniques give you a time and
price for the end of the current cycle in the
Australian SPI, from the 5th to the 8th July 2011
at a price of 5211 to 5218 with a pressure
point at 5186.
This is just to show these techniques keep
on flowing. If the high comes in at 5218 you
would do this calculation: 6880 – 5218 = 1662.
Projecting this range from the 1st November
2007 gives 20th May 2012 for a low.
These are just some simple technical
analysis techniques that are very powerful
and commonly used among technical traders.
I also use other techniques that are not so
common and some others I believe do not
exist anywhere else in the world. I have done
searches looking for similar things and haven’t
found any evidence that these techniques
exist anywhere else in the world. They are
most definitely new discoveries.
Using these other techniques, in conjunction
with what I have already shown. I see the first
top in the Australian market in early July 2011
with the next top in August, being a lower top
in Australia. August could be the highest top
for the US market. (Market drama in August
also lining up with political problems around
the world). From the top in August, markets
will crash, lasting 26 days from top to bottom,
only a short time frame but it will be very
dramatic. Followed by a flat market, then a
rally to the top of 2012 in the first week of
January. This will be six months from top to
top, July 2011 to January 2012, when a bear
market will start.
By Darrell Webster
Australian Futures Trader
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January/February
2011
June/July
2011
7513
Virtue of Selfish Investing
Dr. Chris Kacher
Gil Morales
Market pros Dr. Chris Kacher and Gil Morales provide stock set-ups and ETF recommendations in real-time via email so you can immediately act on their alerts (for both beginning
and advanced investors):
• Dr. Chris Kacher used his timing model to help generate a long term return
of +18,241.2% in the stock market as verified by KPMG.
• Gil Morales achieved a return of +10,904.25% as audited by Rothstein Kass.
• Dr. Kacher and Gil Morales wrote the book, “Trade Like An O’Neil Disciple:
How We Made 18,000% in the Stock Market”.
• 2010 market timing results: +83.8% (unaudited results using 3x ETF TYH).
• 2009 market timing results: +118.3% (unaudited results using 3x ETF TYH).
• CONSERVATIVE APPROACH: using market timing model: June 9, 2009 - June 9
2010 +55.1% with exposure to the market less than half the time as audited
by Rothstein Kass.
• CONSERVATIVE APPROACH: 2008 market timing results: +38.8% using no
leverage (unaudited results).
Watch for Gil Morales and Chris Kacher on Traders World Online Expos
Dr. Chris Kacher / Gil Morales
MoKa Investors, LLC
181 Culver Blvd. Suite B
Playa del Rey, CA 90293
www.mokainvestors.com
www.selfishinvesting.com
14
19
by Jaime Johnson - Dynamic Traders Group
W
hether you are Futures or Forex
trader, live in the United States
or overseas, many people are
concerned over the direction of the U.S Dollar
over the next several months. This article is
going to give the probable trend direction of
the dollar over the next few, if not several
months based on Dynamic Trader analysis and
approach to trading. The analysis is based on
Elliott Wave and oscillators. While the oscillator
used in these charts is a propriety oscillator to
the Dynamic Traders software, any oscillator
can be used in which the bearish and bullish
reversals of the oscillator (or highs and lows
15
of the oscillator) correlate relatively well with
the swing highs and lows of the dollar. This
article was written during the first week of
June 2011.
A Correction Should Still Be
Unfolding Off the 2008 Low.
Chart 1 is a monthly chart of the Dollar
Index. The April 2008 low appears to have
completed a textbook Elliot Wave five-wave
decline off the July 2001 high. Following a
five wave decline, at least a corrective rally
should unfold very often reaching at least the
typical time and price targets for a corrective
high. The extreme bullish scenario is another
five-wave rally could be unfolding. However,
since we will not know if this case for months,
if not years to come, let’s focus on if only a
corrective rally is unfolding.
The typical price target for a corrective
16
high is the 50%-61.8% retracement zone of
the 2001-2008 five-wave decline which is at
96.00-102.00. The ideal time target for the
completion of a corrective high is the 38.2%61.8% time retracement zone of the fivewave decline, the end of Nov. 2010 through
the end of July 2012. The March 2009 high
did not reach either of these targets. The bias
is, if only a corrective rally is unfolding off
the 2008 low, the April 2008 – March 2009
rally should only be the first leg up of at least
three legs of a corrective rally. In Elliott Wave
terms a wave A of the correction. In other
words, ideally, the March 2009 high should be
exceeded before the April 2008 low is taken
out.
The second leg of a correction very
often unfolds in a three wave pattern or an
abc pattern which appears to be occurring.
However, corrections do not always follow the
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50
17
oscillator bullish reversal without the May
2011 low taken out is the initial signal the May
2011 is the wave c of B low.
The Bottom Line and Trade
Direction
Elliott Wave guidelines, so a decline below
April 2008 low signals the correction off the
2008 low should be complete and has strong
bearish ramifications.
Regardless if you follow Elliott wave or
not, the most important factor for the next
few months is shown by the oscillators in
the chart. Both are in the oversold zone, one
which is actually bullish which is a strong
signal of a multi-month low near completion,
if not already complete at the May 2011 low.
Regardless of Elliott wave counts, corrections
or if the April 2008 low is taken out or not, the
oscillators suggest a multi-month low should
be at or near completion.
The Dollar Index Weekly Chart
Chart 2 is a Dollar Index weekly chart off the
April 2008 low. The most important factor in
this chart is the bearish weekly oscillator which
signals the net trend of the dollar should be
sideways to down over the next few weeks.
With monthly momentum oversold, there is
a strong possibility the next weekly oscillator
bullish reversal could coincide with not only
a multi-week low but a multi-month low and
potentially the completion of the three wave
corrective decline of the March 2009 high. If
this is the case, a rally eventually exceeding
the March 2009 high should follow. A weekly
18
We have shown potential Elliott Wave pattern,
position and price targets and we have shown
the signal that a corrective rally off the April
2008 low should be complete. However, the
important factor for trend and intermediate
term trade direction is shown with monthly
momentum. The monthly oscillators of two
degrees in the oversold zone and bullish is a
strong signal a multi-month rally should begin
soon very likely to above the March 2009
high. Once the weekly oscillator turns bullish,
intermediate to long term long trade set-ups
should be considered. If you a FOREX trader,
intermediate to long term short trade set-ups
can considered in the EUR/USD which trades
inversely to the Dollar Index. However, keep
in mind a multi-month bull trend in the dollar
usually has multi-day to week corrections.
For continued analysis on the dollar or EUR/
USD check out the DT Daily Forex Report. For
education on analysis and high probability,
low capital exposure trade set-ups to take
advantage of a multi-month bull trend in the
dollar, as well as shorter term counter-trends,
check out our educational material at www.
DynamicTraders.com.
Jaime Johnson is the author of the newly
released, NoBSFX Trading Workshop. For
complete information, go to www.nobsfx.com.
For more info on the Dynamic Trader Daily
Stock and ETF Reports, Futures Reports, Forex
Reports which Jaime Johnson co-authors, go
to www.dynamictraders.com.
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19
13
High Reward
Low Risk
Trade Setup
by Robert Miner
Dynamic Traders Group Inc.
I
like to use current examples to teach my
trading approach rather than just afterthe-fact examples. We are all genius’
after-the-fact but it is another thing to identify
a trade opportunity with low risk and high
reward as the opportunity is made. But, that
is the real world of trading.
20
This article is written Friday afternoon,
June 3, 2011, about an hour before the close
of the S&P trading. The S&P may appear very
bearish. It has been in a bear trend for a
month, since the May 2 high. Last Wed. was
the largest down day of the year to date.
Today’s low is just above the April 18 swing
low.
Let’s take a look at a few factors to see if
the S&P is as bearish as it may appear from
just the recent price data.
Chart 1 is the weekly SPY, the S&P
ETF. There are two key factors to be aware
of. Firstly, the weekly momentum is deep
oversold (OS) and in a position where weekly
lows are usually made. The DTosc is a very
reliable momentum indicator. When it is OS
in a bull trend, we can say the downside in
time and price should be very limited before
a weekly low is made. The second important
factor shown on the weekly chart is the 1316 (14-15) Weekly Reversal Cycle. The stock
indexes tend to make weekly reversals every
13-16 weeks with most made in the 14-15
week period. The week ending June 10 (next
week) is the extreme of this weekly reversal
cycle. If this cycle continues as it has for the
past 3-4 years, a low lasting several weeks
should be complete by next week.
This week will make an outside-down
week, typically considered a bearish trend
continuation pattern. However, the weekly
momentum and a weekly reversal cycle both
warn that a low lasting at least several weeks
should be very near. Let’s take a look at the
21
daily chart.
Chart 2 is the daily SPY and includes a
wealth of useful information. The decline from
May 2 has had several “overlapping” swings.
What does this mean? Each corrective rally
has traded into the range of the prior swing
down. As I teach in our trading courses and
High Probability Trading Strategies book, the
simple “overlap guideline” is the best and
most simple way to be warned if a pattern
is corrective or impulsive. The decline from
the May 2 high is a corrective pattern by any
count. It is possibly an Elliott Wave ABC-XABC. However it might be labeled, we have no
choice than to consider it corrective.
Today’s low (Friday, June 3) is in a multiple
retracement zone that is just above the April
18 high. This zone includes the 88.6% minor
retracement and 61.8% major retracement.
The daily momentum is not yet oversold.
The daily DTosc must either be oversold or
make a bullish reversal before a specific
long entry strategy can be made. The daily
momentum indicator window also shows the
position of the weekly OS momentum by the
thick red bar.
A quick review. The weekly momentum
is OS and the week ending June 10 is the
extreme of the 13-16 week reversal cycle.
A weekly low is probable no later than next
week (WE June 10).
The pattern of the decline from the May 2
high is typically corrective with today’s low in
a key multiple retracement zone. Some short
term daily timing factors (not shown on the
daily chart) suggest the daily low should be
made no later than Tuesday, June 7.
What is the specific trade strategy? If both
lines of the daily DTosc reach the OS zone OR
the daily DTosc makes a bullish reversal, trail a
buy-stop to go long one tick above the trailing
one-bar-high. If the long position is elected,
22
place the initial protective sell-stop one tick
below the low made prior to the entry. The
initial capital exposure will be very small. If
you are short, use this same strategy to stop
out of the short and reverse to long. If the
long entry is made without the SPY trading
below the April 18 low, the weekly momentum
and pattern position suggests the S&P will
eventually trade to above the May high.
Of course we know a market can do
anything. The SPY may blow right down
through the April 18 low and never rally to
exceed the May high. What we do know is the
SPY is near an ideal setup for a low lasting
at least 2-3 weeks and we have identified a
trading strategy with very small risk to take
advantage of the weekly low should it be made.
The potential reward-to-risk is definitely in
the double digits making it just the kind of
trade to be alert to.
Most readers will read this article weeks
after it was written so you can check your
charts and see how it worked out.
Robert Miner is president of Dynamic Traders
Group, Inc. and the author of the Dynamic
Trading Multimedia E-Learning Workshop and
High Probability Trading Strategies. Traders
World readers are offered a major discount
on the self-study workshop through the end
of July. See the ad in this issue for more
information.
It’s Not
Insider Trading!
Better!
2011 Q1 S&P 500 Track record:
281 Points Profit
Forecast & Trade
Fat Cat Trade
www.fatcattrade.com
23
Risk Control – the Only
Way to Succeed!
by Tony Beckwith
A
s the US government’s debt ceiling
is raised for the 75th time in 50 years
by the US Congress, two small words
- risk and control - are probably being used
together by traders more than any other
combination! If risk had been controlled with
more discipline through the financial systems
of the world, especially here in the West, the
consequences of excess would have been a
whole lot more palatable...
Almost all of the most successful traders
in history learned early on in their careers
(probably the hard way) that there simply
is no “Holy Grail” in financial markets. New
traders usually search for extremely high
24
win / loss ratios, in their quest to be “right”.
Psychologically, this is very seductive...
however this is not something most
professional traders do…
The reason is that this is addressing only
one aspect of trading risk and, arguably, the
weakest aspect. It is clear that a win / loss
ratio of, say, 70 percent, though it may boost
the ego, is just a ticket to ruin if you’re losing
twice as much on your losing trades as you’re
pocketing on your winners…
This is not denying that probability risk is a
vital component of trading success. However,
it clearly is how this risk relates to a trader’s
average win and average loss in actual money
that determines whether an account grows or
dwindles. As we trade more and understand
more, the importance of the overall Profit
Factor is seen -- the win / loss ratio multiplied
by the average winner / average loser ratio.
This must be above 1.0 over time to give an
“edge” to the system or method being traded.
The Second Vital Aspect of Trade
Risk
Control over how much your winning trades
deliver compared with the inevitable losses on
your losers falls squarely into the category of
money management. In simple terms, this is
the second crucial aspect of trade risk – we
can call it money risk. Great traders know
perfectly that they cannot control the profits
because any future outcome is highly (if not
perfectly) uncertain. What they can and do
control tightly is the amount they’re prepared
to lose in the event that a trade goes wrong.
The average loser component of the
Profit Factor can then become a known and
predictable quantity. In fact, it’s pretty much
folklore in trading circles to risk no more than,
say, 2 percent of an account on any one trade
-- though this could easily be far lower if you
are trading plain vanilla stocks (with huge
position values possible).
So, if we assume a US$20,000 account, a
risk of 2% per trade would allow a maximum
risk of $400 per trade on this standard
fixed fractional basis. This contrasts starkly
with methods such as Martingale and antiMartingale, in which you either increase your
bet size as you lose or decrease it.
As an example, a run of 10 consecutive
losing trades reduces account size only by a
manageable 20 percent, the account requiring
only a 25 percent increase from there to get
back to its level before the drawdown. It’s
worth adding, though, that a bigger drawdown
could easily threaten a trader’s so-called Uncle
Point -- the point at which a loss of confidence
and general psychological demoralization
overwhelms any fancy mathematics!
For more information on MTPredictor go to
http://tradersworld.com/software/
mtpredictor.html
25
The Essence of
High Probability Trading
by Jeffrey A. Kilian
I
t would seem with the plethora of available
stock trading software platforms and
accompanying rocket science technical
analysis techniques it should be a noncomplex subject matter to once and for all
define the essence of High Probability trading.
However most of the inefficiencies associated
with substandard trading results are to this
day directly related to Backward Technical
Analysis vs. Forward Technical Analysis. The
before mentioned produces analytical findings
Chart 1- Volume Spike Accumation
26
and although factual are loosely based on
independent indicator findings in isolation and
therefore cannot produce the high probability
trades we all seek to profit from. The after
mentioned produces an entirely different
outcome based on the desired result. The
desired result now becomes our focus and
the end goal is to trade only those stocks that
have the highest probability of making an
accelerated highly profitable move and do it
in a short period of time. Before we proceed
©2011 MetaStock Professional
with making the case for superior single stock
selection using this methodology we must
first consider the definition of “essence” and
its core value directly related to a trading
methodology.
Essence is the permanent as contrasted
with the accidental element of being; and
moreover the real and ultimate nature of a thing
as opposed to its existence. Most Technical
Analysts are searchers of the truth and in this
case that truth becomes the objective findings
that create actionable intelligence for real life
profitable stock trading opportunities. A truly
committed technician exists in the trading
world where his/ her findings are either black
or white as the grey area is for the participants
we require in the marketplace to realize our
profits from. Unfortunately most traders and
Chart 2 - MACD Classic Divergence
27
investors drawn to the marketplace employ
Backward Technical Analysis due to a lack of
experience or simply have not yet discovered
the essence of high probability trading. So now
let’s present a closer look at a Methodology
using a step by step approach that has stood
the test of time in producing the type of trades
we all want to make.
Since the beginning of recorded history
in the US Stock Market; volume has been
responsible for some of the most profitable
moves in stock prices. By nature an unusually
large or historical amount of positive volume
at a certain price level clearly indicates
accumulation. This accumulated buying as
seen through the eyes of a seasoned investor
or trader has great significance as this is a clear
Chart 3 - Stochastics Fast 21 Day
28
signal that a combination of insiders, pension
fund managers, and financial institutions have
made a decision to trade the security with a
vested interest in selling it off at a forward
date. See Chart 1.
An example of how to determine that
accumulation is in fact positive is evidenced by
a volume spike of two maybe three or four or
more times greater than the 21 period average
daily volume or an accumulated high level of
volume over a specified number of days that
co insides with a newly formed Pivot Point
low. Now in the case of an oversold or beaten
down security, that pivot point low with the
volume spike located directly underneath it
could then be located at a previous price level
established 6 months ago being the same
level where another pivot point or base level
formation had previously been established
as well. The simple double bottom pattern
now takes on a new significance as the smart
money players have decided that this price
level has now become the new intrinsic base
value of the stock. The smart money or shall
we say the people whom actually control
stock prices have now taken a position with
an intended intermediate to longer term hold
time to surely sell it off with a huge profit.
We know this because a vested interest in the
accumulation of a stock by these people is one
where there is an expected payback and is
carefully orchestrated and is always realized.
History has shown us time and time again that
when the deal is sealed between the powers
Chart 4 - Money Flow Confirmation
that be; the stock gets its big upward price
move as surely as the sun rises and sets. So
now that we have qualified the first step in
identifying a real high probability trade lets
proceed with the integration of technical
Indicators being graphical representations of
mathematical formulas based on price and
time as applied to Forward Technical Analysis.
Again where forward technical analysis
is the desired result and the desired result
is a high probability trade; the indicators
we choose for our analysis must be able to
predict future price directional movement in
our favor.
The MACD Indicator as applied to single
stock trading using this methodology serves as
a trend following indicator showing us where
29
the trend is likely to change direction by the
crossing of the MACD line from below to above
the signal line, with being situated below the
zero level. Dependent upon the current chart
pattern formation it as well may be on a short
or long term positive divergence additionally
signaling pent up buying pressure within the
security that has not yet been realized in the
form of the stocks upward price movement.
The ideal indicator formation is it being on
a short to longer term positive divergence
relative to the chart pattern formation and
now having the MACD cross above the signal
line but still below the zero level; but now
with continued upward momentum signaling
Chart 5 - 3 and 7 Pair EMAS
30
in isolation the stock has “alta probabilities”
or (high probabilities) for a substantial upside
move. See Chart 2.
The Stochastics Fast indicator as applied to
single stock trading serves as a first responder
providing us with advanced notice of the
directional change in prices. Again let me say
in another way, an advanced notification of
future directional price movement before the
stock price has made its reversal in direction.
The 21 day Fast Stochastics
has direct
application to this methodology as when we
have a security in an oversold environment
it objectively provides us with a relative
comparison in the form of its graphical
representation of where today’s closing price
is as compared to where it was 21 bars ago.
Remember we are using objective analysis
here and not subjective analysis where as
objective analysis by nature is something that
can be analyzed and the results are verified
as being the truth. See Chart 3.
The Money Flow indicator as applied to
single stock trading now becomes the critical
link between all of the indicators previously
discussed. It is the ultimate indicator that
confirms the tide of funds that have come
into a security “desde principio” or (from
the very beginning) was in fact the insiders,
pension fund traders, the financial institutions
that make the market all in unison initiating
their positions for a forward dated highly
orchestrated sell off for a substantial profit.
See Chart 4.
Now let’s integrate the 3 and 7 period pair
of exponentially smoothed averages as the
last confirmation that price movement and
the momentum behind it are more than a
mere aberration or abnormally and the train
is now leaving the track being the first and
official confirmed move of the intermediate or
longer term stock price move that will play
itself out over time. Exponentially weighted
averages as in the preferred 3 and 7 day will
guarantee us that we initiate our trades at the
most opportune time and not come late to the
party as SMA’s that the lesser experienced
traders and investors would like to believe still
have some validity. See Chart 5.
Now that we have the set up and have
successfully constructed a valid and powerful
core Trading Methodology for single stock
selection, we have to decide when to execute
the trade. Basing our entry on only a specific
predetermined day can lead us to miss the
correct entry and get shaken out of the trade
only to see the stock catapult upwards. So
how do we deal with the time element as it
relates to the move? The answer is to expand
the window of opportunity by widening the
time period we allow ourselves to actually
take the trade and by allowing all conditions
to be met in any order that they may appear
within it!. Again we do not need a specific
order for all the conditions to be met before
we trade. All conditions met within per say
a 10 bar period parameter now allows the
trader the flexibility where not previously
possible, for the trigger day to be located
anywhere between day 1 and all the way up
through day 10.
Whether you are a beginning trader or a
seasoned professional, following and staying
true to this methodology will allow you to
consistently maximize your profit potential
and minimize your downside risk other
methodologies only aspire to. Now this my
fellow traders and investors we can all agree
is ”the essence of high probability trading”.
Jeff Kilian is a 13 year veteran trader,
technical analyst and founder of
www.theinsidetechnician.com
specializing in “one on one” developmental
training and the Foundations Course for
those whom aspire to become real life
profitable traders.
31
Darkest
Before the Dawn
By Adrienne Toghraie, Trader’s Coach
W
hen we look back at the struggles,
disappointments,
sadness
and
setbacks in our lives, we see a
pattern of how we handled those dark days.
For some people suffering becomes a way of
life for a long time before they are able to see
the light. Others are able to make the best of
a difficult situation and the healing process
is relatively short. In some cases the difficult
situation was a good thing.
Dark periods affect trading
performance
For a person who trades the
markets, difficult times in life will
affect trading performance because
of:
a) Depression of spirit
b) Lack of focus
c) Feelings that you do not deserve or want
to be happy
d) Judgment of other people
e) The need to sacrifice yourself
f) Sabotage issues more prevalent
g) Need to put your attention to other areas
of your life
It is appropriate to stop trading or
risk less during this period of time.
What you need to ask yourself is:
a) How long do you feel you need to stay in
this depression and why?
b) Are you going through this depression
because of yourself or others?
c) What was the key task that lifted you out of
depression other times in your life?
d) What will it take for you to allow yourself to
be healed in a shorter period of time?
Here are some of the issues that
affect a trader’s performance:
a) Change of any kind
b) Losses in trading and life
c) Realizing your strategy does not work
32
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


















33
George’s case there were so many issues that
he had to deal with that the only smart thing
to do was give up his dream of being a fulltime trader for awhile.
What George did to make the dawn arrive
earlier than most of the people of Greece was:
• Have each member of his immediate
family be willing to make sacrifices
for the good of the family unit
• Make an agreement between family
members that each one would take
the responsibility to contribute to
making the other family members
happy
as
well
as
themselves
d) Personal issues such as losing significant
people, illness
e) Lack of support of people in your life
Handling life change issues
The world changed for George, who was
a trader in Greece, when the government
went bankrupt. He was just going to be able
to give up his job and become a full-time
trader with the sale of one of his properties.
Suddenly, the buyer backed out, his wife lost
her job, his paycheck from the Government
was reduced by one third, and his country
was in an emotional depression. To make
matters worse, each member of his extended
family and friends looked to George for moral
support, because they saw him as the strong
one.
Family sacrifices had to be made and one
of them was that George would not be able to
trade for awhile. Each member of the family
found it difficult to make the adjustments
necessary, but they worked as a family to
find the blessings they had in each other. In
34
• Each member of the family agreed to
support each other in helping to keep
dreams alive by doing something each
day to make their personal dreams
come true
George was able to get a job at a higher
pay in the private sector. He readjusted his
strategy to swing trading and now trades
two hours a day. The best reward from the
upheaval of his life came from experiencing
the love and support of his family and their
bond became stronger.
Conclusion
Whatever issues you are dealing with in your
life as a trader, if you take a proactive choice
in doing whatever is necessary to heal yourself
in the shortest possible time, the dawn will
break in your life sooner. You will become
stronger minded, and as a result, come out of
the difficult time sooner and have less time off
from your life as a profitable trader. For more
information go to: www.TradingOnTarget.com
Super Timing Book
Gann's Astrological Method
W D Gann was one of the most
successful traders of the twentieth
century . While many people
relate to gann swing trading, the
gann wheel, the gann square of
nine, the gann angle and the gann
line not many appreciate that William Gann used
Astrological methods for his trading.W. D Gann
was a trader primarily in the first half of the
twentieth century and Gann theory and Gann
trading are still widely studied over fifty years
later.Many of todays traders of the dow, nasdaq
and commodities markets still rely on WD Gann
Stock trading methods. Myles Wilson Walker has
made a full and detailed study of WD Gann and
his trading success and has written a unique
work establishing the link to Astrology . This link
is as valid today as it was when Gann was trading
stocks and commodities. Gann analysis and
gann theory are a fundamental part of Trading
Technical Analysis and stock market theory and
Myles Wilson Walker’s research stands at the
forefront of Gann books.
In Super Timing the formula is shown in detail.
All of Gann’s public predictions were analysed
to reveal the one common factor. Super Timing
explains all of Gann’s predictions using the one
formula.
It shows you which Planet will be signalling
the next trend turn and it works on all markets.
As well as Gann’s timing method there is the
price target method which is demonstrated by
his predictions and from real life examples in
recent markets (this is not a planets longitude
converted to price)
On this Website I have used one of Gann’s
charts to prove that he really did use astrology
because there are still a lot of people who think
he used only swing charts, angles or fixed time
periods. None of these can be used to consistently
explain all his public predictions.
The real answer is in Super Timing where you
will learn the pattern combination that is found
in all of Gann’s predictions both long and short
term. You will see how this works on a swing
basis as we work through whole sequences of
short term trades that Gann actually did. Nothing
has been omitted.
You will see why he entered the market when
he did and the reason he took profits only to reenter at a better price the next day.
The markets covered are coffee soybeans
and cotton but the same method works on any
market and more importantly it is still working
today. When you take the time to study Super
Timing you will prove to yourself that this really
is the best timing method available.
The method is quite easy to learn as there
is no complex Astrology (It is based only on the
positions of the planets as seen from earth and
their angular relationships)
There is a freeware program included that
will do all the calculations. This also contains all
the trades in the book plus nearly 100 years of
the Dow’s major highs and lows so you can see
how well it has worked for yourself. You will learn
Gann’s price target system that solves the price
part of the formula.
The book is spiral bound with a cellophane
protective front and black plastic laminated
back. The book is in colour and contains over
150 pages. Price is $250.00
Super Timing
35
Interview with
Joel Rensink
Larry: How did you get into trading?
Joel: When I got out of high school I got
into the business of reclaiming silver. Silver
prices were still relatively low, around $2.00
to $3.00 per ounce. It was the mid-seventies
and huge economic and political changes
were underway. Inflation and exploded with
a couple presidents. It made it possible for
silver to move up from the two dollar level.
There was an act created in 1946 named the
Bretton Woods system which made it possible
for governments to sell gold to the United
States for $35 an ounce. Bretton Woods
ended in 1971 by Richard Nixon and all links
between world currencies and metals were
ended.
Also that decade,
a decision by the
government was made to let silver come out
of government vaults. They sold massive
quantities of silver, making it possible for
regular people to buy silver straight from
the treasury. People saw all these actions as
being inflationary. I too decided to get into
the silver market. I learned how to reclaim
silver from x-ray films and used photographic
solutions, making it possible to obtain silver
for a quarter of the spot cost. I made a
business out of it and it was very profitable.
After I made money with my silver business
for a couple of years I thought wouldn’t it
be better to speculate in the silver futures
market directly?
Larry: When you started to trade on the
futures market, what led you to your trading
methods? I know you are big on Gann. What
led you that way?
36
Joel: I found that even if you were right in
the direction of silver and had an idea where
it was going, you still had to have risk control.
I made big bursts of profits and then big bursts
of losses not knowing how much to risk. The
market would always go the furthest against
me at the worst possible time. That is what
caused me to do a serious research of what
methods were really making money. Having
already made a lot of money, I thought that
I knew everything I needed to know up until
that time. I was only 18-19 years old. At that
age you tend to think you know everything,
when you hardly know anything.
I read everything available in the big city
libraries, which was meager and always has
been meager for anything to do with trading.
Fortunately, there were some professional
traders in my home town and I was able to
talk to them. One of them mentioned Gann
and I researched all I could on him. I got
some of his books, the best being How to
Make Profits in Commodities-- and I found that
everything that I had studied up to that time
was worthless. So I continued on with Gann
and I obtained everything that was possible
to get in Gann materials. I ran across Billy
Jones, got to talk with him and obtained the
additional materials that he had available. I
studied Gann for 10 solid years. I still read
How to Make Profits in Commodities at least
once a year.
Larry: Did you ever go to any of Billy
Jones seminars?
Joel: Yes, a number of them.
Larry: Did you learn anything from them?
Joel: Yes, I did, but not that much about
viable Gann trading methods.
You could
learn more about Gann from just reading
Gann’s materials. What I found out at the
seminars is how completely confused people
were about Gann trading, and Billy Jones was
in there with them. He never claimed to be
the biggest Gann expert, but he did claim to
be an expert in Gann materials because he
had most of them. It did turn out that there
are additional Gann materials out there in the
hands of citizens and traders that Billy Jones
never knew existed. Gann would share certain
things with certain people and different things
with other people, so that is why some unique
Gann courses are still out there. I’ve gotten
most of them.
Larry: All the publicity says that Gann
made $50 million dollars trading the markets.
Did he make that much or not?
Joel: I believe that his trading did make
that much, but I don’t think it was all his
profit. It was a tough time to trade in the
40s and 50s when he was alive. It was much
tougher. You had fewer markets to trade. You
had to wait a long time to get a massive trade
on. When you got a big move back then you
had to put massive size and hold on to get the
big profits. It is very likely that he did it with a
combination of his funds and others. I would
have no problem that he make $50 million net
profits, but from my sources; not all of it was
his money. He was sharing profits with other
individuals that were perhaps his sponsors
like our CTAs does today.
Larry: What about the interview in
the Ticker Digest where Gann had made a
tremendous amount of money in front of a
reporter in short period of time? Do you have
any idea how he did that?
Joel: Yes, I am aware of that interview. I
actually got the data from that time and it is
pretty easy to figure out what happened. The
stock in question was under accumulation
by other interests. It was mostly a support
and resistance situation. When a stock is in
accumulation it rises from level to level. So
say they were trying to buy several million
shares at 16 1/8, and that is the new buying
point. So if the market trades between 16 1/8
and 16 5/8, you could easily put a stop at
16 even and be buying at 16 1/8 and 16 1/4
and be taking 1/2 point profits with extremely
low risks because you knew that it was under
accumulation. Also if you had additional cycle
considerations that Gann would have, plus the
fact that there is an operator who is buying
the stuff up, this would not be brain surgery
to be able to trade with 90% accuracy in that
environment. I have seen dozens of situations
like this in the futures market where I was
aware of specific accumulations going on. It
was almost impossible to lose. I believe that
Gann did this and wanted to make his trading
pubic because it was good advertising. In my
mind it does not take away from the fact that
he knew how to do it and to take advantage
of it. This is a highly reliable way of making
money. Hedge funds are doing the same
thing today.
Larry: One of the big controversies around
Gann is was he using astrology to trade with
or not? Did he use it for personally purposes?
Joel: I would say that it is possible. I believe
that he used astrology like current traders
use like MACD. He found some correlation
between highs and lows in specific stocks
and planet nodes and used the correlations
as a form of indicator. He did not buy or sell
because that market squared out with two
planets. He probably took note of that and
and watched to see if the market would react.
He might have used it to tighten up an exit
point with a swing. So I am sure that he used
37
it as an indicator for a strength and weakness
concept rather than buying or selling on an
astrological reason.
Larry: What is your opinion on the use of
the large number of oscillators today being
used in technical trading?
Joel: Yes, some are useful for me, but
mostly as a counter indicator. Most people
that use them are looking at the oscillator
not the price. Price is the leading indicator.
They are following a lagging indicator, which
gets them into problems much faster. So that
creates an advantage for traders that use price
as a leading indicator. It gives us an edge,
because indicator followers are reacting late,
and if you react late the guy that uses price
has the opportunity. We make profits in this
business by taking opportunities from others.
Anyone who uses a lagging indicator is subject
to the one who does not.
Larry: In your opinion of all the oscillators
that are available, if one knew how to use
them which one is the best?
Joel: None. The only thing that I have
seen anyone profit from is RSI. I have seen
many use a simple method using RSI with
divergence. That makes a lagging indicator
become a leading indicator. But it is how you
train yourself to use it that makes it valuable.
I really don’t see any value in any indicator
other than price. The biggest edge is being
first and right. The greatest edge in getting
out of a losing trade, is by your originally being
in first-- you will know you are wrong first and
can get out immediately faster than everyone
else. You can do this because you are using
the fastest leading indicator, which is price.
Larry: It has been said that 90% of traders
today lose in the market. Do you have any
reason why this happens?
Joel: I think a lot of the reason they
lose is because of their overwhelming use of
38
indicators that don’t have any proven validity.
They are not thinking correctly. I’ve said this
to many people, it is all about how you think.
If you start out with an incorrect premise it is
impossible to get to where you want to go. So
if you want to become a professional trader
and profitable you must start out with the
correct premise of how to make profits and if
you don’t start out with that premise you will
end up with losses. People that are promoting
these ideas using indicators are not intending
to lead people down the wrong path. It is not
impossible to make money with indicators, that
is not what I am saying, but it is significantly
harder. Things you have to do to make profits
using only price as an indicator --it is harder
psychologically, which is why it is profitable
to do it. The more indicators a trader uses
the worse it will get. With indicators you don’t
have certainty or statistics to prove what you
are doing actually works.
Larry: In reading Gann books a lot of
people have problems using Gann angles to
trade with. Many say they have lost money
and could never get them to work. Do you
have any thoughts on this?
Joel: I am not sure what they are doing,
but I could shed a little light on it. Gann
angles were never designed to be used as a
trading system. For example , if price crosses
this angle you buy or if it crosses that angle
you sell. All Gann angles are is a form of
strength/weakness indicator for trading. I use
them to this day for the same exact reason
the same way Gann used them. He used them
as indicators. You have only one low and one
high if you are in a range. If you are expecting
the market to get out of the range you need
to know if the market is getting stronger or
getting weaker so you can know if it is worth
your time to enter that market or to put a stop
in, etc. Gann angles are useful because you
can put a variety of them on your chart, 1x1
or 2x1 angles or 4x1 angles so you can know
if the market is gaining or losing strength.
Kind of like an RSI. So since the angles are
going up with a precise level of time and
price you can know immediately if the price
action is diverging from the uptrend that it
is in or ceases to be in because it does not
hold angles it was holding before. So you can
tell immediately if the market is weakening or
getting stronger relative it is to those angles
that are coming down from major tops are
coming up from major bottoms. It was really
clever what Gann was able to discover. I love
it and I think it is one of the easiest ways of
trading. I keep separate daily, weekly and
monthly charts with angles on them. Monthly
and weekly charts are easy to do but the daily
charts are the pain. I keep these on separate
charts than my trading charts. I can look at
these to see if the market it getting stronger
or weaker and then I am able to trade those
views on my trading platforms.
Larry: Gann talked a lot about his trading
charts and using both trading and calendar
days. Do you keep both types of charts?
Joel: Yes I do, I want to know how many
calendar days I am from specific highs and
lows. I do it the way Gann suggested. We don’t
have to be as precise as Gann was because we
have so many markets. It is important to be
aboard the weakest or strongest markets and
that is how you make money in the shortest
period of time. You don’t have to watch all of
the markets. You don’t have to keep all these
dates on everything until you need them. You
can keep the base figures how many weeks,
months on the charts from the last 7 major
highs and lows when you think the market is
going to make a peak or a bottom and then
you can fine tune it with the daily chart when
you are closer. Keeping all these numbers
and figures up on all these markets is not
practical. That would be all you are doing.
There would be no time to trade. High grading
these markets, in my opinion, is the way to
go. If Gann was alive today I guarantee he
would not keep up all the charts he did back
in the 50s. What is so cool about Gann with
all his core material about time and price is
that it is every bit as valid today as it was
back then. Markets make tops and bottoms
within minutes of time nodes as described by
Gann cycles so when you get many of these
things the same day you can expect a major
top or low and it helps a lot, but it is not that
necessary. It does make it a lot of fun to do
and very profitable if you have the time and
effort to find them. You can exit at the very end
of a move whether it is a bear or bull move.
A major Gann time cycle came in recently in
the silver market when it hit $49.84 an ounce.
Since I watch and trade a lot of silver, I was
able to exit the majority of my silver position
at $49 an ounce.
Larry: Can you explain the concept of
Gann time and price?
Joel: The concept of time and price with
Gann is there is a balance point with time and
price for example the 1x1 line. For example
in grains 1 cent move per day would be a
description of a 45 degree angle. If the market
got above that angle it is considered strong
and if below, weaker. It depends on how
strong the market is; like a 2x1 angle, it’s the
relationship of time with price. I would dare
say that price is more important than time
because you make or lose money being right
on price more than time. With time you don’t
have to be in the market at all. If you are
not in the market you are not losing anything
directly. You may be losing opportunities.
Time and price according to Gann are both
important. They would balance at proportions
39
to each other and there would be tops and
bottoms put in and price levels reached
because of the time component as important
as the price being put in. It would help to read
his materials.
Larry: What about cycles?
Joel: That is a very good question. That too
is a very large subject. I believe in the Gann
cycles exactly as he stated in his manuals. He
talks about repetitions of cycles like 10 year
cycles, 15 year cycles, 20 year cycles, 30 year
cycles. If one can’t make sense of it or see
cyclical repetition in numerous markets then
this may not be their gig. It may not be useful
to them. Some people can see a general
repetition taking place and they can make
use of that. Other people say this is April 29th
and 10 years before we were making a top
and we are now going lower in the market
I am watching. So how can that possible be
a cycle? You would have to do a lot of work
seeing a lot repetitions and many cycles
in many directions and it is that personal
exploration that will make the difference. The
reason people are having difficulty working
with cycles today because they are so used
to having computers do everything for them
they are not ready to do that exploration like
a scientist used to have to do. You are like
a scientist when you are trading. Many of us
have spent 15 hours a day -- for many years
-- comparing that price movement to another
price movement. Our brains are the most
advanced computers there are. Eventually if
there is something to be seen, the human mind
will see it. It is a good pattern recognizer. For
my trading ability, I see it. I see the repetitions
that I can profit from. Others can look at the
same exact thing and see absolutely nothing.
That is the way it is going to be. I have no
doubt that Gann was so good at this because
he was the originator of trading cycle analysis
40
for the last 100 years. I have no doubt that he
could see the cycles within the price action of
what he was watching. I have no doubt that
just seeing the price action when wheat was
topping and I am sure he was able to do it
within an hour of the high just because he had
done so much work he knew all the numbers,
he knew all the relationships, strength and
weakness. He was quite good early in his life
but got much better when he got older. He
got very good at this just before he died. The
longer I trade with cycles; it gets better for
me every year.
Larry: What’s going on right now with
the stock market, metal markets, and future
markets? What is your forecast?
Joel: It is more or less a continuation of
what I have been saying for at least a decade.
The dollar is being reduced to rubble by the
financial institutions. The biggest financial
institution is the Fed and the government.
With an alliance and making the dollar worth
less so we don’t have to pay back what we
owe as a country. Whether people like that
or not that is what we are seeing. We have
seen trillions of dollars of money creation to
paper this over and it worked, and the 2008
debacle we all had to put up with pretty much
has been papered over. They are still working
it out in the real estate arena. The money is
sitting in banks and is just now starting to
be released. Banks are dying to loan this
money out. There never has been a case in all
of banking history where banks were given
money that they didn’t eventually release it to
the public. They will. They want to release the
money without being stuck on the hook for it.
They right now have the use of the money. The
figures are around 20 trillion dollars sitting in
bank vaults that they do not have to pay any
interest on. They can receive interest if they
put it in bonds, notes or whatever to receive
return. They definitely want to get more than
½ percent annual return. So they can get 2
percent, 5 percent, or 10 percent by lending it
out for some business. If they can be allowed
to do this by the Fed and the government,
they will do it and they are starting to do it
already. When the trillions start coming into
the business market a good percentage of
that money will move into stocks and that will
encourage an inflationary stock market. Before
they had futures markets, stock markets were
the natural hedge for inflation. In the past if
there was an inflationary environment and
everything was going up in price, the stock
market would benefit from this and would be
priced in higher dollars depending in which
country it was in and it would help hedge
against inflation. Now we have these other
hedges against inflation like metals, indexes
and the multitude of derivatives that people
are able to trade with these days so the stock
market will still work as a hedge against
inflation and it will like rise for the next 3 – 5
years, and it could get pretty wild. People will
start thinking everything is fine again and that
there is very little risk to the downside. There
is no nice way of coming out of an inflationary
environment. For a while people will feel they
are profiting largely. People who have bought
metals two or three years ago when we talked
about it then at the $10 level for silver and
now we are at $50 an ounce. Gold was $300
- $400 an ounce and now we are up to $1500
an ounce. People should see from that we are
in a massive inflationary environment. We
are still at the very beginning of it. $40 - $50
silver is still cheap considering the amount of
money that is covering the earth, so that when
people finally have a vote of no conviction in
the government, they will pour that money
into whatever they can that they can take and
physically control and it could be an incredibly
terrible time. I don’t like to be an alarmist,
but I don’t like to be alarmed. I know that I
am not alone. There is a whole world out there
that does not want to be alarmed and when
they become alarmed it will be a fearsome
force. So I think we are going up strong in
commodities, the physicals, gold, silver,
copper, corn, wheat, all the futures markets
in general, and the stock market will continue
higher. Bond prices will ultimately collapse. As
long as they can artificially hold bond prices
up they will do it. So until they finally let loose
they are staying where they are.
Larry: Any final words?
Joel: I don’t have many final words. Think
about this. Currently we have a thousand
times the world money supply that we had in
1980 when silver was last at $49 an ounce.
The amount of silver has not increased, but
decreased in that time. I am just saying make
sure that you tell people they need to have
metal because at some future point all the
currency they have will be worthless. It does
not mean there won’t be a fiat currency that
comes back in after things settle down. It will
take a while for things to settle down. It could
be a very ugly time period. It would be best to
have something. 10 – 20% of their net worth
right now in metals. I mean physical metals,
something they can bury. I expect silver to
ultimately reach hundreds of dollars an ounce
and gold to be many thousands of dollars an
ounce.
I would prefer being wrong about
this. It is so much easier making money from
markets with fiat currencies. Locked markets
serve no one but tyrants.
Joel Rensink has a website: http://
infiniteyield.com/
41
Fox is in the Henhouse as a
Guard and all is Well
by Gilbert Steele
I
t is amazing to me just how much money
is going into the stock market from
the government. This would seemingly
change the parameters of the market. How
are you buying your stocks? Are you buying
on P/E, Dividends, Growth Stocks, etc?
Do you follow D. W. Gann? Or other people
like him. That would predict the future to
some extent.
A chart of Texas Instrument that is supplied
by Gilbert Steele ( Fig 1. ) shows a good buy
from $25-$29 in the future in my opinion. This
will be a low in the price, while going higher.
This will take place in my opinion based
on 31 years history of Texas Instrument.
The question arises, is the money from the
government going into the stock supporting
it that it cannot fall. I contend it will take
a fast-break on the downside as a natural
42
movement of the stock. Keeping in mind with
the government money the brokerage houses
are supporting the stock from falling in my
opinion.
A good point is how many Stocks are and
have been moving down? Reference ( Fig 2.
) some stocks from my ( A Directory ). In my
opinion not a good buy or sell at this time.
Now looking at the future, we will one
day be at the top of the stock market. The
brokerage houses have a great deal of profit
at this time. And thinking of a very old quote
"the Fox is in the henhouse as a guard and all
is well". I tell you, United States will lose so
much money in the stock market at this time
on the way down it will be a tragedy.
As Mozart heard music and played it. I have
received a gift of mathematical modeling.
And over the years I have found it’s next to
impossible to explain to
people what I do to predate
the stock market. Now at
some point I have met my
partner and friend Harold
Joseph. Harold is a MIT
graduate in Mathematics.
And we both have an
Electrical Degree. When I
create a new system there
is no name except for the
one I make up to put on it.
And my friend Harold helps
me to get my thoughts
together. It is wonderful
for Harold’s support and
unique
insights
with
help for me. Maybe your
question should be how
does Gilbert have a partner from MIT? And a
publisher like Larry Jacobs?
Here is one my stories:
I was sitting on the front porch and
everything went black. I saw this story
As it happened I have not added to it but
reported it as I have seen it.
She felt her hand on the side of a stone
faced mountain it was cold and humid. There
was a light fog about her as she seems to be
following somebody in front Of her going up
a hill in the dense fog. As the fog came in
around her. A man appeared next to her in
the fog. Let me help you my name is Joe. Now
the fog becomes a little more dense and the
road will widen quickly, We're going to take
the path to the right side, it will not be as wide
You will be okay. She says, "The other people
are taking that wide path to the left." Joe said,
"Our path may become more difficult and I'm
here to help you in the climb And shortly the
path will come to a peak and we will go down
a little bit into The dark sand and walk into
the river." She sees the other people crossing
the river, She feels safe, it was in the middle
of the river she said, "Look it seems to be
Very deep and the color is a beautiful green."
He says, "This river is very special. It gives
you rest and peace have you noticed it?" She
said, "Yes, and I see People sitting down in the
water resting and enjoying themselves." He
said, "They are older people and you're much
younger, do you know how old you are?"
And she said, "No, and said, "I do not know
my name either?" Joe said, "You will shortly,
we will be going up a hill in a little bit and
through a mountain pass; you'll see a very
bright light that is when you will know your
name and your age and I will be there to help
you." When walking under the light she said,
"That feels so good, it is like when I was home
I could feel the heat from the wood fire." And
with that she said, "I'm 18. My name is Lisa.
But, I do not know how I got here is this the
place I should be Joe?" "Yes," Joe said, "The
path were going down into and through is a
meadow filled with pretty flowers, can you
smell the flowers?" Lisa said, "It reminds me of
43
when I was younger a family adopted me and
it was the happiest time of my life." Joe said,
"We would like you to be that happy again
Lisa? Do you remember the house where you
were adopted into?" Very well, especially the
farm. Joe said, "It will be that way again.
What were your thoughts Lisa did you
think of having a family, children and going to
school? "Well"-said Lisa, "A child to raise and
take care of now? At this point they're coming
to a house on a farm that Lisa said, "This
reminds me of the house where I lived." Joe
said, "I know A family that needs a child taken
care of please go in and find out if everything
is to your liking, this is where you're going to
stay and I will be back tomorrow to make sure
everything is okay. The next day as Joe was
coming into the house Lisa exclaimed, "It is
everything I've ever wanted." Joe said, "We
got your child he will be here this afternoon
everything you need will be provided for his
home schooling."
There was a knock at the door, Joe said,
"I'll get it." "Come on in Jim", Joe said, And
"Let me introduce you to Lisa." Jim said, "Lisa,
we appreciate you taking care of the baby. It
will be the same as if you adopted this child
it's a boy, about a year old, and you will take
full responsibility for him and the things that
go with raising him." Lisa said, "What else
could I want, I have everything. It's like all my
dreams have come true." As Jim was leaving,
Lisa said, "You're welcome to come back any
time. Jim said, "The baby doesn't have a
name: Lisa said, "Let's call him Ralph." The
boy grows up. He knows where he is, his age
and his surroundings. Now, Ralph says to his
mother, "I want to be a helper." The mother
accepts another child, and does not grow old,
she is not fulfilled in her life.
It was an average beautiful day, Lisa
remarked to Joe the helper, "Is there someone
I could talk to about my life i have never felt
lonely, I need someone just to talk to." And
Joe said, "Is tomorrow a good time for you?"
44
And Lisa said, "That will be just fine." As Joe
introduced Lisa to the Man, He called you
friend, Lisa remarked, "It’s like I have known
you all my life." And He said, "You have asked
Me in your heart one day and I never left. I
have always been there for you and I’m still
there for you. Lisa, you are about 21 now and
you’re raising your second child.
I think you have done a wonderful job."
Lisa said, "The thought went through my mind
is this where I should be? He said, "Yes," "I
think it’s when you’re fulfilled raising children
that we can get to know each other so much
more closer."
Jim was just shown around by his Helper.
And he says, "The only thing I am missing
at my old age is my dog." The helper replied
your dog is here." Why, don't you call him,
Jim said, "Hey Sam, Sam are you here?" And
his old dog comes walking around the corner
to greet him saying, "I have been waiting for
you Jim: Can we walk down to your favorite
fishing hole?" The helper said, "They're are
some things you will need to get used to and
this is one of them.
About Gilbert Steele. [email protected]
As Mozart heard music and played it. I have
received a gift of mathematical modeling.
And over the years I have found it’s next to
impossible to explain to people what I do
to predate the stock market. Now at some
point I have met my partner and friend
Harold Joseph. Harold is a MIT graduate in
Mathematics. And we both have an Electrical
Degree. When I create a new system there
is no name except for the one I make up to
put on it. And my friend Harold helps me to
get my thoughts together. It is wonderful for
Harold’s support and unique insights with help
for me. Maybe your question should be how
does Gilbert have a partner from MIT? And a
publisher like Larry Jacobs?
MarketWarrior
10
45
by Steven Primo
W
hen I first began trading on the floor
of the Pacific Stock Exchange, I traded
the same way 99% of the public trades – I
tried to pick tops and bottoms. If I surmised a
stock to be oversold, I went long. If the stock
appeared to be overbought, I went short. On
the trading floor of the Exchange this strategy
worked great about 9 times out of 10. Not
a bad winning percentage. But it was always
the 10th trade that gave back most or all of
the profits I had just made from the previous
nine. Sound familiar?
It wasn’t until I came in contact with an
elite group of Stock Exchange Specialists that
I learned how to trade with an edge. Today I’ll
share with you one of their secrets - an edge
that has saved me literally thousands, if not
hundreds of thousands of dollars during the
Figure 1
46
course of my 33-year career as a trader. This
edge is called confirmation.
As I mentioned earlier, most traders
attempt to buy at the exact bottom and sell
at the exact top, regardless of market, time
frame, or choice of trading strategy. But just
where is the bottom and just where is the
top? As we’ve all seen in the current market
environment, stocks can go as low as they
want, and much lower than anyone could
have ever expected. Rather than try to pick
a bottom, which is often a recipe for disaster,
the only thing needed is for a trader to wait
for confirmation. This is the assurance that
the stock has concluded it’s downward course
and is now once again headed in an upward
direction. Much like a train leaving the station
for it’s desired destination.
Figure 2
So what exactly is confirmation, and how
do we use it? A buy confirmation consists of
when a stock, in an uptrend, has sold off to a
satisfactory buy level and then reverses and
trades higher than the previous bar’s high.
Conversely, a sell confirmation consists of
when a stock, in a downtrend, has risen to a
satisfactory sell level and then reverses and
trades lower than the previous bar’s low. We
buy and sell only on confirmation, regardless
of the strategy used.
The chart (Fig. 1) shows a common trading
technique used by many traders - buying a
stock once the stochastic oscillator has gone
into “oversold” territory (“overbought” for
sells). Had we purchased the stock at point
(A), when the indicator first went below the
20 threshold and into supposed oversold
Figure 3
47
territory, we would have had to hold on to a
losing trade for a number of days. But had we
simply waited for confirmation at point (B), we
would have entered the trade only after the
stock had traded one tick above the previous
day’s high, a signal that the stock had begun
to move in our desired direction. Ironically,
this is where most traders would have “thrown
in the towel” and exited their original losing
position! Using this method would have saved
you a lot of money, grief, and heartache. The
purpose of waiting for confirmation is not only
to get us IN at the beginning of a trend, but to
keep us OUT of bad trades as well.
As you have just seen, if one trades without
using confirmation they are simply guessing
as to where to place their buy or sell orders.
This guesswork is relative to top picking and
bottom fishing; styles of trading that will
ultimately yield negative results.
Ultimately, just because a trade has
been confirmed does not guarantee that it
will become profitable. But by waiting for
Figure 4
48
confirmation, one can substantially increase
the odds for a successful trade in their
favor. Confirmation is the verification that a
directional move has concluded and that the
trend has once again resumed. A Specialist
always waits for his trade to be confirmed
before entry.
Steven
Primo
SpecialistTrading.com
[email protected]
Steven
Primo is the founder of Specialist Trading,
www.specialisttrading.com. Mr. Primo is a
former nine-year Stock Exchange specialist
and has been actively involved in trading
the markets for more than 34 years. As a
specialist, he traded through the crash of ‘87
and was responsible for making markets in
over 50 stocks. Since leaving the Exchange
Floor, Mr. Primo has focused on managing
money and teaching his own unique approach
of trading the stock, forex, and futures
markets to scores of students, from beginner
to advanced levels.
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Email: [email protected]
phone: +31-15-2123543
fax: +31-15-2132558
ELWAVE is a registered trademark of Prognosis Software Development, Netherlands. TradeStation® is a registered trademark of TradeStation Technologies, Inc.
All trademarks are the property of their respective owners. There is risk of loss in trading. Neither TradeStation Technologies nor any of its affiliates has reviewed,
certified, endorsed, approved, disapproved or recommended, and neither does or will review, certify, endorse, approve, disapprove or recommend, any trading
49
software tool that is designed to be compatible with the TradeStation Open Platform."
Notes on
Day Trading
Part Two
I
n the Jan-Feb 2011 issue of Trader’s
World I talked about Scalping vs. Position
Day Trading. Stylistically these two forms
of day trading are quite different with each
style having it’s own set of expectations
regarding performance and risk. According
to “Novy Principles of Market Flow”, “Position
Day Trading” is generally counter directional
within an area of opposing forces that
requires development that eventually leads
to a capitulation in the form of a breakout.
“Scalping” is more directional where energy
and momentum are about to surge into trends.
Part Two ...The Affects of Volatility
on Position Day Trading and
Scalping
In this article, I am going to talk about
conditions of volatility that affect these
two styles of trading and I will present a
volatility chart to help define expectations of
performance and risk.
Volatility is defined in many ways but it is
clear to most traders that words like “range
and speed of motion” tend to define how
volatility is shaping the trading game board.
Volatility tends to increase in down markets
and tends to decrease in up markets. This is
because down markets are fear driven and
consistently produce more urgency to act than
up markets. The urgency to liquidate tends to
50
produce larger bars with extension of range
and emotional over run.
It is Presumed that the Natural
Forces of Investing are about
“buying” things.
Experienced traders incessantly calibrate the
feelings of other traders through the action
of the market. When feelings of insecurity
surround the market then liquidation can
begin. Liquidation is a fear measurement.
Selling can at first begin quietly as some
investors ease out of their positions unnoticed.
But as liquidation picks up steam, traders will
react swiftly to cutting off potential loss.
When liquidation uncovers even more
liquidation then feelings of disorder and chaos
begin consuming the trading environment as
trading spins out of control. This is why many
markets have limits in which the market can
travel in one day while other markets have
breaker points that halt trading temporarily.
These rules are meant to restore order to the
trading activity albeit a temporary measure.
Markets Can at Times Create
Volatility from Buying
But here too it is often fear, not greed that first
affects the initiating rally. Shorts who run out
of selling power are subject to loss of profit or
real loss if they had sold short the market into
the hole. When the market stops descending
at the same intensity and rate of speed the
short sellers begin hunting for bottoms. They
are usually the very first buyers when the
market stops descending and then rallies. Fear
Figure 1
51
Figure 2
52
is what drives short covering rallies. As the
market recovers, volatility calms down, and
greed eventually comes back after the traders
create a patchwork upward movement and
back filling. This is a period of psychological
repair called base building.
Crashes Need Psychological Repair
It is very important to the long term
sustainability of the pricing of assets to create
a strong base and to repair the psychological
damage related to massive loss. The Bear
market rally that began in March of 2009
denied the investors of psychological repair.
The market moved straight up on Fed
intervention as QE1 began taking effect on the
banking sector. This was followed by QE2 that
created another leg up into 2011. But to this
day, investors and traders do not trust this
market because it has never validated itself
with solid base building at lower prices that
would allow for the natural forces of healing to
repair the psychological damages of the crash
of 2008.
This is the number one reason why
sentiment is almost always bearish no matter
how high the market goes. The disconnect is
that the economy doesn’t feel repaired.
The Average True Range Chart
The chart we use to measure sentiment and
volatility. See Figure 1. It is an Average True
Range (ATR) study of an hourly E-mini S&P
chart with a period 14 pit session only. On the
right hand border is a scale of points per hour
of movement.
www.TrainingForTraders.com
Leonard Novy
Sign up for Free Critical Interim Updates at www.TrainingForTraders.com
Go to [email protected] for Up Coming Free Webinars
Novy Principles of Market Flow are not a Method or a System
Use the Natural Flow of the Market to your Advantage
Contact: Leonard
Novy at [email protected] 760 841 1522
Training
For Traders
Calls returned Promptly
53
First notice that when the market comes
down the volatility goes up and when the
market goes up the volatility comes down.
We can adopt trading styles to
generally optimize the current
volatility.
On the right hand border you will see the
number of points of average true range per
hour. Exceedingly low volatility occurs when
the average true range per hour dips to 2 to
3 points. Volatility never stays there for too
long. On the other end of the spectrum I have
seen volatility raging at 40 points of average
true range per hour (in the 2008 crash).
Moderate Volatility
Average True Range between 5 and 10 points
per hour produces a good trading environment
for most styles of trading. There will be a good
mix of trending days and consolidating days.
The range is large enough to be able to trade
counter directionally (position day trading)
in non-trending overbought and oversold
conditions. The range is also large enough
to pick up high momentum zero drawdown
impulse trades (scalps) that trend from the
center of trading ranges out to the extremes.
Extremely Low Volatility
With extremely low volatility at 2 to 3 points of
Average True Range per hour traders will need
to trade with precision counter directionally at
the lows or highs of the small trading ranges.
Trading from the centers of those small trading
ranges will prove fruitless.
Extremely High Volatility
With extremely high volatility above 10 or 15
points of Average True Range per hour precision
counter directional trading is not your friend.
The emotional over run that extends bullish
and bearish legs of motion will routinely over
54
run planned targets. It is best to let the market
make it’s full turn and then hop on board as
the swoons and swales take hold and run their
course. This would be trend trading on the fly.
It would be good to have a set of trending
indicators to assist in guiding the activity. The
reason this partial trend trading can be done
is that extremely high volatility is the result of
massive amounts of money moving from one
side of the emotional spectrum to the other.
This money must be flushed out and it takes
a lot of movement to do it.
If your software is capable of study on
study then you can use a timing signal such
as the Stochastic Signal to study the volatility.
See Figure 2. This will alert you to potential
turns in the market since a turn towards lower
volatility will be the result of a market wanting
to turn up and a turn towards higher volatility
will be the result of a market wanting to turn
down. I use Neoticker software for this work.
It can be found at www.tickquest.com.
It is my belief that day traders will do better
in adjusting their trade types to changing
volatility
For more information on Novy Principles
of Market Flow please contact me at info@
trainingfortraders.com or 760 841 1522 or
go to www.trainingfortraders.com
This information is for educational purposes
only. Trading with this information is
done at your own risk. All concepts and
writings including the Novy Training/Trading
Method NTM© are proprietary and the sole
ownership of Leonard A. Novy and may not
be reproduced for profits without expressed
written permission. Copyright1995-2011
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55
Trading indicators-A View
Inside the Market Movement
by Jim Shane
T
rading is easy.
All you need is a
computer, a charting service and
a brokerage account to fulfill your
dreams. Right? Of course, we know that
this isn’t true. Trading is hard. It requires a
serious dedication of your time, money and
effort along with a strong sense of discipline
and focus to be successful.
So what is the best way to trade? This is
a very personal question for each individual
trader to answer and, so, there is no simple
solution. Some traders study chart patterns,
some look for tops and bottoms, while others
wait for breakouts. It all depends on your
trading education and background. Every
trader has a unique set of experiences. Every
trader has been taught one thing or another
by reading a book or attending a seminar or
going to an online meeting. Every trader has
their own tolerance for risk and their own idea
of suitable reward. All of these factors blend
together to make every trader different.
Trading indicators can be a solution for
almost any style of trading. Most indicators
will overlay the charts being created by the
charting service, so they can be used on any
market and in any timeframe. You can choose
from simple, commonly available indicators
provided by the charting services or decide
to upgrade to a set of proprietary indicators
designed
by
third-party
programmers.
Indicators provide a view of market movement
which allows you to quickly identify current
market conditions, allowing you to make
better decisions about entries and exits.
56
So, what are we looking at when we use
indicators? We have certainly come a long way
from the days when price bars were drawn on
a piece of paper with a pencil. Modern price
charts do an excellent job of tracing the price
across the screen for all to see. With modern
price charts we can look at data in a seemingly
endless number of ways. Choose a market,
choose a timeframe, change the timeframe,
change the market, all instantaneously. But
does this help us understand where to buy
and where to sell? Let’s face it, the best way
to identify a chart pattern is on yesterday’s
chart, after the pattern has been formed. With
a good set of indicators you can see more than
just the price tracking across the screen.
Indicators can show you what’s happening
in the market NOW.
As the price chart
changes, indicators can help us see when the
price is going higher or lower, when it’s range
bound and when it’s breaking out. While
some are trying to interpret M’s or W’s or
Evening Stars, hoping that the next bar will
confirm the pattern, indicators will tell us that
indeed, the momentum is stronger HERE, the
price has broken out of the previous range
NOW or better still, that two or three of these
events have aligned to create an entry where
the momentum and direction are truly on our
side. Armed with this kind of information, you
can make better decisions about entering or
exiting the market. You can scalp for a quick
profit or stay with the trend longer, depending
on your personal trading style.
As an example, below are two images
of the same candlestick chart, the first with
no indicators and the second enhanced by
overlaying six separate indicators at the same
time. Clearly the information provided by the
indicators makes it easier to find direction and
momentum in the market movement.
In today’s modern trading world, there are
many fine companies offering data, charts
and access to brokerage services. Some
of these platforms also offer programming
57
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environments to further enhance the use of
a good set of indicators. Now indicators can
be used separately or combined with other
indicators to create strategies or signals for
entries and exits. With today’s technology,
you can call the values of the indicators to
identify and combine events into strategies
to back test and, ultimately, to automate
successful ideas. A long way from pencildrawn charts.
In conclusion, there are as many ways to
trade as there are traders in the world. Using
indicators to identify significant moments
in market movement, combine events to
create executions, develop strategies to
back test ideas and even to automate these
ideas to let the software do the work, are
all possible in today’s modern trading world.
With indicators, we can see immediately
what’s happening on the chart in front of us,
so we can make educated decisions about
entering and exiting trades. We can see
“inside” the markets that we trade to find
gathering momentum and market direction.
Mr. Shane is co-owner and founder of
TurnSignal Inc., a developer of proprietary
trading indicators.
TurnSignal and the
TurnSignal indicators are available to
overlay the charts provided by NinjaTrader,
eSignal and TradeStation. The TurnSignal
indicators are all callable for use in strategy
development and automation on all three
platforms.
There is also a new set of
alerts, already available for TurnSignal
for NinjaTrader, also being developed for
eSignal and TradeStation. You can visit
TurnSignal’s website at www.turnsignal.biz
58
Tsunami-Trade
January/February
2011
June/July 2011
5963
Money
Management
by Bennett McDowell
M
oney management in trading involves
specialized techniques combined with
your own personal judgment. Failure
to adhere to a sound money management
program can leave you subject to a deadly
“Risk-Of-Ruin” exposure and most probable
equity bust.
With this in mind, here are a few essential
money management techniques that can
make a big difference for your bottom line:
1) Always Use Stops
2) Use A Proven And Tested Methodology For
Calculating Stops Rather Than An Arbitrary
Figure
3) Use A Proven And Tested Trading System
4) Pay Close Attention To Your “Trade Size”
For Each Trade And Be Sure That You Take
Into Consideration The “2% Risk Rules”
5) Never Exceed A 2% Risk (Of Your Trading
Account Size) On Any Given Trade
6) Never Trade More Than A 2% Risk (Of Your
Trading Account Size) In Any Given Sector
7) Never Exceed A 6% Risk (Of Your Trading
Account Size) Over-All At Any Given Time
8) Always Trade With “Risk Capital” (Money
You Can Afford To Lose)
9) Never Trade With Borrowed Money
Use “Scaling” Out Of Positions To Boost Your
Percentages
In Most Cases, Be Sure Your Trading Account
Size Is Not Greater Than 10% Of Your Total
Net Worth
10) Develop “The Trader’s Mindset”
When you hear of someone making a huge
60
killing in the market on a relatively small or
average trading account, you can bet the trader
was not using sound money management.
They more than likely exposed their trading
account to obscene risk due to an abnormally
large “Trade Size.” The trader (or gambler)
may have just gotten lucky and experienced
a profit windfall. By trading in this manner,
it’s just a matter of time before huge losses
dwarf the wins, and the trader (or gambler) is
devastated emotionally and financially.
Calculating Proper “Trade Size”
If you are trading the exact same number of
shares or contracts on every trade, then you
may not be calculating the proper “Trade Size”
for your own personal risk tolerance. “Trade
Size” can vary from trade to trade because
your entries, stops, and account size are
constantly changing variables.
An expert in the field
of finance reveals his proven
trading system.
As a trading coach and financial advisor, Bennett McDowell has used his
own proprietary trading system--Applied Reality Trading or ART to enhance
the performance of his clients’ portfolios. Now McDowell outlines the
unique benefits of his system and makes the case for trading the reality--not
the fantasy--of financial markets. Readers will discover the importance of
simplicity in a trading approach; how to develop “The Trader’s Mindset;”
how to use ART(r) technical analysis software; and much more. The ART
of Trading will enlighten readers in how to use reality to enrich both their
financial portfolio and their own financial psychology.
978-0-470-18772-2 • Hardcover • 320 pages
US$ 70.00 • CAN$ 76.99 • UK£ 36.99
Not adhering to a sound money management program can expose a
trader to unnecessary risk, and possibly destroy their account. A few
essential money management techniques can make a big difference
to the bottom line. In A Trader’s Money Management System, author
Bennett McDowell introduces readers to the most important elements
of money management in trading. Topics covered throughout this
a trading system; how to calculate the best trade size on every trade;
how to analyze profit/loss results and identify weaknesses in a
strategy; plus much more. Along the way, McDowell also addresses
the importance of risk control and stop loss exits. The book also
includes a one-month free trial of the Trade Size Calculator software.
978-0-470-18771-5 • Hardcover • 224 pages
US$ 70.00 • CAN$ 79.99 • UK£ 36.99
Bennett A. McDowell
(San Diego, CA) founded TradersCoach.com® in 1998 and is an expert in technical analysis
and complex trading platforms. He lectures nationally and writes articles for many prominent trading publications.
McDowell is also a recognized leader in trading education.
1 (800) 695-6188 www.TradersCoach.com
61
In order to implement a money management
program to help reduce your risk exposure,
the first step is for you to fully believe that
you need this sort of program. Usually this
belief comes from a few large losses that
have caused the kind of psychological pain
that makes you want to change. This kind
of experience can enable you to see how
improper “Trade Size” and lack of discipline
can sabotage your trading results.
Novice traders tend to focus on the trade
outcome as only winning and therefore do
not think about risk. Professional traders
focus on the risk and take the trade based
on their proven trading system indicating a
favorable outcome. Thus, the psychology
behind “Trade Size” begins when you believe
and acknowledge that each trade’s outcome is
unknown when entering the trade. Believing
this makes you ask yourself, “…how much can
I afford to lose on this trade?”
Once you’ve answered this question
(based on your money management rules),
you’ll either want to adjust your “Trade Size”
or tighten your stop-loss before entering the
trade. In most situations, the best method is
to adjust your “Trade Size” and set your stoploss based on market dynamics.
During “Draw-Down” periods, risk control
becomes very important and since experienced
traders test their trading systems, they have
an idea of how many consecutive losses in a
row can occur. Taking this information into
account, allows you to further determine the
appropriate risk percentage to allow for each
trade.
Not Every Trade Will Be A Winner
Given enough time, even the best trading
systems will only be right about 60% of the
time. That means 40% of the time you will
be wrong and have losing trades. For every
62
10 trades, you will lose an average of 4 times.
Even trading systems or certain trading set
ups with higher rates of return nearing 80%
usually “fall-back” to a realistic 60% return
when actually traded.
The reason for this “fall-back” is that
human beings trade trading systems. And
when humans get involved, the rates of return
on most systems are lowered. Why? Because
the very nature of being human is that we
make mistakes, and are to emotional trading
errors. That’s what the reality is and what
research indicates.
So, if you’re losing 40% of the time then
you need to control risk! This can be done
through implementing stops and controlling
“Trade Size”. We never really know which
trades will be successful. As a result, we have
to control risk on every trade regardless of
how profitable we think the trade will be. If
our winning trades are higher than our losing
trades, we can do very well with a 60% trading
system win to loss ratio. In fact with effective
risk control, we can sustain multiple losses
without devastation to our trading account
and our emotions.
Some folks can start and end their trading
careers in just one month! By not controlling
Know Yourself
Astrological Report
You need to know when it is favorable for you to proceed
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and wise action. The personal part of the report given will deal with your identity,
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63
risk and by using improper “Trade Size” a
trader can go broke in no time. It usually
happens like this; they begin trading, get five
losses in a row, don’t use proper “Trade Size”
and don’t cut their losses soon enough. After
five substantial losses in a row, their trading
capital is now too low to continue trading. It
can happen that quickly!
“The Trader’s Mindset”
Equally important as controlling risk is having
confidence in your trading system. You must
understand that even with a tested and
profitable system, it is possible to have a
losing streak of five losses in a row. This is
called “Draw-Down”. Knowing this eventuality
can prepare and encourage you to control risk
and not abandon your trading system when
“Draw-Down” occurs.
This
confidence
is
an
important
psychological ingredient in “The Trader’s
Mindset”, which is the mindset you need to
develop to be consistently profitable. You are
striving for a balanced growth in your trading
equity curve over time. When you see that
steady balanced growth then you’ll know
you’ve developed “The Trader’s Mindset”.
The “2% Per Trade Risk Rule”
The “2% Per Trade Risk Rule” will keep you
out of trouble provided your trading system
can produce 55% or above win to loss ratio
with an average win of at least 1.6 to 1.0
meaning wins are 60% larger than losses.
So, for every dollar you lose when you have
a losing trade, your winning trades produce a
dollar and sixty cents.
Assuming the above, we can then proceed
to calculate risk. The “2% Per Trade Risk
Rule” is calculated by knowing your trade
entry price and your initial stop loss exit price.
The difference between the two gives you a
64
“Dollar & Cents” number that when multiplied
by your “Trade Size” (shares or contracts) will
give you the dollar loss if you are stopped out.
That “Dollar & Cents” loss must be no
larger than two percent of the equity in your
trading account. It has nothing to do with
leverage. In fact, you can use leverage and
still stay within a two percent risk of equity
in your trading account. Remember the two
percent risk must include commissions and if
possible slippage, if you can determine that.
If you do not add-on to a current position,
but your stop moves up along with your trade,
then you are locking in profits. When you lock
in profits with a new trailing stop, your risk on
this profitable trade is no longer 2%. Thus,
you may now place additional trades. So,
multiple positions can be possible.
The “2% Per Sector Risk Rule”
Since the stock market is comprised of many
different sectors, it is important that you use
the “2% Per Sector Risk Rule”. This rule allows
you to risk 2% per sector up to a total risk of
6% maintaining proper diversification in your
trading account.
For example, the stock MSFT (which
is Microsoft) is a technology company in
the technology sector. If you want to take
another trade while you are in a Microsoft
trade, you will want to select a different sector
of the market, such as the chemical sector or
the banking sector. This same rule applies
to Options and Futures. In Futures, trade
a different commodity. Using this rule you
will be automatically diversified and won’t be
likely to take a huge hit if one sector of the
market collapses.
Also note that if your risk on a given trade
in one sector is only one percent, you may
take additional trades in that sector until you
reach a total of two percent.
The “6% Over All Risk Rule”
You should not exceed six percent over-all
between all sectors. In other words, the
most or total trading account portfolio risk
you should have at any given time should not
exceed six percent. Using this technique will
keep your risk in proportion to your trading
account size at all times.
“Risk Capital” – Funding Your
Trading Account
It is alarming that many traders use either
borrowed money or money they really cannot
afford to lose. This will set you up for failure
because you are subject to the market’s
manipulation which exploits your emotional
need for a positive outcome on every trade.
In simpler terms, you could be nervous
about losing. Therefore each stop out would
create more anxiety to a point where you may
not emotionally be able to exit a trade and
take a loss. Instead you are hoping the trade
will come back. It takes both responsibility
and discipline to accept a trading loss and get
out when your stop tells you to.
If you do not currently have sufficient
risk capital to trade, begin “Paper Trading”
to improve your skills while you are saving
enough risk capital to begin trading with real
money. This way when you are ready to
trade with real money you will have practiced
your trading skills and will have a greater
opportunity to be consistently profitable.
“Scaling” Out Of Trades
“Scaling” out of trades can be incorporated
into your money management game plan
since it is a component of risk control. The
psychology behind “Scaling” out is to reduce
stress by quickly locking in a profit, which
should also help you stay in trends longer
with any remaining positions.
This is a great technique that can convert
some losing trades into profitable ones,
reduce stress, and increase your bottom line!
I’m a big advocate of reducing stress while
you’re in a trade. Then you’ll be able to focus
on the trade and not be subject to emotions
such as fear and greed. Properly “Scaling”
out of positions is a win-win technique by
making you more profitable and by reducing
the stress.
In order to “Scale” out of trades your initial
“Trade Size” must be large enough so you can
reap the benefits of “Scaling.” The technique
is applicable for both long and short positions,
and for all types of markets like Futures,
Stocks, Indexes, Options, etc. The initial
position must be large enough to enable you
to cover your profitable trade in increments
without incurring additional risk from a large
opening position. Remember, we want less
stress, not more!
Your initial “Trade Size” should follow the
“2% Per Trade Risk Rule”. The key is to initiate
a large enough “Trade Size” while not risking
more than 2% on entering the trade.
There are two ways to do this. One way is
to find a market that you can initiate a large
enough “Trade Size” with your current trading
account based on a 2% risk if this initial
position is stopped out. The other way, is to
add additional trading capital to your trading
account that will allow for a larger position
because 2% of a larger account allows for a
larger “Trade Size.”
There is even another way, and that is to
use the leverage of Options, but you must be
familiar with Options, their “Time Value” decay,
delta, etc. Using Options would be considered
a specialty or advanced technique, and if you
are not familiar with them, use caution since
this method could lead to increasing your
stress!
65
If you’re stopped out before having a
chance to “Scale” out, your loss would only
be 2% which is acceptable from a “Risk-OfRuin” stand point. If on the other hand your
trade is profitable you can cover part of your
position and liquidate enough contracts so
that if you are still stopped out, you make
a small profit! If the trade becomes even
more profitable, then you may want to liquate
additional contracts to lock in more profit.
By trading only one or two contracts you
can’t “Scale” out of positions well. This clearly
illustrates how larger trading accounts have
an advantage over smaller ones! Also, some
markets are more expensive than others, so
the cost of a trade will determine “Trade Size.”
In choosing a market, liquidity is crucial.
Make sure there is sufficient market liquidity
to execute “Scaling” out of positions in
a meaningful way. Poor fills due to poor
liquidity can adversely affect this “Scaling”
out technique.
Actual Money Management
Examples
MSFT Initial Stop: $58.50 Per Share
Difference Between Entry & Stop: $1.50
Commission: $ 80.00 Round Trip
Proper “Trade Size”: 280 Shares
Your trading system says to go long now at
$ 60.00 per share. Your initial stop loss is at $
58.50 and the difference between your entry
at $ 60.00 and your initial stop loss at $58.50
is $ 1.50 per share.
How many shares (“Trade Size”) can you
buy when your risk is $ 1.50 per share and
your two percent account risk is $ 500.00?
The answer is: $ 500.00 minus $ 80.00
(commissions) = $ 420.00. Then, $ 420.00
divided by $ 1.50 (difference between entry
and stop amount) = 280 shares.
Do not buy more than 280 shares of the
stock MSFT to maintain proper risk control
and obey the “2% Per Trade Risk Rule.” If you
trade Futures contracts or Options contracts,
calculate your “Trade Size” the same way.
Note that your “Trade Size” may be capped by
the margin allowances for Futures traders and
for Stock traders.
Example A: The “2% Risk Rule
Example C: E-Mini Chart
Illustrating The “Scaling”
Trading Account Size: $ 25,000
2% of $ 25,000 (Trading Account Size) = Technique
$ 500
(Assuming no slippage in this example)
Thus on any given trade you should risk no
more than $500 which includes commission
and slippage.
Example B: Using The “2% Per Trade Risk
Rule” In The Market Place
Trading Account Size: $25,000
2% Risk Allowance: $500
MSFT Current Value: $60.00 Per Share
66
Here is a chart example using multiple
money management techniques with the
“TradersCoach.com”
proprietary
trading
system “Applied Reality Trading ®”. In the
chart below stops are adjusted and “Scaled”
out of the trade in increments as part of this
solid money management program. The initial
“Trade Size” was calculated using the “2% Per
Trade Risk Rule” based on the trade entry and
the initial stop-loss point as indicated on the
chart.
“ART®” Chart # 54
This E-mini intraday 1 minute chart
illustrates how you can “Scale” out of a
position but still remain in the trend.
Money Management Conclusion
It is important to realize that you must be
aware of the risks in trading the financial
markets and live in full awareness. Let your
positive beliefs lead you to take the action
necessary to succeed. For traders to blindly enter the markets
and trade simply because they are thinking
positive thoughts is to ignore the full spectrum
of what is possible. On the other hand, to
live in the fear of only losing will cause you to
trade the financial markets with fear, anxiety,
negativity and aggression which are equally
destructive. Instead, acknowledge both sides
of the coin, the good and the bad. React to
market activity with full-awareness and pay
close attention towards risk control then you
will create a positive reality with a feeling of
abundance and good will.
By acknowledging the good and the bad
(the reality) and by fine tuning your money
management system you are on your way to
greater prosperity.
Bennett McDowell, President & CEO
Creator Of Applied Reality Trading®
Author of “The ART® of Trading” &
“A Trader’s Money Management System”
TradersCoach.com, Inc. www.TradersCoach.
com
67
NinjaTrader
F
by Raymond Stein
ree end-to-end trading platform for
advanced charting, market analytics,
system
development,
and
trade
simulation. NinjaTrader – Architects of
Electronic Trading Innovation.
With
NinjaTrader
you
can
trade
futures, forex, and equities through any
of the hundreds of supported brokerages
worldwide. The recently released NinjaTrader
7 is a feature-rich flagship trading platform
including powerful tools for traders of all types.
For the discretionary trader, revolutionary
trading tools within NinjaTrader such as Chart
Trader and SuperDOM allow you to trade with
superior speed and precision. For the systems
trader, NinjaTrader comes with a state-of-
68
the-art system development environment
based in Microsoft C#, allowing programmers
to create practically anything they want.
The best part is that the NinjaTrader team
has made these features readily available
to new and experienced traders alike. You
can download NinjaTrader completely free
and use it for as long as you desire (www.
ninjatrader.com). This platform is a unique
opportunity for beginning traders because it
allows you to vastly decrease your costs while
learning to trade. For experienced traders,
this opportunity allows you to spend as
long as you need familiarizing yourself with
the platform before purchasing. With all of
NinjaTrader’s power under the hood, users
are offered unlimited free reign and play over
the platform with no risk and at their own
pace. When you are ready to trade live, you
can either purchase a lifetime NinjaTrader
software license outright for a one-time fee of
$995 or you lease the software on a quarterly
basis with rates starting as low as $50/month.
Purchasing or leasing a live NinjaTrader
license allows placement of live trades to your
brokerage account, whereas the fully-featured
free license enables simulated trading only.
System Requirements
The following are the minimum system
requirements for using NinjaTrader:
• Windows XP, Windows Vista, Windows 7 or
Windows 2003 Operating System
• Screen resolution of 1024x768 or higher
• Intel P4 processor equivalent or higher
• 2 GB RAM or more
• Microsoft .NET Framework 3.5 (pre-installed
on most PC’s or can be freely downloaded)
Along with these system requirements, you
will need to supplement it with a data provider
to fully utilize NinjaTrader. NinjaTrader supports
all leading market data services and can even
use data supplied by supported brokerages. It
is also currently the only platform to provide
support for the inexpensive data feed Kinetick
(www.kinetick.com); end-of-day data is free
through Kinetick. For new traders looking
to further minimize trading-related costs,
Kinetick is directly integrated into NinjaTrader.
Simulated Trading – Great for New
Traders
Once you have data in NinjaTrader, you
can begin to utilize the extensive simulated
trading features it has to offer. The platform
provides you with the ability to setup as many
simulation accounts as you like, each with its
own performance report. NinjaTrader provides
69
an in-depth analysis and breakdown of each
trade placed within each individual account.
Performance reports provide an effective
tool to determine your trade tendencies and
improve your trading technique. You may
realize you consistently enter a trade too early
or exit too late. Only such detailed account
performance reports, provided in NinjaTrader,
can equip you with trading insight unavailable
anywhere else.
Along with performance reports, the
platform also offers Market Replay. Market
Replay allows you to play, pause, and speed
up real market data from any day. This
invaluable tool empowers you to experiment
with different techniques as you analyze live
market data over and over again. Market
Replay is especially valuable for those traders
who work during market hours and don’t have
time to watch the markets when they are
open.
Tools for Discretionary Traders
Another impressing aspect of NinjaTrader is
the full suite of tools available for discretionary
trading. You get access to utilities like Market
Analyzer, an advanced scanning and alert
window allowing you to easily keep a pulse
on multiple instruments at once, or the Level
II window which visually displays the buy/sell
pressure building up in the market.
For traders who primarily rely on charts,
NinjaTrader charts come preloaded with a
plethora of different bar types and indicators.
You are able to chart tick bars, minute bars,
daily bars, and even more exotic bar types
such as Kagi or Point-and-Figure. These charts
can all then be enhanced by any indicator
installed on your platform. The indicator
suite provided out-of-the-box includes over
one hundred indicators common to trading
literature from MACD to RSI to Stochastics
70
and more. This library can be further extended
by purchasing commercial indicators from the
extensive list of 3rd party providers or even
custom programming your own.
A favorite feature that sets NinjaTrader
charts above the rest is called Chart Trader.
As an order entry window integrated into the
chart, you have the power to trade directly
from the chart instead of struggling to punch
orders into numerous order entry windows. For
example, if you wanted to submit a limit order
at a specific price you simply right click on the
chart at the desired price and select the limit
order. Once orders are submitted they will be
painted on the chart at their respective price
levels, allowing you to visually manage your
open positions and orders. Modification and
cancellation of orders is similarly effortless,
taking only one or two clicks of the mouse on
the chart.
If you prefer to work with Depth-of-Market
information, NinjaTrader also offers a unique
experience with its innovative SuperDOM order
entry window. The SuperDOM, designed with
quick order submission in mind, allows you to
just click on any price cell to swiftly submit
orders at that price level. For example, if you
want to place a limit order at 1185, simply left
click on the 1185 price row. The SuperDOM’s
convenient display and functionality give any
trader the speed and precision he or she
demands.
One of the most celebrated and powerful
discretionary tools NinjaTrader offers is
known as the Advanced Trade Management
(ATM) feature. Pioneered by NinjaTrader,
ATM strategies allow you to pre-define your
targets and stops, effectively representing
your trading strategy. In the platform you can
setup ATM strategies that define automated
management features. Executing strategies
such as whether or not to raise your stop loss
to breakeven after price begins to move in
your direction, or even custom managing a
trailing stop are a cinch. When you create and
submit an order with a particular ATM Strategy
in NinjaTrader, all of your trade management
philosophies will be put into play without
manual supervision the moment your entry
order fills. The ATM tool saves you incredible
amounts of time, freeing you to focus on the
trade rather than issues with submitting and
managing your protective bracket.
Tools for System Traders
System development in NinjaTrader is also
extremely powerful. Because the platform
uses a true programming environment for
indicator and strategy development, you are
not constricted by the limits of a scripting
language and can actually program exactly
what you want. You can expect incredible
flexibility in development and speed in code
execution from NinjaTrader’s development
environment.
Traders not only demand advanced
automated strategy development, but a
robust strategy testing tool to complement
it. This goal is realized in NinjaTrader through
the powerful Strategy Analyzer window.
You can run backtests, genetic parameter
optimizations,
and
even
walk-forward
optimizations on any strategy you program for
NinjaTrader. Backtests show you information
on how a particular parameter set for your
strategy would have affected its performance
over time. Parameter optimizations help
you determine the best parameter settings
to achieve your desired performance, while
walk-forward optimizations provide you with
more realistic results by reducing some of the
curve fitting issues common when you overoptimize a strategy.
These advanced features and tools are
designed to provide you with performance
reports that allow you to analyze and improve
your strategy. You can use the Strategy
Analyzer’s Chart tab to review your trades
and isolate areas where you may want to
revise your trade logic or you can use some
of the graphs in the Graphs tab to determine
relationships between strategy performance
and factors like draw down or adverse
excursion. To analyze your strategy from
another point of view, you can run a Monte
Carlo simulation, which helps determine if
your strategy runs the risk of wiping out your
trading account before your strategy can turn
a profit.
Conclusion
NinjaTrader is a complete end-to-end trading
platform that enables you to analyze the
markets, design trade ideas, and place trades
to your brokerage efficiently and confidently
with the software’s powerful features. In
addition to phenomenal out-of-the-box
functionality, the NinjaTrader experience is
enhanced by over 150 commercial 3rd party
add-ons. Seeing as the platform is offered for
free for advanced charting, market analytics,
system development, and trade simulation,
there is every reason to use NinjaTrader no
matter what kind of trader you are. You are
bound to find some aspect beneficial. And
with NinjaTrader’s free online product training
sessions offered daily coupled with stellar
customer support, you can quickly get up to
speed on using a platform that is leaps and
bounds ahead of the rest.
Download here: www.ninjatrader.com
71
Advanced Computer
Support for
Serious Traders
by Larry Jacobs
T
raders need to have fast multiplemonitor computers to efficiently
trade. They need fast execution,
quick quotes and charts. They need
to know that their computer is working at
the best speed it can and without viruses. In
case of a computer problem they need tollfree support and next business day on-site
repair service when necessary. They need to
have their computer's important files securely
backed up so in case of fire, theft, or computer
crash, there is a method of safe recovery.
Now such as service does exist. This is
the Advanced Warranty Premium Package by
Computer Warranty Services for the Sonata
Trading Computer. It includes:
1. Proactive Prevention with active remote
hardware monitoring which is the first line
of defense that will detect and automatically
report most hardware problems before they
become hardware failures. This software
creates a one way communication from your
PC to the CWS technical help desk and reports
only information about the performance of
your hardware component parts and certain
operations such as attempted hacker utility
functions.
a) Monitors your PC or Laptop hardware for
72
optimum performance
b) Remote hardware monitoring software
setup is quick and easy
c) Software notifies CWS technical help desk
of potential hardware problems before they
become hardware failures
d) CWS technical help desk will contact you
to diagnose and repair any detected problem.
2. GFI Vipre Security, voted #1 by users, is
another extremely important line of defense
in preventing damage to both your hardware
but more importantly your personal and
confidential data. Speed does matter; this is
high-performance technology that won't slow
down your trading computer. Low RAM usage
and more efficient scanning, that cleans and
is fast and powerful.
GFI Vipre is next generation virus
technology that protects against computer
virus and malware threats. The security
software included in the Sonata provides:
a) Advanced anti-root kit technology
b) Auto-scan removable drives
c) Anti Virus Software
d) Anti Spyware
e) Real time monitoring protection against
zero-day threat
f) Anti Malware detects both existing and new
unidentified spyware threats
g) Malicious website filtering
h) Anti Malware, proprietary detection engine
uses next generation technology
to detect both existing and new unidentified
spyware threats
i) Scans email for malware threats
3. Remote access is available for issues
that require the direct intervention of the
technical help disk technician. When a
problem is diagnosed and can't be corrected
by the help disk technician a replacement
part will be ordered and sent for next
business day morning delivery to the location
of the computer and once receipt of the
part is confirmed a certified field technician
will perform the repair onsite, and get the
hardware operational: this coverage includes
all required replacement parts, shipping and
repair labor.
4. Unlimited offsite backup not only
available for the Sonata Trading Computer, but
for all your other computers. CWS Unlimited
Online Backup is true unlimited storage space,
no limit on number, or type of files.
Unlimited transfers to and from online
storage center. Bandwidth is never throttled.
Secure personal web portal, log in from
any web browser and view you files.
Military grade encryption for secure
transmission and storage.
Data is stored in state of the art data
centers. Monitoring your files as you work
and backing them up as soon as they are
saved provides complete data protection. The
past 30 versions of each file is retained in the
backup file. Access your secure web portal to
view photos, watch videos, listen to music,
display MS. Office documents (even without
MS Office on the computer you are accessing
the portal).
Restore files anytime from the Web or easy
to use restore app on your computer. View
your files on your mobile phone. An app is
available for your iPhone and iPad; which
provides access to browse your stored files
from your iPhone or iPad. Browse MS Office,
iWorks, or PDF documents; as well as photos
by thumbnail and create slide shows to view
full screen.
Never sync your music collection again.
Browse your collection by Artist, Album,
Genre, or Year. Play your music from any
browser, anywhere in the world. Stream your
music or movie video, in any format directly
to your iPhone or iPad. Videos stream using
3G or Wi-Fi.
5. The Onsite Next-Day* Repair Service
provides replacement of hardware component
parts: which are malfunctioning or have failed.
This service is provided on normal business
days and normal business hours Monday thru
Friday 8am to 5:30pm. Any parts required
to repair are shipped usually by Fedex.
*Availability of parts may cause a delay.
Sometimes distributors are out of stock of key
parts.
For more information call Traders World 800288-4266 or 417-882-9697. Or go to www.
SonataTradingComputers.com
73
Trading with Notebooks
by Larry Jacobs
H
igh end notebook workstations for
traders are in a special class of their
own. This is the first time that I have
felt comfortable testing and using one of these
notebook workstations for trading. Before
this time I tested a Dell, HP and a Lenovo
T410, which were both underpowered and
not capable for trading. I also tested a Sager
Notebook which was powerful, but it got too
hot and was very loud. The Lenovo Thinkpad
W520 for the first time in my testing brings a
notebook to the class of trading and fits the
trader better than any other notebook in my
opinion.
The Lenovo Thinkpad w520 is extremely
fast, in fact it is twice as fast as last years
w510. The reason is basically because of
the new Intel Sandy Bridge chipset that it
incorporates. Additionally the battery life on
the w520 dramatically eclipses the w510. The
battery can now easily last up to 6-7 hours
at the medium screen brightness. The heat
management and noise control is excellent
and better than any anything that I have
previously seen.
The w520 unit I used for this review had
the Intel Corei7 2720M processor (quad-core,
2.210GHz, 6MB Cache) 8GB of DDR 3 memory,
Intel Turbo Boost 2.0 3.30GHz, with Hyper
Threading. The screen was the 15.6” FHD
1920 x 1080 color, anti-glare, LED backlight,
16:9 aspect ratio. The chipset was the 1000
NVIDIA® Optimus™ 1000. Also included the
Hitachi 500GB 2.5” 7200RPM Hard Disk Drive.
It has an Ultrabay which can accommodate
another drive if necessary. The w520 has a
chassis dimensions of 14.68" x 9.65" x 1.291.44" The unit has an Intel 6300 WIFI and
a Intel 82579LM Gigabit Ethernet chipset.
The Thinkpad comes with Windows 7 Prox 64
os. It also comes with both USB 2.0 and the
new USB 3.0 ports. Esata, displayport and
modem ports. It has excellent speakers and
a microphone and even a Fingerprint reader
for security.
The notebook has some nice programs
Lenovo w520 Work Station
Lenovo Docking Station
74
installed on it
such as Skype
configured to use
the 720p camera
built into the top
of the LCD. The
notebook works
with VOIP. It
has the Biztree
Business in a box
software package
which contains
Norton Internet
Security, Windows
Live Essentials,
Corel WinDVD,
Coral Burn, and
MovieFactory.
In this review I
replaced the 500GB
Hitachi drive with the new Intel series 510
250GB 6gb/s Solid State
Drive (SSD). To do this, it
was very easy. I just put the
SSD in a USB 3.0 enclosure.
Connected it to the computer.
Installed acronis software. Then with acronis
I was able to clone the Hitachi 500GB drive
over to the Intel 250GB SSD. It took around
30 minutes. Then I pulled the Hitachi drive
out of the drive bay and replaced it with the
SSD. The 500GB drive was put into the USB
3.0 enclosure. As an external drive, it can be
used as an external backup drive.
The Mini Docking Station Series 3 allows
one to output to 2 large monitors. The
notebook screen also works at the same time
giving you a total of three monitors. In my
case I used two 21-inch monitors on a stand.
All monitors, external keyboard, mouse,
printer, internet connection can be connected
to the docking station. When the w520 is set
down on the docking station and locks in,
all the connections are active. It is excellent
and convenient for any trader. It is entirely
plausible to have a docking station with
monitors at home and one a work. So all you
need to do is to pull the w520 off the docking
station and go home and just put it on the
dock at home. You have multiple monitors in
both places.
If you want more monitors you can opt
for the ViDock option, which can allow you to
output to up to 8 monitors. See the ViDock 4
Plus article in this issue.
For those who now want total portability with
power I would highly recommend this setup.
The Intel SSD and the extra memory makes
this truly as good as a desktop for trading.
This can be purchased through Traders World
Magazine - Sonata Trading Computer. Go
to www.SonataTradingComputers.com for
details.
75
ViDock 4 Plus adds and
accelerates Multiple Monitors
through any Notebook Computer
by Larry Jacobs
I
t is now possible to have multiple monitors
through virtually any notebook computer
using a ViDock. In this review we used the
new ViDock 4 Plus which has the capabilities
of using video cards which can output to up to
8 monitors. In this review I installed the PNY
NVS 290 2-port video card into the ViDock 4
Plus. Here is I how it did it in step-by-step
instructions.
First I plugged in the graphics card into
the PCIe slot in the ViDock. I made sure the
card was completely seated into the slot. See
illustration 1.
I then slid the main board with the graphics
card installed back into the ViDock housing.
See illustration 2.
Then I replaced the back panel, rubber ring
and thumbscrews and inserted the y-cables
onto the video card. See illustration 3.
Then I connected the power cables to the
ViDock, the monitor cables to the y-cables
coming out of the video card. Connected
the ViDock into the ExpressCard slot in my
notebook. See illustration #4. I turned the
notebook off and then I plugged the ViDock
into the notebook express slot. I then turned
the notebook back on. The front panel on the
ViDock was illuminated. One low res screen
showed up. I then downloaded the drivers
for the video card onto my desktop from
www.nvidia.com In my case I downloaded
the drivers for the PNY NVS 290 card. See
illustration #5. I merely then followed the
instructions to install the drivers. When the
drivers were installed I restarted the notebook
and after the restart I configured the external
displays.
In Windows 7, I clicked on identify monitors
which showed me the display settings. I
selected the images for the external monitors
and checked to extend on to these monitors
to create one continuous display on all the
monitors. It was then easy to drag and drop
the images in the display setting dialog box
into the position that represents the physical
position of the monitors of the system. Then I
Illustration #1 - Install video card in slot
Illustration #2 - Slide into ViDock
76
Illustration #5 - Install drivers
selected the monitor I wanted as the primary
one in the display properties dialog box and
that was it. See illustration #6.
That is how easy it is to setup the ViDock.
The ViDock has the necessary power to enable
you to even run larger and more powerful
video cards such as the Matrox M9188 Video
card that can support eight monitors!
The
difference
between using the
ViDock and the USB
to VGA adapters that
many use, is that the
VIDock uses the power
of the video card,
which will not slow
down your computer.
USB to VGA adapters
work off the CPU and
will slow down the computer. A notebook has
only one GPU. If you would connect 4 large
external Displays, say 1920 x 1200, then the
real estate that the GPU needs to work on is
Illustration #6 - Configure monitors
increased by 900%, 1920 x 1200 x 4 = 9.2
Mega Pixel, 1280 x 800 = 1 Mega Pixel. And
if that is not bad enough, the CPU is slowed
down by copying, compressing and moving
these pixels over USB. In short: USB Display
dongles let the Notebooks GPU do all the
graphics job (on the larger pixel real estate)
and then use the CPU to compress / encode to
USB. Instead a graphics card in ViDock adds
a very powerful GPU which can easily reach +
900% GPU performance over the build in GPU
and the CPU is not used at all.
You need all the power necessary for
multiple monitor trading from a notebook, so
the ViDock 4 Plus is an excellent choice for
multiple monitors.
For more information go to
www.villagetronic.com
Illustration #3 - Connect Y-Cable to video card
Illustration #4 - Connect Vidock to notebook & PS
77
Sonata Multiple
Monitor Trading
Computer
The Sonata Trading Computer continues to evolve. It features the
latest hardware technology: including the Asus p67 motherboard
with the Intel Sandy Bridge chipset, either the Intel core i5 or the i7
Quad Core CPU. It can output to 2 - 12 monitors. It is 85% faster
than the i7 920 of last year. Systems starts at just $1499.00
•Certified Rev. 3.0 Sandy Bridge Motherboard
•LGA 1155 Socket
•Intel P67
•Runs up to 32GB of memory
•2 x PCIe 2.0 x 8
•1 x PCIe 2.1 x 4
•4 Sata 3Gb/S
•2 Sata Gb/s
•Realtek ALC892 Audio Chipset
•LAN Chipset Rual 10/100/1000Mbps
•6 USB 2.0 and 2 USB 3.0
•DIGI+VRM Power Design for Superior System Stability
•EPU Energy Saving Real-Time Power Management
•Self Optimized Platform Settings
•EFI Bios controls via a graphical interface with mouse controlled support featuring unparalleled
control options and quick boot options.
Upgrade Program. You can also return your computer every 2-3 years and we will upgrade it
to the latest technology for usually 1/2 the price of a new one. Why throw away a high quality
computer like the Sonata when it gets out-of-date? We usually
just need to replace the motherboard, CPU and memory.
It also now features the CWS advanced Warranty Premium
Package. 1. Proactive Prevention, GFI Vipre Security, Reactive
Repair, Remote Access, Unlimited offsite backup and Onsite
Next-day Repair Service.
www.SonataTradingComputers.com
417-882-9697 800-288-4266
78
Popular Books
417-882-9697
Patterns of Gann Price: $159.00
By Granville Cooley This set
of books [included within this
bound volume] is not about
pulling the trigger. It is not
a system on how to make a
million dollars in the market
in the morning. It is about
certain mathematical and
astronomical relationships between numbers
and their possible application to the number
of W. D. Gann.
The Definitive Guide to Forecasting
Using W.D. Gann’s Square of Nine
Price: $150.00
By Patrick Mikula It has been
almost ten years since I wrote
a book about W.D. Gann’s
forecasting tools. I wanted
to return to this subject with
a book that would stand the
test of time. This book was
written with the intention of
creating the official book of record for all the
Square of Nine forecasting methods. I believe
I have achieved that goal. This book contains
virtually very Square of Nine forecasting
method.
Complete Stock Market Trading and
Forecasting Course Price: $529.00
By Michael Jenkins The author is a serious,
highly successful, professional trader. In his
two books, Geometry of the Stock Market and
Chart Reading For Professional Traders, he
shares some of his ideas on how he trades.
Hungry for more of his ideas
and direction, many of his
readers literally begged for
more. Jenkins has written this
complete course in response
to these requests. In his
books,
Jenkins
explains,
among
other
concepts,
how he uses some of Gann’s methods and
techniques, but he never mentions Gann. In
this course, by contrast, he specifically states
that many of the ideas are those originally
developed by Gann, and he goes into great
detail on how he personally uses these ideas
and techniques. If you want a detailed, in
depth course on how to use Gann in your own
trading, this may prove to be what you have
been seeking all this time.
W.D. Gann in Real-Time Trading
Price: $69.00
By Larry Jacobs If you feel
that you would like to do
short term scalping or swing
trading in the markets, then
this book might be for you. It
illustrates many short-term
Gann mathematical trading
techniques which have a high
tendency to work intraday. Various intraday
time frames are shown and how they can be
used together to keep you in the direction of
the market. 200 pages
Patterns & Ellipses
Price: $49.95
By Larry Jacobs Stocks and
futures move in elliptical
paths. When a market makes
a gap, its price action usually
passes into a new sphere. All
its activity will remain in the
79
current sphere until it moves into another new
sphere. This new book tells you how to use
ellipses along with detailed chart patterns to
determine if a stock or futures contract is bullish
or bearish. 100 pages
Pyrapoint
Price: $150.00
By
Don
Hall Mr.
Hall
discovered a secret from one
of Gann’s associates “Reno”
who shared a desk with him
on the floor of the Chicago
Board of Trade. Apparently
Gann carried a piece of paper
with him to the floor every
time he made a successful recorded trade.
Mr. Hall found out what that paper was and
developed the Pyrapoint trading method
around this. An easy to understand trading
software program was fully developed. It
creates a natural trend channel and areas of
both support and resistance. It’s clearly tells
you when the trend changes. 300 pages.
The Structure of Stock Prices Using
Geometrical Angles
Price: $49.95
By Russell M. Sedlar “This
chart based book shows
how the Geometrical Angles
described by W.D. Gann,
when used is this newly
discovered
way,
literally
become the controlling force
of stock price fluctuation,
causing tops and bottoms to form and trend
lines to be determined.”
Gann Master Charts Unveiled
Price: $49.95
By Larry Jacobs Complete 100 page book
80
explaining how to use Gann’s
Master Square of Nine Chart,
The Gann Hexagon Chart
and the Gann Circle Chart.
Many articles on the square
of nine are also included from
past issues of Trades World
Magazine
The Geometry of Stock Market
Profits Price: $45.00
By Michael Jenkins This book
is about Jenkins’ proprietary
techniques,
with
major
emphasis on cycle analysis,
how he views and uses the
methods of W. D. Gann, and
the geometry of time and
price. You’ll find angles are
important & how to draw them correctly and
more.
Geometry of the Markets
Price: $49.00
By
Bryce
Gilmore Book
explains the theory behind
time in the markets, Ancient
Geometry and Numerology,
Squaring Price Levels, Time
Support
and
Resistance.
Heliocentric Planetary Cycles.
Chart Reading for
Professional Traders
Price: $75.00
By Michael Jenkins This book
is a complete, comprehensive
study on reading charts,
forecasting the market, time
cycles, and trading strategies.
Explains reversal of trends,
when to expect them, and how to know the
trend has change. Shows you how to forecast
with great reliability how long the new trend
will last and its price target.
The Secret Science of the Stock
Market Price: $149.00
By Michael Jenkins In this book
Mr. Jenkins gives a start to
finish ‘scientific’ examination
of time and price forecasting
techniques starting with basic
line vectors and advances the
concepts to circles, squares,
triangles, logarithms, music
structure and ratio analysis. These concepts
are developed into a comprehensive method
that allows you to forecast any market with
great accuracy. Mr. Jenkins demonstrates
how a few simple calculations would have
predicted many of the greatest stock market
swings of the past seven years with accuracy
down to the day and price targets within one
point on the market averages. This new book
advances the work started in his other books
and course but goes much further revealing
little known secret methods only a very small
handful of professionals know and in many
cases he reveals proprietary techniques never
before revealed to the public at any price.
The chapter on the Gann Square of Nine is
much more complete than 90% of courses
available selling for hundreds to thousands
of dollars more. This chapter alone is worth
several times the cost of the book but the
secret ratio analysis at the end of the book
will truly change your trading habits forever.
When you finish this book there is little left to
learn about advanced trading and forecasting
techniques with the rare exception of
astrological methods, which are not covered
in this work. This book goes from beginning
concepts to the most advanced so anyone can
greatly benefit from reading it. All concepts
are demonstrated with actual chart histories.
It is not, however, for the casual investor who
does not want to take the time to calculate a
simple square root on a hand held calculator.
If you liked Mr. Jenkins’ previous books and/
or his trading course, then this one will easily
surpass your expectations.
Gann for the Active Trader New
Methods for Today’s Markets
Price: $75.00
By Dan Ferrera In this ground
breaking new book, Gann
expert Dan Ferrera presents
a number of new techniques
for trading in today’s markets
which build on and expand
the trading methods of
the legendary trader of
yesteryear, W.D. Gann. It is exceptionally
difficult to learn how to use Gann’s methods
effectively…and this outstanding new book is
a treasure chest for those interested in Gann’s
work. Includes a bonus 80 page Gann minicourse! In writing this book, I wanted to pass
on the fact that trading is a profession, just
like any other traditional profession and as
such should be run with a strict set of business
operation rules.
Simple Secrets of the Trading Master
Price: $90.00
By Jack Winkleman In the
ebb and flow of the markets
over a longer time such
as one year or more, it is
important to know what the
market has done in the past.
Certain years seem to follow
the patterns of previous
81
years with uncanny likeness. This is a book
put together by Mr. Winkleman and is a very
valuable tool. This book tells a trader how
to used past harmonic cycles for forecasting
future trends. This book is a picture of the
markets since 1920 in Soybeans. As an added
bonus, it has a track record of the Dow Jones
Cash Index from 1900 - 2006. Cycles are
nothing more than repeating patterns. Trends
follow cycles. This book gives you the key
cycles in the market. All you need to know
is what those repeating patterns are. That is
why the historical charts become so valuable
and this is why this book is so important. With
the content of the book along with charts, it is
nearly 200 pages in length.
Studies In Astro Bible Interpretation Price: $55.00
by Dan Ferrera An interesting exploration
of the process used in coding astrological
and astronomical cycles into literature.
Engages in a thorough analysis of the book of
Genesis, exploring coding systems by which
astrological symbolism is veiled. Contents:
Study of George Bayer’s Bible Interpretation;
A Study of Ludwig Larson’s Key to the Bible
& Heaven; A Study of David Fideler’s Jesus
Christ Sun of God; Revelations Revisited;
Bible Interpretation Related to W. D. Gann;
666 The Number of the Beast; A Study of the
Book of Genesis; The Number 12 and much
more
Mind Power Thought Techniques for
High-Powered Trading
Price: $19.95
By Ruth Roosevelt Traders
worldwide
have
come
to
rely on the advice of Ruth
Barrons Roosevelt, a renowned
psychological trading coach and
82
successful futures trader.
In Mind Power, Roosevelt builds on the
information she dispensed in previous books,
drawing the wisdom from her regular online
column. As with all Roosevelt’s insights, this
book expands on tips, tools, and explorations
she uses. Roosevelt stresses that the human
mind is a powerful engine that can drive your
trading success. In Use Your Head, she lays
out the steps and exercise that will lead to
profitable trading and investing. Discover
what thousands of others have already have:
Roosevelt can help you turn your powerful
ideas into positive action!
The Forchione Method — Winning
with Options How to Speculate
Effectively with Options on Futures
Price: $19.95
By Paul Forchione This book
shares what Paul Forchione
has learned over many years
trading options on futures. It
is organized in 141 “bite-sized
pieces” about options.
Trade the Patterns
The Revolutionary Way of Trading
the CCI
Price: $54.95
By Ken Wood More than 30
years ago Ken Wood, also
known as “Woodie,” discovered
a revolutionary way of trading
on the CCI, a little-known
moving average index. Woodie
noticed that patterns forming
on the CCI reveal how the market is moving.
The CCI is a leading indicator, and Woodie
figured out how it could help him get into a
trade ahead of standard trend lines. Over the
years, as Woodie perfected his techniques,
he quietly built an online following of millions
through Woodie’s CCI Club.
The Little Book of Sideways Markets:
How to Make Money in Markets that
Go Nowhere
Price: $19.95
By Katsenelson, Vitaliy “It’s
hard to talk clearly about
investing and make sense to
ordinary readers at the same
time. Katsenelson gives a lucid
explanation of today’s markets
with sound advice about how
to make money while avoiding
the traps that the market sets for exuberant
bulls and frightened bears alike.” Thomas
G. Donlan, Barron’s “A thoroughly enjoyable
read. Provides a clear framework for equity
investing in today’s ‘sideways’ and volatile
markets useful to everyone. Clear thinking and
clear writing are not often paired - well done!”
Dick Weil, CEO, Janus Capital Group “The
bible for how to invest in the most tumultuous
financial market environment since the Great
Depression. A true guidebook for how to
build wealth prudently.” David Rosenberg,
Chief Economist & Strategist, Gluskin Sheff
+ Associates Inc. “A wonderful, grounded
read for new and seasoned investors alike,
Katsenelson explains in plain English why
volatility and sideways markets are a stock
picker’s best friend.”
you to easily spot early reversal signs in this
informative audio CD. A great supplement to
his best-selling title ‘Japanese Candlestick
Charting Techniques’ and his video workshop
‘Strategies for Profiting with Japanese
Candlesticks’, this audio is equally beneficial
to both the novice candlestick trader as well
as the more experienced Technical Analyst as
a clear and concise refresher on the basics of
candlestick charting.
Stop and Make Money: How To Profit
in the Stock Market Using Volume
and Stop Orders Price: $75.00
by Richard W. Arms Acclaimed
stock market analyst Richard
Arms presents a practical, handson explanation of how he trades
stocks.
the methods that he has
pioneered, along with other
technical tools, Arms will show how to
identify stocks that are beginning to move.
momentum; establish precise entry and exit
points; and manage the trade to maximize
profits. require constant monitoring of the
market, software, or extensive analysis. The
method is simple, efficient, and easy-to-learn.
Candlestick Charting Basics (audio
CD) Price: $19.95
by
Steve
Nison
Learn
candlestick charting from a
trading master! Steve Nison will
take you through the basics of
candlestick charting and teach
83
The Market Cycle Investment Management Methodology (MCIM)
Steven R. Selengut
Most investors, and many investment
professionals, choose their securities, run their
portfolios, and base their decisions on the
emotional energy they pick up on the Internet,
in media sound bytes, and through the product
offerings of Wall Street institutional boiler rooms.
They move cyclically from fear to greed and back
again, most often gyrating in precisely the wrong
direction, at or near precisely the wrong time.
The MCIM methodology combines risk
minimization, asset allocation, equity trading,
investment grade value stock investing, and
base income generation in an environment
whose time frame recognizes and embraces the
reality of cycles. It attempts to take advantage
of widespread "fear and greed" decision-making
by others, by using a disciplined, patient, and
common sense methodology.
This methodology embraces the cyclical
nature of markets, interest rates, and economies
--- and the political, social, and natural events
that can trigger changes in cyclical direction.
Little weight is given either to the short-term
movement of indices and averages, or to the
idea that the calendar year is the playing field for
the investment "game".
Interestingly, the cycles themselves seem
to concur with the irrelevance of calendar year
analysis, and it makes little sense at all to think
of investing as a competitive event. What index
or average comes even close in content to your
unique portfolio of securities?
The MCIM methodology is not a market timing
device in any sense of the word, but its disciplines
will force managers to add equities to portfolios
more during corrections and to take profits
enthusiastically during rallies. As a natural (and
planned) effect, portfolio "smart cash" levels will
increase during upward cycles, and decrease as
buying opportunities increase during downward
cycles. (See the "Process" Chart)
Absolutely no attempt is made to pick
bottoms or tops, and strict rules apply to
both buying and selling
disciplines. NOTE: these
rules are covered in minute
detail in “The Brainwashing
of the American Investor”
(click on the book on the
left to order the book from
Amazon.
Take the opportunity to
come to the Kiawah Golf
Investment
Seminars
for more information click
here.
60 WWW.TRADERSWORLD.COM January/February 2011
84 WWW.TRADERSWORLD.COM June/July 2011

with Notebooks - Traders World Magazine

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