WLT Power Software

Following section explains the news

1. Forexfactory.com
 Go to Calendar, then go to top right corner (Filter) and select your
country for news.

2. CNBC.com Go to markets and select US

3. Marketwatch.com

 The News and the Panic

Part of a day trader’s job is to stay on the top of the breaking news that
affects the markets. Every morning views the Economic Calendar. It is
important to know if there are any important reports or consensus
occurring throughout the day. Usually, they occur at 8:30AM, 10:00AM,
10:30AM and 2:00PM Eastern Standard Time.
The reports and consensus that you must be aware of are as follows:
1 - PPI 10 - ISM Manufacturing Index
2 - CPI 11 - Petroleum & Oil Statistics
3 - Existing Homes Sales 12 - Employment Situation
4 - New Homes Sales 13 - Consumer Credit
5 - Housing Starts 14 - Consumer Price Index
6 - Consumer Confidence Report 15 - Retail Sales
7 - Durable Goods Orders GDP 16 - International Trade
8 - Jobless Claims 17 - FOMC Announcements & Reports
9 - Consumer Sentiments 18 - Fed. Chairman’s Speech

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Now we know when the news occurs, and the types of news we should be
interested in. What happens during the news events, is that the traders
throughout the world are waiting for the numbers, especially banks, fund
managers and all the big players. If the report comes out negatively or the
Fed Chairman is about to cut interest rates, then the market will move big
and becomes confused and in disarray, and to trade in this market
environment would be insanity. No one knows which way the market will
move and how fast, or how far. Therefore, it is advisable to stay away
from the market at these times.

IMPORTANT: Do not trade the market during news events! You will
lose money very fast, and it is an unnecessary risk.

Instead, the best strategy would be to wait at least 10 to 15 minutes at the

most after the news, before trading can be resumed Trading. Trading will
revert back to the normal pace after market has made its move up or down
5‐10 points or more, so all the levels that we have and count on, are passed
up in this fury of market order panic that occurred. Another important day
in trading is “Expiration Friday”. It is usually the third Friday of the
month. It occurs when options and the current contract month is being
replaced by the next commodity contract. Prices are a little unpredictable,
but can still be traded.
All the days before any holiday are a little weak, so there is very little
volume in trading and hardly any movements occur. These are slow days
and should be taken these days off like all the other professional traders.
The market is weak because they are on vacation too.
Let’s say one more time for a good measure: Do not trade the market
during news events!
These news announcements usually move the markets. If there is
important news on any given day, market is expected to move
approximately 12-30 points on that day. If there is no important news
during the day, market moves 8-10 points.
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 Common Strategies of The Market:
Chart Reading
 Three Kinds of Main Charts:
1. Japanese Candle Sticks Chart (best for confirmations)
2. Bar Chart (best for trend spotting)
3. Line Chart (best for swing spotting)

 Market Moves in Three Ways:

1. Upward Trend
2. Downward Trend
3. Sideways (consolidation)

 Up and Down Trend:

1. Too many SELLERS make market to go down.

Down Trend - Lower Highs (LH) and Lower Lows (LL).

Sellers want Lower Lows (LL).
2. Too many BUYERS make the market to go up.
Up Trend - Higher Lows (HL) and Higher Highs (HH). Buyers
want Higher Highs (HH).

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1. Buy at each HL when it comes after HH and Black Candle Must be
at HL to the upside , In side or above Green large Trigger lines.
Exception: Can buy at each HL when it comes after LH, but the
Black Candle must be at the HL to the upside . Buy as low as
possible at the low of the Blue Bar. This is the first sign that the trend
may change to the upside .
2. Sell at each LH when it comes after LL and the Black Candle Must
be at LH to the downside , In side or below Magenta Large
Trigger lines. Exception: Can sell at LH when it comes after HL,
but the Black Candle must be at the LH to the downside . Sell as
high as possible at the top of the Red Bar. This is the first sign that
the trend may change to the downside .

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  NASDAQ, S&P-500, DOW & Russell-2000
Following values show how they are related to each other:
 NASDAQ
a) One Lot = $500
b) One Pip = $5 (Percentage in Price)
c) One Point = 4 Pips
d) One Point = $20

 S&P-500 (Standard & Poor)

a) One Lot = $500
b) One Pip = $12.50
c) One Point = 4 Pips
d) One Point = $50

 Russell-2000
a) One Lot = $500
b) One Pip = $5
c) One Point = 10 Pips
d) One Point = $50

 Commission Charges:
One-lot commission charges for either BUYING/SELLING, or
SELLING/BUYING is between $4.00 and $6.00.

 Trading Hours:
 Night Sessions (NS) Timings: 12:00am to 09:30am
 Day Sessions (DS) Timings: 09:30am to 04:15pm
 Night Session Low (NSL)
 Night Session High (NSH)
 High and Low between 12:00am to 09:30am

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  Ground Rules:

Discipline:
Before starting to trade, keep yourself fresh. Read the news and when in
doubt, stay out of the market. Cut your losses as quickly as possible.
Winners always recognize when they were wrong and act right away.
Losers try to rationalize and tend to forget what they really wanted. Learn
from your mistakes and have faith in what you have learned. Traders who
have the discipline and patience to strictly follow the rules of trading, can
increase their chances of success even in a very competitive market.

As a day-trader, you should be “Flat” (having no current market position)

at the end of each day, no matter what. The most common mistake new as
well as the experienced traders make is to hold on the losing position.
Remember following rules of trading:
 Always Use a Trading Plan
 Treat Trading Like a Business
 Use Technology to Your Advantage
 Protect Your Trading Capital
 Become a Student of the Markets
 Risk as less as You Can Afford less to Lose
 Develop a Trading Methodology Based on Facts
 Always Use a Stop Loss
 Know When to Stop Trading
 Keep Trading in Perspective. Winning & Losing are Part of Job

Write on the blackboard or paper many times – “Discipline”

Discipline Discipline Discipline Discipline Discipline Discipline
Discipline Discipline Discipline Discipline Discipline Discipline

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  Focus:
Focus on the charts and don’t guess. Have confidence in your ability
to act. Take full responsibility for your own trades. Understand and
analyze how market works.

 Patience:
Have self-control and study the psychology of trading. Learn how to
deal with your emotions. You may win some and may lose some
trades, but stay in the game. The next trades could be the big ones
that will make up for all those small losses for you.
Avoid fear of losing or entering into the market. Do not become
greedy, once you have reached to profit target, exit/close the trade.

 Pivot Points Trading:

Using pivot points as a trading strategy has been around for a long time
and was originally used by floor traders. The pivot point is the level at
which the market direction changes for the day. Using simple
mathematical calculation with the previous day’s high, low and close, a
series of points are derived.
These points can be critical support and resistance levels. Every day the
market you are following has an Open, High, Low & Close for the day.
Use this information of the previous day to calculate potential turning
points for the day you are about to trade. Mostly traders follow pivot
points, due to which the markets also react at these levels. This gives an
opportunity to trade. Pivot points are worked out as follows:

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  Pivot Points Formulae:
a) Resistance 3 (R3) = High + 2 (PP – Low)
b) Resistance 2 (R2) = PP + (High – Low)
c) Resistance 1 (R1) = (2 x PP) – Low
d) Pivot Point (PP) = (High + Low + Close) / 3
e) Support 1 (S1) = (2 x PP) – High
f) Support 2 (S2) = PP – (High – Low)
g) Support 3 (S3) = Low – 2 (High – PP)

 How to Apply;
By having the previous day’s High, Low & Close, you can end up with 7
points i.e. 3 resistance levels, 3 support levels and the actual pivot point.
If market opens above the pivot point, then base for the day is for long
trades as long as the price remains above the pivot point. If market opens
below the pivot point, then base for the day is for short trades as long as
the market remains below the pivot point. The three most important pivot
points are R1, S1 and the actual pivot point, and most of the time market
will remain in this area.
The general idea behind the pivot points is to look for reversal or break of
R1 or S1. By the time market reaches R2, R3 or S2, S3 the market will be
already being overbought or oversold, and these level should be used for
exits rather than entries. A perfect setup would be for market to open
above the pivot level and then stall slightly at R1 and then go on to R2.
You would enter on a break of R1 with the target of R2 and if the market
is really strong, close half at R2 and R3, with reminder (NO BUYING AT
R3 AREA) as well as in the opposite direction.

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R3 ________________________________

R2 ________________________________

R1 ________________________________

PP - - - - - - - - - - - - - - - - - - - - - - - - - - - - These are available in software

Or can be set manually.
S1 ________________________________

S2 ________________________________

S3 ________________________________

These levels are available in software or can be set manually as well.

 Buying / Selling When Market Opens Near R1 or S1:
If market opens near R1 but below R1 at 9:30am (opening time), most of
the time it goes down to PP. If market opens above R1 then most of the
time it goes to R2.
If market open near S1 above or below most of the time it goes down,
however you have to watch very carefully.

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  Most Common Mistakes Traders Make & Should be Avoided:
a) Letting Your Losses Mount
b) Failure to Implement Stop-Loss Orders
c) Not Having a Trading Plan or Sticking to Only One Plan
d) Averaging Down or Up to Redeem a Losing Position
e) Excessive Leverage
f) Trading Too Frequently
g) Following the Herd
h) Not Doing Your Homework
i) Trading Multiple Markets
j) Overconfidence or Excessive Pride

 Remember, Remember, and Remember:

Let the market determine its trend and trade with the trend by buying on
the way up or selling on the way down. Remember, patience is power and
it is not the absence of any action. It is all about “timing”. Wait for the
right time to act and in the right way with the right principles.
Trading can be profitable, as long as the trading mistakes as mentioned
above are avoided. While traders of all types sometimes do make these
mistakes, but beginners should be especially cautious of making them, as
the capacity and capability to bounce back from a severe trading setback
is likely to be much more less compared to experienced traders.

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  Critical Time Zones:
There are 14 time periods we need to be concerned with. Let’s go through
them from the open of the market:
1. The Open - 9:30am – 9:50am (EST) - Red Zone:
This is the most dangerous time period for most except the
experienced day-traders. The first 20 or 30 minutes can be very
profitable but is the most dangerous time for novice speculators.
Volatility creates the largest profits and also increases your risk
substantially. It takes about 20 minutes for the market to settle down.
However please note that there is no time zone, which is risk free.
Pay close attention to any news or Fed reports before and after the
market opens. You would do well not to trade during this time period
unless you practice, practice and practice. The red zone does not
mean down or up, it means to be extra careful.

2. Ten o’clock Reverse - 9:50am –10:10am (EST) - Yellow Zone:

Ten o’clock is one of those times you must be on your toes. The S&P,
ER2 often reverses or pulls back during this time period. Look for
gaps to get filled during this reversal time period. This is one of the
more profitable times of the day. If the market remains stable during
this period, it usually remains stable until the next yellow zone. This
is one of the favorite time periods. Learn its personality well! Look
for a double top or bottom to start the pullback or reverse. The yellow
zone does not mean up or down...it’s a time when the market takes a
breather, pulls back, or reverses.

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3. Now is the time - 10:10am – 10:25am (EST) - Green Zone:
This is the time to really focus on what the market is trying to tell
you. This can be one of the safest times to trade, coming off from a
pullback or a reverse or maybe just continuing in the same direction.
Keep your eye on the Dow and NASDAQ here. Look for the market
to move in the opposite direction of the open. The green zone is a
little more predictable and if prices move higher at the open it often
reverses during ten o’clock and continues down during this time
period. This presents a low-risk trade to the up side, so go with the
flow, and wait for the turn. The green zone does not mean up or
down, it is just one of the safest time frames to trade.

4. It’s about time - 10:25am – 10:30am (EST) - Yellow Zone:

The market may pause here or flat out reverse again. We should be
ready, and can anticipate this if we are in a trade and use a tight
trailing stop. Once again we focus on what the market wants to do
here. If you are just starting out, this is the time period you should
study. The market has gone through most of the volatility of the day,
and now it should form a steady trend till 11:15 – 11:30, and just may
continue without any fanfare till 12:00 noon. The yellow zone is time
for the market to stall, pullback, or reverse.

5. Time & time again - 10:30am – 11:15am (EST) - Green Zone:

As mentioned above, this could now trend till 12:00 noon. This
period is a safer time to make simple strategies work. If it did reverse
at 10:30 it may continue in the same direction as time period 3. Please
note that after 11:15am, it is considered to have entered the
doldrums, so take caution if you are in a trade during the last 15
minutes, which is a red zone. Remember the green zone does not
mean up or down, it is just one of the safest time frames to trade.

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6. Time Out 11:15am – 2:15pm (EST) - Red Zone:
This period is when midday doldrums occur. As you approach 12:00
o’clock, if the trend is moving down it may just move up and vice
versa. Many experienced traders call this the 12:00 o’clock hop or
flop. It’s lunch hour for most traders on the floor, and volume falls
off and it may form a channel or just move sideways during this time
period. Inconsistencies follow through and the locals scalp the
market and eat you for lunch. You are advised not to trade during the
doldrums period. Only the most experienced should venture a trade
during this period. Pay attention to the next time period because it
lies in the red zone. Remember the red zone does not mean up or
down, it means to be extra careful. Especially during the doldrums
when most losses occur.

7. Time on my hands - 1:25pm – 1:35pm (EST) - Yellow Zone: This

is just one of those times that, over and over again tries to move to
the lowest price in the afternoon, which I believe is just the lack of
interest. It’s not usually a long time period, and most experienced
traders refrain from trading during this time period. Look out for
breakouts to the downside. You can be proficient with lots of
practice, and due diligence. The yellow zone is time for the market
to stall, pullback, or reverse. Also remember it’s in the middle trades
of the red zone so…danger, danger, danger.

8. Time is flying by - 2:15pm – 3:00pm (EST) - Green Zone: Now

that we have the doldrums out of the way, we can get back to
business. Trends are established and technical analysis can now be
put back to work. More action because after 2:00pm, the bond traders
start to drift into the market, and after 3pm, the Chicago Bond market
closes. Lookout as here they come looking for action. Look for
frequent breakouts in both directions and keep a keen eye on the next
time period. Remember the green zone does not mean up or down, it
is just one of the safest time frames to trade.

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9. Time to catch the train - 3:00pm – 3:10pm EST a yellow zone.
After the bond market closes, they move the market, so look for a
reversal or spikes. It’s not uncommon to have news or reports around
this time. If it does reverse here, look for the turn, and try to catch
the train going north or south; it could be significant, but use caution,
be on your toes here. If you don’t buy the ticket you can’t catch the
train. Remember the yellow zone is time for the market to stall,
pullback, or reverse.

10. Time, and time again - 3:10pm – 3:25pm (EST) - Green Zone:
The market starts to calm down between two significant reversal
times periods, so give it your best shot. If the trend is up, trade with
the trend and vice versa. Use a safe strategy not a power trade.
Remember the green zone does not mean up or down; just one of the
safest time frames to trade.

11. Take your time - 3:25pm – 3:30pm (EST) - Yellow Zone:

There is a good chance it might reverse here just like the 9th time
zone. Best to let it stall, pullback, or reverse and look for the next
opportunity. Well, maybe a small breakout strategy might work for
a point or so. Like any yellow time zone, it’s a time for the market to
stall, pullback, or reverse.

12. Time is running out - 3:30pm – 3:40pm (EST) - Green Zone.

Not much going on here most of the days; anticipate the last reversal
of the day (3:45 – 4:00). Take the time to set up this strategy and look
at support and resistance as what are the possibilities here. The day
is almost over, and if you are running out of time to make a trade, try
not to panic, take what the market gives you. Remember the green
zone does not mean up or down, just more consistent technical
analysis.

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13. Time to settle down - 3:40 – 3:45 EST a yellow zone.
It’s time for that last reverse as brokers, speculators, market makers,
and specialists are settling trades for the day. It moves the market in
funny ways; so you just go with the flow. If you see what the market
is trying to do, look for the strategy to take advantage of it.
Remember the yellow zone is time for the market to stall, pullback,
or reverse.

14. Where did the time go - 3:45 – 4:00 EST a green zone.
This time period reminds us of the 12 o’clock hop or flop. If the
market was moving down in the afternoon session, you can look for
a hop, mainly caused by speculators covering their short positions,
and vice versa if the market was moving to the up side. Don’t try to
stay in the market in the last few minutes. Do not get caught in having
trade move to an overnight position; you may get a margin call.
Remember the green zone does not mean up or down.

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  Important Note: Never trade between lunches times i.e.
11:15am to 2:15pm (EST)

 Time zones post-it note: Keep this post-it note on or near

your computer. It will help you remember that these times zones
are the critical part of the total concept.

Red Zones
09:30am - 09:50am
11:15am - 02:15pm

Yellow Zones Green Zones

1st. Reversal - 09:50am - 10:10am 10:10am - 10:25am
2nd. Reversal -10:25am - 10:30am 10:30am - 11:15am
3rd. Reversal - 01:25pm - 01:35pm 02:15pm - 03:00pm
4th. Reversal - 03:00pm - 03:10pm 03:10pm - 03:25pm
5th. Reversal - 03:25pm - 03:30pm 03:30pm - 03:40pm
6th. Reversal - 03:45pm - 04:00pm 03:45pm - 04:00pm

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 Software
Table of Contents
1. Areas

a) Pivot Points.......................................................................................
b) Outer Band and Mid-band…............................................................
c) Trigger Lines….............................................................................
d) Value Area……………………………………………………...

2. Super MACD and BB Lines

a) Basics of MACD BB Lines...............................................................

b) MACD BB Strength..........................................................................
c) MACD BB Trend..............................................................................
d) Bollinger Band Support and Resistance...........................................
e) Zero Line Rejection…......................................................................
f) Divergences between Highs or Lows...............................................
g) Super Divergence..............................................................................
h) Retracement Divergence...................................................................

3. Bar Patterns

a) Reversal Bar Pattern.........................................................................

4. Rules for Trading

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1. Areas
a) Pivot Points - This is a well-known method used by big traders
and market makers throughout the world. This system has been
around for a long time, and still in use today. Pivot Points are used
to calculate intraday Support and Resistance levels. The areas are
calculated from the previous day’s high, low, and close.

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b) Midband and Outer Bands (T-Bands) - These areas act as
Support and Resistance for exits, as well as areas for entries.
Especially Upper and Lower bands act as overbought and oversold
areas. The Midband change colors automatically after the
conformation of supply and demand.

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 c) Trigger Lines – There are two sets of Trigger Lines, large and
small. The Large Trigger Lines represent 3 things. the overall trend
of the market, cross up in GREEN trending up, cross down in
MAGENTA trending down, They Provide information about the
power and strength of the trend when they are wide and having a gap.
And they also provide Support and Resistance areas that you will be
able to pick your transactions.
Represent 3 things

1. Overall trend of the market:

when large triggers are crossed and they are changing colors, green
or magenta, represent overall trend of the market. Green is UP
Trend; magenta is down Trend.
2. Trend strength and momentum:
when large triggers are crossed green or magenta color and they are
spreading apart from each other (means having big gap in two
lines) represent strength and momentum of the market. Bigger the
gap, stronger the trend, narrow the gap, weaker the trend.
3. Support and resistance:
Green large triggers act as support. Magenta large triggers act as
resistance.

Conclusion
Angle and separation.

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Small Trigger Lines represent the immediate expected direction or trend
of the market and are used as one of entry and exit indicators.
1. STRENGTH & MOMENTUM – When the price bars are
pulling away from the Trigger Lines that spread apart from each other
shows strength and momentum of the market.
2. LOSS OF MOMENTUM / WEAKENING TREND - When
the price action is inside the Trigger Lines, which stop to spread apart
shows, the loss of momentum or an indication of the market to slow
down. This is the first sign that trend is weakening.
3. POTENTIAL FOR THE TREND TO CHANGE - When the
price action is below or above the Trigger Lines, begins to show the
potential to roll, cross, change color and reverse its direction when the
price closes on the opposite side.

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2. Super MACD BB Lines
Developed by Gerald Appel in late seventies, the “Moving Average
Convergence/Divergence” MACD or Mac-D are the most commonly used
indicators that offer insight into the market’s strength or weakness. It is
used to spot changes in the strength, direction, momentum and duration
of a trend in Market prices. MACD Lines provide information about the
current market, and its expected outcome for the near future. It is an
invaluable tool.
The concept behind MACD is that it calculates the difference between a
26-day and a 12-day “Exponential Moving Average” or EMA and a line
is plotted against a straight line commonly known as zero line. When their
difference is zero, the plotted line touches zero line, and when the
difference is positive, the plotted line is above the zero line and vice versa.

a) Basics of the Super MACD BB Lines:

1. If the MACD BB Lines are slowing and the bands are coming together,
it is showing the weakening in the current trend. When this happens, some
“Consolidation” or “Reversal” may take place. The swing distance on the
MACD BB typically indicates the trend and the momentum.
2. If MACD BBs are moving fast in one direction, with very little to no
pullback, it is a strong move. This will typically happen after a period of
consolidation on the charts.
3. The distance between the MACD BBs themselves is also a signal that
help to determine the strength of the move. The larger the spacing between
the MACD BBs, there will be more momentum behind the move.

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MACD BB Lines

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The basic MACD trading rule is to SELL when Red Dots falls below the
Blue line. Similarly, a BUY signal occurs when Green Dots rise above the
Red line. It is more beneficial to Buy/Sell when the MACD goes
Above/Below the Zero Line.
b) MACD Strength - When MACD BB dots move outside of the
BB Lines, it indicates that the market has a lot of momentum.
Generally, it continues in the same direction. If in a position, this
helps to remain patient to maximize the profits. If waiting to enter
into a new position, this helps to stay away from getting in the market
too early.

Bearish Strength

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Bullish Strength

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c) MACD BB Trend - When the MACD BBs cross the upper
Bollinger Band, the MACD trend is up. When the MACD BBs cross
the lower Bollinger Band, the MACD trend is down.

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d) Bollinger Bands Acting as Support and Resistance - This
is expected after a strong move in the MACD BB Lines, and it is
followed by a Retracement to the opposite Bollinger Band. It will
seem as though the BBs are sliding along the Bollinger Bands. RED
line act as Resistance and BLUE line act as Support.

Bollinger Band act as Resistance

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Bollinger Band act as Support

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e) Zero Line Rejection (ZLR) - A Zero Line Rejection occurs when
MACD BB lines reach the Zero line and begin to turn. At this point, the
trend continues. If the MACD BB Lines cross the Zero Line, then trend
changes.

Zero Line Rejection to the Downside

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Zero Line Rejection to the Upside

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f) Divergence Between Highs and Lows – An indication that an end
to the current trend may be near occurs when the MACD diverges from
the symbol. Divergence shows the potential that the trend of the market
may change. A simple way to indicate this is when Small Triggers change
colors in the trend.
Five basics of divergence and the expected outcome for the key areas:
1. Bearish Divergence occurs when there are higher prices and lower
MACDs from previous high. Reversal is expected but resistance may
hold. In other words, Bearish Divergence occurs when the MACD is
making new lows while prices fail to reach new lows.
2. The market is TRENDING UP  when there are higher prices and
higher MACDs. No reversal is expected but resistance may break.
3. Bullish Divergence occurs when there are lower prices and higher
MACDs from previous low. Reversal is expected but support may hold.
In other words, Bullish Divergence occurs when the MACD is making
new high while prices fail to reach new high.
4. The market is TRENDING DOWN  when there are lower prices and
lower MACDs. No reversal is expected but support may break.
5. When closing past a Divergence high or low, it shows the trend may
continue. Both of these divergences are most significant when they occur
at relatively overbought/oversold levels.

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When the MACDs and the Price go in opposite directions, they create a
Divergence between the two, if at an area it is expected to hold. With
Bullish Divergence at an area of support, the area has the potential to hold.

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With Bearish Divergence at an area of Resistance, the area has the
potential to hold.

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h) Super Divergence - This occurs when there is a normal
divergence, but at the same time the MACDs do not break the
opposite Bollinger Band. Super Divergence may only be
considered at key areas. The higher the time frame, the larger is
the reversal.

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There is divergence at support, but at the same time the MACD BBs
do not violate the opposite Bollinger Band. Super divergence may
only be considered at key areas.

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i) Retracement Divergence – At key areas, compare the swings
between the price and the MACDs. Retracement Divergence is
defined as, less than a 38% retracement in the MACDs, and at least
50% retracement in price. This Divergence is showing that the area
is anticipated to hold.

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WPI Strength

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3. Bar Patterns
a) Reversal Bar Pattern:
These are the simple rules to recognize a reversal bar pattern.
1. When looking for a Reversal Bar, price must make a higher high or
lower low than the previous bar and close better then prior bar.
a) Higher high and close lower (black dot) for a short pattern.
b) Lower low and close higher (white dot) for a long pattern.

2. The next bar must close better than the prior bar.
a) Close lower (black dot) for a short pattern.
b) Close higher (white dot) for a long pattern.

3. The third bar does not exceed the reversal bar and closes better then
reversal bar. 3 black dots for a short pattern and 3 white dots for a long
pattern.

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 Trading Rules
1. Buy the first pullback from a new high. Sell the first pullback from a
new low. There’s always a crowd that missed the first boat.

2. Buy at support. Sell at resistance. Everyone sees the same thing and
they are all just waiting to jump in the pool.

3. Don’t chase momentum if you can’t find the exit. Assume the market
will reverse the minute you get in. If it’s a long way to the door, you are
in big trouble.

4. Trend test the point of last support/resistance. Enter even if it hurts.

5. Trade with the TICK and never against it. Don’t try to be a hero. Go
with the money flow.

6. Sell the second high, and buy the second low. After sharp pullbacks,
the first test of any high or low always runs into resistance. Look for the
break on the third or fourth try.

7. The trend is your friend in the last hour. As volume cranks up at

3:00pm. don’t expect anyone to change the channel.

8. 1-2-3-Drop-up. Look for downtrends to reverse after a top, two lower

highs and a double bottom.

9. Price has a memory. Know what did the price do the last time it hit
a certain level.

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10. Trend never turns on a dime. Reversals build slowly after the first
sharp dip.

11. Always find buyers and the first sharp rise always find sellers.

12. Bottoms take longer to form than tops. Greed acts more quickly
than fear and causes market to drop from their own weight.

13. Beat the crowd in and out the door. You have to take their money
before they take yours.

Rules For Effective Trade Execution

3. Execution can be the weakest link in an otherwise great market

strategy. After all, it is a lot easier to find a good market than to trade.

4. Trade for a profit. So how do we enter the market at just the right
time and capture the big moves we see on our charts?

5. Here are some rules for effective trade execution. Try these out the
Next time you’re getting ready to pull the trigger.

6. Seek favorable conditions for trade entry. Or stay out of the market
until they appear. Bad execution ruins a perfect setup.

7. Watch the tape before you trade. Look for evidence to confirm your
opinion, time, crowd and trend must support the reversal, breakout or
fade you’re expecting to happen.

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8. Choose to execute or to stand aside. Staying out of the market is an
aggressive way to trade. All opportunities carry risk, and even perfect
setup lead to very bad positions.

9. Filter the trade through your personal plan. Ditch it if it doesn’t meet
your risk tolerance.

10. Stay on the sidelines and wait for the opportunity to develop.
There is a perfect moment you’re trying to trade.

11. Decide how long you want to be in the market before you
execute. Don’t day trade an investment or invest in a swing trade.

12. Take positions with the market flow, & not against it. It’s more fun
to surf the waves than to get eaten by the sharks.

13. Stand apart from the crowd. Its emotions often signal opportunity
in the opposite direction. Profit rarely and follows the herd.

14. Maintain an open mind and let the market show its hand before you
trade it.

15. Keep your hands off the keyboard until you’re ready to act. Don’t
trust your fingers until they move faster than your brain, but still hit the
right notes.

16. Stand aside when confusion reigns and the crowd lacks direction.

17. Lower your position size until you show a track record. Work
methodically through each analysis, and never be in a hurry.

18. An excellent entry on a mediocre position makes more money than

a good position.

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19. Step in front of the crowd on pullbacks and stand behind them on
breakouts. Be ready to move against them when conditions favor a
reversal.

20. Find the breaking point where the crowd give up or show
exuberance. Then execute the trade just before they do.

21. Use market orders to get on fast when you can watch the market.

22. Place limit orders when you have a life outside of the markets.

23. Buy at each HL when it comes after HH and Black Candle Must be
at HL to the upside . Exception: Can buy at each HL when it
comes after LH, but the Black Candle must be at the HL to the upside
. Buy as low as possible at the low of the Blue Bar. This is the first
sign that the trend may change to the upside .

24. Sell at each LH when it comes after LL and the Black Candle Must
be at LH to the downside . Exception: Can sell at each LH when
it comes after HL, but the Black Candle must be at the LH to the
downside . Sell as high as possible at the top of the Red Bar. This
is the first sign that the trend may change to the downside .

25. Never buy at LL except when it reaches at the expected low of the
day and black candle and the trend is to the upside.

26. Never sell at HH except it reaches at the expected high of the day
and black candle and the trend is to the downside.

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