You Can Beat The Market

You Can Beat the Market
By uncovering new ways to profit in the markets

This book is a guide to various ways to beat the markets from successful traders who presented at our
Traders World Online Expo #18. The book is filled with many explanations giving you many of the
tools necessary to become successful.
Many of these traders have been beating the markets for many years. And now with this accessible guide
they show you how. You are about to discover investment opportunities that many trading experts miss.
This book is your personal treasure map to special ways to trade the markets.
Not all of the presenters wrote a complementary article to go with their presentation.
For a limited time you can access these video presentations at:
http://www.tradersworldonlineexpo.com
Here is a listing of the videos:
1. Trade with the Underlying Structure of the Market by Thomas Barmann
2. Swing Trading in Commodities by Carley Garner
3. Don't Fear Forex: How to Trade the World's Hottest Market by Kurt Capra
4. How to be on the Winning Side of the Trade! 5 Essential Techniques by Steve Wheeler
5. Unleashing the Power of Divergence by Gail Mercer
6. Planetary Harmonics & the Law of Vibration in Astro-Trading by Tim Bost
7. InvestiQuant's Newest Research for Trading Opening Gaps by Rob Hanna
8. The Most Critical Financial Time Period by Andrew Pancholi

9. The 85%, 85 Tick per Day Solution and How to Exploit it by Rob Mitchell
10. Selling Options for Profits and Hedging by Larry Gaines
11. Current Positions for Top FOREX Markets by Jaime Johnson
12. The Faults, Flaws and Fallacies of Auto Trading Systems by Roger Felton
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TABLE OF CONTENTS
You Can Beat the Market
How to Trade Market Volatility Selling Options for Profits & Hedging
The Key To Financial Forecasting and Why 2017 Is Going to Be The Most Critical Year of Our
Lifetimes.
Trading the Stochastic with Divergence
Swing Trading in Commodities
What Is Forex Trading?
Trade with the Underlying Structure of the Financial Markets
Planetary Harmonics and the Law of Vibration in Astro-Trading
Secrets of the Trapped Trader Oscillator
Entry and Exit Techniques for Success
Get a Traders World Magazine Free Issue
Disclaimer
Copyright
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How to Trade Market Volatility Selling Options for
Profits & Hedging
A 6 Step Plan
By Larry Gaines
A 6 Step Plan for Option Trading Success
Step 1. Avoiding the #1 Option Trading Mistake
Step 2. Most Important Option Factor

Step 3. How Option Pricing Works
Step 4. Knowing & Using the Market Makers Secrets
Step 5. Highest Probability Option Strategies for Every Market

Step 6. Risk-to-reward
Step 1.
Avoiding the #1 Option Trading Mistake
Option trading has many more advantages than trading stock, but, as you probably know, it is a bit more
complicated, as well.
And, for the individual trader, options can be a little intimidating. Thats why many investors trade
options by purchasing Out-of-the-money options (often short-term options), since they cost less than
long-term options, and its a simple strategy.
For example, Out-of-the-money calls are especially popular because they are cheap and seem to follow the
old Warrant Buffet paradigm we all love: buy low, sell high.
But is this always the best option strategy?
Imagine youre bullish on Facebook (FB) trading at $100.
As a beginning option trader, you might be tempted to buy calls 30 days from expiration with a strike
price of $120 at a cost of $0.15, or $15 per contract.
Why? Because you can buy a lot of them.
Lets do the math.
Purchasing 100 shares of FB at $100 would cost $10,000. But, for the same $10,000, you could buy 666
contracts of $120 calls and control 66,660 shares.
WOW.
Imagine FB hits $121 within the next 30 days, and the $120 calls are trading at $1.05 or $105 per
option contract just prior to expiration.
Youd make $59,940 in a month!
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At first glance, this kind of leverage is awesome!
But dont let this glitter FOOL YOU . . . because not losing money is just as important as making
money!
One problem with short-term, Out-of-the-money options is that you not only have to be right about the
direction the stock moves, but you also have to be right about the timing.
That ratchets up the degree of difficulty.
To make a profit, the stock doesnt just need to go past the strike price but also must do this within a
defined period of time.
In the case of the $120 calls on FB, youd need the stock to reach $120 within 30 days to make a
profit.
This dual objective of having to be right on direction plus on timing really lessens the probability of an
option trade being a winning trade when buying options.
And everything that I teach my clients is based on managing risk and increasing the probability of
winning trades.
In the Facebook option trade, you are wanting the stock to move more than 20% in less than a month.
This would be like a 2 Standard Deviation move!
How many stocks are likely to do that?
Not many. In all probability the stock would not reach the strike price, and the options would expire
completely worthless.
Based on probability, using Standard Deviation, there is only about a 5% chance of this stock reaching
$120 to $121 by expiration.
So in order to make money on an Out-of-the-money call, you either need to outwit the market or get
plain lucky.
Being close means no cigar.
Imagine that FB rose to $110 during the 30 days of your options lifetime.
You were right about the direction the stock moved.
But, since you were wrong about how far it would go within a specific time frame, youd lose your
entire investment.
And this is outright painful!
So, based on this trade example, a better goal for every trader would be to select trades based on what
provides the most consistent, positive returns, not a one-time big winner.
And consistency is derived from making HIGH PROBABILITY trades based on reliable data and facts.
Where theres a big disadvantage, such as the one you saw in the option buying scenario, you can
usually just look at the flip side of the coin and see an equal and opposite advantage.
In this case, being a SELLER of options gives you a huge advantage over being a buyer of options.
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All of the pros know this and take advantage of it, and so can you.
So as a Seller, all of the things in this example are the same, but in your favor, instead of against you.
This is why a lot of people take advantage of Selling Options for Profit Generation & Hedging . . .
By selling options, we are, in essence, selling time.
What a powerful dynamic . . .

And its a strategy thats yours for the taking . . .
An option is like a coupon that must be redeemed by an expiration date or else it is no longer valid.
But how is this done & what is involved?
Step 2.
The most important option factor for income generation is understanding the concept of TIME, and thats
pretty simple, as you just saw . . .
Time Value
Time Value ~ is used for trading strategies that take advantage of the accelerated Time Decay of an option
into its Expiration.
Option Income Strategies are very tied to Time Value and the impact it has on the price of an option.
What exactly is Time Value?
Time value (TV) (extrinsic) of an option is the premium a rational investor would pay over its current
exercise value (intrinsic value), based on its potential to increase in value before expiring.
This probability is always greater than zero, thus an option is always worth more than its current
exercise value.
Take a look at the following chart to see just how predictable and powerful this option paradigm is! And
answer the question that follows:
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So if the underlying security price was to go sideways, having no directional trend, would you have
wanted to have BOUGHT an option 120 to 90 days out, or would you have rather SOLD an option?
This is the common natural time value progression for all options.
And its seriously like falling off a cliff . . . blindfolded!
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Step 3.
How Option Pricing Works
How to value an option
Time Value (x) Implied Volatility (x) Intrinsic/Extrinsic Value . . .
Note: Once you know these variables, then you are ready to price an option & know what its option
premium should be.
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Step 4.
The Market Makers Secret
What they dont want you to know . . .
Option Implied Volatility
Standard Deviation
Option Delta
Broad markets tend to have 2 to 3 week cycles and will trade in sideways channels 70% to 80% of the
time.
Based on this sideways price movement Out-of-the-money (OTM) option buyers will lose
approximately 70% of the time.
Market makers know these statistics and, therefore, tend to trade from the sell side.
This is the professional money, so you need to think like a market maker.
Its all based on the Math!
Market Makers use mathematical market probability statistics for pricing the movement of an option to
its expiration.
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Knowing the probability of an underlying security finishing within a certain range at expiration is key
when determining what options to buy or sell and what option strategies to implement.
These statistics forecast how likely it is that an option will fall within a certain price, up or down, by
its expiration.
This statistical forecast is referred to as the Implied Move of the Stock.

The Implied move is an estimate of a +/- standard deviation move of the underlying security by its
expiration.
Based on these probability statistics, Selling options & option spreads, when used correctly, provides the
highest probability trade set-ups for generating consistent profits and is also a great way to hedge risk . . .
And its all based on the math of probabilities . . .
GOOGL Implied Move: +/- 4 Option Expiration 10
Days
Trading Probabilities
Trading is a business of probabilities, and to be successful a trader needs to focus on controlling risk.
One important step is to know the winning probabilities of any trade taken . . .
One simple & free tool for measuring probabilities is:
The Option Delta

It will tell you the value of an option based on the underlying move.
It is also used to measure the probability of a price move on the underlying move itself.
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An Option Delta of 68/70 equates that the strike has a 68%/70% probability of being ITM at expiration.
An Option Delta of approximately +/- 16 is equivalent to the outside point of a 1 STD Implied move at
expiration.
This equates that the 16 Delta strike has only a 16% theoretical probability of being ITM at expiration.
GOOGL: A 1 Standard Deviation Implied Move using the ThinkorSwim (TOS) Option Analyzer &
showing the call option delta.
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Using this probability analysis provides traders with a very useful tool for determining price targets to
trade against and its also very useful for setting hedges.
So, based on the math of probability, you can see that approximately 68.2% of options bought expire
worthless, and, based on this, its a good idea for all traders or investors to consider selling options as
well as simply buying them.
This added option strategy for profits and hedging will make a dramatic and positive difference in ones
trading performance when used correctly.
And this is why professional money takes advantage of Selling Options for Profit Generation & Risk
Management.
Step 5.
Selecting the Right Income Option Strategy
The goal of every trader should be to select trades based on what provides the most consistent positive
return and not always the greatest return.
And one of the best ways to achieve this is by knowing the income option strategies that are available
and then selecting the one that is best for your trading style and trading plan.
Income Strategies
Covered Calls
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Calendar Spreads
Diagonal Spread
Long Iron Condors

Credit Spreads
My favorite income option strategy is the Credit Spread for 4 reasons:

It can work regardless of market direction
It almost always works even if youre wrong!
The winning probability of profit is over 68% even without adding technical analysis, which then
increases the profit probability even more
Perfect for HEDGING. . .
There are 3 types of Credit Spreads:
1. Bear Call Credit Spread
2. Bull Put Credit Spread
3. Long Iron Condor
1. Bear Call Credit Spread is best if you think the market is probably going to go down.
Strategy: Selling one call with a lower strike while simultaneously buying one call with a higher strike
in the same month.
Selling a Bear Call Credit Spread 25% Return on Margin
Credit Spread/Max Profit: $100/Ct. Return on Margin: $100/$400 = 25%
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2. Bull Put Credit Spread is best when you think the market will probably go up
Strategy: Sell one put while simultaneously buying one put with a lower strike in the same month.
Selling Bull Put Credit Spread
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3. Long Iron Condor Known for being a non-directional, low-risk trading strategy
Strategy: Combine Bull Put Credit Spread and a Bear Call Credit Spread
Step 6.
Comparing the Risk vs. Reward
2 Long Directional Options Strategies
Strategy 1. Buying Directional Calls
Strategy 2. Selling an Out-of-the-Money Bull Put Credit Spread
Wynn Resorts: Bullish Option Strategies
(1) Buying Directional Calls Vs (2) Selling Bull Put Credit Spread
Entry: May 1 Wynn Trading at $207
Strategy 1: Bought the ATM June $207 Call Strike for $11.40 or $1,140 per option contract
Strategy 2: Sold the $187/$182 OTM Bull Put Credit Spread. Spread sold below Wynns prior low of
$189 which was 9.50% below its trading price of $207 on May 1st.
Strategy 1: Buying Long June $207 Calls
Entry: May 1
Trading at: $207
Debit & Capital at Risk: $1,140 per option contract
Return potential = Infinite
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Open position P/L May 8
June Monthly $207 call original cost: $1,140 per option contract
WYNN trading at $196 P/L: - $583 per option CT.
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June Monthly $207 call original cost: $1,140 per option contract
WYNN trading at $205 P/L: - $518 per option CT.
Strategy 2: Selling Bull Put Credit Spread

Entry: May 1
Trading at: $207
Strategy 2: June $187/$182 Bull Put Credit Spread: $130/Ct.

Open position P/L May 8:
WYNN trading at $196 Credit Spread: -$38.50/Ct. Vs Long Call -$583
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Strategy 2: June $187/$182 Bull Put Credit Spread: $130/Ct.
WYNN trading at $205 Credit Spread: $78.50/Ct. Vs Long Call -$518/Ct.
Based on this example which option strategy would you prefer?

CONCLUSION
Whether trading a small account or large account selling options and option spreads will have a major
positive impact on your trading bottom line while reducing your trading risk. These low risk trading
strategies offer income and profit while also providing the perfect hedging strategy.
The single trader can easily execute these option strategies that can turn that small trading account into a
large trading account and with much lower risk than the traditional buy only option strategy.
Larry Gaines has become one of the leading coaches for successful traders and investors. He continues to
develop and host, every month, new trading educational programs to help traders and investors generate
greater income from their investment capital with less risk exposure.
He founded PowerCycleTrading.com and the Power Cycle Virtual Trading Room following over 30 years
of professional trading experience in the commodity and equity markets.
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During his tenure as head of an international trading company that often traded a billion dollars worth of
commodities in a single day, he learned first-hand the necessary elements of a successful trading system
and the use of options.
Using this in-depth knowledge and experience, Larry developed the Power Cycle Trading Model to
allow for greater profits with a more disciplined, systematic degree of trading success.
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The Key To Financial Forecasting and Why 2017 Is Going
to Be The Most Critical Year of Our Lifetimes.
By Andrew Pancholi
The Market Timing Report
Knowing where to look is the key to financial forecasting. Not only in financial forecasting, but it also
applies to all aspects of history.
Events repeat at regular intervals. Why? It is the way human emotions works. Individual human emotion
funnels into mass psychology. We can argue whether mass psychology causes events or is synchronistic
with them that is a different topic. It is clear that mathematics prevail.
Most readers will be aware of the decennial cycle in stock markets. Edgar Lawrence Smith first wrote
about this back in 1939 in his classic book Tides In The Affairs of Man. Even then he noted that years
ending in 3, 7 and 0 are often down years. History has borne this out and one has only to take a look at
charts for 1987 and 2007 to see glaring examples. Smith also went on to say that years ending in 5, 8
and 9 are most likely to be years of market advances. Amongst other things, he studied weather patterns,
sunspot cycles and radiation. He noted how he believed they had a clear impact on feelings of optimism
and pessimism in humans.
However, the real secret to forecasting lies in long term cycles. The challenge is that of knowing where to
look! On a separate note, many of you will be aware of the notion of a Black Swan Event which refers
to an event that was apparently completely unseen and supposedly impossible to forecast. The Brexit
event of 2016 is allegedly such an example. I would argue that everything follows cyclical patterns it
is just a case of looking at the biggest cycles that we can find. In fact, later in this article, I will show you
how we identified cycles well in advance pointing to the referendum in the UK, thus proving that it was
not a Black Swan.
One of the most critical cycles is that of 72 years. The best way to demonstrate this is to start in 1929 at
the time of the then all-time-high on the Dow Jones Industrial Averages. The American index then went
on to crash 90% in three years.
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If one were to add 72 years to this, we would arrive at 2001. Most of the worlds stock markets made
major peaks between 2000 and 2001. Subsequently the Dow sold off around 40% from its all time high.
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What is less well known is what occurred 72 years before 1929 back in 1857. A series of financial crises
developed across Europe and America leading to a massive collapse that lasted three years. The panic
began in the USA with the failure of the Ohio Life Insurance and Trust Company. This lead to runs on
banks with many of them failing. The 1857 crisis can be regarded as the first modern day financial crisis
that spread across the globe with the American markets correcting 62% from their highs.
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If we are to add 72 years to 2001, we will end up in the year 2073 which will almost certainly be a time
of financial crisis.
The next cycle worth looking at is that of 144 years. It goes without saying that the time span from 1857
to 2001 is 144 years.
Back in 1720 the world saw the South Sea Bubble. This financial crisis was based on over-speculation.
One hundred forty-four years later in 1864, commodity priced boomed. According to W D Gann, cotton
traded at $1.89 on the 23rd August of that year. Only months previously it had been trading at 3 cents
per pound. This hyperinflationary crisis was due to a lack of supply combined with a massive rise in
demand for commodities during the American Civil War. All the men had left the fields and farms and
were out fighting. The demand for cotton for military uniforms was extremely high. All commodity
prices rocketed. By adding 144 years to 1864 we arrive at 2008. There was a clear commodity boom in
this time period.
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Most readers will be aware of the 2007 Global Financial Crisis. This was relatively easy to forecast and
illustrates the 100 year cycle in action. Subtracting 100 years takes us to 1907 when the Rich Mans
Panic occurred. This panic was based on a sudden reduction in the availability of credit following a
massive overexpansion. In 2007 the securitization of mortgage debt played a major role. The causal
factors of both these panics are very similar conceptually. By 2009 the markets had more than halved
from the 2007 highs.
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Just as we saw that the 72 year cycle was half of 144 years, we can look at the midpoints of the 100 year
cycle which constitutes 50 years.
Adding 50 years to 1907 takes us to 1957. This was a year when American manufacturing slowed down
significantly especially in automobile production. A sharp sell off took place in the markets as the chart
below depicts.
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Of course, 50 years later we arrive at the 2007 Global Financial Crisis. However, if we were to travel back
in time 100 years, we would arrive in the year 1857. You will note that 1857 falls into both the 100/50
year cycles and also the 72/36 year cycles sets.
Earlier I mentioned that there were clear cycles in place at the time of the Brexit vote in the UK on
June 23rd 2016. Exactly 45 years ago to the day the French had finally dropped their resistance and
allowed the UK to join what was then known as The Common Market. They had been vehemently
opposed to the island nation becoming part of Europe. However, if we were to venture back a further 45
years, similar events were taking place within Europe. Countries were leaving the then League of Nations
in protest of the actions of others! History repeats, often to the day!
2017 is likely to be a landmark year. Many cycles are coming together. In fact, rarely have so many cycles
all come into phase in one year. This suggests a major turn in cycles.
Firstly, 2017 is a year ending in 7. Years ending in 7 are the most bearish year of any decade.
2017 will be one 10 year cycle from the 2007 Global Financial Crisis.
2017 will be one 180 year cycle from the 1837 Crash. This crash saw the markets fall by 74% and led to
a six year recession.
2017 will be one 144 year cycle from the 1873 financial crisis. Jay Cooke failed in the USA and Europe
suffered a crisis after a panic began in Vienna, Austria.
2017 will be one 100 year cycle from 1917. This was a major sell off during the First World War as can
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be seen in the chart below. The market fell 45%.
2017 will be one 60 year cycle from 1957.

2017 will be one 30 year cycle from 1987.
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So you can see that we have a variety of cycles coming together in 2017 all of which have one thing in
common. They all have sell offs, some of which are large.
For those of us who are prepared, this offers a major opportunity when combined with sound risk
management.
However, we face two big challenges.
If you enter the market too early, your account may run dry.
If you enter the market too late, you may miss the move. How frustrating would that be when you have
been preparing for the opportunity of a lifetime?
We have investigated thousands of smaller cycles and have discovered the ability to hone these events
down into small time windows and even down to the day. Our software resolves all the cycles into
histograms in different time frames. Where the histograms peak, we can anticipate changes in trend. This
gives our subscribers a very clear edge when combined with their own systems.
This chart shows projected turns into 2022. See how past peaks have tied in with major turns.
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The following chart shows several time frames and where the peaks align, bigger moves take place.
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In fact all these points on the S&P500 have been identified in advance.
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All this information is published in The Market Timing Report together with timing on Gold, Crude
Oil, Dollar Index and EURUSD. The report is published monthly and has many benefits. Macro traders
and investors are shown the major long range cycles in red fonts at the beginning of each section. Daily
cycles from our histograms show the dates the markets are likely change direction. High probability days
are noted as well as commentary and tutorials.
Find out more at www.markettimingreport.com
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Trading the Stochastic with Divergence
By Gail Mercer
In the simplest of terms, the Stochastics measures the strength of price highs and lows. It is a directional
indicator and is an excellent indicator for measuring divergences. Before looking at what divergence is,
lets examine what should occur with the Stochastics on highs and lows.
Typical Stochastic Patterns in Trends

If price is making higher highs, since the Stochastic is a directional indicator, it should follow suite
(make new highs). Or if making lower highs, then the Stochastic should also make lower highs (Point A
on chart below).
If price is making higher lows, the Stochastic should also make higher lows (Point B on chart below). If
price is making lower lows, then the Stochastic should make lower lows. These patterns show that both
the Stochastics and price agree.
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Typical Divergence Patterns with Stochastics
However, the Stochastics also shows when the trend is weakening. For example, in the chart below,
price is making higher highs (pink line) and the Stochastics is making lower highs (pink line). The
result is a downward move in price. In a downtrend, if price is making lower lows but the Stochastics is
making higher lows, then an upward movement would be anticipated.
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In a downtrend, if price is making lower lows but the Stochastics is making higher lows, then an upward
movement would be anticipated.
For example, on the Germany 30 binary option, which uses the FDAX as the underlying, price was
making higher highs on the 15-minute binary option chart below. This indicated a downward move was
likely. A 2-hour binary option to the short side was executed at the Germany 30 > 10696 by 8am New
York time for a risk of $28 per contract (maximum payout of $100 minus the Average Price, circled in
red).
The result was a profit of $45.25 per contract.

However, with the typical Stochastics, many false signals may appear as the lines move very quickly
with price. To overcome the false signals, TradersHelpDesk has designed a smoother Stochastics that
includes dots to indicate the support and resistance within the Stochastics that coincide with price highs
and lows. This enables traders to identify the divergence patterns which is often the most difficult for
traders, hidden divergence.
Hidden Divergence Patterns with Stochastics
Although hidden divergence is often more difficult for traders, it is simply the opposite of typical
divergence.
The hidden divergence patterns are:
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Lower High in Price
Higher High in Stochastics
Expect Price to Move Down

OR
Higher Low in Price

Lower Low in Stochastics
Expect Price to Move Up
For example, on the USDJPY 60-minute chart below, price first makes higher highs but the Stochastic
makes lower highs, indicating that price would move down. During the down move, price is making
higher lows while the Stochastics is making lower lows. This indicates another upward move that
should take out the higher at 110.918.
Notice how much smoother the TradersHelpDesk Stochastic is and literally how traders can connect the
dots on both price and the Stochastics. Now the question becomes, Does the Stochastic agree with
price?
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Additionally, since the Stochastics is at the 20 line, this further indicates that the market should go up as
the market is over-extended to the downside (over 80 would indicate that it is over-extended to the
upside).
Using the 2-hour Nadex Binary Options to limit risk, two trades are executed:
USDJPY > 110.12 by 10 am New York time (long) for $47.75 of risk per contract (excluding exchange
fees)
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USDJPY > 110.16 by 10 am New York time (long) for $44 of risk per contract (excluding exchange
fees)
At expiration, both trades expired in the money (meaning price was above the strike) and the full profit
potential was realized. Since binary options have a maximum payout of $100, the realized profit, per
contract excluding exchange fees, were:
$52.25 per contract on the USDJPY > 110.12
$56 per contract on the USDJPY > 110.16
In the examples above, the trader entered off the divergence patterns described in this article using out of
the money binary options to limit risk (in case the trades did not work out) and were able to the profits
that the markets were offering.
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Swing Trading in Commodities
An unconventional approach to speculation and risk management
By Carley Garner author of Higher Probability Commodity Trading
Conventional wisdom suggests that the trend is your friend but in my opinion, there is evidence to
suggest although this is true in some cases, it is a false statement a majority of the time. In fact, on
average a trend trading strategy involves higher risks per trade and a lower percentage of winners than
most trading strategies. Only those with extremely deep pockets, nerves of steel, and intense discipline
are capable of trend trading profitably. Perhaps a better alternative for the average retail speculator is
swing trading.
Figure 1 depicts a common problem for trend traders; a high number of false signals can lead to
significant trading losses before a trend trade pays off. Unfortunately, many traders deplete their trading
account before the strategy returns a winner. In this example, a crude oil trader might have suffered a
handful of losses of roughly $3,000 each before catching a few good trades. Not all traders are capable of
losing $9,000 or more trading a single lot before the strategy turn around. Many would throw in the
towel prior to the money-making trades.
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Figure 1: Trend trading isn't the stress-free strategy it is advertised to be. A high number of false signals
can devastate a trading account before the going gets good.
Swing trading in a nutshell
Warren Buffet said it best: Be fearful when other are greedy and greedy when others are fearful. More
often than not, when market prices reach extreme valuations they revert back to some sort of equilibrium
level which is more sustainable in the long run. Ironically, human nature encourages us to be bulls when
a market rally is overstretched and bears after a commodity price has become historically cheap. History
suggests these are precisely the wrong times to get involved.
Swing traders, on the other hand, look for environments in which traders appear to be overreacting in
hopes of catching a ride in the other direction should cooler heads finally prevail. Generally speaking,
thrilling spikes higher or lower in price are a better time to fade the trend than to go along with it.
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Figure 2 depicts the natural tendency of a commodity market, which is to remain range bound.
Figure 2: It is said that markets spend 80% of the time trading in a range, and only 20% of the time
breakout out of a range. Assuming this is true, swing traders have an advantage on a per-trade basis.
Identifying extreme pricing can be done in multiple ways but the process often involves the use of
technical analysis. For instance, most swing traders use a combination of computer generated oscillators
and trend line support and resistance areas to determine entry and exit price. Yet, in my opinion, it
should also include some sort of evaluation of market sentiment; after all, swing traders are, in essence,
buying fear and selling greed. Swing traders can be position traders holding trades for a few days
to as long as a few weeks. Or they can be day traders holding positions for a few minutes to a few hours,
yet they are all attempting to profit from a trend reversal.
Because markets spend more time trading in ranges than they do redefining trading ranges, swing traders
commonly face higher win percentages relative to trend traders. However, the strategy sacrifices profit
potential in exchange for higher per-trade success probabilities.
News events could create opportunity for swing traders
News events such as the monthly non-farm payroll report, a Federal Reserve meeting, or even a USDA
crop report, have the potential to create significant waves of volatility. Despite the fact that most
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speculators attempt to get in position ahead of the news, they are probably better served by waiting for
the event to occur and then reacting to the price changes. This is because markets have a tendency to
overreact to the news, only to revert to a mean later on.
Picking entry points for swing trading
There are various methods of pinpointing support and resistance levels, but regardless of the manner
chosen traders will always be faced with the dilemma of which level to act on. The first acknowledgment
should be the more distant the support from the current market pricing, the more reliable it is but the less
likely it is to be seen. For example, a swing trader using the Fibonacci ruler must determine whether to
use the 23.6%, 38.2%, 50%, 61.8%, or 100% retracement levels as their entry price. An aggressive
trader might choose to execute a position if the price of the commodity falls 23.6%, but this trader is
facing a high probability of the support level failing. On the contrary, a conservative trader might opt to
wait for a full 100% retracement in the commodity price but this trader might not be provided with many
trading opportunities based on this criteria. In other words, swing traders must decide if their priority
will be quality or quantity in regard to trade entry.
Additionally, corroborating oversold indicators such as the RSI (Relative Strength Index) or Slow
Stochastics with technical support can work toward increasing the odds of a particular level holding. To
illustrate, if an RSI indicator is hovering near 30, a level traditionally identified as being oversold, at a
time the price of a commodity is sitting on trendline support, it is relatively likely a swing trader could
establish a high probability venture.
Day traders shouldnt pigeonhole themselves
Day traders are guilty of defining themselves in a way that deters them from holding positions into the
next trading session but I believe this is counter-productive. Whether a trader is using a swing trading
strategy to navigate the markets over the course of a few days, or a few hours, they should be willing to
hold positions beyond the close of the day session (4 PM Central for most markets). This is hard for
some day traders to accept because in their minds the primary benefit of day trading is to be flat by the
close and sleep in peace at night. However, I argue that traders should let their strategy determine the
time horizon of the trade, rather than allowing time to determine the strategy. Although you intend your
position to be entered and exited within a single trading day, the market wont comply with your time
parameters.
Accordingly, in order for any technical analysis trading method to work properly any signals entered
should be given time to mature. If this means holding a position intended to be a day trade into the
after-market hours, so be it. The futures markets are open and active nearly 24-hours per day; holding
beyond the close of the day session doesnt mean you have to go to bed with risk on the table, you can
offset the trade at any time in the evening hours and believe it or not, prices can be substantially different
from the day session closing price to the time you are hitting the sack. After all, by that time the Asian
markets are trading and the European markets are prepping to open. It is nave to assume the world stops
when the US markets close; they obviously dont.
Naturally, the ability to extend a day trade into a swing trade to be offset in the aftermarket, or even a day
or two down the line, requires the proper margin on deposit in the trading account. While a day trader
might only need $500 on deposit for each e-mini S&P 500 futures, they will need roughly 10 times that
amount to hold positions beyond the day session close.
Do stop loss orders protect swing traders?
The traditionally accepted form of risk management for futures traders is the stop loss order, or simply a
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stop. A stop loss order is one that becomes a market order once the commodity price reaches a certain
level. Although it can be used to enter a market, it is most often used as an exit strategy to either stop
losses or to lock in profits. For example, a crude oil trader going long a futures contract at $44.00 per
barrel might place a sell stop order $43.00 in an attempt to limit the risk of the speculation. If the price
of $43.00 is seen, the position is liquidated at the market. On the surface, this appears to be an attractive
form of risk management but upon further inspection, there are certainly drawbacks. In fact, I will go as
far as to say stop orders might be a disadvantage to traders.
Most traders have experienced the torture of being stopped out moments before the market moves in favor
of the trade. Markets are volatile. Stops tend to be elected at the worst possible time even if the traders
original idea was accurate. Unfortunately, this is a common occurrence; not only does it inflict severe
financial pain but it breeds negative emotions which eventually lead to poor judgment. Another issue
with stop loss orders is it encourages traders to place tight stop orders (close to the current market price)
to keep risk exposure at a minimum. However, a strategy of tight stop loss orders can be more harmful
than not using stop orders at all. If stops are placed too close to the market they are all but guaranteed to
get filled and several small losses quickly add up to large losses.
Depending on the situation, the use of long and short options might be far more efficient forms of risk
management than stop loss orders are capable of being. This is because options hedge price exposure
without the peril of premature exit of what might become a winning trade. For example, a trader going
short a futures contract could purchase an at-the-money call option for absolute protection and lasting
power without the risk of being knocked out of the trade on a temporary price spike. Similarly, a trader
who is short a futures contract could opt to sell an at-the-money put option. The result isnt absolute
protection, but because it is an antagonistic position acting as a risk buffer to protect the trader from an
adverse movement in the futures position.
Figure 3 depicts an example of a swing trade utilizing a long call option to create a limited risk
opportunity without the danger of being stopped out. Specifically, the trader is selling an e-mini S&P
500 futures contract at 2056 and then buying a 2055 call option for 12.00, or $600 (12.00 x $50).
Because the futures entry price is above the strike price of the call option by one point, that point is
locked in as a payout. Therefore, the trader faces a total risk of $550 until the option expires in three
days regardless of how high the S&P 500 goes. Also despite how high the S&P goes, the trade is
always active. Thus, if the market temporarily spikes up to 2120 the trader is sustaining the maximum
loss, but there is an opportunity for the market to reverse. In short, at that point, it cant get worse for
the trader but it can certainly get better. Alternatively, a stop loss trader would have been stopped out
with a large loss and no means to recover should prices reverse. Can you see the difference in odds of
success?
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Figure 3: Long options can be a great way to limit risk and maximize lasting power.
Conclusion
Making money in the markets isnt as easy as identifying the trend and jumping on the bandwagon. If it
were, we would all quit our jobs, purchase a beach house, and live happily ever after. Unfortunately, the
majority of active speculators lose money. Accordingly, it probably doesnt make sense to blindly follow
the herd into slaughter. Instead, traders should consider constructing a trading strategy that defies our
human tendency to go with the latest trend. Further, there are benefits to staying nimble in your
strategy, time horizon, and risk management techniques.
Carley Garner is the Senior Strategist for DeCarley Trading, a division of Zaner, where she also works as
a broker. She authors widely distributed e-newsletters; for your free subscription visit
www.DeCarleyTrading.com. She has written four books, the latest is titled Higher Probability
Commodity Trading.
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Page 45
What Is Forex Trading?
By Kurt Capra
Forex is short for foreign exchange. Forex trading is the trading of currencies against each other.
The Forex Market is the biggest and most liquid market in the world but stocks get all the press. Did
you know, all the worlds equity markets combined only trade about $85 billion per day? Compared to
over $5 trillion in average daily volume, forex markets dwarfs both the stock and futures markets.
In fact, I bet youve traded forex before and didnt even know it.
Have you ever traveled to another country and exchanged money? If so, youve! made a forex trade. (Ill
explain below)
But why should you trade forex in the actual financial markets?
Forex is short for foreign exchange, or the trading of currencies against each other
5 Reasons to Get Started in Forex Trading
Trading in the Forex Market is becoming more and more popular because it offers traders several distinct
advantages over stocks, options, and futures..
Here are the top five reasons to consider FOREX trading
1) Its Practically a 24/7 Market
Forex is a global market and is open 24 hours a day from 5:00 p.m. ET Sunday through 5:00 p.m. ET
on Friday. This is perfect for traders with flexible schedules, or for those looking to make money outside
standard standard exchange hours.
2) Liquidity
Since forex is a multi-trillion dollar market with expanded hours, there are virtually no gaps, effectively
bridging the gap (no pun intended) between day and swing trading. It is very easy to get in and out at
will, no matter the time, day or night.
3) You Can Short At Will
Nowadays, there are many restrictions put on stock trading, the uptick rule for one.
With forex, there are no limitations on the currencies you trade. You can short at will.
4) Lower Trading Costs
Most forex accounts are commission free. Plus, there are no exchange, data, or platform fees. The only
cost you have as a forex trader is the spread, or difference between the bid and ask, which is always
visible for you to see. That makes forex trading much, much cheaper than stocks, options, and futures.
5) Leverage
Because the forex market is so liquid, brokers will extend you significant leverage up to 50:1, and
even higher outside the US.
However, leverage goes both ways.
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Just as easily as you can accelerate profits, you can also suffer accelerated losses. Thats why you must
learn a comprehensive trading methodology.
Now that you understand the basics of forex, and its advantages, its time to trade!
How Forex Trading Works

Lets take a look at an example of a forex trade, as illustrated by a trip from the United States to Europe.
When you leave, 1 euro is worth roughly 80 US cents.

And when you get home, instead of exchanging your euros back to dollars, you decided to hold onto
them as a memory. And 2 years later, 1 euro is worth $1.20.
You made a $0.40 profit for every euro you owned.
Forex trading in the markets works the same way. However, many traders dont understand, or are afraid
of trading forex.
One of the biggest misconceptions about forex is that its only for the pros. That was true years ago.
But its 100% false today. The advent of online trading in the 1990s not only brought stock and options
trading to the masses, but forex too.
Virtually all online brokers will allow you to trade forex, and you dont need much money to get started.
A currency pair is made up of a combination of two currencies:
1. The first currency is referred to as the base currency.
2. The second currency is called the counter currency.
How to Read a Quote and Trade Forex
Currencies are just like anything else that trades on an open market.
They fluctuate as supply and demand changes. And, remember, there are no restrictions! You can buy and
sell at any time, day or night.
With all this buying and selling, it is our job to find buy the strongest currencies and selling/shorting
the weakest.
We do this by trading the various forex pairs.
There are two main ways to analyze strong and weak currencies: fundamental and technical analysis.
Looking at a forex pair for the first time may seem confusing, but it is actually quite simple. If you are
looking at the EUR/USD pair, the first currency (EUR in this case) is called the base currency and the
second currency (USD in this case) is known as the counter currency.
Honestly, the terms do not really matter. The bottom line is, what any quoted forex pair tells you is how
much 1 unit of the base currency (the first) is worth in the counter currency. (the second)
MAJOR FOREX MARKET HOURS
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So if EUR/USD is at 1.20, 1 euro is worth $1.20.
Whenever you place a trade, long or short, you are doing so in the base currency. Meaning, if you go
long EUR/USD, you are buying the euro and selling the dollar. Conversely, if you were to sell short,
expecting price to decline, you would be selling the euro and buying the dollar.
So, if the EUR/USD pair is moving up, it means the euro is rising in value relative to the dollar.
Just like anything else, you want to buy low and sell higher, or sell short high and buy back lower. At
this point, you might be saying, how can I buy or sell the euro or yen if my account is in US dollars?
Well thats the beauty of brokers and speculation. You are simply borrowing the currency when you
initiate trades, and when a position is closed, your trading platform will do all the calculations for you.
What is a PIP?
A pip is the smallest incremental move a forex pair can make and its how you calculate profits and loss.
Most pairs are quoted to the fourth decimal place, which is how pips are calculated.
If the EUR/USD moves from 1.1150 to 1.1155, it has risen 5 pips. And from 1.29521 to 1.29421 is 10
pips.
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Get it?
The only exception is on Japanese yen pairs, which are quoted to the second decimal place. If the
USD/JPY moves from 79.337 to 79.387, that would be 5 pips.
JAPANESE YEN PIPS
So how much is a pip worth?

That depends on your position size and the pair that you are trading.
PIP is an acronym for Point In Percentage. | It is similar to what most markets term a point.
Forex Trading: The Bottom Line
Forex is intimidating to many traders, but there is nothing that makes forex more inherently more
difficult than stocks, options, and futures.
And as I illustrated, it offers significant advantages in terms of costs, liquidity, and leverage. But if you
want to succeed in forex, you must master a trading methodology and use a comprehensive plan.
We believe that technical analysis is the only truth in trading.
Fear and greed rule the markets, so we focus on the chart patterns that illustrate that greed.
Kurt Capra | VP of Training and Education
T3 Live, LLC
1 State Street | 10th Fl | New York, NY | 10006

Phone: 888.998.3548 | Mobile: 845.494.8921
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Page 50
Trade with the Underlying Structure of the Financial
Markets
By Thomas Barmann of NeverLossTrading
Successful trading is based on finding and following repetitive supply- and demand patterns: The price
change you see is a result, not a variable and what we want to demonstrate here is how you can find and
participate in directional price changes before they happen.
In consequence; what we want to do, is predicting the future price happening with a high probability.
Prediction connects the subjective and the objective reality.
This means, you can test what we show you here in the real world: Your trading, where you can compare
how well you predict trade entries and exits today and how, what is shared here with you, can make a
change in your trading future.
Reliable predictive models need to be based on real world happenings: In our case, the financial markets,
which are dominated by institutional investments. Let us name the biggest players and then cluster their
action and interaction, so you can take advantage by this knowledge.
Chart-1: Worlds Biggest Institutional Investors
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* Funds: Hedge Funds, Mutual Funds, Exchange Traded Funds
Institutional investments stand for more than 95% of all financial market transactions; however
institutions are not a homogenous group. They take different roles; have different strategies and market
actions. In the next step, we want to characterize those actions and translate them into variables
(mathematical models) that can help you to predict the future by indicating when a potential price change
is on the brink of happening: Following the model, that only those models that replicate the reality, have
a high likelihood to predict the future.
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Our hypothesis: The action or better interaction of these market participants produces price patterns that
we can identify and follow: The question is how?
For years, moving average crossings are propagated to help a trader to find key entry points for their
trading or better investing: Even on TV, the investment into stocks or other assets is related to the 50-
day and 200-Day moving average crossing.
If trading was that easy, everybody would make money with it: Day traders, swing traders, and long-term
investors are in need of a different strategy and understanding to succeed in trading the markets: A Bot
(auto trader) can be programmed in 15-minutes to act on moving average crossings and you can sure
imagine that such strategy is too simple to work for you; however, what can work?
To build a model that replicates the real market transactions, let us define the key strategies used by the
institutional investors to profit from the markets:
A) Pro-Traders
They trade their own account (Prop Traders), offer specialized funds (to institutions only) and mutual
type funds. To manage their investments, they focus on selecting the best or worst assets in class. In any
case, they have to act with a time delay when investing or disinvesting; else, by their sheer investment
size, they create a spike in supply or demand which is counterproductive to their intention to accumulate
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or sell specific assets.
B) Liquidity Providers
By offering at the bid- and the ask side of the market, liquidity providers can only survive long-term
when they can re-balance their inventories with the underlying motion of the market: When they
recognize a higher demand, their aim is at a certain price point to flood supply and thus run the prices
down, stack up their inventory at lower prices and then sell accumulated assets back into the market at
rising prices. This way, the real profit is generated and not by the penny margin between bid and ask.
The same accounts(,) when assets they hold(,) sell off: With a decreased supply, those who want to cover,
need to buy back at rising prices, helping the liquidity providers to re-balance their inventories prior to a
stronger market drop.
C) Followers
The segment we call followers has a wide reach: from fund managers, to insurance companies, various
banks and so on. They all participate in the markets by following the direction initiated between the Pro-
Traders and Liquidity Providers.
The interaction between leaders, followers, and gate keepers produces typical price patterns that repeat
themselves on multiple time frames, and for all asset classes: Stocks, Options, Futures, and FOREX.
Why meaningful time frames?
As a predictive trader, you need to differentiate signal from noise: Signal being the predictive happening;
Noise a random happening or signal for being the true happening and noise distracting us from the real
happening.
When you operate in very short time frames, you are acting in the middle of the natural volatility or
noise of the market and thus the predictability to interpret the overall price action is reduced.
If trading is your hobby, you can freely choose what you want to do: In hobbies, we assume to sink in
money. If your aim is to trade for returns, you will find value in what we share.
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We teach in our mentorship which time-frames, tick-frames or ranges have a higher probability to
conclude in the desired direction than others.
Back to price patterns: Please see our graph of a typical price development, instigated by a Pro-Trader
demand and how the prices follow a specific flow, triggered by institutional interaction:
The curve speaks for itself:

Pro-Traders trigger an additional demand for an asset, which increases the price.
Followers jump on the opportunity, increasing the price by their demand.
Gate Keepers flood supply to rebalance their inventory: accumulating assets at lower prices to sell them
back into the market on the second demand spike: Leaders initiated and followers driven above the prior
high price point.
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We will show you in the following, how you will be able to find key entry and exit points on this graph
to participate in the institutional interaction for your benefit, making the graph above not only a
theoretical example, but a road map for your trading success.
Math is the science we use to detect and portray those institutional investor-based price patterns. By our
research, we state the following:
Specific price patterns are infinitely repeating and self-similar across different scales: various time frames,
tick charts, range bars.
They are created by repeating a simple process over and over in an ongoing feedback loop: an initiation
of a price change causes a reaction.
Driven by recursion, they are part of a dynamic system and thus, give us an ability to predict the future
happening with a high probability.
Let us take a simple example and you will sure be able to see how the daily chart for AAPL follows the
price pattern of chart-5 and please consider that chart-4 is a schematic and the price curve does not follow
a fixed time sequence (many systems make the mistake to force feed a time-based happening).
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The chart shows you how our indicators help you to participate at each of the demand-triggered phases:
On the orange signal, a Pro-Trader demand was indicated early in the price curve.
Followed by a blue signal, indicating that followers bought AAPL shares.
The blue signals specify by a target dot, how far the potential price move might reach; helping you to
not getting stopped when the inventory re-balancing takes place.
Prior to earnings declaration, supply came in and AAPL prices dropped, allowing key asset holders to
buy back the asset in demand at lower prices, to then sell after earnings at higher prices to those who
created the second demand phase.
The chart shows you: Three solid trades with positive outcome. Imagine how your trading would be if
you had the tools on hand which are giving you strong predictability at specific supply and demand
patterns?
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We developed multiple systems, which we all tailored to your individual wants and needs. All systems
are supplemental and can be combined with each other. We have many traders, who added a second or
even third system to an existing one for either/or achieving an even higher accuracy or a higher
participation rate.
In summary: there are four dimensions to measure and extrapolate a pre-price-move happening:
- Price Momentum Change measured as acceleration in the price move of the underlying.
- Statistical Volatility Change: price moves per observed time frame.
- Price Move Constellation over time.
- Volume Momentum Change in the observed time frames, similar but measured differently to price
momentum change.
In a simple summary: with the help of multiple algorithms, pre-stages of a change in supply and demand
that might lead to a continued price move are detected and reported on your chart; however, trades are not
immediately accepted, other market participants have to confirm the new price direction and only when
this is given, a trade or an investment is accepted.
For our trading, we use a model where our indicators and scanners express and find the initiation of a
potential price move at an early phase and we only trade, when other market participants confirm the new
price direction by either driving rising prices up or falling prices down, using the following model:
As a trader, you operate at any point with clearly spelled out price thresholds for entering a trade: Buy >
$100, Sell < $90.
This way, you can prepare your trade entries in advance with Buy-Stop- or Sell-Stop-Orders, getting you
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only into a trade when the specific formulated conditions are reached.
In addition, at entry, you as a trader should know how far potentially the price move most probabily
reaches before an opposite facing price move is initiated.
In our systems, we use a volatility-based measure called SPU: Speed Unit, which defines bar by bar the
minimum expected price move at trade entry.
Prepared with a defined entry and exit price, you now need to find your stop price level on the chart to
decide if the odds at trade setup are in your favor or not.
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Again, the pro-trader demand initiation was indicated by an orange signal and then followed through,
ending in the current stage, where the inventory is rebalanced.
Using real time data, NeverLossTrading algorithms paint the actual happening with the help of modern
vector graphics on your chart, helping you to easily spot and follow supply and demand patterns that
repeat themselves for all asset classes and all considerable time-, tick- or range-frames.
If you are rather a long-term investor, we work with you trading the same happening like this:
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When trading short time frames, please consider that you might trade in a high noise density, which
distorts the signal; however, our systems still deliver high probability trade entries, in particular when
you follow the concept of:
Pro-Trader initiated a first level of demand.
Followers either trade with or against the new direction.
When the followers trade with the new direction by taking the high of our signal out, we enter a trade
and understand that a price move does not go forever and thus, we take a meaningful bar- or time-based
exit.
This way, you can follow a repetitive pattern that is supply and demand-based and describes the reality,
where Leaders, Gate Keepers, and Followers go to the market with different strategies; however, you can
now spot and follow the new price direction with our systems that paint the happening real time on the
chart for you.
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Does that also work on very short time frames?
Yes, it does, let us take a look at a 10-minute crude oil futures chart:
How does a selloff scenario look like?
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Take a look at a live example:
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Right after a new demand driven pattern concluded:
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On the chart, crucial price turning points are highlighted and offer you the opportunity to: Buy>141.22;
Buy>157.25; Buy>158.95 and trade along with the building price pattern.
With the right tools on hand, you can now spot and follow supply and demand patterns when they
happen, right from your chart.
Welcome to trade what you see, by NeverLossTrading.
In this publication, we featured NeverLossTrading Top-Line, which includes scanners, watch list
indicators, and seasonality-based trading. If you feel those tools are not needed for your type of trading,
we offer NLT Top-Line Light.
Before we get you excited on a budget offer, let us talk about what will not be included:
The NLT Seasonality Projections Study gives you indications where prices have a high probability to
accumulate, breakout, or revert to. Let us take the GS example and add the study as a purple line.
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The purple NLT Seasonality Study shows you where prices have a high probability to accumulate: When
the actual price curve meets the seasonality price curve.
With the right signals on hand, you can then trade the breakout from the seasonality curve or in case of a
reversal signal, the price move to the seasonality curve.
Some traders, by their specifications, do not realize some of our offering in NLT Top-Line:
If you are purely interested in day trading, this study is not of much help for you; however, as a swing
trader or long-term investor, you sure want to know where prices longer-term will go.
Market scanners and watch list scanners allow you to filter out real-time, which assets find a change in
their supply and demand pattern. If you only want to trade five assets, they are not needed.
For those traders, you can realize the signal strength of NLT Top-Line without paying for features that
you do not need for your trading: Then ask for NLT Top-Line Light.
If you like to learn how to trade with clearly defined entries, exits, and stops: Following those chart
Page 66
patterns, we can help you with multiple systems and mentorships. To find out what suits you best,
please find here a short overview of our offeringclick.
If you feel that one of those systems suits your wants and needs as a trader or investor, feel free to contact
us for a live demonstration without obligation:
Call: +1 866 455 45520 or contact@NeverLossTrading.com

We are training and coaching one-on-one; capacities are limited, so do not miss out.
If you are not already part of our free trading tips, webinars, and alertssign up here.
We are looking forward to hearing back from you,
Thomas
Disclaimer, Terms and Conditions, Privacy | Customer Support
Bio
Thomas F. Barmann Owner and Inventor of

NeverLossTrading and TradeColors.com
Author of the Book: My Stock Market Income
and Your Trading Career as a Private Investor
His first introduction to trading came when he was 22 years old (more than 30 years ago). Over the years,
he acquired a wealth of knowledge, how private investors can make money in the markets by focusing on
constant income. The term NeverLossTrading does not promise that you never lose a trade it origins
from the idea of repairing a trade instead of taking the stop loss and Never Stop Loss Trading was a bit
lengthy.
He trades by taking advantage of spotting and trading institutional price moves, minimizing risk and
compounding interest.
His aim is to make the world a better place by sharing knowledge and giving education. A very small
group of people keeps the knowledge how to trade the financial markets and those who enter, without
being well prepared, mostly donate their money to those who know.
Page 67
NeverLossTrading and TradeColors.com are easy to follow, market proven trading and investing
concepts he is sharing with you.
Thomas is the author of two books and many publications:
My Stock Market Income

Your Trading Career as a Private Investor
Please check:
http://NeverLossTrading.com to find out more about activity based, algorithmic trading with human
interaction.
Other Publications and Contact:
Intro-Video to Algorithmic Trading with Human Interaction
Video introduction and trading systems comparedclick here or cut and past this URL into your
browser: https://www.youtube.com/watch?v=DQfHHKgeaVo&feature=youtu.be
Blog on Activity Based Algorithmic Trading
Stay informed about the newest developments and opportunities around the financial markets by checking
or subscribing to our wordpress- and blogspot posts by clicking the referring link.
Join our Facebook Community
Be part of the happenings and news we share: https://www.facebook.com/TradeWhatYouSee
NeverLossTrading
A Division of Nobel Living, LLC
401 E. Las Olas Blvd. Suite 1400
Fort Lauderdale, FL 33301
Call: +1 866 455 4520 or contact@NeverLossTrading.com
http://NeverLossTrading.com
Page 68
Planetary Harmonics and the Law of Vibration in Astro-
Trading
By Tim Bost
Astro-traders enjoy a unique advantage that most other participants in the markets are completely unaware
of. It's the ability to coordinate an understanding of recurring planetary cycles as an influencing factor in
anticipating the movements of the markets. That ability not only reveals short-term trading opportunities
that can be extremely rewarding; with a little extra exploration and reflection, it also opens the door to a
deeper, richer knowledge of what really makes the markets work.
Those planetary cycles can be long or short in duration. In either case, however, with the ability to
examine these cycles and to observe the correlations they have with periodic rhythms in the markets, as
experienced astro-traders we can gain a perspective which often proves to be a real asset, both in our
ability to analyze market dynamics more comprehensively and in our pursuit of more accurate and
effective market timing.
Markets are always multi-dimensional, and we can improve our forecasting accuracy and our recognition
of trading opportunities if we expand our awareness and move past limited assumptions. Experienced
astro-traders know that some of the most powerful insights into market dynamics and trading potential
come from the interactions of pairs of planetary cycles.
While a single planetary rhythm, like the phases of the Moon for example, can often help us identify
trading opportunities that we might otherwise miss, when we combine the cycles of two different planets
to create an aggregated perspective, exciting things begin to happen.
This combined perspective often reveals harmonic interactions and nuances that might otherwise escape
our observation. Those insights can activate a livelier and more comprehensive understanding of what's
really going on in the markets, giving us even greater opportunities to profit from the cosmic rhythms
that drive price and time.
Because planetary cycles are immutable natural phenomena, they infallibly resonate with the core essence
of the Law of Vibration. As astro-traders we can thus be confident that we have access to the kind of
foundational energies which perpetually express themselves in diverse human endeavors, in economic
activities, and in the kaleidoscopic harmonics of the markets.
For most of us, however, the quest for real understanding of the Law of Vibration is a humbling
experience. As we grapple with the intricacies of the markets and persist in our efforts to discern their
underlying resonances, it's easy to feel confused or overwhelmed. Even when we begin to comprehend
some of the complexities of the harmonic interactions in the markets, we can often feel awestruck at the
remarkable implications of the knowledge that is being revealed to us.
That's why observation of planetary cycles is so important.
There is, of course, much more to the Law of Vibration then a simple acquaintanceship with astrology.
Even so, planetary cycles are such pure and reliable expressions of the Law of Vibration that they can
provide clear guideposts along the way, giving us an essential frame of reference as we strive to
understand the immutable rhythms that underlie the movements of the markets.
The Power of Planetary Pairs
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While there are many ways to connect planetary energies with markets dynamics, a reference to integrated
pairs of planetary cycles offers us a reliable starting point for expanding our awareness not only of the
essential nature of the Law of Vibration, but also of the more immediate and pragmatic opportunities that
we can access in the markets through the astro-trading advantage.
As an example, let's examine the interactions of the cycles of Mercury and Neptune. As we do so, we'll
consider some of their symbolic and esoteric implications, and then look at empirical research which
reveals specific possibilities for market analysis and effective trade timing.
The symbolism of these two planets is of particular interest to us in the context of astro-trading. Mercury
is associated with communications, with the transfer of value and ideas, and with commercial activity of
any sort, including the ongoing auctions on trading floors and online exchanges. And, as the book
Mercury, Money and the Markets points out, Mercury is also a key planetary factor in short-term market
cycles.
Neptune, on the other hand, has a symbolic connection with grand ideas, confusing circumstances, and
vaguely-defined concepts. At its extremes it can empower both creative imagination and outright
duplicity, and is often associated with self-deception. Neptune is important to us as astro-traders because
it can trigger speculative excesses, contributing to major price swings, manias, or market panics.
When we look at the combined effect of Mercury and Neptune, then, we are considering the contrasts
between rational business as usual communications about the flow of transactions in the markets on the
one hand, and the urge to succumb to distorted thinking, unwarranted apprehension, or speculative
fantasies on the other. In short, it's the kind of mental and emotional battle that many traders confront
almost every day, as they evaluate market trends and search for profitable trading opportunities.
Numbers and the Law of Vibration
Yet while those symbolic dimensions can elegantly connect us with the psychological nuances of the
trading experience, the core resonances that Mercury and Neptune have with the Law of Vibration are
more clearly experienced through numerology and mathematical relationships. After all, as W. D. Gann
pointed out so directly in his work, the Law of Vibration is ultimately an expression of numerical
harmonies and connections, and planetary dynamics are essentially just expressions of those numerical
verities.
In terms of their relative orbital positions in the solar system, Mercury is the first planet from the Sun,
while Neptune is the eighth. There is thus a strong eighth-harmonic reverberation between these two
planets. Our experience in the markets over many years has shown the consistent dominance of eighth-
harmonic energies in most trading situations, so this particular planetary reverberation is especially
appropriate for astro-trading.
Mercury's orbital period around the Sun is approximately 88 days, while Neptune has an orbital period of
60,182 days, or 164.8 years. Coincidentally, Neptune's orbital period is 164 times the length of the
orbital period for Mercury.
It's thus worth paying particular attention to the number 164 if we want to understand Mercury/Neptune
resonances.
164 is the product of 19 X 36 with 19 being a prime number and 36 = 62. From the perspective of
traditional numerology, 164 reduces to 11, which is considered (along with 22 and 33) a Master
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Number with special significance. It represents a powerful blend of active and receptive energies, with a
focus on uniting mundane human concerns with a more highly-developed spiritual or intuitional
consciousness that transcends rational experience. In some respects, the nature of the number 11 is quite
similar to the symbolic nature of Neptune, which mysteriously allows the realm of spirit to penetrate the
realm of matter in a uniquely diffuse and spell-binding way.
As we look at Mercury/Neptune dynamics, then, we must be prepared for the force of Neptune to take on
a dominant filtering role in the relationship, since the essence of the connection as characterized by the
potent number 164 (and its reduction to the Master Number 11) carries strong Neptunian connotations
by itself. On top of that, the Neptunian energy of the Master Number 11 and its eighth-harmonic
projections are embodied in Mercury's individual orbital period of 88 (8 X 11) days. And, of course, the
numerical components of this entire set of correspondences are extraordinary in their own right.
The number 19 is noteworthy in several ways. As we've already observed, 19 is a prime number, which
the Pythagorean tradition would refer to as an incomposite number, based on an analysis with the classic
Sieve of Eratosthenes, which had its origins around 230 B.C. In numerology 19 is often considered to be
a potent number of transition, since its emphasis on 9 signals times of completion and conclusion, while
its reduction to 1 is a sign of new beginnings.
But 19 is also significant because it is the integer closest to 18.97367 the square root of 360. Since 360
represents the full unity of the circle, providing us with a consistent context for astrological studies as
well as for explorations of harmonic structures, this square-root-of-360 connection is extremely important.
It represents an esoteric squaring of the circle that connects Mercury/Neptune interactions with some of
the most powerful forces operating in the markets today.
We should keep in mind, however, the fact that 19 is just one of the two major factors that is brought to
our awareness through the Mercury/Neptune connection of 164. The other is 36, which is 62, or 6 X 6.
And according to the Pythagorean tradition, 6 is the only perfect number between 1 and 10, and aside
from 28, is the only perfect number between 1 and 100.
The Pythagoreans grouped all even numbers into three classes: superperfect, deficient, and perfect.
Superperfect numbers are those even integers for whom the sum of their fractional parts is greater than
themselves. If we take the number 24, for example, we find that 1/2 of 24 = 12; 1/3 = 8; 1/4 = 6; 1/6 =
4; 1/12 = 2; and 1/24 = 1. The sum of these fractional parts (12+8+6+4+2+1) is 33, which is greater
than 24, making 24 a superperfect number.
Likewise, deficient numbers are those even numbers for whom the sum of their fractional parts is less than
themselves. 14 is a deficient number because 1/2 of 14 = 7; 1/7 = 2; and 1/14 = 1. The sum (7+2+1) is
10, which is less than 14.
Perfect numbers are quite rare. For these even integers, the sum of the fractional parts is exactly equal to
the original number. The Pythagoreans would thus describe 6 as a perfect number because 1/2 of 6 = 3;
1/3 = 2; and 1/6 = 1. The sum (3+2+1) is 6. As noted, the next perfect number after 6 is 28, followed by
496 and 8,128 these four are the only perfect numbers between 1 and 10,000.
The number 6 was held in very high esteem by the ancient philosophers as the perfection of all parts,
representing, according to the conception of Clement of Alexandria, the creation of the world according to
both the ancient Mysteries and the Biblical prophets. And since 36 is 6 X 6, it could be considered the
perfection of perfection of that creative intelligence.
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Key Gann Connections
We shouldn't overlook the fact, however, that 36 is also the product of 4 X 9. The importance of these
numbers is evident to any serious student of W. D. Gann's work, and they have particular significance in
the quartering of the year by the cardinal axis of the zodiac as well as in the powerful numerical
relationships revealed through the application of the Square of 9. All of these strong resonances are
reflected in the Mercury/Neptune dynamics that impact the markets.
Knowledge of W. D. Gann and his contributions to astro-trading can make a major difference in practical
trading results; you can download a free copy of the Expanded W. D. Gann Financial Time Table at
http://bit.ly/GannTime as a starting point for Gann studies.
Practical Applications
With so many potent correspondences to the interactions of Mercury and Neptune, we have a lot to draw
upon as we look for expressions of the Law of Vibration that can serve as useful tools for forecasting and
market timing. To start with, we can examine cyclic patterns that relate to 6, 11, 19, 36, or 164 in
various time frames (days, weeks, months, or years). And of course we will want to pay close attention to
the fourth harmonic (90 increments), the sixth harmonic (60 increments), the eighth harmonic (45
increments), and the ninth harmonic (40 increments) in our analysis of prices and trends.
But although the numerological and symbolic implications of Mercury and Neptune are fascinating to
contemplate and although they can in fact give us key insights into the inner workings of the Law of
Vibration, as prudent astro-traders we must always make sure that our trading behavior is based on
observation of real market action and on empirical back-testing of planetary effects. When we look at the
ways that Mercury and Neptune interact in specific markets, what we find can often be surprising.
To begin with, the strongest planetary impacts do not always coincide with the tenets of ancient
astrology, or with our typical assumptions about planetary strength. For example, when we back-test
Mercury/Neptune effects on the S&P 500, it is not the first-harmonic or second-harmonic alignments that
prove to be the most important.
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The conjunctions of Mercury and Neptune (shown as points A on this chart for the S&P) are
essentially neutral in their impact on the price actions in the index, with the S&P equally likely to
respond in a bullish or bearish fashion following the planetary alignment. The 180 Mercury/Neptune
oppositions (shown as points B on the chart) have a slightly bearish bias, however, and are about 51%
more like to be associated with isolated highs in the S&P than they are to be connected with isolated
lows in the index. Even so, the Mercury/Neptune oppositions do not have a particularly strong
correlation with negative trend reversals. As the research that was published in the book Mercury, Money
and the Markets (Harmonic Research Associates, 2012) has illustrated, the S&P 500 is most likely to hit
a trading top when the angle of separation between Mercury and Neptune is 90, with trading lows most
likely to occur when that angle is either 226 or 293.
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If we go to the London Stock Exchange and examine historical trends in the FTSE-100 Index, there's a
different emphasis revealed by the interactions of Mercury and Neptune. The strongest impact comes
when the two planets are separated by 141 it coincides with a trend reversal about 74% of the time.
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For the All Ordinaries Index in Sydney, Australia, the critical separation between Mercury and Neptune is
199.5 it is associated with significant price reversals about 72% of the time, and its effects have
sometimes been quite dramatic.
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A trip to India and the SENSEX on the stock exchange in Mumbai reveals a particularly strong
correlation between trend reversals and alignments between Mercury and Neptune with an arc opening of
280 it has proven to be an accurate indicator 88% of the time, and brings a slightly bullish bias in its
actions on this index. Note that 280 is 10 times the perfect number 28, and is also 7 X 40, in an exact
expression of the ninth harmonic.
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We can of course apply planetary dynamics to commodities markets as well. In this chart for the trading
action in Gold, we see the impact of a Mercury/Neptune angle of 293. In about 70% of the cases in
which it has occurred, it has corresponded with price reversals in the yellow metal.
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Our final example is of another stock index the tech-heavy NASDAQ Composite. Our back-testing has
shown that Mercury/Neptune angles of 65 have a strong correspondence with the trading action in this
index. Even so, the net effect is essentially neutral in terms of trend direction, although this planetary
angle is associated with isolated trading lows about 70% of the time.
Adding It All Up
By this point, the conclusions from this exploration should be fairly clear-cut. First of all, an
examination of the dynamic relationships in planetary pairs can give us extraordinary insights into trends
and actions in the markets.
Secondly, if we take the time to dig a little more deeply into the esoteric dimensions of those
relationships we can discover important keys for more fully understanding the Law of Vibration and
implementing it in our own trading and market analysis. If we are willing to persist in this endeavor, the
multiplying rewards can be enormous.
Finally, as our trading charts illustrate, there's the important lesson that even though planetary pairs can
be enormously powerful in their impact on the markets, they nevertheless influence different markets in
different ways. There's simply no substitute for careful observation and rigorous back-testing. And when
we combine empirical results with esoteric insights, we can truly begin to appreciate the full dimensions
of the astro-trading advantage.
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Secrets of the Trapped Trader Oscillator
By Rob Mitchell
One of the biggest issues that intraday traders have to deal with these days is high tech trading that is
driven by lightning fast execution and analysis capabilities that are driven by computers that typically
reside at the exchange and that can see and respond to order flow at a level 99% of all traders could not
compete with. Often these algorithms are written by high level mathematics graduates from top
institutions and these guys really know how to find and exploit an edge in the market in fast time frames.
Often trading activities like this have high volume and trading activity from big money players,
algorithmic traders and high frequency traders. Today I am going to show you solid and proven
techniques for exploiting where these traders and other traders get on the wrong side of the market that
can help you to effectively trade at a discount due to mispricing associated with these kinds of trading
activities. These mispricings of other traders is a very valuable thing for you to know and understand.
In my many years of trading in a live trading environment, I have learned that keeping track of
complicated order flow computations can be mentally harrowing for traders. In addition to this, and in
order to make best benefit, you need to be able to execute at a level you are not likely able to compete
with. Further still, these traders often pay next to nothing in commission and have very large amounts of
capital to allocate to these trading operations.
So, the question becomes how does a regular retail trader find a tradable edge in such an environment?
The answer is fairly simple but the details of it are what makes all the difference, so take a journey with
me into a world that can a) benefit in the market with a solid edge and b) that can be executed and c) that
a trader can mentally handle and d) benefit from in the moment. This kind of trading is fun and profitable
and bypasses trying to be something that you are not; a trading Bot.
First and foremost, you want to trade in a market that has consistent potential for gain. This is so
important, I cannot stress enough this single decision that many traders often don't really even think
about. For this, my first choice will be crude oil futures (though it works in any reasonably volatile
market). Why crude oil? Because it moves over a 85 ticks per day ($850 per contract) in general for the
day session and has a 10 tick execution structure. This makes the cost of getting into a trade quite low
because the bid ask spread in this market is $10 where many other markets are $12.50, $31.25 or more.
This is crucial to managing costs while still having a large potential for return.
Back to that $850 range mentioned above. As of this writing, in each of the last 21 days (approximately
a month of trading days), only 3 days did not meet this level of range. This means 81% of the time you
move $850. Often it is much larger, but lately, and/or as of this writing, it happens to be a bit low.
This kind of analysis is super simple and can be done on a chart by eye with a range indicator applied in
just a few minutes.
Another interesting characteristic of this market is something that we call "Stretch" in the Oil Trading
Room. This term was originally coined by renowned trader, Toby Crabel. It is simply how far the
market tends to move off the open before the low or high of the day is formed and it goes the $850 we
described above in the other direction. This is also like asking the question, "at what point do I know
the low or high of the day is in place." If I know the high or low is in, then I can trade for the remainder
for the expected range with 81% probability and that is a very valuable thing indeed! Let's take a closer
look. Let's say we are able to fire our trade at $200 off that low or high. Well, if $850 is the minimum
expected then that leaves $650 of potential. This happens on many days and, in fact on many days it is
much more.
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Now, you may have noticed at this point we started talking about bots and high level math grads and
super fast computers at the exchange etc. But here we are using the same kind of intelligent logic these
high level math guys are using, but we are putting it into a scale WE can actually use and benefit from.
And, that is a very nice thing! A very nice thing indeed, is it not?
Now that we have a good idea as to the playing field, and a good idea of how the game is played, now
what we want to do is figure out a way we can exploit that in such a way that we can be relaxed (not in a
state of mental overload), and entirely aware of what the market is trying to do within reasonable limits
when we take a trade. In fact, with what I am about to show you, those Bot guys just might be on the
other (wrong) side of the trade you are taking. Why? Because I am going to show you another secret;
that of exploiting places on your chart where traders are trapped on the wrong side of the market and
where you can benefit from that in the general direction of that $850 / 81% expansion!
In order to do that, we are going to look at the Trapped Trader Oscillator (from IndicatorSmart.com) that
we use in the Oil Trading Room every day. We have turned this level of analysis into an art form there
and many traders are learning to do the same every day. So, here I will show you a couple patterns and
charts so you can see how this works in a way you can certainly benefit from every day if you put your
mind to it!
Pattern #1: Exploiting the morning "Trade Away"
In the chart below, I have each 30 minute period of the day labeled A, B, C etc. One trade we can look
for that was described above is trading away from the test of the range that ends up being the low or high
of the day on most days. This often, but does not always occur, somewhere around the completion of the
AB periods. This occurs after the market has established the "Stretch" for the day (remember above?).
Now, on this particular day (see below), the market traded through A and B period and then what
typically happens is you retrace into the original run up and then the Smart Trapped Trader Oscillator
helps us to find the traders who got on the wrong side. We know there is good potential here for range
expansion. So, let's take a look!
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Before continuing further, let's cover a simple rule that will make this even clearer: When price is higher
and the Trapped Trader Oscillator drops below prior lows, then there are trapped traders are on the wrong
side if the market reverses. When this occurs, they are forced out of the market going the wrong way.
This tends to propel price action in the direction of your trade. We always trigger into the trade on the
background color change on the chart. So to buy, that is where the pattern exists on the Smart Trapped
Trader Oscillator and you get a green price bar and a green background color change, or a red background
and a red price bar to sell. Knowing this, let's take an even closer look with a textbook example.
Let's take another look at the chart above and the relationship between the Trapped Trader Oscillator and
the price action. During the first hour of the day (AB periods) the market had a high and low of 45.53
and 45.15 respectively. This is a 38 tick range or $380. The market then retraced back into the same low
from earlier in B period forming a double bottom (about 7:01 AM). At the same time, the Trapped
Trader Oscillator went below the last three prior lows, making it the lowest value of the day. At this
point, the price was 45.27 which is only 12 ticks off the low of the day. If we are expecting 85 ticks
minimum with an 81% probability that we discussed above, then we would have 85 minus 12 ticks of
potential, or 73 ticks ($730 of potential) with a better than 80% probability. Range promptly expanded
up to the C period high or, about 60 ticks from the entry arrow marked on the chart for about $600 in
total potential per contract in about 12 minutes. This set-up doesn't happen exactly this way every day
because there are themes and variations of this movement that fall into this general category of trade. We
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also have other simple statistics that support the trade.
This general theme of knowing a) the range, b) the probability and c) where the traders are trapped creates
ongoing potential throughout the day.
We have not expired our entire expected range yet (remember it is 85 ticks?), especially if we get a nice
retracement here. So, let's take a look at the next alternation:
The next alternation going higher, occurred after the market traded down 25 ticks off the high in period
C. At this point, it retraced to 45.72 which was about 60 ticks off the low. If we are expecting a
minimum of 85 ticks, then 25 more are expected. In this case, you weigh out as a trader if you want to
take the trade based on the risk you are assuming (often we can trade these with about 10-15 ticks of risk
on average or less). So, you take the trade at the arrow, and ride it up into the 85 tick level in D period.
Period E was the high of the day and a new trend downward was established following that.
So far we have covered two Smart Trapped Trader Oscillator patterns. Now I want to show you a third
before telling you where you can learn more about this kind of "Bot" free trading.
This next pattern involves a traditional divergence pattern near a high or low that is then followed by the
Smart Trapped Trader Oscillator taking out the right hand side of the divergence. That would look like
this to sell (see the red down arrow):
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So what we have here is the H period high formed a downward pattern on the Smart Trapped Trader
Oscillator (note the high of H period is lower as marked by the first slanting magenta line). Then, once
you get that pattern, look for the trap. The trap occurs when the Smart Trapped Trader Oscillator goes
above the right shoulder of the first pattern. The logic of the trade is as follows: The market was weak at
the H high BUT, some guys got all excited and bought too much at J high. This ended up being the
high of the day. The market traded down another 50 ticks ($500 of potential) into the low area on the
right side of the chart.
Trading with the Smart Trapped Trader Oscillator can be very rewarding and there are other patterns that
can be learned and exploited. We are constantly developing new techniques with this tool and other
methods in the Oil Trading Room.
The Oil Trading Room is a live classroom environment teaching these techniques and much much
more. These techniques will work in any market. I am there for a couple hours each day teaching
techniques that span the subject of trading globally and also a lot of resources for your personal
development and knowledge. There is nothing else like it!
The Oil Trading Room is not for everyone though because rather than foster dependency, we teach
techniques that will last you a lifetime and that will serve you going forward. We have many full time
professional traders in the room who also help and make it an incredible experience. Join with the full
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expectation of learning and sharing and it will pay you back in many areas of your life. Come to it with
that and you will find a good home there for learning.
The Oil Trading Room may very well be the most cost effective learning environment available. The
tools used there come from our sister website IndicatorSmart.com.
Also enjoy this recording where you can learn more about The Trapped Trader Oscillator and other tools
and resources such as the Smart Patterns Trading System and the Oil Trading Room: Click Here and
watch the video at the bottom of the page to learn more!
Rob is President of Axiom Research & Trading Inc. and the mother company to the
OilTradingRoom.com and IndicatorSmart.com. Rob has been the largest Emini S&P trader in the world
at various times and has won the prestigious Robbins World Cup Emini Trading Championship. He has
been a trading system developer for over two decades, is a Certified NLP Trainer and Master Practitioner.
He is a Board Certified Master Hypnotherapist and Master Time Line Therapist. He is a proven trading
educator, presenter, and mentor helping others to achieve their dreams as traders.
Copyright 2016 Rob Mitchell
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Entry and Exit Techniques for Success
By Steve Wheeler
Founder and CEO of NaviTrader.com (www.navitrader.com)
Professional Trader and System Designer/Developer

www.navitrader.com
Let me start by introducing myself. I am a full time trader and trainer in the futures markets. I run a real
time trading room two hours each trading day. I have traded for over 20 years, and concentrate primarily
on the currency (FOREX), crude oil, gold, and stock index futures markets, such as the S & P E-
mini. In a previous career, I was a practicing C.P.A . in the state of Florida.
I have developed a full suite of charts and indicators known as the Trendicators and a market analyzer
known as the TradeFinder, as well as a number of automated trading systems and automated buy, sell,
and trade management systems.
What follows are the fundamental elements you need to be consistently profitable in the futures markets.
I have also included information below that is crucial to your overall success and in managing your risk.
Preparation for trading profitably consists of market observation over a period of time so that the trader
can build confidence in knowing what usually happens in the market, and how to profit from the recurring
market behavior that repeats itself every day. To take advantage of cycles in the markets, observe the
typical move that a market moves after it moves up or down out of a range contraction pattern.
The real objective is to build knowledge of probabilities of market behavior so as to take consistent
profits out of specific trading instruments. The following are observations of market behavior that will
help to put the probabilities in your favor
Technical Trading
To put the probabilities in your favor, you must have an objective method or system for your trading. I
talk to traders almost every day who tell me they are not having consistent results. If you think about it
logically, you will have consistent results only when you start doing things consistently.
Patterns repeat themselves over and over in all markets, so knowing these patterns can help to put the
probabilities in your favor. The more you can automate your trading signals, the more objective you will
be in your trade selection. You need to determine a set of technical conditions for which you would take
a long or short position in any market. You can use technical indicators that are widely available, or
you can develop your own indicators. Once you have chosen the indicators you want to use, test them
for validity in your trading. As in any testing, the more data, the more reliable the results will be.
Below is an example of a market analyzer where I have chosen a number of technical indicators that need
to match up for a long or short position. Tools such as this enable you to scan multiple markets to
determine the best instrument to trade at any given time. You will be able to run the analyzer in a back
or forward test to check for validity.
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Below you will see an example of a 6 (Brick Size) Navi_Renko chart of the S & P Futures E-mini chart.
This chart has buy and sell signals. The buy signals are the green arrows pointing up and the sell
signals are the magenta arrows pointing down, as noted on the chart.
You can test these signals to determine the probability of success and the average winning trade vs. the
average losing trade. Once you have that data you will be able to determine the mathematical probability
of making money.
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Making money in the market is a matter of being on the right side of the market. Specific to the futures
markets, there are both up and down moves each day that provide many trading opportunities. One
approach to the markets is to look for evidence of major support and resistance levels based on chart
history. Many people ask me which time frame that I look at for my trading, and by best answer is that I
look at all of them. A good analogy would be that if you were going to buy or short a stock, you would
most likely start by looking at a weekly or daily chart. Why would you approach the futures markets
any differently? To put the odds in your favor, you must find things that occur over and over and trade
with this information.
Below you will see an example of a 6 (Brick Size) Navi_Renko chart of the S & P Futures E-mini chart.
This chart has buy and sell signals. The buy signals are the green arrows pointing up and the sell
signals are the magenta arrows pointing down as noted on the chart.
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The above chart and the system displayed by the chart is an example of a signal that will enable you to
objectively test a signal on any chart time frame or data series that you would like to test. Other
examples would be using indicators such as moving averages for buy and sell signals One method of
testing is to use a trade simulator such as the Market Replay function of the Ninjatrader platform. You
can download Market Replay data and test based on historical data taking trades based on your entry and
exit criteria. You will be able to test various stop and profit target levels over a series of trades. I would
suggest that you test during the time periods in which you plan to trade. An example would be to test
the S & P futures from 9:45 AM Eastern time through 11:00 AM Eastern time if that is the part of the
day that you intend to trade.
Put the Probabilities on YOUR Side
To develop a plan that has a probability of success, you must test a sufficient amount of data to get a
statistically significant sample of trades. I suggest testing at least 75 trades during the time period in
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which you plan to trade, taking the trades based on your plan and managing the open positions according
to your plan. This process will enable you to gather data on your average winning trade, and your
average losing trade in dollar terms. You will also know the percentage of winners versus the percentage
of losing trades.
From that data, perform a calculation as follows:
Probability of winning trade X Average Winning trade in dollars minus the probability of a losing trade
X the Average Losing trade.
Example:
(.7 x 200) - (.3 x 100) = 110 When we have a positive value from this calculation this means
that you have a positive expectancy based on your data. In other words, you have a system that has put
the probabilities in your favor of being profitable.
Probabilities favor the continuation of a trend, therefore you want to trade or invest in the direction of the
major trend. For purposes of intra day trading or even investing, a daily chart is a very good place to
start to analyze the major trend. To put the odds even further in your favor, I recommend that you
analyze whatever you want to trade to find out the consistency of the trend. This can be done by
measuring the trend in various time frames all the way from short term trends such as a five minute chart
all the way to daily or even weekly charts.
Success Checklist
The following is a basic checklist that you should apply to your trading:
1. Select System to Trade and test for positive expectancy
2. Do I have pending news that is likely to impact my trade?
3. Am I trading during the start and stop times of my trading plan?
4. Have I done my technical analysis to know where specific areas of support and resistance are in the
market I am trading?
5. Have I analyzed markets that correlate with the market I want to trade?
6. Do I currently have a signal from my selected system to go long or short?
Platform:
As you develop your trading skills, I suggest that you use a professional trading platform that will allow
you to trade directly from the charts and will allow you to trade in simulation mode as well as to execute
trades in your live futures account. As with any skill, the more that you practice, the better you get at
it. It is important to develop your skills regarding the proper use of your trading platform while in
simulation mode so as to minimize trading errors after you are trading your actual trading account.
Trading in simulation mode will help you to develop your confidence and an overall methodology that
fits your personality.
Your Trading Belief:
Most traders will develop fear as they trade due to a history of losses. Like any fear, the way to
overcome it, is to continue to do what you fear the most. An advantage of having a trading platform
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that provides for simulation is that you will be able to trade in simulation mode, as in our example
above to build a plan with a positive expectancy and thereby develop greater confidence in your
approach to trading. As you trade in simulation mode, develop a set of notes that will act as the
beginning of your trading plan. Trade in simulation mode until you have mastered the use of the
trading platform you have chosen. As you trade in simulation mode, practice developing the discipline
needed to execute your trading plan. Through repetition, you will begin to develop into a polished and
profitable trader.
Trading Markets:
FOREX and Forex Futures
You will find that the FOREX spot and FOREX futures markets are most active starting with the
European open of 3 A.M. eastern time. The FOREX market usually will trend quite well for at least
three hours.
Stock Index Futures

The U.S. stock index futures markets will generally be the most active and will trend the best between
9:30 A.M. Eastern and 4 P.M. Eastern time.
Please let us know if you need any help in developing your approach to profitable trading. Send an e-mail
to support@navitrader.com with any questions and visit our website at www.navitrader.com
Above charts use the Trendicator Charts running in the NinjaTrader platform.
If you have any questions on the material in this publication, please send an e-mail to
support@navitrader.com www.navitrader.com
Contact Information:
Steve Wheeler
steve@navitrader.com
www.navitrader.com
800 987 6269
Skype navitrader.steve
Page 90
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Disclaimer
The articles in the book and the video presentation on our tradersworldonlineexpo.com site are purely
for educational purposes. Any stocks mentioned DO NOT constitute advice and should NOT be
construed as recommendations. This publications is designed to provide accurate and authoritative
information in regards to the subject matter covered. It is documented with the understanding that the
publisher is not engaged in rendering legal, financial advice, accounting, or other professional service. If
legal advice or other expert assistance is required, the services of a competent professional person should
be sought.
Following the rules of the SEC (Security Exchange Commission), we advise all readers that it should
not be assumed that present or future performance of applying the techniques in this book would be
profitable or equal the performance of our examples. The reader should recognize that the risk of trading
securities, stocks, options, futures can be substantial. When trading Futures and FOREX, an investor
could potentially lose all or more than the initial investment. Risk capital is money that can be lost
without jeopardizing ones financial security or life style. Only risk capital should be used for trading and
only those with sufficient risk capital should consider trading. Past performance is not necessarily
indicative of future results.
U.S. Government Required Disclaimer Commodity Futures Trading Commission. Futures and
options trading has large potential rewards, but also large potential risk. You must be aware of the risks
and be willing to accept them in order to invest in the futures and options markets. Dont trade with
money you cant afford to lose. No representation is being made that any account will or is likely to
achieve profits or losses similar to those discussed on this website. The past performance of any trading
system or methodology is not necessarily indicative of future results.
HYPOTHETICAL PERFORMANCE RESULTS HAVE MANY INHERENT LIMITATIONS, SOME
OF WHICH ARE DESCRIBED BELOW. NO REPRESENTATION IS BEING MADE THAT ANY
ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE
SHOWN; IN FACT, THERE ARE FREQUENTLY SHARP DIFFERENCES BETWEEN
HYPOTHETICAL PERFORMANCE RESULTS AND THE ACTUAL RESULTS
SUBSEQUENTLY ACHIEVED BY ANY PARTICULAR TRADING PROGRAM. ONE OF THE
LIMITATIONS OF HYPOTHETICAL PERFORMANCE RESULTS IS THAT THEY ARE
GENERALLY PREPARED WITH THE BENEFIT OF HINDSIGHT. IN ADDITION,
HYPOTHETICAL TRADING DOES NOT INVOLVE FINANCIAL RISK, AND NO
HYPOTHETICAL TRADING RECORD CAN COMPLETELY ACCOUNT FOR THE IMPACT OF
FINANCIAL RISK OF ACTUAL TRADING. FOR EXAMPLE, THE ABILITY TO WITHSTAND
LOSSES OR TO ADHERE TO A PARTICULAR TRADING PROGRAM IN SPITE OF TRADING
LOSSES ARE MATERIAL POINTS WHICH CAN ALSO ADVERSELY AFFECT ACTUAL
TRADING RESULTS. THERE ARE NUMEROUS OTHER FACTORS RELATED TO THE
MARKETS IN GENERAL OR TO THE IMPLEMENTATION OF ANY SPECIFIC TRADING
PROGRAM WHICH CANNOT BE FULLY ACCOUNTED FOR IN THE PREPARATION OF
HYPOTHETICAL PERFORMANCE RESULTS AND ALL WHICH CAN ADVERSELY AFFECT
TRADING RESULTS.
CFTC RULE 4.41 HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE
CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED
RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT
Page 93
BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE
IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY.
SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT
THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS
BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES
SIMILAR TO THOSE SHOWN.
Page 94
Copyright
Copyright 2016 Hallikers, Inc. All rights reserved. Information in this publication must not be
reproduced in any form without written permission from the publisher. Traders World Digest is published
quarterly by Hallikers, Inc., 2508 W. Grayrock Dr., Springfield, MO 65810. Created in the U.S.A. is
prepared from information believed to be reliable but not guaranteed us without further verification and
does not purport to be complete. Futures and options trading are speculative and involves risk of loss.
Opinions expressed are subject to revision without further notification. We are not offering to buy or sell
securities or commodities discussed. Hallikers Inc., one or more of its officers, and/or authors may have
a position in the securities or commodities discussed herein. Any article that shows hypothetical or
stimulated performance results have certain inherent limitations, unlike an actual performance record,
simulated results do not represent actual trading. Also, since the trades have not already been executed,
the results may have under - or over compensated for the impact, if any, of certain market factors, such as
lack of liquidity. Simulated trading programs in general are also subject to the fact that they are
designated with the benefits of hindsight. No representation is being made that any account will or is
likely to achieve profits or losses similar to those shown. The names of products and services presented
in this magazine are used only in editorial fashion and to the benefit of the trademark owner with no
intention of infringing on trademark rights.
Page 95

You Can Beat The Market - by Larry Jacobs

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By uncovering new ways to profit in the markets

8. The Most Critical Financial Time Period by Andrew Pancholi

Step 2. Most Important Option Factor

Step 5. Highest Probability Option Strategies for Every Market

What a powerful dynamic . . .

This statistical forecast is referred to as the Implied Move of the Stock.

The Option Delta

Long Iron Condors

My favorite income option strategy is the Credit Spread for 4 reasons:

Credit Spread/Max Profit: $130/Ct. Return on Margin: $130/$370 = 35%

Open position P/L May 21

Strategy 2: Selling Bull Put Credit Spread

Strategy 2: June $187/$182 Bull Put Credit Spread: $130/Ct.

Based on this example which option strategy would you prefer?

2017 will be one 60 year cycle from 1957.

Typical Stochastic Patterns in Trends

The result was a profit of $45.25 per contract.

The hidden divergence patterns are:

Expect Price to Move Down

Higher Low in Price

How Forex Trading Works

When you leave, 1 euro is worth roughly 80 US cents.

So how much is a pip worth?

1 State Street | 10th Fl | New York, NY | 10006

The curve speaks for itself:

How does a selloff scenario look like?

Call: +1 866 455 45520 or contact@NeverLossTrading.com

Thomas F. Barmann Owner and Inventor of

My Stock Market Income

Founder and CEO of NaviTrader.com (www.navitrader.com)

Professional Trader and System Designer/Developer

Stock Index Futures

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