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THE OFFICIAL MAGAZINE OF TECHNICAL ANALYSIS

TRADERSWORLD
Multiple Unit and Time
Frame Forex Strategies
Oct/Nov/Dec 2016

How to Trade the Market


with Extreme Precision
Using Boomerang Day
Trader

Finding the Perfect Trade


Setup

Simple Tips to Dramatically


Improve Your Trading Disci-
pline

Multiple Time Frame Trade


Strategies

Simple Tips to How Domi-


nate Cycles Can Pinpoint
Market Turns

Learn to Trade it is Never


Too Late

Mastering Your Emotions to


Create A Trading Mind
Mastering Your Emotions to Create A
Secrets to Making Money Trading Mind
Every Day
Secrets to Making Money Every Day
Frame Forex Strategies
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Oct/Nov/Dec 2016 Issue #64
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WWW.TRADERSWORLD.COM October/November/December 2016 4


WWW.TRADERSWORLD.COM October/November/December 2016 5
Contents Planetary Harmonics and the Law of Vibration
in Astro-Trading by Tim Bost 97
Oct/Nov/Dec 2016 Issue #64

Finding Profitable Momentum Trades with a HIGH PROFIT, HIGH PROBABILITY PATTERN:
MRM Scan by John Winston 10 THE UNKNOWN TIME by David W. Franklin 107

Decision Fatigue by Craig Haugaard 15 The Next Wall Street Class Action Suit Starts
Here by Steve Selengut 115
Succeed Without Self Sabotage by Adrienne
Toghraie 19 Crisis Cycles Clashing 4Q 2016 Ushers in
Critical Phase by Eric S. Hadik 120
How to Trade a Small Account by Larry Gaines
27 Three Top Forex Markets that Should Continue
their Strong Bear Trends to New Lows by Jaime
Silver Wheaton Corp - Elliott Wave Case Study Johnson 128
& Forecasts by Peter Goodburn 35
Execution is Key in Trading by Samuel Bassey
Conceiving, Believing and Achieving Realistic 133
Trading Goals by Roger Felton 39
The Importance of Timing by Andrew Pancholi
The Basics of Relative Strength by Clif Droke 136
44
W.D. Gann and the PATH System by Patrick
How To Be Successful At Trading Introduction Hughes 139
by Steve Wheeler 50
Higher Probability Commodity Trading 146
THE PRESIDENTIAL CYCLE by Jacob Singer 54
Amazon Books 147
Using Andrews Divergence to find Reversal
Points by Ron Jenisch 60

Some Secrets of THE TUNNEL THRU THE AIR


or LOOKING BACK FROM 1940 by David Burton
66

Unleashing the Power of Hidden Divergence


While Limiting Risk on Entry by Gail Mercer 79

Trading Hype Cycles of the Financial Markets


by Thomas Barmann 84

Invisible Walls: Turning Your Fears into


Personal Power by Rande Howell 93

WWW.TRADERSWORLD.COM October/November/December 2016 6


WWW.TRADERSWORLD.COM October/November/December 2016 7
WWW.TRADERSWORLD.COM October/November/December 2016 8
HOW TO TURN SMALL ACCOUNTS INTO
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BY GORDON ROBERTS
REPRODUCE GANNS LEGENDARY RETURNS THROUGH LEVERAGED POSITION TRADING

INTENT OF THIS COURSE WHAT YOU WILL LEARN

The intent of this course is to provide a trading strategy that Low risk, high reward trades averaging
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The analytical techniques and strategy taught in this course Uses classical Gann risk management and
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STATEMENT OF INTENT
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trades and of Ganns Mechanical Method provide profound
An Exploration of the Mechanical insights into the mind of one of the greatest traders of
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BY TIMOTHY WALKER and learn to understand the specific rules and triggers that
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SYSTEM APPLIED TO THE MODERN S&P500 instance, from his initial investment of $3000 in February
1915 until October 21 of the same year, Gann produced a
IN 2014 PRODUCED 570% ON A $5000 E-
1,337% return increasing the account to $40,123.
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WWW.TRADERSWORLD.COM October/November/December 2016 9


Finding Profitable
Momentum Trades with a
MRM Scan
By John Winston

I have been asked many times what I look for in picking stocks and how I'm able to identify
good trigger points. As much as I would like to be able to say there is a simple pattern that
I'm looking for, it is really more about understanding sector rotation, momentum and price
channels. I call this the Momentum Reversal Method (MRM) and I believe this is one of the
strongest entry trigger points any trader can learn to find potentially profitable trades. I
believe that anyone can learn to identify and pick solid winners with these three components
and lots of training.
Ideally, I use the sector analysis to determine if the unique sector of the market is trending
higher or lower overall. There are times when certain sectors are in a bullish/neutral state;
possibly trending higher overall, but more recently trending downward. The opposite would
be true for a bearish/neutral state. These states of trend can also produce exceptional
opportunities.

Once I have determined the state of the sectors and their overall trend, then I will select
one to three sectors that I believe opportunities may be found. For example, a recent scan
last week showed me the following sectors were all strongly positive over various time frames
and related an average trending score as shown.
A higher relative trending score does not mean any stocks within that sector will immediately
push higher or trend upward forever. This is just a preliminary scan of sectors that will,
potentially, allow us to find opportunities. Ideally, I like to see a Relative Trending Score
greater than 4.0 as this relates to moderate volatility and trend capitulation. This is a starting
point for us to continue locating new trading triggers nothing more.

WWW.TRADERSWORLD.COM October/November/December 2016 10


Next, I would typically review the key sectors that show opportunities. For example,
Technology and Industrial Goods are showing decent Relative Trending Scores. When I review
these sectors, there are typically three measures I'm quickly scanning for, Volatility, Volume
and Recent Price Rotation. With this type of scan, I'm attempting to identify relatively low
volatility (as related to my risk factors), moderate average volume (above 400k on average)
and relatively narrow recent price rotation (typically within a 10% range). The reason for this
is simple, I'm looking for triggers that are fairly strongly liquid with moderately mild volatility
and fairly narrow price rotation that may be a precursor to further trending.
Quickly reviewing my list of symbols in the Technology sector, I see the following symbols
meet my criteria for selection.

Remember, this scan is relatively simple, allow me to review why SHOR made my list.
SHOR's recent volatility is well below +2%. SHOR's longer term volatility is below +14%.
Average Volume is 441k. This symbol appears to be a strongly liquid US based technology firm
with bullish short and long term trend/volatility that is in line with my expectations. Price is
somewhat irrelevant in the searching process, we are looking for opportunities and will weed
out the symbols that don't meet our equity requirements later.
So, now that we have a few bullish triggers in the sector we believe will continue to trend,
or at least has the potential to trend further, we need to identify the MRM setups. Without
going into complete detail, and giving away my secrets, let's just take a look at a few of these
charts and I'll let you see if you can spot any opportunities for gains.

WWW.TRADERSWORLD.COM October/November/December 2016 11


The simple concept behind the MRM trading system is to wait for the sectors and symbols
to show you the trend, then simply wait for a low risk setup to jump into the trade. In most
cases, I'm able to generate 6%~20% ROI within a few days or weeks on each trade. For
example, AXTI has jumped 42% since its trigger near July 15th 42% in about 7 weeks.
Again, I'm not going to fully disclose the MRM system and the rules that I use to trade, but
I will show you how easy it is to try to do this on your own. Remember, there are hundreds of

WWW.TRADERSWORLD.COM October/November/December 2016 12


opportunities each month and it is just a matter
of finding them. Sector analysis allows us to TradersWorld Magazine
hone into groups of stocks that are showing Premium Subscription
some trending capacity. From there, it is a
Get everything we have for only $19.95 per year
matter of finding the ones that best suit our
Save 50% over our regular subscription of $39.95
needs for trading triggers. The MRM system
is my way of finding low risk triggers I have
found that work. I simply wait for the MRM
setups and compare my risk factors before
deciding to execute the trade.
I make all of my MRM trade triggers
available to my clients so they don't have
to spend hours doing the analysis like I do.
There are opportunities every month and
providing only the best triggers to my clients
is the best way I can service their needs. I QUARTERLY MAGAZINE SUBSCRIPTION
Read articles explaining classical trading
don't have to try to teach them or continue to
techniques, such as W.D. Gann, Elliott Wave,
try to review various symbols with my clients,
astro-trading as well as modern technical
I simply issue a trade alert to them when I analysis explaining indicators in eSignal,
find the best MRM triggers. If you like the NinjaTraders, MetaStock & Market Analyst.
concepts I'm teaching you, then please take a
COMPLETE BACK ISSUES OF TRADERS
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WORLD Magazine (ISSUES 1-64)
You also get our complete archive of 60 back
John Winston issues from 1986 to present. This, contains
Chief Investment Strategist articles, product reviews, hundreds of chart
www.ActiveTradingPartners.com examples, how-to-trade articles and much

format, which you can read online anytime.


In every issue, you get the information
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Works for stocks, bonds, futures, options.

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WWW.TRADERSWORLD.COM October/November/December 2016 14


Decision Fatigue
By Craig Haugaard

If you ever find yourself in prison and coming up for parole make sure that the parole
hearing comes as early in the day as possible. In an interesting study conducted in 2011 in
the Israeli prison system researchers found that the best indicator of which prisoners were
paroled wasnt if they were Arab Israeli or Jewish Israeli but rather what time of the day their
parole hearing was conducted. In a fascinating study they found that prisoners who had
an early morning parole hearing were paroled roughly 70% of the time while the poor slobs
who had a late afternoon parole hearing were paroled less than 10% of the time. This study,
which lasted a year and looked at over 1,100 parole hearings, was notable in that even when
the crimes were identical in nature the time of day that the parole hearing was held seemed
to play a large factor in whether or not they received parole. The obvious question is, Why
this discrepancy? or even more appropriate, Why are you writing about Israeli parole boards
in a trading article? The answer to both of those questions is that there seems to be a
strong correlation between the number of decisions a person makes and the quality of those
decisions.
Researchers tell us that the average adult makes in excess of 35,000 decisions per day.
Those decisions run a large gamut in importance and may cover everything from what to
eat for breakfast to whether or not to short the soybean market. The parole study, which
was conducted by Jonathan Levav of Standford and Shai Danziger of Ben-Gurion University,
illustrated that the process of making decision after decision wore the decision maker down.
As you go through the day making decisions each one takes a toll in mental fatigue. While
it is not as noticeable as physical fatigue the accumulated fatigue from mental decisions
eventually causes your brain to look for short cuts. Research once again shows us that these
short cuts generally take one of two paths. Firstly, the decider may become reckless and act
impulsively rather than clearly think out all of the repercussions of the action. For the trader
this may come in the form of a trade that comes as a result of a gut feeling rather than a
well thought out trading system. I suspect that I am not the only trader who has entered into
a trade in a reckless manner and I also suspect that I am not the only one that has been beat
like a rented mule as a result of that ill-informed decision.
The other mental default is to avoid making a decision. This is what we saw in the Israeli
parole board study. As the parole board members became more mentally fatigued they went
with the safe option of keeping the status quo and refusing parole to the prisoners whose
cases were up for review. While in the short term it may feel good to do nothing and let the
status quo run ultimately it may lead to larger problems. In the world of farmers and cash
commodities that I live in this may explain why a farmer would build another bin rather than
have a well thought out marketing plan. It allows him to delay making a decision. The same
can certainly be said of traders who have a position on and freeze up when it is clearly going
against them. While this passive, do nothing, strategy may ease your mental strain on the

WWW.TRADERSWORLD.COM October/November/December 2016 15


front end on the back end it can result in disastrous results.
If we accept the fact that mental fatigue is real and can have a negative impact on our
decision making processes what steps can we take to counter the impact and insure that our
trades are based on a sound decision making process? One thing that we can do is to learn
from the Israeli parole board study and make sure that we are making our biggest decisions
early in the day. A second strategy for those of us who reside in the world of futures trading
is to stop staring at the computer screen all day long. I have certainly had those days when I
felt that if I just stared at the screen hard enough I could make the market go the direction I
wanted it to head. Of course, that is foolish and as I now know, counterproductive. Research
would seem to tell us that we will make better decisions and be better traders if we take a
break once in a while. Walk away from the screen and go outside for a walk. Of course there
is a chance the market could make a large move against you while you are communing with
nature but there is a far larger chance that if you dont take the hike you will build up mental
fatigue to the point where you make a trading decision that would make even a two year old
in the midst of a temper tantrum seem rational.
While the cumulative effect of decisions leads to mental fatigue it is a given that not all
decisions are equal in their complexity. In fact I would argue that the decisions that traders
make can be at an elevated level of complexity. In the world of grain trading for example we

WWW.TRADERSWORLD.COM October/November/December 2016 16


have to weigh in production data, weather data at points throughout the Corn Belt as well as
grain producing regions around the world. We evaluate export demand, domestic demand,
the strength or weakness of the dollar, whether or not China is going to have a recession.
The list seems endless and with a plethora of potentially conflicting data points the decision
making process can be daunting. I started my trading career as a trader who traded the
fundamentals. What I found was that if I had a pre-conceived idea of what the market should
do I could always find some fundamentals that would agree with what I wanted to see happen.
While wrapping oneself in the security blanket of fundamentals that agree with you can feel
great I also found that it can lead to horrible trading decisions. It has been my experience,
and research seems to validate it, that when I make trading decisions in a manner that are
process driven rather than the result of mental deliberation my success rate goes through the
roof.
While I believe that the futures market is a giant tug of war between the bullish and
bearish fundamentals I no longer try and evaluate each piece of fundamental news to try and
determine which side holds the greatest weight and will win the day. Rather, I rely on a set
of technical tools to tell me which side is winning that fundamental tug of war and place my
orders accordingly. For me in the grain market this consists of me waiting until the ten day
moving average, the stochastics and the MACD all give me the same signal as illustrated on
the preceding chart.
Amelia Earhart once noted that, The most difficult thing is the decision to act, the rest is
merely tenacity. The fears are paper tigers. You can do anything you decide to do. You can act
to change and control your life; and the procedure, the process is its own reward. Of course,
her decision to act was also a decision that resulted in her death so perhaps she is not the best
person to take decision making advice from. I would like to think that had she started with the
process as the foundation and not as its own reward she may have lived to tell the story of her
great adventure. I am certain that a trader that focuses on the process will prosper financially
and that, as Amelia Earhart would say is its own reward.

WWW.TRADERSWORLD.COM October/November/December 2016 17


Trading on Target
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Adrienne Toghraie, Traders Success Coach

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Succeed Without
Self Sabotage
By Adrienne Toghraie, Traders Success Coach
www.TradingOnTarget.com

Are You Limiting Your Profits Because of Poverty Consciousness?

Poverty Conscious Traders are those individuals who limit the amount of profits that flow
into their lives because of a particular type of negative thinking. This negative thinking occurs
when a traders attitudes are fogged with thoughts and feelings of lack and limitation. This
limited thinking becomes a self-fulfilling prophecy that can lead to limitation and loss in the
real world.

Tidal Wave Over the Economy

Just as a family can be negatively affected by one trader, negative thinking in the trading
community can affect the entire world. When the trading community is in a state of worry,
trading becomes erratic. Traders either hold back from trading at their normal levels of
activity, or buy and sell wildly, thus creating a negative impact on the world economy. There
is less money in circulation, thereby limiting the activity in the markets, which in turn makes
traders even more restrictive in their activity.

The poverty consciousness in traders that results from activity in the marketplace is a
temporary but self-limiting reaction. However, beyond the normal reaction to external forces
and circumstances in a traders life, he can have many forms of poverty-conscious thinking.
This thinking can start at any point and time in life, although the roots of it are most common
in childhood. For instance, if a baby cannot get his basic needs met, the longing for fulfillment
of those needs can last a lifetime. Even if a trader has the appearance of affluence, his choice
of behavior can sabotage his full potential.

Here are some specific kinds of poverty conscious thinking, how they
might affect you as a trader, and solutions to these mental impediments:

1. The Unworthy and Undeserving


These traders find it difficult to reward themselves, no matter how much money they have.
They live as though they are poor because they feel that they still are poor. In some cases,
they are afraid to find joy in their success for fear it will cause it to end.

WWW.TRADERSWORLD.COM October/November/December 2016 19


Effect
Traders in this category put a cap on their potential earnings by failing to reward themselves
when they succeed. The unconscious mind needs to be rewarded for successful behaviors and
attitudes in order to be motivated to repeat them.

Solution
Set realistic goals to accomplish and attach a small reward. It is important to follow
through and enjoy this reward.

2. Self-imposed Notions of Lack and Limitation


These traders buy into the notion that there is not enough to go around. This usually starts
in childhood when the environment cannot support the child emotionally and/or materially.
As adults, these individuals become pack rats because they feel that someday their garbage
will be useful. Many people who grew up during the Great Depression, or have parents that
experienced this era, display this behavior.

Effect
Traders in this category are often very disorganized. This disorganization results from a
deep conflict within. Their conscious minds tell them that they have a goal to reach and they
must get into action. But, their unconscious minds, controlled by fears of poverty, tell them
that their goals are unreachable and hopeless. As a result, they never have enough time to
complete anything, and they find a way to create lack and limitation in their trading. In the
event they do create abundance, they are very uncomfortable with it.

Solution
Make your garbage useful now by giving away all of the items that you have not used in
the past two years. List the things you want to accomplish and a time frame in which you can
complete the tasks. Put them in order of importance and either delegate the rest to someone
or give up the tasks that are least important.

3. Doomsday is on its Way!


These people live in the shadow of impending disaster: You never know when youre
going to lose it all so plan as if disaster is on its way. Unfortunately, for many, this fear
is based on the reality of past, traumatic losses in their lives. As a result, they expect
these losses to recur and feel a perverse sense of fulfillment and vindication when they do.

Effect
These traders are perpetual bears. They often miss the obvious upward movements
because they are so focused on an impending downward trend. Traders in this category will
take profits too soon if they overcome the fear of entering a trade in the first place.

WWW.TRADERSWORLD.COM October/November/December 2016 20


Solution
Expand your present level of risk by 10%. When it feels comfortable to trade at this new
level of risk, expand it again by another 10% until it becomes comfortable at that level, and
so on. You can deal with Doomsday when it arrives, but act as if you are anticipating more
affluence with each new day and notice the difference in your life.

4. The Taker: I Deserve it, You Dont


These people always look at every situation by thinking, Whats in it for me? This position
comes from a great insecurity and a sense of lack. These traders often resent the fact that
they have to work hard and do not necessarily see the value in other peoples contributions. At
the heart of their world view is the notion that there is not enough to go around. Life for them
is a struggle for survival. The root cause of this syndrome is often a childhood in which the
childs basic emotional and physical needs were either unmet or attended to with indifference.
As a result, they are willing to toss the scraps of overflow to their family, friends and society.
They expect family and business associates to put out equal effort, but they do not believe in
equal rewards.

Effect
Traders in this category fail to see that success is greatly influenced by the willing cooperation
of people around them. Their insensitivity to the feelings of others and their eagerness to
point the finger when things go wrong creates stress and bad feelings all around. The negative
environment created by these behaviors ultimately affects trading performance.

Solution
If you live by the motto, You only have what you give, you will find that your life
will prosper as your generosity increases. This strategy invokes the power of the ten-fold
principle which multiplies abundance through prosperity. The people around you will then
want to help you become more successful instead of begrudging you each success and looking
for ways to sabotage you. As a result, trading will become less stressful and, as a result, more
profitable.

5. Hitting the Poverty Tolerance Level


We all have a level at which we begin to feel insecure financially. For some traders,
insecurity is reached when they lose their job, with no prospects and no money in the bank.
Then there are traders who are financially secure, but have a temporary losing streak and feel
deprived from being able to enjoy frivolous spending.

Effect
When poverty consciousness kicks in, opportunity checks out, because you are entering a
victim state of mind. When you see only problems, you will not find solutions and performance
will suffer until you take control.

WWW.TRADERSWORLD.COM October/November/December 2016 21


Solution
List a group of actions which would take you toward the success that you want and start
with the easiest first. This puts you back in control and will pull you out of a victimized state
of mind.

6. The Guilt Ridden


These individuals feel they should not have what other people do not have either. Regardless
of their efforts and their successes, they feel guilty in reaping the rewards. A childhood in
which praise is absent and criticism is abundant is often the reason for this viewpoint.

Effect
These traders sabotage their efforts to become successful so they do not have to face the
problems of feeling guilty about having too much.

Solution
Work with the idea of putting yourself in a position of abundance to help many people and
share the joy of your successes. At the same time, examine the relationships in your life for
friends and family members who are critical and unsupportive. These relationships feed your
low self-esteem and need to be either corrected or eliminated if you are going to feel worthy
of success.

7. The Success Comfort Zone


Everyone has a comfort zone of success. If a trader grew up in a poverty, he may feel
uncomfortable in an expanded comfort zone of success. Some traders sabotage success just
to stay in their comfort zone.

Effect
The best case is that your level of success stays the same or your growth is very slow. The
worst case is that you create major losses whenever you are feeling anxious about being too
successful and outside of your comfort zone.

Solution
In order to have a quick transformation to higher success you must transform your limited
beliefs. Dwell on beliefs that would bring you enormous success, e.g., By the creative actions
I demonstrate, I deserve to enjoy affluence and abundance. Visualizations of yourself in a
new life of abundance can help your unconscious mind accept comfort at each new level of
success.

Conclusion

Poverty consciousness can affect any trader and the results can range from a dampening
of profits to large losses. Most traders come by this sense of loss as a result of external

WWW.TRADERSWORLD.COM October/November/December 2016 22


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10 www.tradersworld.com Jan/Feb/Mar 2013 WWW.TRADERSWORLD.COM October/November/December 2016 26
How to Trade a
Small Account
Larry Gaines, Founder, CEO, Power Cycle Trading

Introduction

Hello traders,

Welcome to this presentation on How to Trade a Small Account.

My name is Larry Gaines and my trading career started in 1980 in Houston, Texas as foreign
crude oil cargo trader. In 1990 I became the Executive Vice President for one of the largest oil
trading companies in the world and ran their international trading desk for over 10 years. Today
I run my own company, powercycletrading.com, were I offer comprehensive trading courses,
coaching and trading services.

I started out my career trading big accounts, of other peoples money (OPM), but when I went
out on my own and started trading for myself and it was my own money the whole game really
changed.

Now trading for yourself can be one of the most rewarding jobs on the planet, if you are
educated about what you are trading and if you stay focused on managing your trading risk.
I tell my clients and members theres no perfect tradertheres no perfect system its a
journey of learning and I am on that journey tooconstantly learning each and every day
And in my opinion the most important lesson in trading is that you should not be just focused on
making money but should really be focused on managing your trading attitude and risk and then
the profits will come

My real AHA trading moment came when I reset my trading mindset and started to incorporate
a variety of well defined, low risk Option Strategies into my trading. To be a successful trader
mindset, risk management and consistency is what wins out and this is what Ill cover in this
presentation.

Here are some important actions you can take that will get you started on your trading journey
to becoming a successful trader.

Actions & Attitudes of Successful Traders:


Mistakes sabotage every area of our lives, and trading is no exception. The good news is that

WWW.TRADERSWORLD.COM October/November/December 2016 27


we learn from our mistakes. In fact, seeing mistakes as learning opportunities is the popular
approach to viewing human error and with good reason since they provide learning lessons
aplenty, albeit often excruciatingly painful ones both in the psyche and the bank account. In over
3 decades of trading, I have probably seen every trading mistake possible, and Ive even made
most of them.

As in life, mistakes seem to recur until we own them and modify, at which time we overcome
that particular error and move on to the next. The good news is that you can learn by observing
and studying the behaviors and habits of successful traders who have already been in the
trenches and learned from their mistakes. This practice can shave years off of a traders learning
curve. Its all about adopting the powerful actions and attitudes of successful traders.
There is no perfect trader or perfect system but in order to become a consistently good trader
you must constantly be observing not only the markets, but also other experienced traders to
gain knowledge and wisdom. Its a never ending journey, like most valuable pursuits, but it can
be an extremely rewarding one, both personally and financially.

When you model top traders actions, you make more money. Its that simple. Theyve figured it
out from years of experience, and you learn from them how to make more money in much less
time.

1. Consistently getting in or out of trades too soonor too late

The culprit behind this common error is trading from fear or greed instead of following a chosen
strategy. In trading its not always about trading the right option, the best model, or the perfect
entry; its way bigger than that. If your attitude is not right, and your trading related actions
arent right, then even the best technicals cant help generate profitable trading results for the
big or small trader its all the same.

Studies show that 60% to 80% of trading success comes from a traders mental and emotional
state. Great traders are always working to keep their emotions out of their trading. By
developing a state of detachment when trading, you can neutralize those emotions that can
otherwise control your trading actions.

2. Being a lone ranger


Everyone knows that the nature of trading is to go it alone. Trading attracts the introverted
analytical thinker who generally thrives on hours of uninterrupted time to completely focus on
the next great trade or indicator. The focus time can be beneficial, but the lack of accountability
and team camaraderie is not. Being someone who has spent decades in the enthusiasm of a live
trading room, complete with both shared cursing and celebrations, I can say that camaraderie
is real, and its an asset. The value of camaraderie explains the proliferation of virtual trading
rooms over the past few years, and my drive to have created one of the first.

WWW.TRADERSWORLD.COM October/November/December 2016 28


3. No plan for success or goals
Have you ever noticed how easy it is to jump into a trade that is outside of your trading plan? A
plan encourages self-discipline and accountability. A good plan includes the following features.

Capital allocated to trading


Defined risk reward
Time frame for holding trades
Working hours
Parameters around paper vs. real trading
Structured time for accounting and review
Tested model or system

Start with a plan and stick to it. Review it often and adapt it as you learn and improve.

4. Trading a model that doesnt work

Time and expense are usually the perpetrator with this costly saboteur. The perfect analogy is
buying something that doesnt work when youve gone shopping just so you havent wasted your
time. The trader thinks about how long it took to learn the system, or the investment, often in
the thousands, that was made to purchase the model. The solution is to buy a proven system
from a demonstrated expert, and get the support to correctly learn and implement the model
swiftly.

5. Not thoroughly reviewing trades and accompanying charts

Lets face it; its much more enticing to trade than to review trades, but the reality is that
successful trading comes from reviewing what you did that worked, and doing more of it. Its
that simple. Without consistent time dedicated for review, this cant be done.
Take time to review each trade; this is your money, and your business. Write the answers to the
following questions in a log:

What worked?
What didnt work?
What were the indicators doing?
What time of day was the trade made?
Why was the trade placed?
Why was the trade exited?
Could a slight tweak have made the trade more profitable?

6. Not accounting for trades


Have you ever known a trader that likes to do accounting? Traders love the excitement of the
trade, but hate the boredom of all the surrounding responsibilities, such as accounting, taxation
and documentation. Boredom, avoidance of responsibility and denial are the backing behind this

WWW.TRADERSWORLD.COM October/November/December 2016 29


common slipup. Its a lot easier to think about that great winning trade you made than to look
at hard after commission numbers. Numbers dont lie, but they are a strong teacher for how to
improve results because they allow you to see whats working and do more of it.
The solution is to schedule time for accounting. Its so easy now with downloads from most
brokers. With zero costs, youll then have the numbers to reveal the most potent answers you
can get to improve your trading results.

7. Lack of goal setting

As Peter Drucker said What gets measured gets done. This paradigm is a step above
accounting and review. Goal setting is about taking the big picture view of your overall life and
money. Take this a step further and think about what your life will be like upon achieving those
results.

Define what you want to make from your trading business. Review it often. As Drucker said,
measure your results, and then compare them to your goals. This motivating habit drives you
to do the mundane, like to accounting. It drives you to show up to trade when you want to play
golf instead on that perfectly beautiful day.

8. Trading with the emotions of fear and greed

Trading emotions could be an entire book, and it often is; your beliefs about money go all the
way back to your childhood. What was happening in your childhood home around money? Was
there never enough? Were you taught to manage money? Was there predominantly fear or
greed? As woo woo as this sounds, taking a few minutes to think about this unseen force can
quickly and easily help you spot those same patterns in your trading.

The way successful traders overcome this powerful saboteur is by trading from a plan, which
allows complete detachment. A simple exercise to discern whether emotions affect your
trading is to paper trade for a few days. Notice if the results are different from real trading.
Of course, live trading can provide slightly different results due to the actual fill; take this into
consideration, account for it and try to see how differently your trading results are when real
money is not changing hands vs. when it is. This easy little application can reveal powerful
insights about how your emotions may be hurting your profits.

Another clue is to notice how you feel when you trade. Does your heart race when you place a
trade? Are you unable to leave your charts beyond the time designated in your trading plan?
These are signs of emotional trading. Some of the best traders in my virtual trading room have
consistently exited the room promptly at 9:30 daily. They are done, based on their trading plan.
Its unemotional and detached.

Fear causes traders to miss out on winning trades, or close trades before the optimum exit.
Greed causes traders to stay in trades beyond their planned exit, or to take trades outside of

WWW.TRADERSWORLD.COM October/November/December 2016 30


their plan. Emotions exhaust traders.

First, recognize your money patterns and own them. Choose to not allow someone elses past
issues affect your trading results. Again, the crucial key is to detach emotionally from your
trading. The best way to detach is to trade from a well thought out plan.

As you read this article, which points made you squirm the most? The most uncomfortable
points will be the first area to focus on to improve your trading results. Discomfort signals denial
or expansion. The great thing is that most of the points above are absolutely free. Thats a risk
reward you dont see often in the trading world. Ill take it.

An Option strategy guide to get you started:

General Option Guidelines:

When Implied volatility is high it is better to sell options (Credit Spreads, Iron Condors)
When Implied Volatility is low its better to buy options (Delta 50 to 70) & Vertical Option
Debit Spreads
When a market is in a consolidation phase or a volatility compression squeeze, look at this as
a sign that a low volatility environment is about to change into a high volatility environment.
And change your trading style accordingly.

Go-to-Option Strategies ~ for defined, low risk trading:

Long Calls or Puts ~ can be used for all day trading, swing trade set-ups and long term trend
trades. Best when implied volatility is low, generally use a 60-70 delta for strike. A defined risk
with unlimited profit upside.

AAPL Long $113 Call Strike ~ Delta 60 ~ Debit Cost $210/Option Ct.

WWW.TRADERSWORLD.COM October/November/December 2016 31


Vertical Debit Spreads ~ can be used for all Swing Trade Set-ups & long term trend trades.
Best when implied volatility is low. Defined risk, low capital cost, low time decay but profit
upside is capped.

AAPL Vertical Long Call Debit Spread $115/$120 ~ Cost $160/Option Ct.

Long Butterfly ~ this spread is a neutral strategy that is a combination of a bull call debit
spread and a bear call credit spread. It is a limited profit, limited risk options strategy. There are
3 striking prices involved in a butterfly spread and it can be constructed using calls or puts. Used
when you think the underlying stock will not rise or fall much by expiration. Trade results in a
net debit. Short volatility & price pinning strategy.

AAPL Long Call Butterfly ~ Debit Cost $35/Option Ct.

WWW.TRADERSWORLD.COM October/November/December 2016 32


Credit Spreads ~ can be used for day trades, swing trade set-ups & long term trades. Best
used when implied volatility is high. A defined risk, takes advantage of time decay & a sideways
price action but profit upside is capped. Three variations; OTM (negative risk ratio), ATM (neutral
risk ratio) & ITM (positive risk ratio). Short volatility & time decay strategy.

AAPL Vertical Bear Call Credit Spread ~ Credit Received $110/Option Ct.

CONCLUSION
Trading a small account offers the single trader a big advantage, stealth. The single trader
can easily execute trades that the big hedge funds and institutional traders just cant without
muddying the waters. This becomes a great trading advantage and an opportunity that can turn
that small trading account into a large trading account. Once you have the right trading mindset
and learn to use some well-defined, low risk Option Strategies your journey to successful trading
will become a short one and well worth the time and effort you put in.

ABOUT THE PRESENTER


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.
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.
Click here to learn more!
http://powercycletrading.com

WWW.TRADERSWORLD.COM October/November/December 2016 33


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WWW.TRADERSWORLD.COM October/November/December 2016 34


Silver Wheaton Corp - Elliott
Wave Case Study & Forecasts
By Peter Goodburn

Many of the silver miners formed simultaneous lows last January (2016) which have since
triggered new intermediate & medium-term uptrends. For some, the January lows ended
counter-trend zig zag/double zig zag patterns dating back to pre-financial-crisis highs of
Nov.07/April 2008 i.e. Silver Standard Resources, Pan-American Silver Corp. whilst Silver
Wheaton Corp. simply ended a smaller counter-trend phase of declines that began from the
April 11 highs. The big difference was that Silver Wheaton Corp. did not break below its
financial-crisis low of 2.51 whilst the others did in order to complete their own corrective
patterns. This means that Silver Wheaton Corp. is outperforming relative to its 2011 high.
There is scant historical data for these equities which makes intermediate/medium-term
forecasting difficult, in terms of precise wave counting but especially true for amplitude
measurements. All we do know is that if medium-term Fibonacci-Price-ratios are used for
Silver Standard Resources & Pan-American Silver Corp., measuring their initial advances from
major lows of August 98 and April 01 respectively into those pre-financial-crisis highs, adding

WWW.TRADERSWORLD.COM October/November/December 2016 35


these fib. 100% ratios for an equality measurement from the Jan.16 lows, then upside targets
are towards 279.00+/- and 98.50+/-. Thats gains of 7,543% and 1,730%. For Silver Wheaton
Corp. a similar fib. 100% equality ratio is used measuring the post-financial-crisis upswing
then adding this to the Jan.16 low of 10.04 to yield targets towards 190.40+/- reflecting
potential gains of 1,800% per cent. As historical data is even shorter for Silver Wheaton
Corp., such targets could be erroneous. For the time being, we rely on the internal structure of
Januarys developing five wave impulse advance to determine that a minimum upside target
towards 71.00+/- is viable during the next couple of years.

Elliott Wave Case Study


There is still doubt in many quarters of the commodity markets that industrial metals, like
silver have begun new uptrends. It was earlier this year when commodity prices extended
lower in January/February that mainstream analysts were marking prices heavily down
alongside forecasts of incremental U.S. interest rate rises. Neither were realised. Even though
some impressive gains have since taken place, sceptics continue to argue the bearish case
that rallies are simply counter-trend that major secular-bear downtrends are in progress.
The purpose of examining price declines of Silver Wheaton Corp. during the year-2011/2016
period is an attempt to proof this was just a counter-trend sequence within a prevailing

WWW.TRADERSWORLD.COM October/November/December 2016 36


uptrend.
An important high formed in April 11 at 47.60 see fig #1. As historical data is limited
(begins July 05), this high represented a new record high which for the purposes of examination,
ended primary wave 3 although we cant be certain. But what is very tangible is the way the
subsequent declines have unfolded as primary wave 4 into a precise Elliott Wave corrective
pattern, a seven price-swing double zig zag labelled in intermediate degree, (A)-(B)-(C)-(X)-
(A)-(B)-(C).
There are some interesting aspects of this pattern. For example, it began with a leading-
expanding-diagonal as wave (A), completing into the May 12 low at 22.94. This is quite an
unusual start for a multi-year decline, but perfectly acceptable. Wave (B) rallies followed,
complying with one of R.N. Elliotts guidelines where retracements head back towards fourth
wave preceding degree, as it did ending at 41.30. Wave (C) declines then got underway,
unfolding into a more common five wave expanding-impulse pattern defined where its 3rd wave
undergoes price-expansion, eventually ending at 17.75. This is an extension to alternation
as we know it so this guideline adopts the concept that if wave (A) unfolds into a diagonal-
impulse then wave (C) has a tendency to unfold into a more simplistic expanding-impulse
(and vice-versa).
Now its worth noting Fibonacci-Price-Ratio analysis because extending wave (A) by a fib.
38.2% ratio projects the terminal low for wave (C) towards 17.36+/-. The actual low ended
just a fraction higher at 17.75 good enough to verify!
TIP: Why use a fib. 38.2% ratio and not 61.8%? One of the fib-price-ratio guidelines that
weve documented is this when wave (B) retraces wave (A) by a fib. 50% ratio or more,
then extend wave (A) by a fib. 38.2% ratio to determine the terminal completion of wave (C).
If on the other hand, wave (B) ends shorter than a fib. 50%, use 61.8%.
The next observation was something unusual. Intermediate wave (X) unfolded into a
three wave triangle, not a conventional five wave sequence. Each of these three price-swings
subdivide into 3s threes, but the completion at 27.66 leaves behind only a three wave
triangle. Weve documented these in the past and have archived them for reference, but the
fact that they can occur is enough to validate one trading guideline that we use daily never
await the completion of a five price-swing triangle to take a trade always attempt to initiate
the trade at the end of the third sequence. Unless this is an expanding triangle, trading wave
cs completion wont stop you out as wave e will normally complete within wave cs range.
The secondary zig zag pattern began from 27.66 with wave (A) ending at 16.57 nothing
unusual about this except that it ended up being quite a bit shorter than wave (C). Now,
to determine a terminal low for the secondary zig zag, the first between 47.60-17.75 must
be extended by two ratios fib. 38.2% and 61.8% projecting downside targets to either
12.18+/- or 9.65+/-. Then, cutting the secondary zig zag from 27.66 by a fib. 61.8% ratio
to both downside levels, an interim target for the secondary (A) wave is derived, to either
16.70+/- or 14.40+/-. When wave (A) ended at 16.57, close to the 16.70+/- level it originally
heightened the probability of wave (C) eventually ending at 12.18+/-.
When wave (C) did get underway, the internal structure of the pattern did not compete
a five wave subdivision into the 12.18+/- level, so this was the first indication that it would

WWW.TRADERSWORLD.COM October/November/December 2016 37


eventually extend to the next golden-section 0.618 number towards 9.65+/-. The actual low
formed at 10.04 but justifying that golden-section ratio with a reversal-signature afterwards.
Its also a good idea to compare Silver Wheaton Corps. pattern with its peers this often
assists in determining a more exact, terminal low.

Short-term Forecast
Primary wave 5s advance from the Jan.16 low has so far, had little in the way of correction.
Other mining companies are either in the process of ending three or five wave patterns from
equivalent lows, but this is nothing similar to the progress of Silver Wheaton Corp. So far, its
advance has unfolded as a 1-2-1-2-3 sequence, with a 4th wave correction now in progress
see fig #2. The August high at 31.35 ended minor wave iii. three of intermediate (3) that
began from Mays low of 17.87. This can be proofed where its first wave, minute wave 1 to
22.18 is extended by a fib. 161.8% ratio to project the terminal high of this entire impulse as
minute wave 5 to 31.35.
The following correction is labelled minor wave iv. four. So far, an intra-hourly five wave
impulse pattern is discernible within the interim sell-off to 24.75 which makes this minute
wave a within an ongoing zig zag pattern. Using the same fib-price-ratio guideline as before,
extending wave a by fib. 38.2% and 61.8% ratios projects a terminal low for wave c towards
either 22.61+/- or 21.39+/- (log-scale please). As wave b retraced by more than a fib. 50%
ratio, the preferred downside target is at 22.61+/-. All that has to happen now is to test these
downside targets whilst subdividing into a five wave impulse sequence.
After that, the uptrend can resume.

Peter Goodburn is the senior Elliott Wave analyst at WaveTrack International and is the
author of the monthly institutional Elliott Wave-Navigator report and the bi-weekly private
client Elliott Wave-Compass report. Details at www.wavetrack.com
End | Fin | Ende

WWW.TRADERSWORLD.COM October/November/December 2016 38


Conceiving, Believing and Achieving
Realistic Trading Goals
By Roger Felton

Like many traders, I love to discover new, innovative ways to trade that wont fizzle when
market dynamics inevitably change. Its no surprise then when traders tell me they want a
winning trading system that will keep working for the long haul. Im fairly well-known for
sharing many of my techniques with any trader desiring help and having the passion to learn.
But when we discuss trade setups and strategies, what does the term keep working mean?
After all, two traders can take the same trade with the same fill yet one trader can lose while
the other makes out like a treasure hunter with ESP. How can setting goals have any possible
bearing on the outcome of any particular trade, or series of trades? Lets explore this and
more as we discuss setting realistic trading goals, their clear connection to trading success
and what it takes to achieve them.
When traders call on me because they need help, they often
have no clear idea what that assistance should be. Most want a
quick fix to whats probably been a long-term problem. Although
understandable, its also an unrealistic expectation. Trading success
is a process, not an event and achieving that desired success must
always begin with a solid concept, or plan, that must be both
believable and achievable by the trader. Creating a list of lofty
trading goals without a plan to achieve them is just a pile of worthless wishes and nothing
more.
A good trading plan is a logical step by step map of objectives, or goals, and how they
will realistically be achieved. Its also one of the most overlooked and
misunderstood parts of the trading puzzle. A plan doesnt exist until its
actually written down on paper (conceived) but it should never be carved
in stone. The plan must be realistic or it wont be believable. If its
not believable it wont be achievable. It should be fluid because, as your
goal-conquering knowledge increases and your critical trading skills are
honed, your trading proficiency will naturally increase over time and you will naturally want to
increase your trading goals. But again, a plan not written down is a plan to fail and its hard
to make a living as a trading expert in what doesnt work.
One of the most important considerations of any trading plan is the acquisition of knowledge
and the conversion of that knowledge into successful trading skills through experience and
practice. Great skills beat a great system every time. Take a trader with excellent skills and
give them a really strong, robust system and you have a trader who is virtually unstoppable.
So, as you build your Trading Plan of Goal Achievement, its a good idea to give the
acquisition of trading skill serious attention. Its beyond the scope (and ability) of this article
to teach trading skill to anyone. That takes time, hard work, self-mastery and plenty of

WWW.TRADERSWORLD.COM October/November/December 2016 39


dedicated practice and practical experience. Trading skill can never be achieved by simply
watching successful traders, either. You may gain some insight into the system they use, but
their actual trading skills cant be obtained by osmosis. However, I can give you some useful
guidelines that can help traders avoid many of the pitfalls that can devastate any traders
chance of ever enjoying consistent long-term success.
Let me list the essential components of my personal trading plan in order of their importance
to me when I began my trading career. Then well discuss them individually so that each is
clearly understood. In order of importance (to me) they are:

To accumulate the appropriate and necessary knowledge to enable me to consistently


make correct trading decisions on every trade.
To acquire the highest level of trading skill of which I am personally capable of achieving.
To master self-control so human emotions never influence any trading decision I ever
make.
To develop, purchase or otherwise obtain a system or methodology that ideally fits my
personality, my trading style and my trading account.
Find a professional mentor.

Entire books have been written on each of these five topics that I chose for my trading plan.
Starting with the first, To accumulate the appropriate and necessary
knowledge to enable me to consistently make correct trading decisions
on every trade sounds quite lofty. Does it mean that my goal is win
every trade? Not at all. This means the accumulation of good, solid,
valuable trading knowledge to enable me to evaluate what markets are
most likely to do when a particular confluence of conditions (or setup)
occurs. With discipline and practice, trading decisions must be correct
even if a trade, or series of trades, fail. The only time a trader is ever
wrong isnt when a trade loses, its when they fail to do what should be done when its time
to do it.
As traders gain knowledge, I believe its worthwhile to obtain a good working knowledge of
Technical Analysis. The proper use of TA can enable you to increase your trade accuracy by
acting as a filter, of sorts. But traders must be aware that most Technical Analysis indicators
are useless. Many of the remainder can have some benefit but it is not enough to justify the
added trading complexity that they create. The number of really useful, consistently valuable
TA indicators can be counted on one hand.
No trader in the world will know exactly what the market is going to do at every point in
time. Most of the time traders can only guess and thats certainly no way to win for the long-
haul. But all markets repeat patterns of one form or another. So your plan must include the
pursuit of knowledge and commitment to the hard work necessary to turn that knowledge into
consistent profits.
The second item has to do with trading skill. As with the mastery of any difficult task, skill
is the result of the proper application of knowledge through intensive practice and extensive

WWW.TRADERSWORLD.COM October/November/December 2016 40


experience. As this implies, skill should increase naturally over time but this is greatly
dependent on the quality of the knowledge acquired as well how it is applied in real time
trading. Knowledge and skill are inseparable qualities in trading, as well as mastery of most
other complex and difficult tasks.
Emotional self-control was placed at number three on my list but its importance cannot be
over-emphasized. Trading is like chess in that its a totally mental exercise. Theres nothing
physical about it. But theres a world of difference between learning how to master the market
and learning how to master yourself. Both are vitally important but,
for most traders, self-mastery is by far the most difficult. No trader
can succeed without the ability to harness human emotions to the
point where they cannot influence trading decisions from entry to
trade management to the eventual market exit. No trader can divorce
themselves from their emotions short of a self-induced coma. But the
negative impact emotions can create can be managed. Humans are
by nature emotional creatures so self-mastery takes great discipline,
focus, patience and, for most traders, a whole lot of work. A trading
plan would be unmanageable and any meaningful success nearly impossible in the absence of
strong emotional control.
Once a trader has a professional level in-depth understanding of Price Action (I call it
predictable market behavior), then the outcome of every trade taken essentially becomes
irrelevant. Thats because the odds of trades being profitable are so skewed in the traders
favor, that theres little emotional concern when a trade wins or when it loses. When a trader
has mastered Price Action and can accurately predict market behavior, mental stress becomes
practically non-existent and is replaced with rock-solid, unshakable confidence. Stress and
negative human emotions have virtually zero effect on a trader with this level of confidence.
To master markets you must first master yourself.
We come now to number four on the listthe actual trading system a trader will be using.
This is the item that usually goes first on most traders list. It is important. Choosing a trading
system can be compared to choosing a spouse. Hasty
decisions on important matters usually end badly. After
all, your trading system isnt just a tool; its your trading
partner, your confidant, if you will. Your financial future
may very well depend on your systems ability to crunch
a lot of vital data and present it to you instantaneously
in a form that will enable you to make successful trading
decisions. Of course, without Knowledge, without Skill
and without Emotional Mastery, no trading system will ever produce the ROI traders hope for.
Whatever system you choose, make sure it fits seamlessly with your personality (aggressive,
conservative, etc.), your style (trend trader, position, long-term investor or scalper) and the
size of your trading account. If your funds are small, your drawdowns must be also. And
always remember the KISS rule, especially in trading.

WWW.TRADERSWORLD.COM October/November/December 2016 41


In my trading, my charts contain only what I need to win. Below is an example of how my
charts look. The bars are highly modified Renkos that I created many years ago and, for me,
they are vastly superior to any other bar type I have ever used.
Others must be agreeing as Im
seeing more and more trading platform
and system vendors creating similar
versions of my Renkos over the last
few years. But its not the bars or
the filters that win, the trader does.
Excellent charting is great, but its how
you use them that counts. I created
a unique system called SignalPro that
does a great job of automating almost
everything. It finds great trade entries
and filters them for the best possible
accuracy. Notice that each of the
filtered entries in this screen cap all
contained hundreds of dollars of profit potential and they appear with plenty of warning. But,
when it comes to teaching traders, profit potential is pretty much a meaningless term unless,
of course, the student has ESP.
Any trader wishing to learn more about my charts and how I trade is invited to contact me
anytime. Info is provided at the end of this article and theres no charge whatsoever.
Traders want to know the precise moment to enter a trade, the exact stop placement and
precisely when to exit a trade to the tick. This software does all that and a whole lot more.
A trader can even teach SignalPro to trade for them if they choose. But lets save that for
another day and another article.
The proof is in the pudding as they say so, before
concluding, Id like to show you what my Trading Plan did
for me. Well, it was my guide but I did all the grunt work,
of course. But take a look at my Equity Curve for the first
half of September, 2016. My daily goal in my Trading Room
is to make a four-figure profit trading just 2 contracts on
6 to 8 trades per morning. As you can see, Im right on
track for the month.
But a couple of weeks of success do not a
trader make. At least not a professional one. So
Ive included my Equity Curve for the past couple
of years from the data that the team tracks and
logs day by day. Be warned that, due to the large
timescale involved, the drawdowns are difficult to
see. But there were some, they just didnt last
long. Im a fairly good trader but I owe a lot

WWW.TRADERSWORLD.COM October/November/December 2016 42


to the system I developed, the software my programmer coded and the work I invested in
myself to get to this point.
Now we come to item number five, Find a professional mentor. When I began trading
futures, the CME had just launched the S&P 500 E-mini. As far as electronically traded
markets were concerned, that was it. In that arena, I was sort of a pioneer and there really
were no mentors on a professional level in existence that I could find. So, I became my own
student and, eventually, my own mentor.
Nowadays, there are quite a few pro level futures traders. And some may be available
for mentoring other traders. Personally, there are few things
I enjoy more than mentoring traders and I guess thats why I
make myself available for mentoring sessions 7 days a week.
My students know they can schedule time with me for help any
afternoon, evening or weekend and I never charge students a
fee. If you are a trader whos serious about your career, the
best advice I can give you is Find a Mentor! It will save you
thousands of dollars in needless trade losses and it can trim years off of your learning curve.
With just these two amazing benefits alone, isnt it incredible that a mentor is usually the last
thing most traders think they need.
Each of the things covered in this discussion are important, some even crucial, to your
success. If you can conceive the trader you want to be and you truly believe that trader is
within you, then the only thing standing between the trader you are and the trader you can
be is having the right plan. If you need help getting started, please let me know and well
get you on track quicker than you might think.

For more information on Felton Trading or anything you have read in this article, please email
Questions@FeltonTrading.com or visit our website www.FeltonTrading.com.

WWW.TRADERSWORLD.COM October/November/December 2016 43


The Basics of Relative Strength

By Clif Droke

Its all relative is a common expression which is often used to dismiss something. Yet
when it comes to the stock market, relativity can be an investors best friend.
One of the most important skills a trader can learn is relative strength analysis. Knowing
how to make an informed study of relative strength is a sure pathway to stock market profits.
Traders and investors in precious metals mining shares could benefit from this knowledge.
Relative strength analysis is a quick and simple way to short circuit the analytical process.
Wall Street pros can spend hundreds of thousands of dollars gathering all the information they
can about a particular company before buying the stock. These investors pore over balance
sheets, grill company executives for information and sometimes even obtain illegal insider
information before placing a bet on the companys future. By merely using the techniques
described in this chapter, weve allowed Wall Street to do all the expensive due diligence work
for us.

What is Relative Strength?


Relative strength is a measure of how an individual stock is acting in relation to the overall
broad market. If a stock is rising, for instance, it can exhibit poor relative strength. If the
stock market has advanced 10% in a period of months while the individual stock in question
has only gone up 5%, the stock is underperforming the broad market on a relative basis.
Conversely, if the stock youre looking at has been in a downward trend or perhaps
bottoming after a steep decline and the market is falling even more than the stock, then
the stock in question is exhibiting relative strength. Knowing which stocks are in a relative
strength position versus the broad stock market can be a valuable tool for increasing your
investment returns.
There are actually two different ways of looking at relative strength (RS). Well be examining
both forms of RS analysis in this chapter. In his book Secrets for Profiting in Bull and Bear
Markets, Stan Weinstein defines relative strength with the following formula:

Price of XYZ
___________________
Price of Market Average

He writes, If stock XYZ is currently at 50 and the S&P composite average is at 310, then
its relative strength is .16 (50/310). By calculating this figure (or by using a stock charting
program that does it for you), you will see a clear picture forming over time. The stock youre
following will either be exhibiting relative strength or weakness versus the broad market. This
in turn will give you an opportunity to decide whether or not to buy or, in the event you own
it, sell the stock.
WWW.TRADERSWORLD.COM October/November/December 2016 44
How to Recognize Relative Strength
There are two important aspects to performing a simple relative strength study: accumulation
and distribution. That is, we want to be able to identify when a stock is being bought or sold
by deep-pocketed professional traders. Knowing this will give us a huge tactical edge over
most retail traders. More importantly, this knowledge will allow us to follow in the footsteps
of the Wall Street pros and make money as we track their presence within a particular stock.
To detect accumulation, look for bullish divergences between the broad market (as
measured by the Dow Jones Industrial Average, the S&P 500, or the NYSE Composite) and
the stock youre analyzing. Bullish divergence can best be seen when a stock fails to be as
severely affected by selling pressures as the broad market, says Larry Williams in his book,
The Secret of Selecting Stocks for Immediate and Substantial Gains. Another way of putting
this is that a stock exhibits accumulation when it does not match the markets downward
moves. Instead, the stock holds up better than the averages on market down moves and
rallies stronger on market rally.
The above chart example is a good example of relative strength in a stock. In this case
Boeing Co. (BA), a component of the Dow Jones Industrial Average, made a series of higher

lows and higher highs in the October-November period of 2012, even as the Dow was making
lower highs and lower lows. This relative strength reflected in BA presaged a major rally in
the ensuing months.

WWW.TRADERSWORLD.COM October/November/December 2016 45


Williams further points out that the greater the divergence between the market and your
stock, the greater the likelihood that the stock will move impressively higher at some point in
the near future. In Williams words, Divergence of a few days will forecast moves of a few
days duration. Divergence of a few weeks will forecast moves of a few weeks and divergences
of a month or more will forecast extended, long-lasting moves.
Its important to remember that comparisons of relative strength between the market (S&P
500) and an individual stock should be made at major turning points. For instance, when the
S&P has declined for a period of several weeks or months and then reverses higher, at that
point you should be looking for stocks that turned up well before the S&P.
An example of this would be 3M Co. (MMM), a Dow 30 component which bottomed and
turned up a few weeks before the major indices following the broad market plunge of late
2015/early 2016. Here you can see the extent to which MMM reflected relative strength,
beginning in late January 2016 and continuing into the summer. Relative strength patterns
which manifest in individual stocks around market bottoms are usually a sign of informed (i.e.
smart money) buying activity. And it usually pays to follow the smart money.
When seeking stocks for potential short sales, watch for distribution (insider selling)

patterns, which is basically another way of saying relative weakness. Stocks that make lower
highs while the S&P is making higher highs fit the description of what were looking for. A
good example of this is the pattern that was visible in the chart for Kinross Gold Corp. (KGC) in

WWW.TRADERSWORLD.COM October/November/December 2016 46


December 2004. While the S&P 500 was trending higher in late 2004, KGC was trending lower
(below). This presaged the long decline in Kinrosss share price through the spring of 2005.
Another example of negative relative strength can be seen in the following graph of
International Business Machines Corp. (IBM). The time frame was between January and
August 2013, and during that time the S&P 500 (SPX) was making a series of higher highs and
higher lows, which is the basic definition of a bullish trend. In contrast, however, IBM began
tracing out a series of conspicuously lower highs and lows between March and April. The recoil
rally that followed in May was certain to fail, and traders who sold short would have profited
nicely by simply adhering to the relative strength (or in this case, relative weakness) principle.

WWW.TRADERSWORLD.COM October/November/December 2016 47


It will do us well to remember that the longer the divergence lasts between the stock were
watching and the Dow and/or SPX whether bullish or bearish the more likely the next
tradable move will be significant. For this reason relative strength studies are invaluable,
especially at major turning points.

Clif Droke is a recognized authority on moving averages, internal momentum and Kress
Cycles, three valuable tools as applied to the equity market. He is the editor of the Momentum
Strategies Report newsletter, published three times a week since 1997. He has also authored
several books on trading and technical analysis, including his most recent one, Mastering
Moving Averages. For more information visitwww.clifdroke.com

WWW.TRADERSWORLD.COM October/November/December 2016 48


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WWW.TRADERSWORLD.COM October/November/December 2016 49


How To Be Successful At Trading
Introduction
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.

How To Be Successful At 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

WWW.TRADERSWORLD.COM October/November/December 2016 50


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.

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.

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

WWW.TRADERSWORLD.COM October/November/December 2016 51


resistance levels based on chart history. Many people ask me which time frame that I look at
by 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.

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.

How To Develop a System with a Positive Expectancy


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 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

WWW.TRADERSWORLD.COM October/November/December 2016 52


also know the percentage of winners versus the percentage of losing trades.
From that data, perform a calculation as follows:
Probability of winning trade times Average Winning trade in dollars minus the probability of
a losing trade times 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.

Trading Checklist

The following is a basic checklist that you should apply to your trading:
Select System to Trade and test for positive expectancy
Do I have pending news that is likely to impact my trade?
Am I trading during the start and stop times of my trading plan?
Have I done my technical analysis to know where specific areas of support and resistance
are in the market I am trading?
Have I analyzed markets that correlate with the market I want to trade?
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.

Developing a Belief in Your Approach and Overcoming Fear:


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 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
WWW.TRADERSWORLD.COM October/November/December 2016 53
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.

When I Trade Specific 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

WWW.TRADERSWORLD.COM October/November/December 2016 54


THE PRESIDENTIAL CYCLE
By Jacob Singer

.
With the American Presidential election capturing everyones attention, especially when
Donald Trump, the Republican candidates mouth spews off the cuff accusations that are
causing many who supported him initially, to reconsider their support. While the Democratic
candidate, Hillary Clinton is accused of turning the State Department into an adjunct of the
Clinton Foundation as she jetted around the world as Secretary of State, and is also accused
of not telling the truth about her claims concerning her private email server, one wonders what
the future for the American stock market will be should either candidate be elected.
To find out, we will look at what happened to the market prior in previous Presidential
elections and then project what we think will happen to the market with the present Presidential
election. With the election taking place in November, who knows what else will occur between
now and election day that will tempt voters to change their opinion.

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The two charts in Figure 1 and Figure 2, are monthly charts of the S&P500 index with the
Presidential cycle superimposed. The charts show how the index moved from the presidency
of President Richard Nixon to that of President Barak Obama. Note how in the months before
a new President takes office the Index falls, in some cases a few months before the President
takes office, and in other cases only when the President takes office. Why the difference? I can
only assume it is because investors come to market decisions as to whether there will be a
change in the party represented by the newly elected President, based on the speeches made
by the Presidential candidates, speeches that suggest what they would do within the financial
system of America, should they be elected.
Of course, depending on who is eventually elected, either Democrat or Republican, the
financial plan will differ, as we have presently seen with the financial plans of candidate Hillary
Clinton and that of the candidate Donald Trump. Whether voters consider the financial plan of
the Chair of the Board of Governors of the Federal Reserve System, Janet Yellen, is something
that will only occur once the new President comes to office.
In an attempt to predict the future, do notice in Figure 2 how the S&P500 Index fell before
George W Bush, a Republican, took over from Bill Clinton a Democrat, and how the market
fell months before Barack Obama, a Democrat that took over the Presidency from George
W Bush. Is this telling us something? Will the index start falling as the Presidency of Barack
Obama approaches finality, and then start to rise as the new President, either a Republican or
Democrat candidate takes office? Will the financial market react dramatically to the Republican
candidate Donald Trumps financial plan that will differ from the plan presently in place? Will
the Democratic candidate Hillary Clinton continue with President Obamas financial plan, one
of the reasons why the chart is not showing a correction before the November election? Is the
chart possibly forecasting the result of the election who the next President will be?

WWW.TRADERSWORLD.COM October/November/December 2016 56


The answer is a very probable YES. Yes, there was an initial drop in the S&P500 index
probably forecasting a possible change in the party behind the newly elected President, but
the Index starting rising before either candidate was confirmed, hinting that the Democratic
nominee will be elected President.
No matter who the next President will be, looking at past Presidential cyclical performance,
there will be a correction as the incoming President takes office and applies their own economic
policy to the country. This could be the result of the effect the Kondratieff wave, will have on
the world economy.

The chart in Figure 3 is a chart of the Kondratieff wave showing the Presidential cycle.
Nikolai Kondratiev was a Russian economist who was a proponent of the New Economic Policy
that promoted small private free market enterprise in the Soviet Union. Published in 1925 in
his book, The Major Economic Cycle, capitalistic economies were characterized by successions
of expansion and decline. This contradicted the Marxist idea of the imminent collapse of
capitalism. In July 1930 Kondratiev was arrested on Stalins orders and sentenced to 8 years
in prison in Siberia. In September 1938 during Stalins Great Purge he was sentenced to a
further 10 years, and then executed on the same day the sentence was issued.
The Kondratiev wave is forecasting a minor correction sometime in 2016 or 2017 with a
major correction sometime in 2019 - 2022. This suggests that whoever the next President of
the United States will be, the economy will enter a correction during their term of office. The
reason for the correction is anybodys guess. The correction in the market in the United States
from 2000 was the result of the technology bubble bursting, and the collapse from May 2007
to March 2009 during the Presidency of George W Bush, a Republican, as we all know today,
was the result of the mortgage backed security crises, a meltdown that occurred when Ben
Bernanke was Chairman of the Federal Reserve. The buck of the anticipated meltdown that
the K-Wave is calling for, will now pass onto Janet Yellen, the present Chairman of the Federal
Reserve.

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Will the forecasted meltdown be the result of the economic policy of the President, Barak
Obama, or will it be the result of the economic policies initiated by the newly elected President,
either Donald Trump or Hillary Clinton?
On August 15th, 2016, President Barak Obama announced that the American property
market is in a bubblicious, another mortgage bubble bursting. With the rise in the price of
property over the past years, the credit score of approved borrowers have been trending
down even as their debt levels have grown. Today. Fannie Mae and Freddie Mac have been
demanding lower credit standards in pursuit of the same affordable housing goal, just as
they did under President Bill Clinton with the mortgage backed security crash occurring during
the Presidency of his successor, President George Bush. Some borrowers today need only put
3% down to get a Fannie Mae loan. With the Kondratiev wave calling for a fall in the economy,
a lot of these loans will go bad, just as they did in the 2007 2009 mortgage meltdown.
The chart in Figure 3 shows how strongly the S&P500 index rose during President Obamas
years of office, even though the K-Wave called for the economic bottom to happen in 2012. A
look at the chart shows that there was a correction in the index, a small correction, which did
bottom in 2012, but the index soon recovered and continued to rise strongly. This recovery
occurred during the period Ben Bernanke was Chairman of the Federal Reserve. He inherited
the mortgage backed security meltdown in October 2007 from Alan Greenspan when he took
over office in January 2006. Will Janet Yellen inherit the meltdown from Ben Bernanke? To
answer this question, one must look at the chart in Figure 4.

The chart in Figure 4 is a chart of a strategy developed by Roger Paget. When I lectured
on Elliott Wave theory in South Africa in the 1980s an old man with a long grey beard and
straggly grey hair, approached me at the end of the lecture. He had scrolls of paper and he
insisted that I look at what he had. His name was Roger Paget and after studying his charts,
all drawn in pencil, charts that stretched across the table, I became convinced that he had

WWW.TRADERSWORLD.COM October/November/December 2016 58


developed a convincing market cycle strategy.
He believed that the indexes repeated their TradersWorld Magazine
patterns every 16 years. Premium Subscription
The chart in Figure 4, a monthly chart of
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S&P500 Index, with vertical lines repeated
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every 4 years, illustrates this. Looking at the
chart one can see that in 1984 and 2000, the
index corrected (1 and 2). This suggests that
in 2016 a correction should occur, as shown
on the chart. Whether the correction will be a
strong correction as forecast by the K-Wave
in Figure 3, or whether it will be a mild one
with a strong correction only happening in
2019 2020 as suggested by 3 and 4 on the
chart of the Paget cycle will probably depend
on the economic strategy of the newly elected QUARTERLY MAGAZINE SUBSCRIPTION
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COMPLETE BACK ISSUES OF TRADERS
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newly elected President replaces the financial issues from 1986 to present. This, contains
advisors of President Obama. Of course, articles, product reviews, hundreds of chart
depending on who the President will be, will examples, how-to-trade articles and much

determine the strength of the fall in the index.


format, which you can read online anytime.
Either way, caution is necessary. In every issue, you get the information
you need to trade the markets better with
Jacob Singer is the author of three books, charting, astro, cycles, oscillator tools.
Works for stocks, bonds, futures, options.
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WWW.TRADERSWORLD.COM October/November/December 2016 59


Using Andrews Divergence to find
Reversal Points
By Ron Jaenisch

Times were very different a hundred years ago. If one had the inclination and the intelligence,
it was possible to attend and graduate from the Massachusetts Institute of Technology and
Harvard University at the same time. This is what Alan Hall Andrews did. He received his
education in what was high tech back then, aeronautical engineering.
His father, who ran an investment business, was more interested in Alan being involved in
something that made money, and lots of it. He charged his son with making over one million
dollars in his first year while working in his fathers investment firm.
It took Alan three years to accomplish the goal. He achieved it by using techniques his
father taught him to trade cotton with. Later he learned additional techniques from George
Marachel and Roger Babson. After many successful years in the investment business, he
decided upon a less hectic life and moved to Miami. There he became a college professor at
the University of Miami.
As an Engineering Professor at the University of Miami, he taught some of the brightest
students. When the stock market was in the news he would digress from his normal lectures
and discuss how geometry is used in trading. His students were fascinated to learn from his
real world experiences. In one of his classes he was discussing the trading technique he
learned from Roger Ward Babson, the founder of the world famous Babson Business College.
A student in the class suggested that the median line could be used in conjunction with the
Babson techniques.
After drawing hundreds of median lines by hand on paper charts, Professor Andrews came
to the conclusion that prices make it to the median line about 80% of the time, and it is a
useful tool for understanding what the trend is. Furthermore there were parallel lines that
could be drawn along with the median line, which create a price channel. He made the median
line techniques part of the trading course he taught through the Foundation For Economic
Stabilization. This is when the author of this article became a member of FFES and spent
considerable time with Professor Andrews, learning the techniques his father taught him along
with the Babson and Median Line methods. Dr. Andrews was easily able to market his trading
course because once a year he gave the 5K into 50K demonstration.
Every Monday course members received the course newsletter in their mail box with a
script to read to their broker. This typically turned 5K into 50K over a period of a few months
trading futures. The explanation of what lines and rules that were used for each trade were
detailed in the weekly course letter. Often charts accompanied it. The idea was for the students
to learn by doing. The Professor knew that he could keep his students interest in learning the
techniques by helping having them see the success. Often a technique that was discussed was
the use of what is now referred to as the Andrews Pitchfork.

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Getting Started with Pitchforks
When examining a recent chart, three probable pivot points are selected and one possible
pivot point is selected. Two median lines, each with their respective parallel lines are drawn.
By drawing the lines the trader is able to quickly answer the questions: 1) what was the prior
trend? (As noted by the red median line from the probable pivot points), 2) in the probable
trend, did price make it to the median line? And 3) what is the possible next trend? (Using two
probable pivots and one possible pivot.) As you can see each median line in chart #1 they
are accompanied by two parallel lines, which help the trader see the channel of the trend. The
three lines together are often referred to as the Andrews Pitchfork. Dr. Andrews referred to
them as the ML (median line) and MLH (median line parallel lines).

Selecting the Pivot Points


The initial step in using the ML and MLH lines is selecting the four pivots for drawing the
lines. The pivot points are swing points which are highs and lows and are referred to as
probable pivots and one possible pivot. Chart #1 shows the median line drawn from the high
in August. The first point selected is labeled point A. The next swing points are labeled points
B and C. Points B and C define the width of the Andrews Pitchfork channel. The median line is
calculated by drawing a line from point A through the midpoint of a line between points B and
C. This line midpoint is also the 50% of value point between pivots B and C. Knowing this gives
traders the ability to draw median lines with software that only has trend lines and Fibonacci

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points in their choice of studies.
The drawing the possible median line using point D, was suggested by my friend Dr. Alan
Andrews. It answers the question: If prices reversed at the last possible pivot point, what will
the new trend be? This can be seen in Chart #1. In Chart #2 the next set of four pivot points
is used to draw the next set of lines.

Finding Support, Resistance and Reversal points


As you can see in Chart #2, prices charged up and weaved around the up sloping median
line for months. After they made the highs they stayed inside the upper parallel line, of the
next median line and parallel set, using one possible and two probable pivots, when prices
tested the highs, you were able to go short. On the same day there was an ORE sell signal
in the Nasdaq and a week and several days earlier there was a sell signal with the Andrews
methods in the Dow.
With specific exceptions, prices will typically stay inside the median line parallels lines.
But as my friend Alan Andrews told me, there is a lot more to it than that. Andrews stressed
placing buy and sell orders near where the pivots are, rather than waiting weeks or months,
until they pass through the parallel lines.
This is accomplished by finding Ore points, as posted http://ireport.cnn.com/docs/DOC-1047298
and
as seen in chart #3. It is also accomplished by finding specific types of Andrews Babson

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Reversal Points, or by finding Andrews divergence.

Andrews Divergence is determined by measuring the distance between a median line that
was not made and where a small pivot occurred. In order to determine divergence, there are
typically two or more pivots used to determine it.
The theory behind it is very straight forward. As prices go in the direction of the trend they
are going towards the median line. Upon each attempt to make it to the median line a pivot
is made. If these pivots are clearly diverging, in terms of distance, from the median line, then
a reversal is taking place. This divergence is very easy to measure, when using Andrewss
market geometry.
In the example, in the correction in the price of Google in chart #4 it can clearly be seen.

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After prices went down and made a pivot labeled A a line is drawn to determine the
distance that prices missed the median line by. Prices thereafter, went up and tested the MLH
(median line parallel) two times, prior to going down to point B and making another pivot. As
you can imagine short term traders like these lines because of the ability to predict short term
moves they provide.
After prices were unable to make it to the median line the second time, the distance
between the pivot and the median line is measured in line B . Note that even though prices
were lower in price at the second point there is a significant difference in the length between
lines A and B. This results in what is referred to as Andrews Divergence. When this divergence
is taking place a reversal is in progress.
Then it can be taken to the next level. By taking the distance of line B and placing it past
the next median line, the astute trader can estimate the distance of the next move which in
this case is up.

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As can be seen in the google chart #5, as prices went up from $550 to well over $750 they
made the median line and went beyond it, by the distance expected. Prices went past the
median line the distance that was projected when they did not make it to the median line, near
the $550 value. Dr. Andrews taught that when prices did not make it to the median line they
make up for it on the next move in the opposite direction.
In chart #5, line B was used to forecast the distance that price would go up past the median
line. After price went up to make the pivot in the forecasted area near the point estimated
by line B, they reversed. Then they went down to the area of the lower parallel, near $650
where support is was found, at this point prices reversed and made another low pivot, prior to
heading much higher.
Even though price patterns are repetitive, they do vary. Andrews Divergence points are
one of the easy to use tools that are used to find one of the various types of reversal points.
Others that use relevant in different situations are found in the Advanced Andrews Course,
which comes with over 25 videos and a manual. All are available at www.Andrewscourse.com . All
readers of this article are invited to join the free yahoo discussion group by clicking upon the
new? link on the website.
The most complete compilation of the writings of Andrews, including the ORE technique is
found in the 800+ page Expanded Andrews course, which includes over 25 additional videos.

WWW.TRADERSWORLD.COM October/November/December 2016 65


Some Secrets of
THE TUNNEL THRU THE AIR
or LOOKING BACK FROM 1940

By David Burton

The level of knowledge Gann possessed is way above what anyone has discovered, he on
a completely different level from any thing I have seen. What Im about to explain, you will
probably never have seen before in your life? I first discovered that the cover to Tunnel was
encoded about 20 years ago (see the image of the correct cover with 16 planes on it). Many
people who claim to be Gann experts dont even know the cover is concealing a code, in fact
many dont even know that Billy Jones changed the cover in the 70s and have interpreted
the wrong one. There is not one Gann expert in the world that can do what Gann himself has
done. If you overlay the Tunnel cover with Ganns square of 144 overlay, you will see there is
a perfect line up.

The front cover of The Tunnel Thru the Air or Looking back from 1940 (TTTTA) is
coded with the square of 144. On page 144 is a poem which has 144 words, and each of the
three sections on that page has 51, 44 and 49 words respectively. 144 + 51 + 44 + 49 = 288,
or twice 144. The last section is on page 145 which has 53 words. In total there are 36 lines of

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words, 36 x 4 equals 144. The total number of words is 197. 19 x 7 is 133. Page 133 has the
name of the person who wrote the poem. 144 + 51 equals 195, and page 195 starts Chapter
16, the number of planes on the cover.

When you place the square of 144 plastic overlay (12 squares to the inch) over the front
cover, it measures 144 squares wide and 90 squares high. The 8 planes of the 16 are the last
square of 72, or the death square of 144. Only one plane is crashing in the tunnel, which is 48
squares up, and 96 squares across, which is twice 48. These are the green lines or third lines.
There are three poems on page 48; the middle one has 48 words. The total words in the three
poems comes to 180.

The other plane in the tunnel is at 60 and 120 lines or one sixth and one third of a circle.
The tunnel, which is smaller on the left, runs to the right becoming the widest between the 2
x 1 Gann angle and the 3 x 1 Gann angle, and finishes perfectly between those two angles.
The plane furthest to the right is on the 126 line, and page 126 is Chapter 12, which squared
is 144.

The smallest plane is 108 lines across and 36 lines up, right in the middle of the death
square. 108 is 36 x 3. The two inside flaps of the cover have 4 planes each, making a total
of 16. These too have measurements on the square of 144. Theres more decoding in these
pages if you wish to go there, but most wont

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If you have studied Ganns article on the square of 144 he says that if you multiply 144
x 144 it equals 20,736 days. This is an important time period in TTTTA because when you
subtract 19,400 days from 20,736, you end up with 1336 (1335 is a Bible number). Because
the 144 overlay is used on the monthly chart, it is 4,383 days, but when you use Jupiter days,
its 4331 days, the difference of 52 days or 1/7th of a year.

Gann said he got all of his cycles from the Bible. This is true, and he coded this in TTTTA.
You would know this if you discovered the eclipse series in the Bible. He gave you a number of
major starting or finishing points in TTTTA, one was the last date in the book of 30th August,
1932. This was the end of the 5th set of eclipse series. Now there are three sets of Jupiter
cycles to two sets of eclipse cycles, which you will discover if you subtract it from 1932 date.
When you do this it will give you a date of 1 February, 1897.

You know that 144 x 3 = 432, also 1440 minutes in a day x 3 equals 4320, that subtracted
from 4331 equals 11, which could be the meaning of the 11th hour. The Eclipse period is 18
years and 10 days and theres 70 eclipses to one set. There are 649 years to a complete a set
not allowing for the sidereal movement of the equinoxes. You will also discover after study
that Saturn and Uranus have a pattern that comes in for a period and then disappears. This
requires some serious study to find.

When you count from eclipses, you come up with dates in the book as well. For example,
if you take away 1940 from the 30th August, 1932, you end up with the following dates. The
first one is the day the book was published, and you would also notice the days go backwards
like the Chaldean order of the days of the week.

Result 1: Monday, 9 May 1927


Result 2: Sunday, 15 January 1922
Result 3: Saturday, 23 September 1916
Result 4: Friday, 2 June 1911
Result 5: Thursday, 8 February 1906
Result 6: Wednesday, 17 October 1900
Result 7: Tuesday, 25 June 1895

When you take the total lunar eclipse date in his book of 15th June, 1927, and go back 16
total lunar eclipses (remember, 16 is the number of planes on the cover), you end up with
9th February, 1906, close to the date above. Gann had a chart on which he had drawn all the
lunar eclipses, which you most likely havent seen. In fact, there are 270 Gann charts that
were taken from the Gann collection back in the 1990s, which may never see the light of day
again. These, at a guess, were for Ganns personal study only, so housewife astrology would
probably not be able to decode them.

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The square of 144 overlays over the cover (see attached, planes are number 1-8) shows
you the extent Gann went to code things. The square of 144 overlay also shows the squaring
of the circle, but this is really another article in itself. Follow the plane numbers and the inches
between are 4.5, 3, 1.25, 2, 1.5, 2.75 and 2 which add up to 17, half the number of the
missing chapter in the book which is Chapter 34.

The overlay covers the cover 144 squares along the bottom and 90 squares up or 144 x 90.
144 x 90 = 12,960, minus zero you have 1296, the square of 36, which is the magic square
of the Sun. All eight planes are in the DEATH SQUARE of 144. (144 x 8 = 1152, 144 x 16
= 2304 the Bible number). The two Gann angles measure the tunnel being from 72 to 48, a
difference of 24, the hours in a day.

The 90 time line goes straight through the middle of the first crashing plane. All the planes
are between the 90 and 126 time lines, the difference is 36, being one quarter of 144. The 126
is important, because its 2520 divided by 20. There is a plane at 108 degrees, and this is the
start of the death square. 108 is 18 degrees Cancer, while 144, the end, is 24 degrees Leo.
The second DEATH SQUARE would start at 252 degrees or 12 degrees Sagittarius, and
end at 288 or 18 degrees Capricorn. If you move the overlay to line up with where the tunnel
is 12 squares wide (the 54 square line), you have the perfect square of 90 x 90, another Gann
overlay. The inner circle of the square of 144 lines up five planes when you include the book
cover flap and one plane in the middle adds up to six, the number 7 plane is the only one flying
out of the TUNNEL, and theres more to that than meets the eye.

If you place the overlay through plane number one, its on the 54 square (you should know
the meaning of the number 54) to the edge of the cover and 81 square to the edge of the flap
of, the cover, which is the square of 9. The stock market bottomed when Jupiter was at 24
degrees Leo in 1932. The so-called Gann experts were all writing about the other cover of the
book, which Billy Jones designed. They are still using the square, circle and triangle, which is
not a Gann symbol.

The Sun changes signs 12 times in one year and Jupiter changes signs 12 times in 12
years. If you multiply 12 (Sun) by 144 (Jupiter) we get 1728. The Sun/Jupiter conjunctions
happen once a year. The one before 1927 happened on the 25th January, 1926, and Robert
Gordons first trade was one year later on the 24th January, 1927.

When you do the natal chart for 1926 you will see that when he wrote the book transiting
Venus was conjunct the natal Moon and transiting Moon was conjunct natal Neptune. The
day Marie Stanton disappeared, Venus was transiting the South Node. I was thinking Marie
Stanton was an unusual surname, so maybe Stanton stands for stations of planets. There is a
small town in Texas called Stanton which is 488 miles from Texarkana, where Robert Gordon
was born, and theres 487 miles from Lufkin, Texas, where Gann was born, to Stanton (487 x
3 = 1461 the Sothic cycle in years). Theres 1927 miles from Stanton, Texas to Stanton, New

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York, the year TTTTA was written.

The numbers 488 418 pages = 70, 487 144 = 343 (7x7x7). Pages 332, 333, 334 have
Tunnel thru the Air nine times, 16 letters x 9 = 144. Marie was born a Libran, which is ruled
by Venus. Her Venus was just past 144 degrees or 24 Leo, and Robert was born a Gemini,
which is ruled by Mercury. He says Mercury is price in the book. I looked for the stations of
Venus and it was on her birthday 6th October, 1911 (her birthday in the book is 6th October
1908, theres is another one he was using as well). Use this chart and you will find some
interesting things to do with Marie, like its 7634 days to the 1932 eclipse (53 x 144 = 7632).

Back to the chart I used because it is the first opposition of Sun/Jupiter to the sign Leo,
which is the first sign of the zodiac in the Bible, and it doesnt happen for another 12 years.
The sign of Aquarius is the first sign after winter and it was at 334 degrees of the circle. When
Robert Gordon bought on the 24th January, 1927, Jupiter was at 1 degree Pisces, and when
he sold on 8th September, 1927, it was at 1 degree Aries (361 square of 19), and Jupiter had
moved 30 degrees. The 9th September, 1926 was the Hebrew New Year, so 1 year to the Cotton
high.

Anyone who has his scale for planets knows that he use 12 points per degree for Jupiter.
30 x 12 is 360 this is 30 degrees Aries, 720 is 30 degrees Taurus, 1080 is 30 degrees Gemini
etc. He bought Cotton at 13.80 cents/lb., which times 12 is 165.5, Jupiter at 331; half is 165.5
or 50%. This is 15 degrees 30 minutes Virgo; Mars was 16 degrees Taurus (120 degrees) on
the day he bought (Venus is like a smaller Jupiter) was at 18 degrees Aquarius when he sold
it was at 18 degrees Virgo or 150 degrees. These charts are set up for New York, where Gann
lived at the time of TTTTA.

I havent ever talked about the number 1728 before well theres lots I never talk about.
As Gann said it stays a secret only when you keep it yourself and dont sell it. But I may drop in
the odd gem now and again just to keep the housewife astrologers on their toes. I will get back
to that number soon. First you must print out all the Jupiter/Saturn conjunctions, oppositions,
parallels and contra-parallels. The same as the Sun/Jupiter. You have to print out all the charts
from the great Mutation chart in 1842 to say 2100.

Now Jupiter in magic squares is 4 and Saturn is 3 (3 x 4 = 12). The magic square of Jupiter
has some powers, like all the numbers in each direction adds up to 34 (34 is the chapter that
is missing in TTTTA). Benjamin Franklin had a magic square and circle of 16 (4 x 4), and he
also was a Mason. If you had done any major studies, you would know that Jupiter is the
only planet that makes a square in the sky based on astrological points. Jupiter is at Aphelion
approximately 15 degrees Libra and Perihelion at 15 degrees Aries. Jupiter is exalted at 15
degrees Cancer and in its fall at 15 degrees Capricorn. These are all 90 degrees apart making
a perfect square or cross.

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Robert Gordon was born on 9th June, 1906, when Venus was at 15 degrees Cancer, and he
made his greatest discovery when Pluto was at 15 degrees Cancer on 19th June, 1927. He got
together with Marie on 30th August, 1932 (eclipse), when Mars had just passed 15 degrees
Cancer, after she disappeared on 5th June, 1927. He wrote the book when Mars was at 13
degrees Cancer. He made his first trade when moon was at 15 degrees Libra. He expects the
stock market to close when Venus was at 15 degrees Libra in 1931.

Each of these charts is important when you are looking up a certain year. You will recall
in Ganns stock market course he said that the year 1936 will following close to the 40-year
cycle of 1896. He is saying here to look at the planetary alignments that are close to the
current year in the 20-year cycle. That year was a Jupiter contra-parallel Saturn which was on
1st September, 1896. Parallels have the same effect as conjunctions and contra-parallels the
same as oppositions.

You know the book was written on the 9th May, 1927, but why? I havent shown you this
before. On the 9th May, 1911 there was a Jupiter contra-parallel Saturn. In that Natal chart,
there is a Venus conjunct Pluto at 26 degrees, 22 minutes Gemini and the ascendant was 23
degrees, 48 minutes Sagittarius for New York. Venus was exactly at 26 degrees Gemini on 9th
May, 1927, 16 years later which is two Venus/Sun cycles of 8 years, as he gave you an idea
about with the 16 planes on the cover.

In his book, he forecast that the stock exchange would close on between the 3rd and 5th
of October, 1931. This was also 333 days from 30th August, 1932, 333 being half the beast
number of 666. They did talk about it closing, but it didnt, and there was a good low before a
big bounce. How did he do this? Well one of the charts is this 1911 chart, why because its 20
year to 1931. This is not the main reason but on that date Mars was transiting the south node
of that natal chart. The natal chart of 1842 and the natal chart of 1911 have Mars nearly in
the same place at 12 and 15 degrees Pisces.

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In the book Gann said he made his greatest discovery on the 19th June, 1927, and the Sun
was also at 26 degrees Gemini on this day. Gann was calling for a top on 8th September, 1927
in Cotton at 24.40. This price equals 22 degrees Capricorn at 12 points per degree. At the low
in 1932, Mars was at 19 degrees Taurus making another 120-degree angle from the high. One
of the reasons was that the Jupiter/Saturn conjunction before 1927 was on 10th September,
1921, 6 years or 72 months (half square of 144) from that date. Mars conjunct the Jupiter/
Saturn of 1921, Mercury/Venus conjunct at the same degree as the Sun on that date. There
are 77 Natal charts you can make up from 1842 to 7th August 1940, which is the Jupiter/Saturn
Conjunction at 14 degrees Taurus, which is close to the Mercury/Sun natal chart of 1911.

On the 5th June, 1927, Marie Stanton disappeared, it has nothing to do with page numbers,
thats just nappy Gann. There are a number of things, but two relate to the charts I have been
talking about. Mars was at 29 degrees Cancer when she disappeared. Mars was conjunct the
natal moon of 1842 and conjunct the part of fortune opposite Uranus in the 1911 chart. It was
an unexpected disappearance.

In the book he was expecting a great depression and war. The stock market topped on 3rd
September, 1929, when transiting Saturn was on the ascendant chart of 1911. If you look at
the Jupiter/Saturn parallel chart of 15th July, 1917, you will also see Jupiter was in Gemini.
There are 144 months from 1917 to 1929. The Great Depression had to do with transiting
Uranus conjunct the Natal Pluto in the 1842 chart at 19 degrees Aries. This happened in April
1932 to January 1933. Pluto squared natal Pluto from August 1930 to June 1931. Saturn in
Capricorn is bearish and in conjunction with the Jupiter/Saturn chart of 1842 in February
1930, there was a lower top in April 1930 before we went down to the low on July 9th 1932.
Transiting Neptune trine the 1842 conjunction from June 1932 to July 1933. I also have his
Jupiter/Saturn table from 1800s which isnt in the public domain.

Table of the next few Jupiter/Saturn Charts to be drawn:

Gann said you could predict 100 years or 1000 years just as easy as 1 or 2 years in advance
with small adjustments for the smaller cycles. This is what Im pointing out here.

If you buy Ganns Ephemeris from 1941 to 1950 (get it from Lambert-Gann before they
run out), you will see hes marked all conjunctions etc. from Mars to Pluto, thats a lot of natal
charts he was doing for markets. If you look, hes marked 9th May 1948, exactly 21 years from
TTTTA. No one marketing Gann material is doing this sort of work save your money and dont
buy any Gann material except all the books on Ganns reading list.

You arent looking for anything to happen on the day of the chart, aspects dont work like
that, theres 1000s of aspects each year, sometimes it does happen but in most cases nothing
happens. The Jupiter/Saturn aspects only work 35% of the time, and you cant trade with that
like the housewife astrologers believe you can. The conjunctions of planets are explained in

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Sepharials book Transits and Planetary Periods. In the Ephemeris you will see different
markings of the Averages of Planets. They seem random, but they arent. They come from
some previous time period which could be 100 years or 1000 years before, or some aspect
or eclipse. You will just have to do your own work, as theres no one that can help with this.

The books subtitle is Looking Back from 1940. Well, there are three Jupiter/Saturn
conjunctions, 7th August, 1940, 19th October, 1940 and 15th February, 1941. I mentioned the
importance of 1728 earlier. There are 6906 days between the 1921 and 7th August, 1940
conjunctions. 6906 divided by 4 is 1726.5 days. 1728 + 8271 is 9999.

I have written about the eclipse of 30th August, 1932 before, and from here to the day the
book was written is 1940 days. 1940 days x 4 is 7760 days, 1728 x 4.5 is 7776 days again
the difference of 16 (planes). From the 9th May, 1927 to 18th August, 1940 is 4850 days (1940
x 2.5). The yards in a mile is 1760, 1760 1728 is 32 (16 x 2). 1728 has other meanings,
576 x 3 (square of 24). The Precession of the Equinox is 25,920 years (1728 x 15). 25920 is
also 144 x 180. 360 x 72 = 25920. The Bible number of 2300 years minus 1728 is 572 (just
4 off 576). 2300 1940 (I think the Bible number is 2304) is the circle or 360 degrees. Take
25920 23040 (2304 x 10) = 2880, twice 1440 which is minutes in a day. The major low on
2nd March, 1921 is 2300 days to 19th June, 1927, when Gann made his greatest discovery.
Cotton topped on 8th September, 1927 when Mercury was at 19.40 Virgo, in its own sign.
Ganns great time cycle is 56 years 7 months and 23 days or 20736 days (144 x 144). Guess
what 12 x 1728 is 20736.

Gann averaging of planets! Gann, I believe, was using energy the same way Nikola Tesla
was, those same numbers 6, 3, 9 (triangle numbers) were important to him. Gann has marked
averages of 9, 6 and 3 in his January 1949 Ephemeris. Tesla worked for Thomas Edison in
New York when Gann was in New York. 369 + 963 = 1332 (666 x 2 ). 1335 (Bible number) +
5331 = 6666.

He had a machine called the Egg of Columbus which is the name of one of George Bayers
books (another coded work), who was also a Financial Astrologer. George Bayer was also a
wealthy man. There is also more in his book George Wollsten on page 165 he was staying
in room 418, same number as pages in TTTTA. In Hebrew Gematria the number 418 is the
total of the magical formula Abracadabra. Also, it looks like L. J. Jensen copied some works
to what he was doing before he died in 1981. Jensen was two years old when Gann started
trading, how could he have taught Gann, as some claim?

You cant just average the planets and run them through the commodity chart as support
and resistance lines, hes doing much more than that, thats so simple you can do that in your
head, its not a revelation. Gann averaged the planets way back in 1927 and before this date.
I was going to ask a question, but no point, since none of the Gann experts every answered
any of the other questions on averages, so I will just give you the question and the answer:

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Question: What trade date in the book did Gann average planets to geometries with the
cover? Which planets?
Answer: Robert Gordons first trade was on 24th January, 1927 and the average of Jupiter
and Saturn was 288, twice the square of 144 (the overlay that fits on the cover). On page
288 is the largest typing of the letters in the book. The number of books in the bible is 66,
288 + 66 is 354 the moon cycle. The pages in the book, 418 354 is 64 the square of 8. His
first trade is on page 66. 288 minus 150 is the price of 13.8, on page 96 he bought Cotton
for Marie Stanton, he said 17th March but I showed you in previous articles it was the 15th
March. 96 is two-thirds of 144. The average of eight geocentric planets (8 planes in death
square) on Robert Gordons birthday is 144. The major low in Cotton in 1921 average 168 of
Jupiter/Saturn, Mercury and Venus were at 168 degrees or 18 degrees Virgo at the top on 8th
September 1927.

I have to give some very small clues as these people arent even close to know what he
was doing, so lets run through some really simple stuff. Im not giving you the KEYS as
people just copy my stuff for their own seminars. Take the lunar eclipse of 25/7/1926, its 288
days to the 9th May, 1927 (average of 3 planets, Geo = 216, 72 x 3 =216, 72 x 4 =288) when
Gann wrote TTTTA. 288 is twice 144, the square that fits over the book cover, which is also
in previous articles. It looks like he changes the averages for different commodity and stock
markets, and has different triggers for them, Im still working on it. Maybe 5 years work just
on that, I guess this is why he never sold his secrets.

Important dates from 25th July 1926 are: -

Robert Gordons first trade 24th January 1927 is 183 days or 180 degrees.
Marie Stanton first trade 17th March 1927 at 13.90, Cotton never traded at 13.90 except
on 15th March 1927. These are 233 days and 235 days. Add these together equals 468,
plus the reverse equals 864 is 1332 double the beast at 666. Also 864 is 144 x 6 or 288
x 3.
The day Gann wrote the book is 288 days to 9th May 1927
The day Marie Stanton disappeared was 5th June 1927 was 315 days, 315 degrees of
7/8th of circle or 3.00 am (the time she disappeared) or 4th February on the square of
nine.
Sell July Cotton 1st June 1927. 7th June 1927 buys October and December Cotton, sells
October and December Cotton 10th June 1927 The 10th June is 320 days, 40 x 8 or 9th
of a circle.
10th June 1927 he expects Cotton to top 5th or 6th September which is 87 days away,
minus 87 days to get the 15th March the day I think Marie Stanton bought Cotton.
Robert Gordon is 21 years old and 1 day, 21 is 3 x 7.

Why is the 10th June so important? Add 5 years to it and you get the exact low of Cotton

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in the depression on 9th June, 1932. There is something about the purchase date of Cotton on
25th June 1927, its the only buy and sell figure that ends in a 3 (16.83) why? This number will
give you an important date in 1927 when you play around with it, the 16.83 contains a code
date which is very important to unlocking one of the codes to the book. All the other trades
end in zero except the buy dates of December Cotton on 25th June and 6th August at 17.15 and
17.35 which end in 5.

What else is he trying to tell us? Some homework. Ok, I will tell you 17 x 15 = 255, 17 x 35
= 595, 595 + 255 = 850. Add 850 days to 9th June, 1906, Robert Gordons birthday, will give
you 6th October 1908, Marie Stantons birthday. This is part of it, as the low in May Cotton was
on 6th October 1908 @ 8.26, 3 x 8.26 = 24.78, the high was 24.50 which was also twice the
4th December low of 12.25. What Gann is really saying is to study all the Cotton prices from
1906 to 1932. Then you have to study all the astrological cycles as well, but not housewife
astrology, which you can find all over the world. There are most likely 14,400 of them on the
planet, nothing special there.

I have all the daily Cotton data going back to the 1890s, which I brought from the N.Y.C.E
in the 1990s. The exchange was destroyed on 9/11, so it is mostly likely hard to get the true
data anymore. You need all the daily Cotton data on the contracts hes talking about from 1906
(Robert Gordon born) to the end of 1932 to work out correctly what Gann was doing in TTTTA.

All Cotton trades in TTTTA:

24th January 1927 RG buys July Cotton @13.80, 49 (7 x 7) days after the low
1st February 1927 WK. buys July Cotton @13.70
17th March 1927 MS buys July Cotton @13.90
1st June 1927 sold all July Cotton
7th June 1927 RG, WK, MS buys October and December Cotton
10th June 1927 sells October Cotton @17.30 and December Cotton @17.50. Start Robert
Gordons Great Campaign in Cotton, Chapter 16 (number of planes on cover) page 195. 90
days added to this date gave 8th September 1927, the end of the bull market.
25th June 1927 RG buys October Cotton @16.83, December @17.15
25th July 1927 RG sell Cotton
30th July 1927 shorts Cotton
5th August 1927 buys December Cotton
6th August buys December Cotton@ 17.35
9th August sells December Cotton and goes short.
13th August buys December Cotton
19th August buys December Cotton
22nd August buys December Cotton
27th August buys December Cotton
29th August buys December Cotton

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8th September sells December Cotton @ 24.40 and goes short @24.50, End of Bull Market.
Predicts this in the book to the day and price.
9th September sells December Cotton
11th September sells December Cotton
13th September buys December Cotton
14th September sells short December Cotton
17th September sells December Cotton
21st September sells December Cotton
23rd September buys December Cotton
28th September sells December Cotton
29th September buys December Cotton
3rd October sells December Cotton short
6th October buys December Cotton. If you have Ganns book How to Make Profits in
Commodities it was this date in 1908 that Cotton bottomed and Marie Stanton was born, 19
years later a Moon/Sun cycle.
8th October expects prices higher on crop report, no trades mentioned.

Square of Nine Date in TTTTA

The low on 4th December, 1926 was 12.25, which is the square of 35 (1225) on the 4th
February line on the square of nine. The numbers go clockwise and the reason for that is the
ascendant is fixed at the horizons as the signs of the zodiac rotate anti-clockwise towards
ascendant, therefore after 24 hours from sunrise you always have numbers 1, 2, 11, 28, 53,
86, 176, 233 etc. You would notice 233 written in this article.

You know Chapter 34 was replaced with number 39, well 34 is at the mid-heaven on the
square of nine. The highest price RG sold was 24.50 well 2451 is a square to 1225 with dates
of 5th May on the square of nine. 411 is opposite 233 and it was 410 days from 25th July, 1926
to 8th September, 1927 major top in Cotton. It was 49 days from 4th December, 1926 until RG
bought Cotton on 24th January, 1927, and I have told you in previous article than 1927 is 49
years after Gann was born in 1878, Gann dies 49 years after RG was born in 1906, in 1955.
49, the square of 7, lies on the same as line as 1225 where all the odd square numbers sit.
RG buys at 13.80, 13 x 80 = 1040 the exact years of the Sun/Moon cycle in the bible.

In the previous article I showed you that the square of nine was used in India as a tea
calculator, which is used with the Moon, as Moon is the magic square of nine. The lunar eclipse
Moon was at 278 degrees and Sun was at 98 degrees, 360 278 = 82 + 98 = 180 which 180
degrees from zero on the square of nine or 22nd September or sunset.

You are aware that there is 1940 days between the date the book was written and 30th
August 1932, which was the last date in the book and an eclipse. Half of 1940 is 970, 970 is in
exact line with RG buying the price of 1380 on the square of nine. 20,736 Ganns great cycle

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is 288 x 72. 1940 + 288 = 2228, 2300 (Bible number) 2228 = 72. On page 108 of TTTTA
he says, the great plane described by Ezekiel, the eagle with the wheel with in wheel, would
one day be reality. 108 is half of 216, and the word Ezekiel is also on page 72 and 180. 72 +
108 + 180 = 360, which is time. On the square of nine chart 216 degrees is between 202.5
and 225 degrees line up with 418, the number of pages in TTTTA. 216 is 6 degrees Scorpio.

Eclipses 1926 & 1927

I dont want to do all the work for you, but clearly the book is broken into a few parts,
before and after 9th May, 1927, and before and after 10th June 1927. Before and after 30th
August, 1932 and the dates looking back from 1940. are is six eclipses in 1926 and five
eclipses in 1927. The eclipse Im presenting here is the last one before the low in Cotton on
4th December, 1926 which is 25th July, 1926. The Moon conjuncts Mercury in this eclipse chart
on 25th January, 1927, 15th March, 1927, 9th May, 1927 and 5th June, 1927. Have a look above
to see the dates they trigger. Why did the great Cotton campaign start after his 21st birthday
on 9th June 1927? Because Mars and Venus on that day were conjunct the sun of this eclipse
chart.

This is the 96th eclipse after Robert Gordon was born, 96 is of 144 and there are 123 to
the last eclipse in the book. You need to look at the other eclipses in 1926 & 1927 for some
more clues. As you can see this book has more codes than anyone ever dreamed of, which
what you would expect from such a brilliant man.

I showed you in a previous article that TTTTA was using the averages of planets. Gann
had everyone sign a non-disclosure agreement on these secrets, so only the people who
had completed his $5000 course could have access to them. Now if you study his personal
Ephemeris you would see that he averaged a number of planetary combinations, but he also
left a number out, but this is for you to figure out... I have found that he was using different
averages for different markets.

But lets start with TTTTA, Robert Gordons birthday using the average of 9 is 136. Marie
Stanton is 153 (the fishes in the Bible), add these two together you get 289 the square of 17,
double 17 is the chapter missing in TTTTA which is 34.

When Robert Gordon bought Cotton on 24th January, 1927, Saturn was at 5 degrees
Sagittarius, which is 245 degrees, the average of 4 planets Geo was at 245 degrees. On 26th
July, 1926 (Eclipse date) Neptune was at 153 degrees. When you average Venus, Sun, Jupiter
and Neptune Geo you get 216 (144 + 72) on the day Marie Stanton bought Cotton. Using the
same planets, the low on the 4th December, 1926 averages 243, put a point at 24.3 and you
get close to the high.

Now you can see that Gann probably wrote a booklet (it would have to be at a guess

WWW.TRADERSWORLD.COM October/November/December 2016 77


more than 20 pages, because I could do that
and dont know what he knows), on planetary TradersWorld Magazine
averages for his clients. God knows how much Premium Subscription
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Unleashing the Power of Hidden
Divergence While Limiting Risk on Entry
By Gail Mercer

Hidden divergence is one of the most powerful types of divergence because typically there
is an immediate acceleration in price. Since hidden divergence identifies the move early, it
is considered a leading indicator for future price action. Utilizing hidden divergence setups,
traders can enter trades with an expectation of a quick move in their direction. Although
hidden divergence is a very easy pattern to describe, for most traders, it is quite often the
hardest to identify on the live edge of the market.

Identifying Hidden Divergence Short Entry


Identifying hidden divergence is easy to do provided that the trader is measuring highs and
lows in both price and an oscillator. In this case, the oscillator is the Stochastic. With hidden
divergence, price should be making lower highs but the oscillator will be making higher highs
(or lower lows).
For example, in the 15-minute USDJPY chart below, both Points A and B on the price chart
show that price is making lower highs. However, Points A and B on the Stochastics is showing
higher highs.

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Immediately after the hidden divergence appears price accelerates to the downside. This
is what is expected after hidden divergence appears.
A trader can enter a short trade, once the hidden divergence appears, and set his stop to
just a few ticks off the high (or low if going long) for a very low risk entry point. Additionally,
if trading binary options the trader could also enter one to two strike price away from where
price is currently trading for a very low risk binary option trade.

Identifying Hidden Divergence Long Entry


In the example below, the E-mini S&P 500 is making higher lows but the Stochastics is
making lower lows. Again, an excellent opportunity for a low risk entry. The stop would be
just a tick or two below the low that is forming the hidden divergence or, if trading binary
options, a long entry one to two strike prices from where price is currently trading.

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Benefits of Trading Hidden Divergence
The benefit of trading hidden divergence is that it is a leading indicator and, when combined
with the power of price bars, immediately identifies where price should go. This provides the
trader with an edge because the future price movement is identified. Of course, sometimes
all patterns fail to perform. This is where the disciplined trader is able to re-analyze the price
chart and scratch a trade with either a minimal loss or at breakeven. In other words, if price
does not perform as anticipated, re-evaluate and, if warranted, exit the trade.

Which Markets Does Hidden Divergence Work On?


Since hidden divergence relies on price action and the oscillator, it will work on all markets.
It is a leading indicator that quickly identifies where price should go.
For example, on the Gold futures 15-minute chart below, price is making lower highs and
yet the Stochastics is showing higher highs. A leading indication that price will accelerate to
the downside.

As the chart below reveals, subsequently Gold dropped from a high of 1318.50 to 1306.90
or 116 ticks.

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By incorporating a powerful technique like hidden divergence, traders can easily identify:
Where price should go in the future;
Where to place their stop to lower their risk on entry; and
Provides a benchmark for analyzing whether price is performing as anticipated.

To learn more about using hidden divergence for entering trades or how to incorporate
hidden divergence with trading binary options, simply visit our online training courses by
clicking here.

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Stocks, Options, Algorithmic Trading;
Futures, FOREX traditionally reserved for big
SOFTWARE banks and hedge funds, now
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available for you:
` Spot and follow institutional money moves.
EDUCATION
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training and coaching. Stay in control of the final decisions with concepts for:

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Day Trading
Assets ready for a price move.
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DOCUMENTATION Long-Term Investing
Photo sharp documentation.
Individual session recordings. Schedule your personal consulting hour and find out
which concept fits your trading or investing style.

contact@NeverLossTrading.com Call: +1 866 455 4520

WWW.TRADERSWORLD.COM October/November/December 2016 83


Trading Hype Cycles of the
Financial Markets
By Thomas Barmann from NeverLossTrading

The market behavior of the financial market participants is NOT distributed or explainable by a
normal distribution or Bell curve. Thus, statistical methods and mathematical based indicators
that consider a normal distribution have a high likelihood for not giving you the tools on hand for
a high probability price prediction. Examples for widely used technical indicators that assume a
normal distribution are: Bollinger Bands, MACD, Moving Averages

Chart-1: Normal Distribution Curve

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The characteristics of a normal distribution curve are:

It is symmetrical: Half the cases are to one side of the center; the other half is on the other
side, where it is assumed that the percentage of data is distributed by the standard deviation.
The distribution is single peaked.
Most of the cases will fall in the center portion of the curve and as values of the variable
become more extreme they become less frequent.
The Mean, median, and mode are the same.
Percentage of cases in any range of the curve can be calculated.

The financial markets react more in what is explainable by a price development similar to a
Gartners Hype Cycle.

In our research, we differentiate a Demand Based Hype Cycle and a Supply Based Hype Cycle.
Your important takeaway from this: Hype Cycles are repetitive and predictive and thus can build
a very valuable tool for your trading.

Hype Cycles are created in all asset classes: Stocks, Options, Futures, FOREX.

Over time, we built multiple systems that help you as a private trader or investor to participate
in the initiation phase of a Hype Cycle and exit your trades prior to the hype coming to an end.

Chart-2: Demand Based Hype Cycle by NeverLossTrading

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Characteristics of a Demand Based Hype Cycle:

In the initiation phase, an asset comes in demand and as a result: prices rise. Other market
participants recognize the demand and jump in, creating the hype; letting prices for the asset
rise strongly in a short period of time.

In the next phase, market controlling forces flood supply and create fear in the late investors,
rebalancing their inventories, triggering a selloff and dropping asset prices.

When a certain price point is reached, additional demand then triggers the second phase of the
Hype Cycle and prices rise, breaking the prior high.

Such cycles repeat themselves until they stop and produce either a haltering price pattern or a
Supply Based Hype Cycle.

Chart-3: Supply Based Hype Cycle by NeverLossTrading

Characteristics of a Supply Based Hype Cycle:

In the initiation phase, an asset faces additional supply and as a result: prices fall. Other market
participants recognize the selloff and jump in, creating the hype; letting prices for the asset fall
strongly in a short period of time.

In the next phase, market controlling forces reduce the offered supply and create fear for the

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late investors, to rebalance their inventories, triggering a short covering demand and rising
asset prices.

At a certain price point in time, additional supply then triggers the second phase of the Hype
Cycle and prices fall, breaking below the prior low.

Such cycles repeat themselves until they stop and produce either a haltering price pattern or a
Demand Based Hype Cycle.

The key question: What is the underlying structure that triggers this happening and how can you
benefit from knowing this?

Institutional investors are responsible for 95% of all financial market transactions. They are
initiating and creating the hype cycles.

For our trading, we use a model where our indicators and scanners express and find the
initiation of a hype 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:

Chart-4: Activity Based Trading Model by NeverLossTrading

Thus, 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 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 reaches

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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.

Chart-5: SPU Measure (NeverLossTrading Specific Indicator)

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.

Let us do such operation with the help of the NLT Top-Line Chart:

Chart-6: AAPL Daily NLT Top-Line Chart June 22 to August 12, 2016

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The chart shows you how our indicators help you to participate at each of the demand triggered
hype phases, producing strong directional trades with high predictability, helping you to prevent
getting stopped by increased supply letting the asset price drop.

By us using a fractal based math, we help our traders to repetitively spot and follow supply- or
demand based price patterns for all assets and time frames.

We offer multiple systems that we always tailor to your specific wants and needs as a private
investor.

To help you learning to trade with our systems, we teach in individual sessions: one-on-one, at
your best available days and times. All training sessions will be recorded, helping you to repeat
the learned at your leisure; learning like a professional athlete, to take repetitive actions when
favorable chart situations occur.

Our systems work for day-traders, swing-traders, and long-term investors.

Take a look at our offering and if you see a fit, please do not hesitate to schedule a live
demonstration:

Call +1 866 455 4520 or contact@NeverLossTrading.com

Our introductory system is called TradeColors.com and if you decide to start entering the world
of algorithmic trading with this system, you can always upgrade to a higher level trading system,
getting the tuition you paid acknowledged at the upgrade.

Here is a chart example and again, you will see how the price development on the chart follows
a supply- or demand based hype pattern and how our system helps you to find solid entries and
exits:

Chart-7: GBP/USD on a 20-Minute TradeColors.com Chart, August 29, at 7 a.m. EST

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Now that you know what to look for, you surely spot the supply based hype cycle, which was
initiated at 2 a.m. EST, with short covering at 4:40 a.m. and then the breakdown at the current
candle.

How to trade such situation?

With TradeColors.com you get a potential trade initiation when a new set of two-of-the-same-
color-candles is formed and the following candle, in this case: a red-candle-sequence, takes out
the low of the second candle.

The Target of the trade is highlighted on the top of the chart and changes bar-by-bar: At the
current bar: 10-pips or a maximum of an 18-pip price-move are projected.

Let us now highlight on the chart, how many trade situations were initiated and the results that
were achieved:

Chart-8: GBP/USD on a 20-Minute TradeColors.com Chart, August 29, at 7 a.m. EST

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You can see two trade setups of the Supply Based Hype, highlighted in orange.

In both cases the candle that followed the trade-setup-phase took out the low of the second
candle of the sequence, initiating two trading opportunities: both came to target.

The stop of each trade was one-pip above the high of the second initiation-sequence-candle and
thus, the stop was not triggered and the two setups resulted in winning trades.

How do you find such trade setups without going through many charts?

There are two alternatives of how you can find your favorable NeverLossTrading chart setups:
Watch list or market scanners: NLT Top-Line offers both alternatives, where you can either scan
the markets, specific industry segments or find preferred assets with a potential trade setup
in your watch list. TradeColors.com offers you for three time frames, we let you determine, to
operate a watch list scanner.

NLT Alerts: For all systems, we offer Excel base NLT Alerts, where we scan the markets for you
and supply you with a report that tells you where prices move. The NLT Alerts are made for day
traders, swing traders and long-term Investors. All NLT Alerts are subscription based and you
receive them via email. During the first phase of your mentorship, those alerts are delivered for
free.

Take a look at our offering and if you see a fit, please do not hesitate to schedule a live

WWW.TRADERSWORLD.COM October/November/December 2016 91


demonstration: Call +1 866 455 4520 or contact@NeverLossTrading.com
Without a trading system that follows a hype based price pattern, you might see the following:

Chart-9: AAPL Daily Chart with MA-Crossing, June 22 to August 12, 2016

Following the rules of the MA-crossing, one trade potential was delivered (highlighted in orange)
and in the aftermath, it shows that the price pattern followed a Demand Hype; however, if
you go back to the AAPL-chart (chart-6), you see how our system anticipated the pattern and
gave you three clear cut trading opportunities: a 300% higher productivity and at each trading
opportunity, you knew where to take profit, while with the chart above it is doubtful if you were
able to produce a win from the highlighted trade setup.

We hope this gives you an idea of how hype based price patterns are repetitively produced by
institutional market activity and how you can spot and follow those.

By training one-on-one, our capacities are limited, please do not miss out and schedule your
personal live demonstration without obligation.

Call +1 866 455 4520 or contact@NeverLossTrading.com


If you are not yet signed up to our free trading tips, webinars, and reportsclick here.
We are looking forward to hearing back from you.
Good trading,
Thomas
Disclaimer, Terms and Conditions, Privacy | Customer Support

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Invisible Walls: Turning Your Fears
into Personal Power
The Truth is in the Eye of the Beholder -- Plato

By Rande Howell

Blinded by the Beliefs You Bring to Trading

With a subconscious set of mental filters formed from his or her beliefs and experiences, every
trader interprets the same information differently. How does this work in trading? You know its
possible to trade at a higher level, but something keeps getting in the way that you cannot see.
Its frustrating. You see a small, elite set of traders succeed at trading day in and day out while
you continue to struggle. Its mystifying? On the surface, both the elite trader and you know
their stuff. So its not so easy to see what separates them from you.

Both of you can talk the talk. They dont work any harder than you (maybe even a good bit
less). So, what gives? What you notice is that they do seem to be to be able to keep their act
together in good times and bad. They dont seem to crumble with fear, nor do they get over
confident and do stupid things. Maybe they were born with more talent than you you know
thats a cover-up though.

What does separate you from traders at the next level? Is it that they are just better? None
of that. The biggest hurdle that challenges the growth of a trader is not more knowledge it is
self-knowledge. What do you really believe about yourself when no one else is looking? Getting
to know what makes you tick under pressure is what traders avoid until there is no choice. Yet,
this is the difference maker.

Indeed, struggling traders steer clear of really getting to know themselves under pressure for
as long as they can. They can talk the talk of trading, but never grab the bull by the horns
and learn to walk the walk. Often, until they simply run out of capital or have squandered too
much time. Meanwhile, the journey of the elite trader is characterized by turning toward the
discomfort of facing down his or her self-limiting beliefs.

Ultimately, a trader comes to a fork in the road. They have to learn to see (and change)
what they do not want to see about themselves. This is like taking a fearless inventory. Do
they want to continue the same old patterns of mediocrity? Or do they want to come to grips
with what they have been avoiding? Do they want to continue the fiction they have been

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telling themselves about success being around the corner? Or do they want to get to know
themselves and actually do something about their underlying fear-based beliefs that compromise
performance and the truth they see in the numbers?

It is these self-limiting beliefs and biases that have been holding them back. In particular, it
is the unacknowledged fear-based beliefs that traders filter information through that torpedoes
your quest for trading success. And by continuing to see through the eyes of fear, they have
been blind to the path leading to the next level. What does this look like in trading? In fear-
based perception, performance is rooted in self-limiting beliefs about adequacy and personal
power. In impulse trading (chasing trades), it is about proving your worth by winning.

Turning Fear into an Asset

Fear is the oldest of emotions. It is far easier to avoid dealing with a threat than it is to deal
with it head on. Early humans learned this survival wisdom and learned to avoid dealing with
threats head on. Fear was simply an adaptive response that was successful for survival. Fear
was so successful a response to threats in the environment that it was bred into our genetic
heritage as a trait.

It is here that the seeds of poor performances in trading happened. Humans evolved with
a prime directive to control their environment as a way of ensuring survival success. It was
imperative to control outcomes. Anything unknown was considered a threat until proven
otherwise. The unknown was threatening. It was avoided through fear or attacked through
aggression. Even this response to threat was encoded into our emotional nature as the fight/
flight response.

The problem with this solution was that it pitted two drives against one another controlling
environment and outcome vs. embracing the unknown that manifested itself long after the
biological threats to survival disappeared from cavemans world. The emotional brain was still
designed to be on the lookout for biological threats to its existence to attack or avoid when it
encountered the unknown. When applied to trading, these two drives collide in a spectacular
way. The emotional brain has a drive to control outcome in the short term, while trading
presents a situation where the outcome is unknown and the trader has to learn how to embrace
the uncertainty and vulnerability of the unknown.

Somethings gotta give. Until the trader learns to re-train the brain into embracing the
uncertainty and vulnerability of not knowing, a traders psychology is no match for the powerful
survival drives that give rise to the mind that engages uncertainty. It is here that the trader
has to start doing something completely unnatural to the self that evolution has organized
the trader has to turn toward the fear of the unknown represented in risking capital (life) while
trading and change the response. The fear lets you know the old survival programming is
activated thats the asset now it is time re-train the brain to move from self-preservation

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in the short term to probability thinking for long term benefit. This is the training that the elite
traders have done, one way or the other, to create the mind and psychology to embrace the
uncertainty and vulnerability of the unknown.

The Brain and Mind on Trading in the Blink of an Eye

The vast majority of trading decisions are made in the blink of an eye and totally outside
of working awareness. The brain already had a working model of the world that it projects out
there. There it works behind the scenes keeping you safe on a path through the dangerous
jungle of threats all around you. You would never know it is there until you begin to question
why you keep doing the same things that short circuit your long term potential of winning for a
short term survival response to the threat of risking capital.

Most will never notice that you see through the eyes of survival in the moment even while
you rationally talk about risk and reward while following your rules. Your conscious mind
thinks that it is in control and that you have an edge because of your rules. It all seems so
very tame until the rational mind is hijacked. Then real capital is put at risk, and all bets are off.
Suddenly, the talk of risk and reward from a logical mind is simply snatched away and replaced
by a mind that equates capital at risk with a biological risk to life in the moment.

Your logical trading rules that give you an edge are gone. Your Sarasympathetic nervous
system (SNS) has triggered and taken over your trading mind. You are in fight/flight. You are
either trying to avoid short term loss of capital (life) or you are using aggression to attack the
source of a threat from the unknown. When the smoke clears, you wonder what happened. You
knew what to do, but you could not do it under the pressure of risking capital. You really could
have lost that money if you had risked it. Or if the fight/flight hijacking occurred during trade
management and the trade was going against you you may have aggressively thrown more
money at a losing position in a fight to get back what was being taken from you.

It happened so fast. In the heat of the moment, it seemed like the right thing to do. But now
that the situation has passed and you have cooled down, you discover (yet again) your emotions
have betrayed you. You did exactly opposite of what you should have done rationally. This
is the collision between the interests of your emotional brain with its emphasis on short term
survival (nanoseconds) and your logical mind that seeks an advantage in probable outcomes
Think about this hijacking in the blink of an eye from the perspective of the emotional survival
brain. You survived. Either by avoidance or aggression, the emotional brains response to the
threat to survival keep your alive for another moment. That is exactly what it is supposed to do.
The problem is that it cannot tell the difference between a biological threat to the organism and
your mere psychological discomfort when exposed to uncertainty.

This is the gap that traders dont know to bridge. They dont see it to know they need to
bridge it. And until they can learn to see out of something other than fear (trading not to lose,

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trading to win, trading to be right), they will be blind to the perceptual trap that keeps shooting
them in the foot.

Calming an Old Brain and Creating a New Mind

As long as the trader chooses to deny the fear, the self-limiting belief can never be excavated
and brought into the light of awareness. Traders have to learn emotional regulation skills or the
emotion stays so reactive that the mind is hijacked as an adaptive response to uncertainty and
not knowing. It is in regulating the emotion that the trader can get to the door of the mind. It
is here that that he or she gets to examine the beliefs and biases lurking behind the emotion.

For the courageous trader this is where trading offers a unique opportunity. The health of your
trading account is a direct measure of the beliefs you are projecting upon market information. If
it is growing, the trader is demonstrating a set of beliefs that allow the trader to extract capital
out of the markets. If it is stagnant or shrinking, your trading account is a direct measure of the
self-limiting beliefs that drive your trading performances. Either way, your beliefs about your
capacity to manage uncertainty are being revealed by your trading account if you are willing to
listen to it.

It is also here that you discover that the mind you brought to trading is not going to be the
mind that brings success in trading. The mind you brought to trading was built to control its
environment and outcome and to avoid uncertainty. And the mind that you need for trading is
one discards the illusion of control over short term outcome and embraces the uncertainty of the
unknown. Instead of trying to control environment and outcome, the trader teaches the brain/
mind to control the mind that he or she brings into the moment of performance. In regulating
emotion, the trader has learned to turn off the life-or-death switch of the fight/flight response
and build a mind comfortable with psychological discomfort.

This is the key. When uncertainty no longer means biological threat, a new mind based on
probability can be designed to deal with uncertainty. This is what the elite trader has learned to
do. When biological fear is taken off line, the trader can act from psychological concern. Here,
emotions are no longer hijacking the trading mind. The trading mind is focused on performance
in the moment, which gives the trader an edge in probability. This is enough.

This evolution does not happen by itself. The trader can be a partner in the design of a new
mind built for trading. Or it can resist the needed change. But knowledge will never be enough.
At the highest levels of performance, everybody has the knowledge. The elite trader has
learned how to shift their understanding of uncertainty so that it no longer triggers the brain/
mind to fight/flight response. They have taught the brain to believe in probability. And that
belief is grounded by growth in his or her trading account.

It is not easy and it takes work. But it beats the alternative. Either way, your trading account

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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. Its 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 whats 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.

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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, its 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.

Thats 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

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, lets examine the interactions of the cycles of Mercury and Neptune. As we do
so, well 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, its the kind of mental and

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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.

Mercurys orbital period around the Sun is approximately 88 days, while Neptune has an orbital
period of 60,182 days, or 164.8 years. Coincidentally, Neptunes orbital period is 164 times the
length of the orbital period for Mercury.

Its 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 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 Mercurys 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.

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The number 19 is noteworthy in several ways. As weve 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.

WWW.TRADERSWORLD.COM October/November/December 2016 100


Key Gann Connections

We shouldnt 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. Ganns 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,
theres 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.

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.

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.

WWW.TRADERSWORLD.COM October/November/December 2016 104


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, theres 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. Theres simply no substitute for careful observation and

WWW.TRADERSWORLD.COM October/November/December 2016 105


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.

WWW.TRADERSWORLD.COM October/November/December 2016 106


HIGH PROFIT, HIGH
PROBABILITY PATTERN:
THE UNKNOWN TIME
By David W. Franklin

DEFINITION: PATTERN

http://www.thefreedictionary.com/pattern
noun
1. anarrangement or designofrepeatingorcorrespondingparts,decorativemotifs,etc:
2. the repetition of an element in a work.

Examples:

Unknown to the world of technical analysis is a pattern made by unique Time calculations.
These calculations provide trading opportunities of high probability and substantial profit.

This recurring event happens when two independent lines of Time, one BLUE and one RED,
come together and/or overlap each other in a narrow range of identical values.

This is an Equilibrium of Time pattern. Here are Real Time examples of the DOW market:

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WWW.TRADERSWORLD.COM October/November/December 2016 108
WWW.TRADERSWORLD.COM October/November/December 2016 109
WWW.TRADERSWORLD.COM October/November/December 2016 110
Together, the BLUE and RED lines are proportional, mathematical representations of TOTAL
TIME available in stock options for a Market or an individual stock.

Individually, the BLUE line is a proportional, mathematical representation of the total value
of all time in Put Options.

WWW.TRADERSWORLD.COM October/November/December 2016 111


Conversely, the RED line is a proportional, mathematical representation of the total value
of all time in Call Options.

This Equilibrium of Time informs the author as to WHEN the sum of option Time for the
long and short sides of a Stock or Market have become equivalent, in balance, and therefore
at the highest probability for price reversal. To achieve a deeper understanding of the above,
the reader is strongly encouraged to visit the following website: http://www.timesinewave.net/
furtherreading/. In particular, please read and study to comprehension, the following articles:
A Sine of the Times and My Story and the Truth about Time. These documents contain the
mathematical SEED IDEA of how these Time calculations are derived and maintained.

The author has achieved this purely mathematical understanding of Time by applying the
investigative principles of Science; specifically, the physics of the Laws of Motion combined with
his university training in the sciences of logic, chemistry, and mathematics.

Each Real Time charts presented in this article contains over 80,000 points of Real Time
data. As such, it is and would be impossible for your author to invent, make up or fake these
results. Further, more than a decade of tracking these Time values in Real Time have proven
their viability, validity and adherence to the scientific principles of reliability and repeatability.

WHAT DO THESE TIME EQUILIBRIUMS MEAN?

There are many individual true answers to the question above. Each one reveals a part of
the whole Truth about Stock and Market Time. All the answers known to your author provide a
complete understanding of the how and why these Time Equilibriums occur. Here are two:

Stock and Market Time Equilibriums represent;

A. the 50% area of Total Time wherein the maximum Time and distance losses accrue to the
substantial majority of all short and long positions.
B. A Time stalemate of all long and short positions, wherein any variety of straddle positions
will result in either a loss or extremely small profits if any, after commissions.

The diagram below illustrates one of the possible stalemates (equilibriums) in a Chess
game:

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Readers who are seriously interested in achieving a deeper understanding of the
equilibrium concept are encouraged to consider the work of the late, brilliant John Nash. In
1994 Mr. Nash was awarded the Nobel Memorial Prize in Economic Sciencesfor his work on non-
cooperative game theory. Professor Nash pioneered the mathematical principle in game theory
known as the Nash Equilibrium.

Ingame theory, theNash equilibriumis asolution conceptof anon-cooperative


gameinvolving two or more players in which each player is assumed to know the equilibrium
strategies of the other players, and no player has anything to gain by changing only his or her
own strategy.[1]If each player has chosen a strategy and no player can benefit by changing
strategies while the other players keep theirs unchanged, then the current set of strategy
choices and the corresponding payoffs constitutes a Nash equilibrium.

SEE:

https://en.wikipedia.org/wiki/Nash_equilibrium

See also:

https://en.wikipedia.org/wiki/John_Forbes_Nash_Jr.
Whether in a Bull or Bear Market, weekly and monthly charts demonstrate the fact that
in a single year, there are perhaps, a dozen times or less, when a stock or market moves a
great distance in a very short period of time. These fast, periodic moves provide wonderful
opportunities to make substantial profits quickly for those with this degree of knowledge. As
revealed in this article and others on the timesinewave.net website, it is those opportunities

WWW.TRADERSWORLD.COM October/November/December 2016 113


wherein the Time Sine Wave Analysis shines
brightly.
TradersWorld Magazine
FOR SERIOUSLY INTERESTED Premium Subscription
PARTIES
Get everything we have for only $19.95 per year
The author has a serious interest in Save 50% over our regular subscription of $39.95
partnering with a qualified professional
trading firm(s) or individuals, for the purpose
of bringing this proprietary knowledge to a
technological speed of light, state of the art
performance level, for mutual benefit.

Interested professional trading firms and/


or individuals should possess the following
qualifications:

A. An open mind capable of setting aside all


prior Stock and Market predispositions.
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side the Box Read articles explaining classical trading
C. the skills and capability of creating cus- techniques, such as W.D. Gann, Elliott Wave,
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NinjaTraders, MetaStock & Market Analyst.

Qualified parties are encouraged to


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submit a Letter of Interest accompanied
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The Next Wall Street Class Action Suit
Starts Here
By Steve Selengut

This is the first in a series of articles that could encourage the regulators to change their
direction and focus. Quick as they are to punish product salespersons, and focus on costs
instead of quality and income, most of their efforts prove counter-productive and more
expensive for investors. It almost(?) seems that they work for the Masters of the Universe and
against the average investor/shareholder.

In my experience, Ive determined that most regulators are blind followers of da law, with little
practical knowledge of investing. They write their quota of traffic tickets, punch the clock, and
repeat the process with the next victim.

Lets give these terriers better guidance, and turn their generally rude behavior on the real
malfeasants in the institutional hierarchy. We need clearer statement information, better
products, and fairer pricing. The financial industry Police Force (SEC, DOL, FINRA, etc) is
ignoring all three.

Well be looking at several issues, including the following:

Wall Streets Purposely Confusing Account Statements


Requiring Clients to pay Fixed Fees Instead of Variable Expenses
Allowing Exorbitant Pricing for On Line Trading In Full Service Firms
Tacking Service Fees, and SEC Fees, On Top of Everything Else
Hijacking 401ks Within Institutions In Spite of Low Income Only Product Choices
Holding Interest Rates Down as Part of a Long Con

------------------------------------------------------------------------

Compliance related employment is one of the fastest growing professional fields in America.
We are expected to believe that the regulatory oversight protects us, and makes us safe. But, in
reality, it does little more than increase costs, interfere with progress, and make life miserable
for financial services practitioners.

It paralyzes independent thought, reduces productivity in every area it touches, and


institutionalizes absurd redundancies, while turning nit-picking obstructionism into an art form.

And we are paying dearly for the regulatory overload

WWW.TRADERSWORLD.COM October/November/December 2016 115


The DOL is attacking costs within 401k and IRA investment programs while they ignore the high
risk products and anemic income production inside.

The SEC requires small advisory businesses to comply with rules designed for huge organizations
while ignoring both the misleading statement information provided by institutional Wall Street,
and the trillions in excessive service fees that rub our nostrils raw.

Compliance officers levy fines on their own employees for minor clerical errors, just to avoid a
confrontation with or whipping by FINRAs cat-o-nine-tails. As a result, they make it virtually
impossible for their dependent advisors to bring better and fairer products to the market place,
or to do timely new product marketing.
While small firm compliance directors huddle in fear, regulatory agencies poll
institutional Wall Street firms for their regulatory advice. Who do you think benefits
from that collaboration?

1. Wall Street Prepared Account Statements

Most professional investors would agree that ASSET ALLOCATION (growth purpose vs. income
purpose), various DIVERSIFICATION guidelines (position size, sector participation, etc.),
fundamental security QUALITY (risk level), and realized INCOME production are important
areas of portfolio development that all investors should be helped to understand.

Wall Street prepared statements ignore all but one of these... the realized income.

As a private portfolio manager, the first thing on my regulators-could-fix-this list is the account
allocation pie chart that my clients see on their monthly account statements.

According to my personal National Financial Services (NFS is the custodian subsidiary of Fidelity
Investments) statements, my investment portfolios (at age 71) are 97% invested in equities,
which most normal people would think means the stock market.
I know that only about 15% of my total portfolio is in growth purpose securities, while the rest
is invested for tax free and taxable (in the IRAs) income, and that the actual common stocks are
Investment Grade Value Stocks (please Google IGVSI if you think Im talking about what Wall
Street calls value stocks).

The account statements reveal nothing about the purpose of my securities, the sectors they
belong to, or their fundamental risk level? Nothing specifies or summarizes my actual portfolio
diversification numbers by either individual security, or by class of security (income vs. equity).

According to NFS (the paid custodian of my total investment portfolio) I am almost


100% invested in equities... as are most of my clients. In reality, after this 9+ year
rally, my portfolios contain fewer individual common stocks than in either the pre-

WWW.TRADERSWORLD.COM October/November/December 2016 116


crash summer of 1999 or in June of 2007.

Shouldnt the custodian be sending out an equity overload warning message? or


are they not fiduciaries either?
----------------------------------------------------------

Several years ago, I received a call from an irate client: What have you done to my Municipal
Bond Portfolio, he blustered, my statement says youve got me 100% in the stock market!

What I had done was take smaller than expected profits on his odd lot individual bond
holdings and replace them with a diversified portfolio of Tax Free Closed End Funds (CEFs)
paying about twice as much interest, in monthly increments. Not one common stock in the lot.

Why smaller than expected? Because Wall Street firms put shamefully unrealistic bond
market values on customer account statements. Go ahead, ask your broker to get you a live
bid on your individual bond holdings. Why has this been tolerated for so long?

Yes, CEFs do trade like equities, but should the statements ACCOUNT ALLOCATION pie chart
tell the unsophisticated investor (or an unscrupulous product salesperson), that the account is
fully invested in the stock market?

Not by any stretch of the regulatory imagination should portfolios containing hundreds of
municipal bonds, corporate bonds, preferred stock, senior loans, and convertible securities, etc.
for even one eye blink be considered in the same financial risk category as any common stock.
-------------------------------------------------------
Should a Blackrock Municipal Income Trust or a Pimco Muni Income Fund be represented to the
investor in the exact same category as a penny stock? The regulations seem to allow it.

Couldnt Mutual Funds show the Morningstar risk assessment? Shouldnt stock symbols be
accompanied by the S & P quality rankings? Wouldnt it be nice to know the % of portfolio for
each security or fund?
The information is readily available, and a whole lot easier to understand than the two and a half
pages of boiler plate footnotes and legalese at the bottom of account statements. Smile if youve
never read even half of the fine print.

As an alternative to individual income securities, CEF professionally managed income


portfolios are traded for regular commissions instead of manipulatable, and invisible, mark-
ups. Individual bond portfolios are dangerously illiquid and impossible to price accurately on
statements. Wheres the required consumer protection warning label about these
financial cigarettes!

CEFs eliminate both unrealistic pricing AND illiquidity... but the financial institutions

WWW.TRADERSWORLD.COM October/November/December 2016 117


dont want you to know that they exist.

And (conspiracy theory again), are the individual odd lot positions an attempt to diversify or
simply a set-up for a double-dip mark-up tax swap a year or two later.
Perhaps unwittingly, some financial advisors use shorter duration bonds to soften the on
paper market value impact of rising interest rates, while the regulators nod their (empty) heads
in approval.

Dont they understand that market value change rarely has any impact on the income
produced by fixed income securities.

CEFs provide instant income portfolio diversification AND an opportunity to take


advantage of changing interest rates, in either direction. Comprenez? But most
institutions seem to insist that their salespeople focus elsewhere.
---------------------------------------------------------
At a conference a few years ago, I had an opportunity to present my misleading statement
observation to a National Financial Services (NFS) representative. Long story short, NFS had no
interest in changing its statement presentation.

An equity is an equity is an equity (who cares what message is received by the


customer)... unless, of course, the boss wants the statements to lead that consumer in
a particular direction.

Interesting or, perhaps alarming, NFS has recently set up a new statement sub-category
called Exchange Traded Products where they now list the endless varieties of ETFs ... not
investments, not securities, not sector speculations. Funny, but these market timing
gaming devices are (drum roll please) traded like equities!
AND arent CEFs Exchange Traded Products, but with a much safer recipe?

If you own open end equity and income Mutual Funds, stock options, futures contracts, etc., Im
guessing that their account allocation is equally as inappropriate as it is for the income CEFs.
---------------------------------------------------------------------------------------

The solution isnt too difficult; all the information is out there. S &P publishes common stock
quality rankings and Morningstar publishes apples-to-apples comparisons of income (and equity)
CEFs. Mutual Funds are risk analyzed as well.

Financial Institutions are not required to disclose portfolio content that we the
investors need in order to understand what their employees have sold us. Is it the
regulators or the institutions that are culpable.
Why is it that employees of financial institutions are being deemed fiduciaries when
the company itself is not? How much lobbying did that take?

WWW.TRADERSWORLD.COM October/November/December 2016 118


Lets make them (the institutions) preface the pie charts (yes, there should be more than one)
with laymans language expectation paragraphs and simple explanations of the ingredients in at
least three new and required account allocation pies.

The Risk Assessment Pie is a summary of individual security portfolio risk assessment
arrows and S & P fundamental rankings inside the portfolio. The * should state that the less
financially risky income purpose securities are more likely to be price impacted by rising interest
rate expectations, BUT, that market value generally has little or no impact on the income
produced.

The Sector Diversification Pie is a sector by sector breakdown of the individual securities
AND products inside the portfolio. My personal portfolio, for example, would show 90%
national municipal bonds, 4% NY bonds, 4% NJ bonds, and 2% PA bonds. It could be
further separated by: quality, duration, and risk.

The Asset Allocation by Purpose Pie is a growth vs. income purpose, asset allocation
assessment. The purpose pie chart for my IRA portfolios would show: 70% income
generation, 30% growth of capital... my objective is to generate more than enough
income to pay the RMD, 1/12 monthly.

There is also a lot of work to be done in the Current Holdings section. Every security
description should be required to include the S & P Ranking, or Morningstar Risk Arrow/Analysis,
a sector categorization, and the % of the total portfolio cost basis that the security represents.

This is not new information... standard portfolio management software can do most of
it, for example:

Honeywell, Intl, HON, S & P Ranking = A, Sector = Aerospace & Defense... and (1.5% of total
portfolio cost basis) next to the cost basis. The estimated yield, and cost per share are already
provided.
Pimco Income Strategy Fund CEF, PFL, No S & P Rating, Morningstar Analysis = 4 Stars, Taxable
Bond Income... 2.75% of portfolio cost basis.

Conspiracy Theorists, rev up your imaginations!

Why is none of this important information included in our account statements? and
why oh why...

are there no CEFs in 401k portfolios,


has your Wall Street firm broker never once suggested that you add an income CEF to your
portfolio,
not even once, ever, have you heard about the scores of income CEFs that have been paying

WWW.TRADERSWORLD.COM October/November/December 2016 119


yields well above what you have been
receiving... since the early 1990s TradersWorld Magazine
is a Vanguard Retirement Fund yielding Premium Subscription
less than 2%, invested 30% in equities,
Get everything we have for only $19.95 per year
and 15% in non US debt, one of the most
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popular (over $10 Billion) in the 401k
space... when so much better yielding
stuff is available.

Lets get this information out there, and force


the regulators to do something about this, and
a growing number of other issues, that they
have routinely (if not negligently) ignored.

Hmmm, should I sue my brokerage


firm or the regulators for not telling me QUARTERLY MAGAZINE SUBSCRIPTION
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COMPLETE BACK ISSUES OF TRADERS


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You also get our complete archive of 60 back
issues from 1986 to present. This, contains
articles, product reviews, hundreds of chart
examples, how-to-trade articles and much

format, which you can read online anytime.


In every issue, you get the information
you need to trade the markets better with
charting, astro, cycles, oscillator tools.
Works for stocks, bonds, futures, options.

60-Day Money Back Guarantee

CLICK TO SUBSCRIBE

1-800-288-4266
www.TradersWorld.com
www.TradersWorldOnlineExpo.com

WWW.TRADERSWORLD.COM October/November/December 2016 120


Crisis Cycles Clashing
4Q 2016 Ushers in Critical Phase

By Eric S. Hadik

Crunch Time
Since early-2015, INSIIDE Track has repeatedly described expectations that equities would go
through a topping process (in 2015/2016) similar to what was seen in the DJIA in 2000--2001
and an ensuing decline (3Q 2016--2017) - akin to what was seen in 3Q 2001--4Q 2002.

The intensification point - identified in early-2015 - is nearing.

4Q 2016 represents the transitional phase - when a ~1.5 year topping process is expected to
shift gears.

There were many factors - some technical, some cyclical & some fundamental - incorporated into
this outlook & the continued focus on late-2016. At their core were corroborating examples of
Hadiks Cycle Progression (see Diagram #1). Before getting to those

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Context is Critical
In any form of analysis, it is best to begin with an awareness of the broader context. Analyzing
isolated events - robbed of their proper setting - can lead to misleading conclusions. Nowhere
is this more applicable than in the markets. And nowhere is the absence of context more
dangerous!

A 200-point rally in the stock market (DJIA) would be viewed significantly different if it came
at the tail end of a 3,000-point, multi-month advance OR after a 2-month consolidation phase
within a 400-point trading range OR after a 2-week plummet of 2,000 points.

In the first case, it is more routine although it could mark a blow-off rally. In the second case,
there would be an increased likelihood the market is poised to accelerate to the upside after
breaking out of prolonged congestion. Alternately, in the third case, it would be barely a blip on
the radar a feeble excuse for a dead-cat bounce in which a few shorts covered positions.

The same move would have dramatically differing ramifications, depending on the actual
context.

2016 - 2021: The Big Picture


Such is the case when viewing the coming years and market events that are already unfolding.
Many of those appear similar to corresponding ones in recent years (rally in gold & silver, topping
formation in stocks, rally in Dollar, etc.). However, I contend they are radically dissimilar and
will have exponentially greater impact on ensuing moves in 2017 and into 2021.

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From a fundamental perspective, the US, Europe & other industrialized nations are still
staggering from the meltdown of 2007--2008. Though anecdotal evidence (often cherry-picked
for this very purpose) sporadically shows signs of improvement, the economies, national debts,
civil unrest & personal finances of most citizens reveal a contrasting reality.

In that reality, there HAS been a recovery since 2009 or 2010 but from a much lower level.
It has been far more anemic - and far less encompassing - than previous recoveries, with the
resulting economic infrastructure left far more vulnerable to the impact of the next downturn.

In other words, this recovery has a considerably different context.

And, the current social structures are considerably more polarized. Another stress on the
system would be like a 7.0 earthquake striking a region that is only beginning to recover from a
7.5 earthquake.
The ability to withstand another seismic shock is severely compromised. And that appears to be
even more the case in Europe, than America reinforcing my ongoing outlook into 2018--2021.

2011--2021 - The Bigger Picture


With that as the backdrop (context), it is important to build on that analysis. There are many
warning signs that have been anticipated as validation to the outlook for 2016--2021. These are
all pieces of the same puzzle. And that puzzle is powerfully impacted by the uncanny 40-Year
Cycle.

WWW.TRADERSWORLD.COM October/November/December 2016 123


These signs have been published for over a decade. One of those involves the 2011--2021
outlook for gold & silver. 2011 was projected to usher in a Major, multi-year top in precious
metals with gold forecast to peak on the 40-year anniversary of the Nixon Shock of August
1971. (The related 2011 Date with Destiny reports can still be viewed at http://www.
insiidetrack.com/reports.)

That was forecast to trigger a multi-year crash in silver, directly related to that 40-year cycle,
into 2015. See Diagram #2 [Hadiks Cycle Progression & Silvers 40-Year Cycle].

Silvers (& Golds) 40-Year Cycle


This analysis has been detailed separately (dating back to the 1250s), but here is a brief recap

1811 - Expiration of charter of 1st Bank of the United States; Set off intense, ~5-year battle for
& against a national bank and control of currency (impacting role of gold & silver). Led to 1816
chartering of 2nd Bank of US and ensuing Panic of 1819.

1851 - Act of March 3, 1851 - debasing Silver coins from .900 fine to .750 fine. Followed by
Coinage Act of 1853 (reducing silver content in half $, quarter $, dime & half-dime) that led to
suspension of Silver in 1857 & Panic of 1857.

1891 - Sherman Silver Purchase Act of 1890 (part of Billion Dollar Congress of 1889--1891) led
to collapsing silver prices in 1891--1893 & Panic of 1893. Election of 1896 surrounded silver &
gold.

1931 - UK abandons Gold Standard, followed by the US in 1933. Silver Act of 1934. Led to
easy credit until 1936, when Fed abruptly began tightening credit, resulting in 2nd stock market
crash of that decade - in 1937.

1971 - Nixon Shock when Nixon slams shut the gold window to international convertibility.
Leads to 1973 collapse of Bretton Woods and ultimately to 1976 Jamaica Agreement, the Dollars
divorce decree from precious metals.

The events of 1811, 1851, 1891, 1931 & 1971 led to various attempts to abandon/devalue gold
& silver. Combined with a myriad of other cycles, technical indicators & fundamental events,
that 40-Year Cycle led to projections for a multi-year crash in silver, beginning in 2011 - the
transition of the latest 40-Year Cycle.

As culmination of those expectations, 2016 was projected to be The Golden Year and represent
the start of a multi-year advance in precious metals - following the completion of silvers
projected crash (in 2015).

2016 - The Golden Year Update


WWW.TRADERSWORLD.COM October/November/December 2016 124
As published in 2015, IF the scenario for 2016--2021 was to be validated, gold needed to see
successive surges in 1Q 2016 and 2Q 2016 - leading into weekly & monthly cycles peaking in
mid-2016. See http://40yearcycle.com/tag/mid-2016-gold-peak/. That was the context leading
into this year. It sets the stage for 4Q 2016.

In January 2016 (Traders World Issue #62), this author wrote The Clash of Cycles II &
reiterated that analysis, explaining why gold was poised to see its biggest surge since 2011.

In May 2016 (Traders World Issue #63), The Clash of Cycles III was written & reaffirmed that
analysis, explaining why June 2016 would see another surge leading into that expected mid-
2016 peak.

That analysis has been powerfully confirmed with gold & silver surging in June and topping
within the first few days of July 2016 precisely at mid-2016. A multi-month correction was
forecast and is expected to lead into the second-best buying opportunity in this decade (second
only to the mid-Dec. 2015 buy signals see http://40yearcycle.com/tag/golden-year/).

[As part of that analysis, gold & silver were forecast to see a quick, sharp drop into late-August -
which is currently unfolding. That is a decisive, intermediate cycle low in precious metals.]

Similar to 1976--1980 (one 40-Year Cycle ago), a renewed inflationary surge in commodities &
precious metals is expected in 2016--2020. That is one piece of the puzzle.

The 8-Year Cycle - Update


Another piece of the puzzle involves the outlook for Europe from 2011--2021. That outlook has
been published since 2008 and includes projections for a declining Euro and the fracturing of the
current European Union, leading into 2018. That would usher in a unique convergence of Cycles
of European (Re-) Unification in 2018--2021.

The latest trigger for that evolving Euro Crisis was described in May 2016 and included in The
Clash of Cycles III (Traders World Issue #63). That article reiterated the 8-Year Cycle that
involves Britain/UK and a persistent, recurring pummeling of the Pound - previously seen in
1968, 1976, 1984, 1992, 2000 & 2008.

It was projected to trigger another pummeling in 2016 and led to the conclusion that the British
would likely vote for Brexit in late-June. A month later, the Brexit vote powerfully fulfilled that
and the British Pound suffered yet another pummeling. (See http://40yearcycle.com/tag/
european-union/). However, it is the longer-term repercussions - of that surprise vote - that
are the most concerning for European Unity.

Dj vu: 2000--2002 Parallel


A third piece of the puzzle incorporates ongoing analysis that 2015--2016 would witness a Major
topping formation in Stock Indices - similar to that seen in the DJIA & DJTA in 2000--2001 - that
WWW.TRADERSWORLD.COM October/November/December 2016 125
confounded traders for almost 18 months before a convincing decline finally took hold (in 3Q
2001). See http://40yearcycle.com/tag/2000-2002-parallel/.

That forecast originated with one of the largest cycles - the 40-Year Cycle (dating back 200+
years). Over the last century - since the bottom of 1932 - the stock market experienced
successive, ~40-year advances.

The first went from July 1932 until Jan. 1973 - a total of 40 years & 6 months.

That was followed by one of the most tumultuous periods in modern American history - including
the resignation of a US President, a Middle East war that pitted US proxies against USSR proxies
(not unlike modern-day Syria), the wielding of the oil weapon against America, social upheaval
and a corresponding 50% crash in stock prices in less than two years (Jan. 1973--Dec. 1974).

The second began in Dec. 1974 and lasted - in many Indices - until 2Q 2015, another advance of
40 years and ~6 months.

Leading into and through this peak, however, it was another cycle that was uncanny in
pinpointing the final accelerated advance (from mid-2013 into late-2014) and the ensuing
topping process - timing each subsequent high & sell-off with great precision.

And, that cycle has a lot to say regarding the period from mid-August 16 into April 17.

Stocks & 32--33 Week Cycle


Diagram #3 [Hadiks Cycle ProgressionTM & 32--33 Week Stock Cycle.] illustrates how this 32--
33 Week Cycle has evolved to where it is currently.

In a textbook Cycle Progression, a cycle times 4 consecutive lows and then transitions to 4
subsequent highs (often confounding many cycle enthusiasts). In mid-2013, the 32--33 Week
Cycle Progression diagram was published with the corresponding analysis that stock indices were
poised for an accelerated advance into late-2014 (40 years from the late-1974 bottom) as that
Cycle Progression transitioned to future highs.

Those highs typically pinpoint the peak of a wave 3 of III, the peak of a wave 5 of III, the peak
of the wave V and then the (lower) peak of a wave B. After the 4th consecutive high, the
market prepares for a more sustained decline as it readies itself to begin timing subsequent lows.
[NOTE: There are several crucial filters that MUST corroborate any Cycle Progression!]

The stock market was projected to see an initial peak in early-Sept. 2014 and then a more
significant peak in late-April/early-May 2015. That is precisely what unfolded as the markets
underwent a precursor shock in Sept./Oct. 2014 and then a much larger shock in May--August
2015. See http://40yearcycle.com/tag/32-33-week-cycle/.

WWW.TRADERSWORLD.COM October/November/December 2016 126


The ensuing phase occurred in mid-Dec. 2015 TradersWorld Magazine
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Each one of these peaks, and each one of


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on the decisive phase of the 32--33 Week
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WWW.TRADERSWORLD.COM October/November/December 2016 127


Three Top Forex Markets that Should
Continue their Strong Bear Trends to
New Lows
By Jaime Johnson, NoBSFXTrading.com

In the NoBSFX Daily Reports and Net Trend Videos we look at the seven top Dollar crosses as
well as the GBP/JPY continually looking at the trends in the weekly charts down to the 60 minute
charts. Two of the top Dollar crosses we pay strong attention to are the British Pound vs US
Dollar (GBP/USD) and the US Dollar vs Japanese Yen (USD/JPY). Both have been in bear trends
for at least the past year and the pattern is suggesting the bear trends should continue to new
lows.

In this article, we will discuss why the bear trends of the GBP/USD and USD/JPY should
continue. We are going to look at pattern and momentum/oscillator position to explain the
probable continuation of the bear trends of both markets. While the bottom oscillator used in
these charts is a proprietary oscillator to the Dynamic Trader software, any oscillator can be used
in which the bearish and bullish reversals of the oscillator (or highs and lows of the oscillator)
correlate relatively well with the swing highs and lows of the markets. The top oscillator is a

WWW.TRADERSWORLD.COM October/November/December 2016 128


Slow Stochastic. This article was written during the third week of September 2016.

The GBP/USD
Chart 1 is a GBP/USD weekly chart. The GBP/USD has been in a bear trend from the July 2014
high. However, in a long term bear trend there will be multi-week, if not multi- month corrective
bull trends. There are two multi-month confirmed textbook ABC corrective rallies shown in Chart
1, the April 2015 June 2015 rally and the March June 2016 rally. The March June 2016
corrective rally was completed following the Brexit announcement. It is looking like another
corrective rally is unfolding, if not already complete, from the July 2016 low. It is very likely
already complete as of the high of the week ending September 9. The difference between this
corrective rally from the other two is if it is complete, it is an irregular ABC correction. It is
irregular because the Wave C high did not exceed the Wave A high. However, the result of the
last corrective rally should be the same as the other two, a decline to a new low. In this case, a
decline to below the July 2016 low.

Lets now take a look at weekly momentum or oscillator positions. Both oscillators in Chart 1
use settings in which their highs and lows correlate relatively well with the swing highs and lows
of the weekly GBP/USD. Both oscillators are currently Bear, with their fast lines far from the
oversold zone. This is a strong weekly momentum signal that the net trend of this market should

WWW.TRADERSWORLD.COM October/November/December 2016 129


be down for several weeks very likely to below the July low confirming the high of the week
ending September 9 as a corrective high.

The USD/JPY
Chart 2 is a weekly USD/JPY chart. This market has been in a strong bear trend from the
June 2015 high. The July 2016 high is in the ideal position to be the completion of a textbook
ABC corrective rally and the high of the week ending September 2nd is also in the position to
be a corrective high. Like the GBP/USD, both the weekly oscillators are Bear, a strong weekly
momentum signal that the net trend over the next several weeks should be down very likely to
below the June low confirming the July and September corrective highs.

Daily Charts
So should we jump into short positions right away? Not exactly. In multi-week bear trends there
will be multi-day corrective rallies and at the time of this writing, September 22, 2016, both
markets are in the position for multi-day rallies, very likely corrective rallies. Charts 3 and 4
are GBP/USD and USD/JPY daily charts respectively. Both markets have Bull daily oscillators,
strong daily momentum signals their net trends should be sideways to up over the next several
trading days. With weekly oscillators Bear, any multi-day rallies should be corrective rallies in
higher degree time frame bear trends.
For the GBP/USD (Chart 3), short positions may be considered following a daily oscillator
Bearish Reversal (the fast line crosses below the slow line), above the oversold zone as long

WWW.TRADERSWORLD.COM October/November/December 2016 130


as the Sept. 6 high is not exceeded and the weekly oscillator remains bear. This would put
both weekly and daily oscillators in the same Bear position. Very likely the next daily oscillator
Bearish Reversal will coincide with a minor corrective high.

For the USD/JPY (Chart 4), short positions may be considered following a daily oscillator Bearish
Reversal above the oversold zone as long as the July 21 high is not exceeded and the weekly
oscillator remains bear. A rally above the Sept. 2 high does not void the July 21 corrective high.
Considering these short trade set-ups can put you in positions for declines lasting several trading
days, if not several weeks potentially to below their July/June lows.

The GBP/JPY
We looked at the GBP/USD and USD/JPY, lets now take the US Dollar out of the mix and look at
the GBP/JPY. Chart 5 is a weekly chart and it looks very similar to both prior markets, actually
more similar to the GBP/USD. The high of the week ending September 2 is a probable irregular
Wave C corrective high and the weekly oscillators are Bear. Very likely a new low will be made
in this market, but like the other markets, the Bull daily momentum suggests that the net trend
should be sideways to up for a few, if not several days.

WWW.TRADERSWORLD.COM October/November/December 2016 131


Conclusion
If you trade any of these three markets, the trend should be down for several weeks if not
longer very likely taking out their June/July lows. Shorter term traders keep in mind during
these potential bear trends, there should be shorter term trade opportunities in both directions.
Regardless the direction or time frame you choose to trade, always use objective trade entry
strategies, always use stop-losses, trade more than one unit and have exit strategies for each
unit, use stop-loss adjustment strategies, use a money management plan and most importantly,
be disciplined enough to stick to these trade strategies.
For education on practical trade strategies for every timeframe to take advantage of the
potential multi-month declines in these markets and for short term corrective rallies during these
declines, check out my NoBSFX Trading course (info below).

More Information as the Market Unfolds


With these markets as well as any other market, more information is revealed on whether the
longer term outlook is correct or not as the market unfolds. For continued analysis of these three
markets as well as many more top Forex markets as they unfold and for further education on
the analysis used in this article, check out the NoBSFX Daily Reports and the NoBSFX Net Trend
Video Reports (info below).

Jaime Johnson is a full time trader and the author of the NoBSFX Trading Workshop, the NoBSFX
Daily Reports and the NoBSFX Net Trend Video Reports. For complete information, go to www.
nobsfx.com or send him an email at jaime@nobsfxtrading.com.

WWW.TRADERSWORLD.COM October/November/December 2016 132


EXECUTION
IS KEY IN
TRADING
By: Samuel Bassey, MBA

How one executes a trade is a key factor, in an individual being profitable in trading. Regardless
of the market the person is trading; execution is definitely viable in the outcome of the trade.
When one executes a trade, there is no turning back, that person has to hone up to the trade
and its liabilities. It is very important to study a trade, before executing the trade. The trade will
either go in one direction or it will go the opposite direction.

The question should not be on what an individual does to execute a trade; but should be about
how one prepares for executing a trade efficiently and effectively? That question though a
relevant one, is a hard question to answer. Anyone who is a trader or investor has their own
unique way in trading and investing in the financial markets. I may execute a trade different
from someone else because I view the transactional history different. Someone else may
execute a trade different from me because he/she believes the trade will go in his/her favor, or
against them. There is no right and wrong way to place a trade in the markets; its just making
sure one can execute the trade with whichever method he/she pursue effectively.

Once an individual can find a routine of executing his/her trade, he/she should consistently
use that routine to make amends in their strategy. If a person can consistently execute trades
that make them profitable, this individual can now institute a strategy that can be self serving
in growing their trading accounts daily. Execution is symbolic in trading because it allows
the person to see if the position he/she placed in execution, worked in his/her favor. If it did
not work in the persons favor, the person should try a different approach in their trading
mechanisms, or he/she can take note of their trades for that particular day, simulate future
trades for practice and return on a different day to anticipate on profitable trades down the line.

There are no guarantees in executing a trade in a certain manner or certain way, as such there
is no way to determine the global markets either. If one places a trade, there is nothing in the
markets that indicate that though a trade was placed in proper form, which way the trade

WWW.TRADERSWORLD.COM October/November/December 2016 133


will go in his/her favor, to make that person more profitable. If this was the case, many people
who have the right setup and execution in trading would be infinitely rich; and that is not the
case realistically. If everyone had a proper execution all the time, many more people would be
millionaires and billionaires, instead of losing most of their money in the markets.

Instituting a formidable setup is a precursor to a strong execution, which then will enhance a
persons gains. When there is a good setup of the trade being established, this allows for greater
profits and in any case, allows for more established setups to be concurrent from the previous.
When one can produce reoccurring setups that makes sense to the individual, the individual will
be able to position themselves in executing more effectively. Setting up how an individual wants
to execute a trade is important because the setup allows the individual to foresee the whole
picture entirely. Having a bad setup can be an error that makes an individual lose way more
money then he/she should. This can definitely be a problem because without an established
setup that is producing gains for your trading, it is leaving you account to be blown away and
then you either are going to reinvest or stay away from trading altogether. Having a neutral but
winnable setup is important in maintaining control over your account.

Understanding order execution is also important, as the order of the position is placed,
numerous orders are filling in the buy and sell, and so an individual must understand the order
of execution in their respective markets. When you execute an order, one must analyze the
market and where the market may or may not be moving towards. Again, no one exactly knows
or can dictate how the financial markets are going to play out, but anticipation and speculation is
a factor in attaining monstrous profits. This need to be noted when one is planning a trade.

Preparation of the execution needs to be adhered, preparation is key in any trading activity,
preparation is key in execution, progression and in life. When one can prepare his/herself for
the trade, the execution becomes simple and depending if it the right time of the execution, can
provide major opportunities. The more the person prepares for the trade in hindsight, can make
other objectives in the trade easier. Execution allows an individual to enhance their skills and
provides how the dynamic of the trade may formulate. Execution does not guarantee profits;
it does make sure one knows how to figure out methods to maximize their profits. The goal is
to make sure the execution can weigh in the favor of the trade, now if it does not do that then
there are other options to determine, such as reevaluating the trade, or reviewing where the
execution went wrong and why it did go wrong?

It should be noted that the execution is one of the many pieces of the pie, when in trading
or investing. It is only a part of the dynamics in trading, dont rely on execution as being
the beginning and the end, it can be either or but it is not suited to be both at one time.
Comprehend the execution allows you to do what it exactly is meant; and that is and to fully
execute. With the right preparation, setup in place and execution, one can be a masterful
trader, or at least highly successful in trading. This does not mean that all the time one will
be profitable, there are sometimes when the trade is not meant to be or goes against what a

WWW.TRADERSWORLD.COM October/November/December 2016 134


person has practiced and prepared, one can not
control the markets, but in any case one should Order all Back Issues
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WWW.TRADERSWORLD.COM October/November/December 2016 135


The Importance
of Timing
By Andrew Pancholi

Super trader and Hayman Capital portfolio manager Kyle Bass has made billions both personally
and professionally.

He shorted the sub-prime mortgage situation back in 2007 and 2008. His return was deemed to
be 600% in 18 months. He also made a huge fortune shorting the demise of Greece, and he had
a successful campaign on pharmaceuticals.

In one interview he said, I know what is going to happen, I just dont know when. So he buys
insurance in the form of options and other leveraged derivatives. Eventually each bet comes in
and when it does, it generally comes in big time!

He never talks of the use of any timing system.

Portfolio managers and traders in such situations would be able to run their operations far
more optimally if they had a handle on when such events might occur. This would increase their
profitability substantially as they would be in a position to know when to overweight that
particular part of their portfolio and thus maximize profits.

By adding timing, we can transform other concepts into a very effective trading systems. One
example of this is the use of Commitment of Traders data with market timing.

Astute analysts are able to spot trends in the making well in advance by looking at the difference
between what positions different groups of traders are holding.
This entails looking at what the direction and size of the positions held by speculators versus
those held by end users. Put simply, the Commercial Traders (i.e., Farmers, Hedgers, Producers,
and Factories) are usually right and the Large Speculators (i.e., Banks and Large Financial
Money Managers) are usually wrong. When a huge divergence takes place between their
positions, we can expect a large move. By monitoring changes in these situations, people
like Steve Briese of Bullishreview.com are able to forecast the direction of a move coming up
within a larger time window. With the addition of market timing, we are able to fine-tune these
windows into precise weeks and even days.

WWW.TRADERSWORLD.COM October/November/December 2016 136


By being able to time these situations accurately, we create a very big advantage for ourselves.

As we can see from the above, the smartest traders and investors combine a serious of
techniques and indicators to increase their probability of being successful. Of course, we must
also add money management to this, but that is a different topic.

The Market Timing Report is created to give traders and investors valuable timing information
which, when combined with their existing systems, will give them a massive unfair advantage. It
is a monthly report covering the S&P500, Crude Oil, Gold, EURUSD and the Dollar Index.

So what are the benefits for you, the trader and investor using The Market Timing Report?

The report gives you both the big picture and potential daily turns. If you are an investor, you
can focus on the the editorial comments and the larger cycles mentioned at the beginning of
each section. These in themselves are worth their weight in gold!

You receive this information in a variety of ways.

The editorial section looks at what is coming up ahead. Regular readers already know that we
are expecting some of the biggest macro long-term cycles to occur over the next one to three
years, affording those who are prepared unparalleled opportunities for success.

As a recap, the two major cycles that are coming in are 1.) The 90 year cycle from the 1929
Crash and 2.) the 30 year cycle cycle from the 1987 crash, which also coincides with the 60 year
cycle from the 1957 sell-off and the 180 year cycle from the 1837 Boom and Bust. The 90 year
cycle is likely to create a major event just in itself. After all, the half-way point of this cycle was
in 1974, which was the beginning of this last bull market. 1974 marked an historic low during
which the western nations were brought to their knees by the OPEC oil crisis. Since 1974 the
market has headed up, and the lows of that time frame have never been revisited.

Many of you are keen not only to receive the information, but also to learn techniques on trading
and analysis. Most months such tutorials are added. As The Market Timing Report is published
monthly, forecasting price up to a month in advance can be difficult. We will often show some
price forecasting techniques in action in order to help you synthesize the timing information.

Each section opens with comments on long-range cycles. These are applicable to all readers, but
investors will get the most out of this section. The points are made in red. These are usually the
bigger swing points of the year. These turn points are explained shortly.

We then identify the key recurrent patterns and cycles that are likely to influence the month
ahead. Then we look for correlations in them.

WWW.TRADERSWORLD.COM October/November/December 2016 137


We also reveal daily probability based on the content of our databases. For example, did you
know that on 75% of occasions since 1975, Gold has closed up 75% of the time by the end of
trading on October 6th compared to the previous day? Similarly, on the 20th January, Crude Oil
has had a down day 76.2% of the time since 1983. These probabilities are significant. If we
combine these with indicators giving confirmation, we are increasing our probabilities of success.
Its things like this that give us the edge.

The report takes these set-ups further by looking at long-term moves.

For example, did you know that Crude Oil has traded lower on 21st November 75.8% of the time
than it traded on 11th October 75.5% of the time since 1983? So again, if you have other factors
confirming this and your risk-reward profiles align, then this could provide you with a great
opportunity.

However, the most important and accurate feature of The Market Timing Report is the ability to
forecast dates using the Profit Finding Oracle system. This is a proprietary series of formulae
and they are resolved into histograms. These generate very high probability turn point dates
across a variety of time frames.

At the time of writing, a major turn point is already coming up on the S&P500 and other global
indices for the week ending 9th December 2016. The Profit Finding Oracle is already seeing that
on its radar. We can also expect a major turn for the week ending 21st July 2017. Mark that in
your diary along with the first week of June 2018! I guarantee a market turn then, too! How
many other people are able to give you such certain information so far in advance? How could
this change your ability to be more profitable? If Kyle Bass is reading this, would he find such
information to be useful? I am sure he would. I am also convinced that his profitability would
improve massively!

Come and join us at The Market Timing Report. Watch the critical cycles over the next few years
unfold well in advance of the general public. They, of course, will be living in hope, fear and
greed. Some of them will lose their shirts. We will know what is coming up so we can take a
measured successful judgment and response. We will take advantage of the situation.

Not only will you be forewarned of whats coming up, we will make it risk-free. If you are not
satisfied within the first 28 days, we will make you a no questions asked full money back
promise. Thats our guarantee.

Click on this link and receive a full year of The Market Timing Report. Dont forget that there is a
28 day money back guarantee!

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WWW.TRADERSWORLD.COM October/November/December 2016 138


W.D. Gann and The PATH System
By Patrick Hughes
StockMarketHarmony.com
gannfann@gmail.com

There is has been much written on William D. Gann and many of you already know he was a
trader in the early 1900s, and he was extremely successful. He utilized all types of mathematic
techniques geometrical, and astrological ones to help determine market changes. He was
extremely successful and created educational courses, where he taught his techniques. For many
years, technicians, have been trying to find the elusive Gann secret that he took to his grave and
many of us technical analysts believing that we have discovered this important secret. Of course,
we will never know for sure what that is, but I do believe he has given us something even more
important, which is a psychological drive to work to discover new techniques and analysis.

I started to learn my analysis with the help of Michael Jenkins as I learned from his books,
where I put in place his techniques that became very helpful to me. There was a concept that
Michael put in one of his books Chart Reading for Professional Traders that referred to adding from a
divisional 360 circle increments into workable numbers. This I believe to be very true, and I
utilize this within my work. I take that concept one step further, as I think Michael would even
agree to show that everything comes into perfection when looked at under the right lens.

What is the PATH system?

The PATH or (Perfect Adjustment Through Harmony) system was created by myself to account
for fluctuations in a forecasted price and the actual price. The reason why this is important,
but often disregarded is that if we understand that our forecast is of sound mathematical
reason, then any difference needs to be accounted for in future moves. This difference
between forecasted and actual calculation values should not be disregarded. I say it needs to
be accounted for in further calculations to adjust prices back into their harmonic and correct
movement. So both the forecast and actual have equal importance.

Consider a fine instrument that goes out of tune. We do not throw out the instrument when
it gets out of tune, but we adjust it and we do not blame the instrument for an un-tuned
instrument. This is similar to a car that needs a tune-up. We do not throw the car out, but we
know that he just needs a little bit of fine-tuning to bring it back into fine running order. This
is similar in the marketplace because if we are using sound mathematical principles, then we
know that our calculations should be correct, but there is a finer, deeper reason for the lack of
exactness.

PATH or Perfect Adjustment Through Harmony can be considered as if we are looking at a


photograph and I moved it quickly, and it became blurry. The photograph is still intact without

WWW.TRADERSWORLD.COM October/November/December 2016 139


precisely giving the exact distance, speed and direction moved it would be difficult and
impossible to get refocused. This is what I believe happens to price action in the marketplace.
This is what happens to people when they do a 50% retracement, and prices do not stop
perfectly on them. It does not mean that it is not working perfectly it means that we have to
account for that slippage or discrepancy which I call now PATH.

The Gann Soybean Chart

If we take a look at Ganns famous soybean chart there is an area where has not been noticed
within the chart. Many have looked at the planetary lines that Gann has drawn such as Mars
and Jupiter line, in showing their influence, and this is compelling. What also is compelling, but
disregarded is the upper right-hand corner, where he draws in the 67 stating its the low, and
adds 180 to it. Gann does it in the next column too, and draws the low of 44 + 180, and he
is clearly adding them together. What is interesting is he makes a mathematical mistake when
he puts down 227 instead of 247. He then averages them together but what is more important
is that hes adding in 180 to the calculation showing the importance of adding in the circle
rotations into the calculations from the low.

Main image courtesy of Myles-Wilson-Walker.com but modified

If Gann thought all lows and highs were so important, then why would he not utilize the most
simplistic measurement known to man as the circle and fractionalizing it? Did he already do by
using a timeline such as using 180 degrees or half of 360 converting it? The 45 degrees timing
line is a similar representation of the 180 since it is showing half or 50%.

WWW.TRADERSWORLD.COM October/November/December 2016 140


In using 67 + 180 = 247 or price of 247. This is the balance price, and when prices become
unbalanced/overbalanced, they could be over bought or oversold. What he is also doing is
averaging two major important lows and showing the importance of opposition and giving the
next progression and potential high becoming a major resistance in the future.

Gann starts by adding 180 degrees or opposition to the important lows. (See red arrows)
Gann then averages out both of the low forecasts and divides by 2 (he makes an
arithmetic mistake in averaging out the numbers)
240 price starts the count of days forward. (This shows he knows its importance)
At the low of 67 in both counts, prices take a major turn (1 becomes the high or last
high and the other 67 count catches the fast break in price). (See black arrows)
So basically Gann counts from 240 in price time forward by looking for the 67 low in
time and price.
67 low 44 low = 23 PATH
23 x 2 = 46 (Expanded and close to 45 degrees)
44 low + 180 degrees opposition + 46 (PATH expanded) = 270
3.60 degrees (PATH please see my book stock Market Harmony for reference) x 2
(expanded) = 277.20 (the top)

1929 Crash using PATH and Venus

These examples show the PATH system with Venus to forecast movement. Traders need to
remember that although the degrees are off slightly you would see the change occur quickly
and move into perfection since Venus is a fast planet. All we are doing is adding in degree
movements to forecast potential turns.

123.25 Venus on 9/3/29 + 45 degrees = 168.25 Venus degrees


358.80 on 10/11/1929 = Venus 168.92

WWW.TRADERSWORLD.COM October/November/December 2016 141


123.25 Venus + 90 degrees Square = 213.25 degrees
213.25 degrees 3.60 (PATH) = 209.65 Venus

386.10 / 2 = 193.05
193.05 + 209.81 Venus = 402.86
402.86 360 degrees = 42.86 Venus Degrees

360 degrees 209.81 Venus low = 150.19
150.16 + 42.43 = 192.62
192.62 + 105 time = 297.62 price

42.43 Venus + 60 degrees = 102.43


102.43 2.40 (PATH) = 100.03
99.67 is actual Venus top on 6/2/1930
42.43 4/16/30 Venus high x 3 = 127.29

Very close to 127.14 Venus degrees. These methods can be done with all the planets under any
timeframe.

The Balancing of time and price using PATH

It is impossible to really discuss market corrections without coming to the 1929 crash, but it
really perplexes me to see such little work done on this time frame. The reason why I really like
this time frame is that the numbers are in more reachable and in more presentable ranges. The
1929 crash was before the time of computers and hedge funds or mutual funds. So although
manipulation still occurred, we cannot say that this was computerized trading, creating the
market moves. Think this is a powerful difference and helps validate any conclusions, we may
come up with as long as they are strong with merit.

WWW.TRADERSWORLD.COM October/November/December 2016 142


TJ-1929-GSDL-3

Using Gann Single Degree Lines in the 1929 Crash

In this chart, we have the 1929 crash. Of course, the most dramatic crash in history, and we
can see by utilizing our tools that prices show that there is harmony at work. Ganns concept of
balance in time and price comes at the point where Gann explains the 45 angle as a balancing
point in time and price. When we are using the Gann single degree line. The GSDL or Gann
single degree line is determined by its scale or ratio being using but in its simplistic format it is
like 1 point up for every 1 day of movement.

We can see how the 45-degree angle holds significance in the price action. Prices can be seen in
this chart coming from the major low as prices stay above the 45 angle for some time until the
last several months where prices start to trade underneath the 45 angle again. Of course, this
would mean weakness (since prices are below the 45-degree line) as prices above the 45 angle
show strength. A clear signal to sell. Of course, any recovery from such a big bearish decline
would also mean that this rally should be considered a countermove and a continued decline
should occur. Utilizing our timing lines from the major highs we can see when prices are crossing
these Gann lines, we see that change in trend should occur at those intersections.

When we take a Gann line drawn from major lows and then from the major high and
look for intersecting angles for support or resistance. In our methods is that we are
utilizing a different scale for the price and allow for the importance of what is significant
of PATH. We know the numbers 120, 240, 360 are significant and are PATH numbers,
and therefore when we can adjust our angles to represent these numbers. (Just look at
the 1.20 ratio off the major low). We see a significant support or resistance at the trend
line.
We know that 386 is significant since it was the 1929 high on September 3rd. We draw

WWW.TRADERSWORLD.COM October/November/December 2016 143


the 3.86 line from the major low, and we could see it intersects important support, low,
and holds the prices in the future.
The use of 331.50 is 360 - 28.50, (which is the all-time low in August 8, 1896). Gann
refers to this time in his forecast for the 1929 crash in the supply and demand magazine,
where he calls the high to be August 8th also that it is the 135 line on a Cardinal corner,
and also referred to in his 45 years in Wall Street book.

We have the following;

The high from September 3, 1929 x 3 = 11/4/1932. This clearly misses the mark of the major
low at 40.60 occurring July 8, 1932. Lets see why were slightly off. When we put PATH to the
test. We could see that it accounts for the missing action.

386 (9/3/1929 top) x 3 = 1158 or 11/4/1932 120 days or PATH = 7/8/1932

Why is 3 x 386 important?

386 x 3 = 1158 days or 3 years 8 weeks 6 days

You see the reason prices did not stop because this adjustment is necessary part of
forecasting.

TW-1929-PATH-2

This chart demonstrates the PATH adjustment or fine tuning and the GSDL hit the 4/16/30 top.

360 28.50 = 331.50


331.50 1.20 (PATH) = 330.30

WWW.TRADERSWORLD.COM October/November/December 2016 144


You can see it catches the top of April 16, 1930
perfectly. TradersWorld Magazine
Premium Subscription
It is imperative that we have an open mind
Get everything we have for only $19.95 per year
when it comes to charting and the markets.
Save 50% over our regular subscription of $39.95
Remember the market cares little of whether
or not you believe in its harmony. The markets
move in harmony in time and price. Learn to
seek its rhythm and you should be successful.
Those that are looking for more answers
regarding the PATH system can read it in my
new book called Stock Market Harmony
Where Time and Price Meet coming in
December.

QUARTERLY MAGAZINE SUBSCRIPTION


References Read articles explaining classical trading
techniques, such as W.D. Gann, Elliott Wave,
Gann,W.D. (1976). 45 years in Wall Street:
astro-trading as well as modern technical
A review of the 1937 panic and 1942 panic, analysis explaining indicators in eSignal,
1946 bull market with new time rules and NinjaTraders, MetaStock & Market Analyst.
percentage rules with charts for determining
the trend on stocks. Pomeroy, WA: Lambert- COMPLETE BACK ISSUES OF TRADERS
WORLD Magazine (ISSUES 1-64)
Gann.
You also get our complete archive of 60 back
Jenkins, M. (n.d.). Chart Reading for issues from 1986 to present. This, contains
Professional Traders. Greensville, SC: Traders articles, product reviews, hundreds of chart
Press Inc. examples, how-to-trade articles and much

format, which you can read online anytime.


In every issue, you get the information
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WWW.TRADERSWORLD.COM October/November/December 2016 145


Higher Probability-
Commodity Trading
A Comprehensive Guide to Commodity Market
Analysis, Strategy Development, and Risk
Management Techniques Aimed at Favorably Shifting
the Odds of Success
By Carley Garner Commodity Market Analysis &
Broker at Decarleytrading.com Review by Larry Jacobs

This excellent book takes serious readers on a pathway through


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Carley discusses many alternative market concepts and views


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the futures and options markets.

Available on Amazon
WWW.TRADERSWORLD.COM October/November/December 2016 146
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WWW.TRADERSWORLD.COM October/November/December 2016 150


them a trading edge over other traders. If you want to be successful at trading, you too must
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Seasonality
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Moving Averages
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WWW.TRADERSWORLD.COM October/November/December 2016 152


Price and Volume the only True Indicators
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Secrets of Safe Profitable Day Trading
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WWW.TRADERSWORLD.COM October/November/December 2016 153


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Please remember that past performance is not necessarily indicative


of future results.

Please remember that Forex trading involves substantial risk of loss,


and past performance is not necessarily indicative of future results.

In the rest of the book I will explain to you some of the trading ideas Takumaru said he used

WWW.TRADERSWORLD.COM October/November/December 2016 154


in the championship. You can then actually see and understand how his ideas work.

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Championship of Futures Trading with a 366% net profit. In this
book there is a detailed interview with Michael with questions and
answers of exactly what he used to win the championship. In this
book I will explain to you the indicators that he said he used in the
interview. You can then actually see and understand how they work.
Here are some the indicators and methods that he said he used: 1)
Moving Averages 2) Seasonality 3) Cycles 4) Seasonality 5) Price
Patterns 6) Williams %R 7) Long with Stops 8) Commitment of
Traders Report You will also be able to download a video presentation
that I personally created so you can see how these indicators can be
setup and followed in a step-by-step manner. After you understand
how these indicators work, I would then recommend that you go to WorldCupAdvisor.com and
consider following Michael Cooks trades.

WWW.TRADERSWORLD.COM October/November/December 2016 155


Elliott Wave Techniques Simplified
How to Use the Probability Matrix to Profit on More Trades

By Bennett A. McDowell

One of the biggest complaints from Elliott wave traders is that many
of them feel it is too subjective making it unreliable.
When you use Elliott wave analysis correctly it is not overly
complex nor is it cumbersome, if you employ the techniques covered
in this book. Elliott wave analysis does become reliable when you
understand it because you know how to identify wave counts with the
highest probability. The author has designed this book to simplify the
process and make it easy for anyone to learn how to use the Elliott
wave count. If done according to this book it is possible to remove the
subjectivity many have experienced in the past.
It is the wave three that professional traders generate the most
of their profits with. With this book youll also see how to place a
numerical probability percentage on Elliott wave counts using the McDowell probability matrix
separating stronger wave counts from weaker ones. Plus, in this book youll also learn how to
apply what is known as the classical approach to Elliott wave analysis in conjunction with more
modern approaches that yield higher probability wave counts.
The methods youll learn in this book dont require any specialized software other than a
high-quality charting platform and the market data feed which you probably already are using.
Relying on Elliott wave can give you the roadmap of the markets on all markets and all
time frames. Elliott Wave has rewarded the author time and time again with profits analyzing
and trading the markets.
The concepts in this book are easy to learn and structured so that they can be applied to
any market you want to trade. Dont be concerned if youre completely new to Elliott wave
trading because this book is written with the assumption the reader is starting it at the
beginning and knows very little about the markets. Read this book and practice the principles
until they become second nature to you so you become proficient in the use of these Elliott
wave methods and then go on to develop a good solid track record by practice trading using
simulated paper trading while you learn.
You will find that this book will help you to take the guesswork out of your trading strategy,
help you to analyze mass psychological signals in the market, identify market wave counts
with higher then normal probabilities, anticpate and prepare for the future price action in the
markets and really sharpen your trading skills for both short-term and long-term success in
the markets.

If youre serious about trading with the Elliott wave theory I highly recommend this book.
For more information go here.

WWW.TRADERSWORLD.COM October/November/December 2016 156

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