testing crap

Discussion in 'Chit Chat' started by axxs, Jan 24, 2009.

  1. axxs


    Anek's Holy Grail v 1.0 or AHG for short.

    Good working strategy for Day trading, principles can be applied to most time periods and instruments. This strategy works in most trending markets.


    STEP 1 - DETERMINE THE TREND - (Up, down, sideways) ………………………………...… pg 3

    STEP 2 - ONCE TREND DETERMINED, HOW TO PLAY IT (entry) …………………………… pg 3
    Downtrend (The Evil Twin)
    Change Of Trend
    Trendlines / 45 ̊ Trend lines
    Fibonacci Retracement Lines

    STEP 3 – INDICATORS ……………………………………………………………………………. pg 6
    UPDATE: Official List of Allowed Indicators for AHG (10-08-07)
    Tape reading
    Time and Sales – Filtered

    STEP 4 - MONEY MANAGEMENT ……………………………………………………………….. pg 9
    Winners and Losers.

    STEP 5 – DISCIPLINE ……………………………………………………………………………… pg 9

    Higher time frames / Anchor Charts
    Heikin Ashi Bars (from Investopedia)
    Closing Bars
    Strong Bars / Weak Bars.
    Chart Analysis

    ENTRY AND EXIT SIGNALS ………………………………………………………………….. pg 12
    Entry signals
    Entry on retracement
    Exit suggestions (not inclusive)
    Mechanics in a concise manner
    Priority List

    PATTERN TRADING ……………………………………………………………………………. pg 16
    Double Tops / Double Bottoms
    Rectangle/Horizontal breakouts
    Failed head and shoulders
    Dragon Pattern
    M and W patterns
    Consolidation and Congestion

    PRICE HESITATION …………………………………………………………………………….. pg 19

    MONEY MANAGEMENT – Advanced …………………………………………………………. pg 19
    Scaling out
    Averaging up

    Tips ………………………………………………………………………………………………… pg 23
    Futures over equities
    Frustration, Risk and the Acceptance of Small Losses
    Patience Update (11-20-07)
    The Best Trades

    Conclusion of AHG Phase I - Summary …………………………………………………………… pg 27

    Appendix To AHG Phase I
    Charts & annotations …………………………………………………………… pg 28-43
    Indicators/Paint bars …………………………………………………………….. pg 44-58
    (Ninja Trader)
    (QuoteTracker “QT”)

    Profile – Anekdoten …………………………………………………………………. pg 59
    Recommended Reading List
    Additional utilities
    Recommended ET Members to Research
    Questions on advanced technique ………………………………………………….... pg 61
    Additional Questions – Miscellaneous
    Individual Study- Work assignment (11-18-07)
    What leads price to congestion?
    Decisively Broken Areas
    Trend line Swings

    The Final Key to Success ……………………………………………………………………….…. pg 68
  2. axxs


    STEP 1 - DETERMINE THE TREND - (Up, down, sideways)

    • Determine if there is a MEANINGFUL TREND present, (There are two types.)
    o Positive Uptrend = higher highs, higher lows
    o Downtrend = lower highs, lower lows
    • The ones you should ignore (for now) because they require greater skill to consistently profit from or simply, the sideway ones:
    o Congestion/Indecision = higher lows, lower highs (Symmetric Triangle formations)
    o Consolidation = horizontal lows/highs
    o (Further explanation in additional patterns section)
    • As you gain more experience you can profit from;
    o Consolidation by fading support/resistance
    o Symmetric triangles (HL LH) because they tend to give birth to POWERFUL new trends
    o For now stick to the meaningful trends. (Uptrend and Downtrend)

    Note: (HH’s and LL’s are defined by CLOSE, not wick for trend determination)


    If a MEANINGFUL TREND (uptrend or downtrend) has been found we need a logical entry.


    • BUY on a pullback and be nimble with your target.
    • Take advantage of minor WEAKNESS in a STRONG TREND to get a good fill.
    • Target can be whatever you feel comfortable with, it is entirely up to you and only in time will you master this. A few examples as follows:
    o 50% Fib retracement from the recent High to Low swing
    o few ticks below previous resistance
    o measured move up
    o You could trail the stop to ride those breakouts, all very discretionary.
     (Stop? Whatever would make it a lower low aka a CHANGE of trend)
    • Uptrend channel: Two higher lows, two higher highs
    • uptrend.trendline.jpg - sample of using a trend line with an uptrend. They are VERY subjective

    DOWNTREND (the evil twin)

    • SELL (Short) on a pop up and again be nimble with our target.
    • Take advantage of minor STRENTH in a WEAK TREND to get a good fill.
    • Target can be whatever you feel comfortable with, it is entirely up to you and only in time will you master this. A few examples as follows:
    o 50% Fib retracement from the recent Low to High swing
    o few ticks below above previous support
    o measured move down
    o You could trail the stop to ride those breakdowns, all very discretionary.
     (Stop? Whatever would make it a higher high aka a CHANGE of trend.)
    • Downtrend channel: Two lower highs and two lower lows

    When looking for entry, say a long or even re-entry, you want strength to return in the pullback and when that happens make sure price did not violate the current highs and lows.

    Never go against the trend. When the trend is strong buy a pullback. When the trend is weak short a pop up. The market can not be predicted consistently and consistency is what we want, so be smart about this. No exceptions!!!

    If STOPPED OUT, meaning, a CHANGE of a trend, stay ON THE SIDELINES until a NEW MEANINGFUL TREND is defined and we take our stop like responsible traders.

    REVERSALS are the enemy, they stop us out. Luckily, they are not very common which is exactly why this strategy works. Some days will be filled with them and sadly I don't know how to overcome this. On days like this, you will lose money.

    A lower low without a lower high is not the same as a lower low with a lower high.... and a higher low without a higher high is not an uptrend.


    • Trend must go from a downtrend to an uptrend or vice versa. (2 HH's 2 HL's or 2 LL's 2LH's)
    • The exception is if one of the two swings is a double bottom or a double top but the next swing must be a HH/HL or LL/LH.
    • If nothing of that kind, then you stay out and let a clear trend develop.
    • Trend line breaks are usually more aggressive when the last high was not a higher high, especially if it was a LOWER high.
    • The steeper a trend line the higher chances of a TL break, they simply have much higher chances of losing control of the trend

    Never call a top, never call a bottom, it is IMPOSSIBLE to predict accurately on a consistent basis therefore the best approach is to examine what is happening NOW, attempt to profit from possible volatility and situate yourself in a strategic place, with patience and conviction.

    • A bottom is never confirmed until you see higher lows *and* higher highs, with a subsequent low that is also a higher low hinting towards yet another new, higher high.

    The Trend Update (11-20-07)

    • The statement exists for a reason. “the trend is your friend”
    • Many of you seem to be playing G.I. Joe with your own capital thinking that you have predictive abilities that will make a trend change on a consistently basis before it actually does. Here is a tip, YOU DO NOT!
    • Here is a simple AHG rule that is simple but it does not seem to be very clear.
    • Unless a confirmed reversal formation has completed you do not trade against the trend, ever. Not even as a fun scalp because the odds will be against you, you want odds in your favor.
    • I never ever do it unless I see multiple confirmations supporting the stunt and that's taking into consideration that I'm fairly adept at reading the tape
    • *You should make it a post it note and stick it in your monitor*


    • As many as you need to determine the current trend. (Hand placed preferred)
    • 45 º trend lines are extremely useful. If you don't have complete pivots to guide you, you can anticipate the second one by using a 45 º trend line.
    o You will be amazed at the number of times price rebounds on them *if* there is a trend.
    o When an engulfing signal forms around there an opportunity for low risk potential rewards usually presents itself.
    o Once the second pivot forms, you no longer need estimate readjust it.


    • Are both subjective and objective, that's where skill and experience comes into place.
    • The pivots plotted by the software are quick areas of reference but not necessarily written in stone as they have fixed parameters that might work for some scenarios and not for others.


    • Use frequency displacement or wave length to gauge one pivot from the other.
    a. Confluence in distance helps.


    If price is trading in a channel, for the sake of argument, let’s say a downtrend channel; expect it to bounce up and down with a bearish tendency. Now, to ensure your stops are small, even in a downtrend you want to short high, and in an uptrend you want to buy low, this is where the trend lines of the channel help. This is not the same with formations, a solid confirmed reversal formation is quite alright for entering at the lows but this is not the case of channels. Hence why I suggest the trend line channels usage as guidance. The formations price will form at the extremes do tell good info, so make sure you pay attention. In yesterday's case the downtrend channel formed a bear flag as it broke the channel to the downside, I was almost certain price was ready to fall, but it failed miserably. Naturally I took my small stop and realized that price was not ready to go to lower lows because if a confirmed bear flag failed, which is one of the most reliable formations for downside, the failure should be applied accordingly. The subsequent move was higher lows from the bear flag pattern until it finally broke out of the channel. However, that was predictable. As explained in the past, failures are sometimes as powerful as or even more powerful than patterns themselves.

    Notice that during rectangle consolidation, where price is bouncing off support and resistance there is no predominant side to choose between the two, in this case, look at the whole day and choose the side that has been winning all day long, if no clear definition, simply stay out and wait for better setups or wait for a confirmed breakout that aligns with the predominant intraday trend.

    Fibonacci Retracement Lines (Anek's favorite)

    • 50% from last swing low/high provides an excellent entry point. Problem is sometimes the trend is so strong it won't even give you your wish and you miss the fill.
    • Used to predict targets not trends, for the trend you have price.


    Only TA tools for required for trading

    • Highs
    • Lows
    • Double Tops
    • Double Bottoms
    • Time and Sales
    • Trend lines
    • Support/Resistance

    There are some useful for strength / weakness references, entries and exits. Examples as follows:

    UPDATE: Official List of Allowed Indicators for AHG (10-08-07)

    • Support and Resistance visual aids (TRO indicators are excellent) www.kreslik.com
    o tro dynamic sr.zip - chart.jpg
    o dynamic s/r is not an indicator. Simply an application for marking the swing highs and lows.
    • Trend lines, better if hand placed.
    • Highs and Lows visual aids
    • Volume based bars, tick based bars
    • Time and sales (tape reading)
    • Paint bars to accentuate price action
    • Candlesticks to find extra confirmations
    • Market internals, optional (useless to me, maybe I don't how to use them)
    • Zig Zag indicators to enhance patterns
    • Fibonacci Retracement percentages
    o 50% is the best kept secret in trading
    • Horizontal Lines
    • AHG E-motion (Dynamic Fib retracement) – see appendix
    • (Catalog of .eld files and paint bar code to be found in appendix

    • Anything else unless it's a derivative to enhance any of the above without
    adding lag to it is probably a waste of time.
  3. axxs


    Tape Reading

    Tape reading takes time, more so than reading price action on the chart. (11-23-07)
    For some basic ideas filter your time and sales window to highlight market buying and selling (that means AT MARKET) mostly because this is a sign of requiring speed before precision. When price is at key areas on the chart, say support, resistance, trendlines, wedges contracting, anything meaningful watch the tape very carefully.

    In fact today, when price broke out of the symmetric triangle all I did was read the tape, was not even looking at the chart. I could tell most of the pressure was on buying, the anxiety to sell did not start until it really fell, not even on the retracement. That was just free fills for the longs. All very very telling. See price can go down as the buying pressure increases, it is possible and that's how you use time and sales to get killer entries.

    Eventually you will start noticing when price is going down how it is bought on the way down and how aggressively or if the pressure continues, are the sizes increasing on the way down, is the market buying outnumbering the market selling is it the selling. All these details are very telling but this is all happening live and very fast so will take lots of practice. It does not matter if it’s buying or short covering, why would a short cover? Because he thinks price is going higher now right?

    I can't teach you tape reading, this one you must do on your own, it is without a doubt the most powerful thing out there but your eyes will get very tired until it starts making sense as it happens. Not trying to discourage you just warning you that this one takes an effort and a lot of screen time but it’s the absolute trampoline to the next level.

    • Forget Level II Level III and Level IV. Unless a trade happened the information can be deceiving.

    • “Out of bid/ask range large size transactions” indicates that traders are getting stopped out or wanting to get in or out in a hurry.
    o Let me put it this way, on the tape, who's panicking? Who's desperate to get in or get out? The trend of panic inside the tape is it balanced or is it favoring a specific side....
    o Remember short covering is buying…

    • You must watch the tape at critical points not just when a sporadic below bid or above ask shows up.
    o Highlight the following:
     Above Ask
     Below Bid
    • When looking for "below bid" and "above ask" at critical points keep in mind the cumulative numbers between them.
    o (as translated by iluv2trade from Anek’s e-mail) (11-27-07)
    o add the above ask transactions (buys)
    o add the below bid transactions (sells)
    o compare the numbers to see which side is winning...
     note: useful at critical points, may be useful / may not be at others

    Time and Sales - Filtered

    Watching the tape for big orders, feel tape can be better read with less distraction when I only paying attention to the big orders and exclude the little people.

    • Sample of how clear price action was filtered on tape - tape.jpg
    • To eliminate noise suggested settings
    o NQ > 75 (50)
    o ER2 > 50
    o ES > 250
    o YM > 40
    • lesser car sizes in the tape = noise

    Avoid the following technical indicators: death.to.cci.jpg

    • Any indicator that is not 100% based on price action.
    • Divergence never found to be very reliable so stopped looking for it.
    • STOCHASTICS: (not recommended for AHG)
    o A cross can be a powerful tool when you are looking for an entry in a strong trend. (5,3,3)
    • BOLLINGER BANDS: (not recommended for AHG)
    o (Volatility indicator only, everything else it's not that hot)
    o With 2.5 Standard Deviation. (2.0 gets hit far too often and distracts with noise)
    o When price is continuously hitting a band, pay attention. It's trying to tell you which side is stronger. If you are having difficulty identifying the current trend or suspect a reversal, the price hugging a particular band can provide great info as to where momentum is headed,
    • MACD: (Not recommended for AHG)
    o Extremely slow, late entry by 3-4 bars, leaving profits behind on entries and exits.
    o Its divergences signals are good approximately 50% of time, random, and useless.
    o It is nothing but the derivative of two LAGGING indicators (Moving Averages).
    o Better off learning CCI, in fact you are better off with price action alone, no stochastic either.

    Technical indicators are lagging in nature, as they only indicate past performance.

    • Price action is all that is needed and when using tick/share charts, volume indicators are unnecessary.
    • Volume indicators provide little information.
    • Time and Sales is invaluable and provides all the volume information needed. This is widely known as reading the tape. (screen time)
    • Don't complicate things, it all comes down to what is big volume doing, buying or selling.


    • CAPITAL PRESERVATION – Highest priority!!!
    • DO NOT AVERAGE DOWN unless attempting to get fills for your intended car size, never surpassing it.
    • Advanced money management technique, an average up approach is highly recommended.
    o see advanced section,, until then, use the same car size on every play

    • Winners and Losers.
    o There are only five possible outcomes in trading:
     Big Losses (Stay away from the first one and the rest will EMBRACE you.)
     Small losses
     Big Winners
     Small Winners
     Break even
    o AHG attempts to accomplish
     Small wins
     Small losses
     Breakeven trades
     Letting winners run (big wins)


    Trading is not for the irresponsible. Break the rules and you will eventually lose big, period. Trading will forgive you if you were wrong on a play even several plays; it will not forgive or tolerate stupidity.


    Long bars are evil, highly recommend tick/share charts, provide ability to split the data and examine it with care. For the YM recommend 75 or 89 tick charts. This differs greatly from one instrument to the other, the greater the volume/activity it has, the greater the ticks size you will need. Adjust tick/share volume depending on how current day is developing. If low volume day, may even go down to 150, 100. etc… Adjust for best view and what you are most comfortable with.

    Tick and volume bars, you need to be able to kill the possible long bars in time based charts that hide what could be important to observe; at least as a scalper.

    Volume Bars suggested settings: (adjust for low volume)
    • ES = 2500/5000
    • ER2=750/1000 - 610 tick anchor
    • NQ=1000/1500

    • Note: Tradestation does not display Volume bars correctly
    • Anek not concerned, been using TS for a while now. Would rather use tick charts than learning a whole new platform at this point
    • Anek does not like time based charts, other than for Anchor reference
    Higher time frames / Anchor Charts

    • Use two charts, one for a clear understanding of the main trend, if any, and one for low risk good reward entry.
    • Help determine the big picture or major trend. Always trade in the direction of the big picture and to be aware of possible of key levels that can and will produce congestion.
    • Higher time frames also help alert if the breakout or breakdown was meaningful enough to merit averaging up on retracement.
    • Dual confirmation
    • There is no correct chart frame, whatever fits your risk/style/goals. Anchor 4x base chart is good
    • Example of what is referred to as a Multi Day Chart.
    o Notice current wick high on last bar, reason decided to take profits around that area.
    o It has "yet" to break out/down.
    o Interesting thing is that I think the key to the market (all e-minis) lies on this chart right here.
    o The 2205 and 2160 areas are extremely important in the next development phase.
    o Learn to recognize the bearish hemisphere from the bullish one and what's the line in the sand.
    o Remember, the NASDAQ is leading.
    o It is extremely important, always, at all times, be aware of the big picture, without it, you would not know how far your good trades can go.
    o multi.day.jpg higher time frame - nevermind.jpg primary and anchor chart
    • I use two anchor charts, one regularly and one I examine late at night.
    • The regular one is 610 ticks, and the other 2500 ticks.


    • candlestick quick reference guide - 001.pdf - candlestick.pdf (reference)
    • Provide one more confirmation, not a signal.
    • Important candlestick formations for AHG:
    o Hammers at the very end of a downtrend with wicks piercing support
    o Shooting stars at the very top signaling that bulls got trapped.
    o Both preferably with good volume.
    • Additional attention given to:
    o Doji, as they mark indecision, particularly at S/R areas
    o Engulfing patterns.
    o (The rest not cared for)
    • For instance, say a bar pierces through trend line support and closes as a hammer. to see a tick below the lowest area of the bar that closed before shorting is preferred.

    Heikin Ashi Bars (from Investopedia)

    "A type of candlestick chart that shares many characteristics with standard candlestick charts, but differs because of the values used to create each bar. Instead of using the open-high-low-close (OHLC) bars like standard candlestick charts, the Heikin-Ashi technique uses a modified formula:

    Close = (Open + High + Low + Close)/4
    Open = [Open (previous bar) + Close (previous bar)]/2
    High = Max (High, Open, Close)
    Low = Min (Low, Open, Close)
  4. axxs


    The Heikin-Ashi technique is used by technical traders to identify a given trend more easily. Hollow candles with no lower shadows are used to signal a strong uptrend, while filled candles with no higher shadow are used to identify a strong downtrend.

    • Solid uptrend with superb momentum let the Heikin Ashi bars guide you (for runners not for entries).
    • Then the exit is second nature. If you stick to that simple strategy you will obtain some monstrous wins whenever the opportunity presents itself if you happen to be in the trade or spot an entry.
    • Don't use Heiken Ashi (HA) bars for entry, only for exit. HA bars for entries are counter productive. (They go red when you should be going long).

    HA bars help for the runners, the best trades always tend to work from the start causing very little heat.
    (This technique should be used in combination with standard candlestick charts or other indicators)

    Closing Bars

    • Closing bars (not wicks) are used for confirmation when breaking support or resistance. closeisall.jpg
    • The close is important because not every trader uses the same chart type
    • For additional confirmation, the closing bar TYPE matters as well.
    • Breaking of support
    o Bearish indicators: Big red body or gravestone (not a hammer, long legged doji or dragonfly)
    • Breaking of resistance
    o Bullish indicators: strong green body, nothing indecisive (short body, long wicks)
    • You can apply this to support, resistance, trend lines, symmetric triangles, etc.
    • To bring some clarity to price action discussions AHG will refer to the following as:
    o Bars closing above previous bar high are referenced as Strong Bars
    o Bars closing below previous bar low are referenced as Weak Bars.
     If in a downtrend, you want to find the weak bars in the pop ups.
     If in an uptrend, you want to find the strong bars in the retracement.
     Strong and Weak bars used as entries for retracement and as alerts when scaling out or getting back in.
    o A strong bar or a weak bar is basically an "engulfing" signal.

    The Close of the bar (amendment)
    • Someone posted about why the close of a bar is of no importance when we all use different charts and chart types during intraday trading so in theory it is only relevant to you and not to the next guy.
    • Discussion with another trader took this further with new concepts and philosophies.
    o For instance if you have a stop at say 2100 and price hits 2100.25 but closes at 2198.00 the stop does not care where price closed, it got hit.
    • In the end the highs and lows are the King and the Queen.
    • There is a lot to be learned from this alone.

    Chart Analysis
    • Charting annotation software - http://www.faststone.org/FSCaptureDetail.htm
    • AHG official color code for chart notation/analysis
    o Red = Short
    o Green = Long
    o White = Exit
    o Yellow = Point of interest

    Entry signals

    • Trend line breaks, a tick means nothing, a close below or above the tick is what matters.
    o Sample for an uptrend line in jeopardy.
    1. Was the last high a higher high?
    2. Was the last high a double top?
    3. Was the last high a lower high?
    o On top of that you want bars closing below the trend line + 1 tick below the breakdown's bar low, this give you the signal assuming 2 or 3, definitely not 1. - the.one.tick.jpg
    o If the case is 1, I would not short it, I will simply wait for the higher low to get back in, regardless of the "TL Break" which in this case it's more like noise since TL's are not infallible. If it does break, then so be it, but coming from a higher high you don't want to short that unless a swing low is created first.
    • When you see a bar closing above or below Support or Resistance stay alert but the signal will come when the bar's high or low is pushed by one tick. This is known as dual confirmation or as I like to call it, the magic tick
    • Strategic entries, very important. This allows your stops to be smaller AND your targets wider. Unfortunately, be prepared MENTALLY to miss extremely good trades that refuse to give you a good fill because well, they had no plans on stopping for you!
    • Multiple confirmations on entries are the key to accuracy nevertheless this game is not about being right but about making money.
    • Trend line pierced with a body that closed (not a wick but body) and nothing but higher lows. Falling knives rarely make higher lows, when they do; it's most possibly a reversal.
    • Engulfing bars after close, good to go…
    • Reference AHG setups ver 2.2.jpg and numerous Anek charts posted on thread
    o Visual reference: AHG set-up chart - ahg setup ver 2.2.jpg (Rn86)

    Entry on retracement

    When looking for a retracement in a clear uptrend you also want some sort of strength confirmation to avoid buying a falling knife or a retracement that is not yet complete. -- (Obviously, reverse for shorts)

    In order to facilitate this task, suggest waiting for a bar closing above previous bar high as a sign of strength and a bar closing below previous bar low as a sign of weakness. Again, everything with the trend.
    • Is there a trend? – “Yes”
    • What is the trend? – “It's long”
    • Is it retracing? – “Yes”
    • Has it printed a bar closing above previous bar high (strength) after retracing considerably without breaking major support or pivot swing? – “Yes”
    • Stop placement? -- A few ticks below the strong bar should do
    o (You can always re-enter in case of noise or fake.)
    o (Remember; small stops, as it is not about being right but about making money
    • Price action is used to increase the odds when looking for an entry during retracement.

    Note: Anek does not use the DOM for order entry (8-25-07)


    • Price action always dictates the stop goes, then compare to notes and decide if it's something you should take or not.
    • Stop needs to be strategic for whatever reason but strategic, not some fixed number.
    • Protect capital with small losses and break even trades while adjusting stops in your favor, never against it. (Never loosen a stop)
    • Assuming long, when the price runs in your favor, consider placing stop below the low of last 2-3 bars, reverse for short.
    • Placing at break even is just a common saying, using the lows of previous bars is much more astute.
    • Once trend line established, move stop to protect capital, use the TL for placement guidance.
    • Initial stop placed at time of trade for security reasons. ALWAYS
    • After order fill, adjust stops strategically base on support/resistance and/or complacency levels.
    • Use Heikin Ashi to adjust trailing stops/targets or otherwise known as riding the winners.
    • (If using OSO in Trade station, manually move this in the Matrix as price moves in your favor.
    o Basically auto places stop(s)/target(s) based on predetermined fixed values.
    o There is no better trailing stop, this is much more precise than a fixed # stop because it's based on recent lows or highs.

    If you are having trouble with the runners/stops consider moving stop to low or high of the last 2-3 bars (depending on volatility and/or how fast your chart of choice is) once price has left the initial S/R area, which is usually where your initial stop should be. This will allow you to catch more runners than you can imagine using a mechanical way and prevents your emotions from taking profits too soon. Adjusting stops is more desirable than simply selling or covering. The idea is to be in control of your emotions while maintaining logic in check.

    Stops (additional notes)

    • Stops on intraday swings are usually initial stop and or break even then starts to scale out. Unless averaging up, then simply use pivot highs and lows for strategic points.
    • Look out for previous pivot high/low areas and place strategic stops and/or lookout for reversal formations.
    • Small stops, unless playing a pattern, then that's a whole new set of rules because they are not scalps and by definition the car size is obviously smaller at the beginning of the play.
    • Stops depend on the candle, the smaller the candle the bigger the stop. Not sure if that makes sense but some room must be given.
    • If trade reverses you, take your small loss and move on.
    • When your trade premise is correct your stop should be big enough to handle noise but not much else.
    • Volatility rules the market so some room must be given to your stop.
    o (However, if your examination is correct, no need to use volatility as insurance)
    • (Thi s stop management technique lowers your accuracy rate, but increases profits.)
    • Use small stops and possible multiple entries (failures) in comparison to a bigger stop because a second re-entry encompasses multiple confirmations which leads to greater probability than risking it all on just one confirmation and a big stop.
  5. axxs


    Big Stops (Reason against for day trading) (this applies to day trading not swing trading or investing)

    • A big stop by definition indicates you are not sure of your entry signal
    • A big stop promotes hoping and praying and not trading
    • A big stop is gambling
    • A big stop is for those refusing to take a loss, when losses are necessary in successful trading
    • A big stop creates the illusion of higher accuracy but in the end it only results in a negative P/L
    • A big stop prevents you from loading up because the drawdown can be monstrous
    • A big stop is for those who fail to realize they can always get back in a trade
    • Big stops are for the insecure, they make lazy traders over-trade
    **Took a long time to learn this, hope it takes you only a fraction**

    Exit suggestions (not inclusive)

    • Define profit targets, (3:1 risk vs. reward ratio) minimum
    o For training purposes suggest to trade with a 1:1 risk vs. reward ratio to Force you to trade well, then as you improve you can increase the reward;
    • Every single play *MUST* have a target greater than the risk but if price action says otherwise we take what we can.
    • If long before last known resist area
    • If short before last known support area
    • If scaling out and trade happens to break out in your favor then watch the next time it makes a HH or a LL depending if you are short or long.
    • HA bars help determine VISUALLY in a quick manner if you should trail your stop because momentum is there.
    • Learn to read momentum. Extremely powerful, when price is on fire and not looking back, there is no reason to leave the roller coaster, ride it until you see hesitation. Once again, price action, price has mood swings, behavior, and characteristics, learn to read them. It's very valuable.
    • When price is close to HOD, look for a pullback to sell MOST below the HOD and leave a bit on the table for a possible run. When price is close to a LOD, look for a pop up, to short it back and cover around the LOD with again, a runner for home runs.

    Mechanics in a concise manner

    1. Study highs and lows
    2. If a trend forms, examine entry opportunities.
    3. Once in a trade gauge S/R for stops/exists
    4. Ride the winners with the HA bars if the trade gets solid momentum.
    5. Rinse and repeat. (Keep it simple be patient, wait for set-up.)
    • Find one and only one tool to help you find optimal entries.
    • It is IMPERATIVE that you keep it simple or you will lose focus.
    • When trend has been determined search for low risk opportunity to enter.
    • Use Heikin Ashi to adjust trailing stops/targets (otherwise known as riding the winners.)
    • Use trend lines to gauge the big picture and Fibonacci for prediction.
    (Currently, not much else recommended.)

    When the system fails to produce profits it is probably because the market had no direction and nothing but reversals. When this happens you WILL have a losing day even if following the system, however, it will most likely fall in the small losses category and that is what it is all about.

    PRIORITY list - (In order of importance)

    1. Discipline (above everything else) - It makes no sense to develop a set of rules if you are not going to follow them. Nothing tops this.
    2. Trend/Reversal/Chop Recognition - The substance of the system. Must excel at trend/chop/reversal recognition. If you want to succeed with AHG learn to avoid calling absolute tops and bottoms.
    3. Risk management / Prudent and intelligent stops – Know trade can be entered with absolute certainty of success. You are taking a trade that appears that it will work. When wrong, which is a 50% probability, your stop should be prudent.
    4. Entry refinement - Strategic entries - very important. Allows stops to be smaller and targets wider. Unfortunately, be prepared MENTALLY to miss extremely good trades that refuse to give you a good fill because well, they had no plans on stopping for you!
    5. Exit refinement – Difference between good traders, great trader, and sometimes even master trader.

    All of the above are extremely important, once the basics mastered, concentrate on #4 and #5. #5 makes the difference between profitability and abundance but it's last for a reason... (#5 being the most difficult)
    The swing high/low method works, and it works in all markets, as price is always oscillating, and therefore, is always trending.

    The hardest part of AHG is identifying the chop and staying on the sidelines, the rest is trading with the trend using small stops and letting the winners run purely on price action.

    Pattern trading

    With a solid understanding of price action Pattern Trading is an extremely powerful technique.

    Learn to spot the following important pattern formations before you place a trade:

    • Consolidation
    • Uptrend’s
    • Downtrends
    • Double tops
    o (one of the most powerful, if played correctly are by far the most rewarding and safe patterns)
    • Double bottoms - double.bottom.jpg
    o (one of the most powerful, if played correctly are by far the most rewarding and safe patterns)
    • Wedges
    • Symmetric Triangles - symm.png
    o (A favorite trading pattern, and one of the most powerful, they give birth to trends.)
    o Requires two higher lows and two lower highs. (minimum)
    o Price gets trapped, when it finds a direction and escapes, you have a breakout and ride it.
    o A breakout with the trend has greater chances of success than one against it.
    o Rate of success is above 50% and their targets can be exponentially bigger than the stops.
    o Most powerful when close to LOD or HOD areas.
    o When price stalls, it's a sign of loss of momentum which could mean a reversal or congestion. (start looking for options)
    o The stop should be strategically placed below or above resistance.
    o If using 50% fib retracement area, watch the 61.8% area as stops, etc.
    o Wait patiently for formation, two different time frames increase chances of them developing.
    o One strategy play, place a buy stop and short stop outside of the triangle and wait for breakout.

    • level 0 (Begin with recognition)
    o Consolidation - (No Trades in beginning, for advanced trading only)
     No 2 lower highs, no 2 lower lows, stay put.
     No 2 higher highs, no 2 higher lows, stay put
     Sometimes the best trade is no trade
    • Level 1 (Only on opportunity, no forcing no chasing)
    o Uptrend’s
    o Downtrends
    • Level 2 (Only with confirmation, no guessing, ride them aggressively)
    o Double tops
    o Double bottoms
    • Level 3 (Only with confirmation ride them aggressively, target should be larger than your usual scalp)
    o Wedges
    o Symmetric Triangles
    • Stay out of anything else for now
    • Use trend lines at all times.

    Successful pattern’s in order of preference

    • Double Tops / Double Bottoms
    • Rectangle/Horizontal breakouts
    • Flags
    • Triangles
    • Failed head and shoulders - failed.head.and.shoulders.jpg
    o prefer break of right shoulder by a closing bar because they are more reliable.
    o Rarely take a head and shoulder neckline break unless it forms at the very top of the chart as they are only reliable in up trends.
    o Those that do form at the bottom tend to fail and you may enter in a more aggressive matter in comparison to a failure at the top.
    o The same is true for Inverse Head and Shoulders in downtrends.
    o Be more enthusiastic about the failures than the pattern themselves, especially if they form at the "wrong" places.

    Patience is required, wait for patterns to develop, wait for an opportunity, look around you (s/r) aim (think of entry/stop/targets) then fire (execute).

    Additional Patterns: (Section incomplete)

    Dragon Pattern – (advanced)
    • dragon.jpg
    • dragon.played.jpg - how played....
    • watch.out.if.short.jpg - Possible dragon formation (11-15-07)
    • http://www.trading-naked.com/JerrysDragonPattern.htm (Piscuy)

    M and W patterns form during congestion, especially if scattered around the intraday.

    • The M-top and W-bottom are common (easy). kindergarden.jpg
    o Treat an M-top or a W-bottom as a reversal formation once the middle swing is taken by a closing bar
    o Very similar to double tops and double bottoms but require a bigger stop because the resistance area is not as obvious and the stop actually goes at the other side of the pattern due to their peaks not being identical, otherwise they would just be DT's and DB's.
    o The 1st target is the first major point of S/ R then price action based on trend lines, etc…

    • The M-bottom and W-top are extremely rare and also another reversal signal if found at the extremes - the.quest.jpg

    • "M" Formation at the bottom (rare) m.bottom.jpg
    o The M is completed after 3-swings; the two outer swings are higher than the middle swing.
    o You know how a head and shoulder has the middle swing higher than the outer ones? Well this is exactly the opposite.
    • "W" Formation at the top daily.es.jpg
    o (sometimes known as the Crown pattern)
    o The W in the middle of a chart is possibly a continuation of the previous trend.
  6. axxs


    • Anek's Solution to the M-bottom and-W top as posted:
    o http://www.elitetrader.com/vb/showt...440#post1634440 : (Thread cancelled)

    “I'm sure most of you are aware of the M-top and W-bottom formations. They represent reversals with small risk and decent rewards. Well, the fact that M-formations at the very bottom rarely form and W formations at the very top rarely form sparked the following idea”
    Search for the rarest patterns in trading and trade logically against them efficiently eliminating one of the possibilities.”

    “Why? Because when we have half of an extremely rare pattern formed we have a pretty good idea of where price will probably not go first when it's about to complete itself.”

    Consolidation and Congestion

    • When price reaches the HOD or the LOD congestion, hesitation is to be expected; examine it from the sidelines unless you are already in a trade and just managing your exit. (Unfortunately, easier said than done because there is massive uncertainty at those areas.)
    • Congestion is when you see a HH and LL or HL and LH. i.e. Consolidation, Symmetric Triangles, etc. Uncertainty if you will.
    • Learn to spot the chop, it will save you AND make you money. Chop kills and reverses us. No one is forcing you to trade as the market is always there.

    Congestion at Extreme Areas vs. Reversals

    Make an effort to notice the difference between one and the other.

    Usually when price develops a very strong move once it becomes exhausted, it must rest and consolidates. Mostly because traders are hesitant to jump in at such levels, they are potentially painful levels and no one wants to get burned. This is precisely when amateurs start calling reversals or opening positions after the fact, turning trading into hopes and fears. Please avoid this. This is when patience will serve you well.

    Even though reversals are very much possible and offer great risk vs. reward this is exactly why we use and require confirmations. Without the confirmation it is simply, a gamble and good traders are not gamblers but predators.

    Don’t fall preys to congestion, congestion offer no hint except the fact that the previous trend is the strongest but it is also very much tired, at least for now. From a psychological perspective since you probably missed the whole initial move you feel frustrated and probably want to ride it all back down (or up) because the market moves in waves right ? plus you probably feel frustrated that all this happened right in your face. Well, that's understandable but make sure an actual good potential setup is developed before stepping into a train.

    This is the time when we examine the surrounding support and resistant areas to see where price might be heading next after we get confirmation(s) so we can determine our logical targets and see if the risk involved in the trade merits opening a position when and if the time comes.

    Price turns for different reasons and not every reason is significant.
    (Please remember that)
    Difference between retracement and a possible reversal

    The difference between a retracement and a possible reversal in theory is a "bet", which is why it's hard for some people to trade this way, they see price going down, even if the support is not taken and they sh** their pants, or worse they want to short a support that has yet to be broken.

    One way to tell that helps is that retracement usually happen on lower volume where reversals usually start on increasing volume. If you using volume bars you will see them print very rapidly in comparison to when price action was calm.

    Price Hesitation:

    There are many areas that will cause price to hesitate.
    • Globex high
    • Globex low
    • Previous close
    • Previous high
    • Previous low
    • Previous open
    • Pivot point
    • 15 min opening range
    • 30 min opening range
    • S1
    • R1 #WSX
    • S2
    • R2
    • Weekly Pivot
    • can go on forever -The question is, when do you stop cluttering your charts - let's stick to price
    • If an area is important for whatever reason you will see it as support as resistance in your chart, end of story.
    • Globex low and globex high can be an area of congestion, support or resistance. Yet, how is this different from any other congestion, support or resistance so treat it like any other. Pivots the same. Price action skills will prepare you for this, whatever it might be.


    Money management is very personal and many proper methods exist. Search deep within yourself to determine which style fits you best. Trading comfortably is important.

    • AHG: Scaling out and Averaging up
    • AHG: Prefer Averaging up Method
    o (it is hard to beat once you get good at reading the market)

    Scaling out

    Primarily helps the psychological factor as it may releases the pressure of securing profits, especially when trading multiple positions. Yet, a simple strategic trailing stop accomplishes the same. Remember, you can always get back in a trade.

    Primary problem with scaling out is when stopped out before reaching first target; you lose on your full lot. (However, if your first target has a good ratio in comparison to your stop, then by all means, scale out until your heart stops pounding.)

    When the play is going your way, scale out before clear "previous" known resistance and support. If there is nothing remotely resembling that, don't do it unless evidence of a possible reversal formation, then scale out and adjust stop accordingly.

    • Confirm first target is AT THE VERY LEAST as big as stop.
    • Then quickly move stop to breakeven and let it ride as much as possible until price loses momentum.
    • Take profits BEFORE the next resistance (going long) and BEFORE the next support (going short.)
    • You may leave a small portion of the trade ride for the home run.

    Averaging up

    With an averaging up approach one good day erases multiple losing days and then some.

    Averaging up is only pertinent to those with good accuracy and a solid understanding of how the market and day trading works. Now, it is possibly the last step to good fortune as far as phases and stages.

    The concept of only adding to a winning position is phenomenal because by definition it ensures that your trades are only about small losses, break evens and small to gigantic wins. Notice this is exactly how I suggest your money management results should be so it's highly compatible with AHG.

    Nevertheless, you need to be able to handle, from a psychological perspective, a streak of small losses and break evens, in many cases watching small winners become small losses. This is the negative aspect of averaging up. The positive aspect is the monumental winners it can and will provide if you do it right.

    When I average up, add to a winning position on retracement only if the major trend is intact and healthy always keeping a stop for ALL positions, this stop strategically placed at a definite change of a trend. As the trade keeps going in my favor, I keep adding to the position and adjusting the stop, the stop is the same for all brothers and sisters in the trade. As the trend develops the trend pivotal point obviously moves up as well.

    When the trend ends, you take a small loss/break even on the last position ONLY or the last two depending on how flexible you were and all the initial add’s collect massive returns, especially the original one.

    It is the holy grail of money management systems BUT for seasoned traders not for someone who has just starting to get his/her feet wet with a new system.

    Averaging up is probably the most important reason as to why I was attracted to future's leverage. In fact,
  7. axxs


    I've reached 20x with this technique and knowing I had secured profits on 85% of the adds felt like I was the king of the world. In the ES I usually trade between 3-10 cars depending on the stop risk of the trade. I have yet to average up aggressively on ES since I'm fairly new to the contract but when I'm comfortable on a great run this number could go all the way up to 40-50, without giving too much info on my personal total leverage. When averaging up, at least on the YM, I have used full leverage on the account without a single ounce of fear because of secured profits on most of the additions. When you get a nice run the profits are nothing short of a monstrosity.
    Obviously, if the trade does not go in your favor you don't even touch leverage or add to your position.

    (Very powerful strategy but requires complete dominance of your psychology.)

    Averaging up methodology and results:

    Initial entry is minimal in size as no real evidence exists on how strong the new trend really is. Naturally this assures that if mistaken in the analysis, losses are very small.

    Once strength develops, use retracement to further increase position always using the same stop (a change of a trend, a break of support/resistance) on every single addition.

    As the trend keeps running, and new areas of S/R are marked, the stop is continually moved as the additions start piling into the play.

    When I get lucky to catch a beast of a trend I might go as far as to using full leverage as I add positions on retracement but always securing profits on the vast majority of the additions. This gives me the freedom to trade monstrous contracts responsibly without an ounce of fear.

    They say trading should be about small losses, break evens and small to huge winners, this is exactly what averaging up promotes. Needless to say on extremely choppy days you end up with multiple small losses. In the long run though, it's an indisputable winner as far as money management goes.

    “When its clear resistance has become support or support became resistance you may consider averaging up. Momentum must be there, no exception. Approximately only 15% of trading days are heavy trending days so keep this into consideration, not every day is optimal for averaging up unless a potent reversal formation after massive exhaustion was spawned.”

    • Averaging up example: for.bk.png
    o Enormous gain on the first
    o Gigantic gain on the second
    o Great gain on the third.
    o Small loss on the fourth.

    • Averaging up example: aup.jpg
    o Question: why not start with 12 and move your stop accordingly as higher highs and higher lows are made?
    o Answer is naturally risk management. If you were wrong from the start you take a full stop on a full leveraged position, not exactly how we want to trade and protect our capital.

    (Only recommended for experienced traders who dominate to perfection these teachings.)

    Averaging Up approach for reversal formation at the LOD/HOD. (Non exclusive)

    • Study reversal formations very carefully.
    o Double Tops, Double Bottoms, M tops, W bottoms, V bottoms, Triple and Rectangles.
    • Upon confirmation begin average up approach with a minimal position.
    • Add on every possible pullback before the next major support or resistance area as soon as a strong/weak bar is evident once the retracement looks exhausted.
    • Sell/Cover it all around the next significant support or resistance point or partial.
    • If resistance becomes support or support becomes resistance you can begin all over again with your minimal position or can continue adding to what it is still in play provided that you have a change of a trend trailing stop protecting every add and of course, past profits.
    • Confirmation is an insurance card, use it accordingly but make it a requirement for every move you make, whether it is entry or exit.
    • Every trade should be an educated prediction and every addition should be an additional confirmation.
    • The more confirmations the more your car size should increase because at first we never really know where price will go but as we get additional data supporting our original trade theory, the story starts revealing itself.
    • As you well know this method promotes small losses and all kinds of winners from miniature to gigantic. It is no coincidence that it is chop proof because if you get no additional confirmations you stand on the sidelines with your small position. This method will also help you avoid calling tops and bottoms because in the back of your mind you don't want it to end, this can be a very powerful psychological asset.
    • The absolute key to mega profitable consistent trading is having the skill to spot the birth of a new trend correctly and playing it responsibly with solid money management.

    (Note: not part of AHG) when averaging up, use pyramid technique – never adding more than the original car size. i.e. initial position 3-cars, 2nd position add 2-cars, 3rd position add 1-car
    (reverse pyramid can lose all profits with a small loss.) – obtain Anek's comments accordingly


    • Risk management at all times.
    • Find one and only one tool to help determine optimal entries. It is IMPERATIVE that you keep it simple or you will lose focus.
    • Use trend lines to gauge the big picture and Fibonacci for prediction.
    • Develop the skill in analyzing momentum and the S/R surroundings as price is going.
    o When it stops, why did it stop, should I wait, if so how long?
    o If it retraces, your stop better be there to secure your profits, not too tight, give it room, use past bars to have a logical exit.
    • Never attempt to call bottoms or tops, just trade the trend.
    • Better to miss a good entry than force a bad one
    • Order Execution, limit orders exclusively except market orders for emergency stops.
    • MASSIVE moves, uncertainty usually unfold. (powerful tip)
    • Statistically speaking, trend patterns outnumber reversals
    • Mornings are superior to the afternoons, and lunch can be a bit tricky.
    • Globex low and globex high can be an area of congestion, support or resistance. Yet, how is this different from any other congestion, support or resistance so I treat it like any other. Pivots the same.
    • Screen time is at the thousands of hours.
    • Do not call tops because no one can do it consistently.
    • Do not call bottoms because no one can do it consistently.
    • Do not use big stops, if stopped out you have the luxury of re-entry assuming the trend is still intact and you were stopped out due to noise.
    • If the trend is up, buy low sell high, do not short if the trend is up.
    • If the trend is down, short high cover low, do not buy if the trend is down.
    • If no obvious trend, sit on the sidelines, patience is rewarded in trading. If price is chopping you will only trade for your broker.
    • Become an expert on price not on indicators; in fact don't use any but bars, trend lines, support or resistance.
    • You will not beat this game unless you allow the runners to run, price has a much easier time going through previously known areas, new territories should be treated with respect and only for examination.
    • Try to stay out of breakout areas, the in between is far easier to trade because price will either go to support or resistance and in the middle they are clear and rarely unknown.
    • Protect your capital at all cost, protect your profits but be very greedy when you are right.
    • Never move your stops unless it is to secure profits.
    • Small losses are inevitable and very much required to succeed, large ones your doom.
    • Go find your edge and do not fall prey to indicators price is and always will be king. It speaks in highs and lows, listen to him, he owns the market.
    • Learn about reversal patterns and look for them at major support and resistance areas.
    • Holy Grail = Only adding to Winning Positions + Mastering a simple working strategy + solid discipline (9-10-07)
    • The best trader has no Bias, goes long or short without a single ounce of bias and his decision is 100% based on price action not on fundamentals, economic news or what Joe Guru X said the night before
    • trader should trade both ways, long or short depending on what's the predominant trend,
    • One of the hardest but most important things to do in trading is sitting on your hands. Work on that patience. If no play, no trade.
  8. axxs


    Tips continued

    • Always assume that support or resistance will hold or reject price, by definition.
    • Triangle breakouts aligned with the side of the previous trend have a higher chance of success.
    • In bull markets W-bottoms and Double top’s chance of success increase dramatically.
    o In contrast in bear markets their effectiveness is reduced but not a great deal.
    • In bear markets M-tops and Double top’s chance of success increase dramatically.
    o In contrast in bull markets their effectiveness is reduced a great deal.
    • After hours trading: limit orders on entry, in AH this is a golden rule you don't break

    Futures over equities:

    • Traded equities for four years, they offer VERY little pros in comparison to futures
    • From equities slowly drifted into SPY/QQQ and then finally futures
    o Day trading 4-5 years to attain current level of proficiency
    • Better liquidity
    • Less games (electronic)
    • More leverage
    • Around the clock (kind of)
    • No research involved
    • Less slippage
    • No short up tick rule
    • Can day trade without 25k
    • Easier taxation

    ES over SPY (ETF):

    • The major difference between trading the ES and SPY (ETF) is flexibility,
    • If swing trading and something catastrophic happens at 3AM in the morning. Futures give you the option to bail or solidify your position if you are on the right side. In equities or ETF's you would need to wait until pre-market opens to decide. They even give you the option to hedge if you got investments
    • As a very aggressive averaging up trader when things go my way, and panic hits the market hard the massive leverage provided by futures allows me to keep averaging up if the trend continues. In SPY I would be limited to 4X, least last time I checked. That is priceless for my particular style of trading.

    ES/NQ/ER2 (stopped trading YM due to CBOT issues)

    • Volume bars: ES=2500/5000 * NQ=1000/1500 * ER2=500/1000 (610 tick)
    • Volume bars work well, adjust accordingly for low volume “after hours”, etc...
    • In terms of volume ES>NQ>ER2>YM (Besides no crappy CBOT and occasional liquidity problems)
    • ES over NQ, due to NQ’s “commission premium”

    NQ Benefits

    • NQ is like YM with more volume (less slippage) and better moves for Anek’s style.
    • NQ is twice as liquid as the YM. It's no ES, but still the second most liquid e-mini of the four, including ER2.
    • NQ is Trendy and explosive (works well with trendlines) compatible with AHG
    • NQ is CME (not CBOT crap)
    • NQ Entry Charts
    o 1000 volume bars and/or 233 ticks (base chart)
    o 610 tick for massive pattern detection (anchor chart)
    o 2500 tick for multi-day appreciation of the main trend's support/resistance areas.

    o NQ = $20 point per contract
    o ES = $50 point per contract
    o ER2 = $100 point per contract
    o YM = $5 point per contract

    • The DAX can and will lead the ES in the early mornings but remember that the chart at hand should always be enough. Still an extra bonus always helps

    Frustration, Risk and the Acceptance of Small Losses

    Nothing works all the time, I think we can all agree with this. If you don't, time to adjust because nothing does.

    With that in mind don't bet the house on any setup because we never know for sure if it's going to work or not. However, if your trading allows the runners to run, like AHG suggests, then a loser here and there should not frustrate you, not only should the loss be relatively small compared to the winners but as I said numerous times they are necessary and inevitable in profitable trading, notice what I said, profitable trading.

    Losing small is ok; don't be like the rookies who just hate to be wrong, the first sign of a real trader is when you see him/her losing quite often, albeit losing small. Why? Because it's not about being right but about making money.

    Patience Update (11-20-07)

    • A good trade does not present itself every three minutes. When taking this into consideration you deduct that patience plays an extremely important role in trading.

    • Not only is patience required to be the predator trader that you should be but it's also imperative for letting those good trades do their own work. Not everything works in 15 seconds even after it has every characteristic of looking great.

    • Couple of things you can do to work on your patience.
    o Stretch your legs
    o Fool around in ET forums
    o Music, I personally have digital music streaming at all times
    o Get a snack
    o Practice tape reading skills
    o I seriously advice against turning on Bloomberg or CNBC, this will give you a bias and screw with your trading. Those people there know nothing about trading.

    The Best Trades

    • The best trades work from the start
    • The best trades got multiple signal confirmations
    • The best trades offer no heat
    • The best trades require small stops
    • The best trades follow your trading plan
    • The best trades develop momentum and acceleration after your position is in, not before
    • The best trades are simply when you are quick enough to spot the birth of a new trend without actually being a contrarian

    Now, wouldn't you like most of your trades to be like that?
    If so, shoot for the best trades and skip the rest.

    Conclusion of AHG Phase I

    You will find many pieces of the puzzle on this chart. phase.1.completion.jpg
    Please note the following AHG key elements at work:
    • The engulfing paint bars for entries and exits when riding meaningful trends although plenty of examples are scattered in the journal in this area

    • Unnecessary large stops, the option of re-entering

    • Meaningful Patterns

    • Pattern failures

    • Reversal Pattern confirmation

    • Trend lines at work to help you stay with the trend and knowing when it might be over

    • The magic "tick" confirmation after the breakout closing bar when a pattern forms the.one.tick.jpg

    • The powerful synergy between macro and micro charts, knowledge of key areas

    • The complete elimination of lagging indicators

    • Comparison of narrow range (yesterday) and wide (today), more volatility is good for traders

    • Market E-Motion lines for measuring strength of the trend and possible targets plus areas of congestion, highly powerful stuff. A Swiss army knife, learn this tool well.
    Screen time and practice should be the priority now along with avoiding the root of all evil, the chop.