Telechargé par philippe

Joe Ross - Day Trading

Joe Ross
Cash transactions
to that
German translation
by K. P.Kagels
Further books of Joe ROSS, particularly for the Trading with Futures and options;
Day Trading: Cash transactions at the Futuresboersen
Futures Trading: Position business at the Futuresboersen
Chartformation Ross hook: Advanced commercial strategies for Futures Trader
Trading is a business: Professionally at the futures exchanges act
Bucher of Joe ROSS and Mark of Cherlin, particularly for the Trading with shares:
Share Trading, Bd. I: Electronic Day Trading
Share Trading, Bd. II: Professional stock exchange speculation.
Share Trading, Bd. III: Stock exchange gains with Chartanalyse and technical indicators
Share Trading, volume IV: To tactics, techniques, tips and cheat, which lead to profits
CIP Titelaufnahme of the German library
ROSS, Joe:
Day Trading: Cash transactions at the Futuresboersen / of Joe ROSS
High home/Main: ROSS Trading Germany, 1996
Unit eight: Trading By The minute < dt > Fac'tf " " ' ' " " " ' ' ' ' ' •^j^ue ' 1
ISBN 3-932741-01-3 " " " ' " " "
Title of the American expenditure for original
" Trading By The minute "
Copyright© 1,990 by Joe ROSS
-Eidolon2002, - -.
The information in this work is published without consideration for a possible patent protection. Brand
without guarantee of the free usefulness are used. During the composition of texts and illustrations
with largest care one proceeded. Nevertheless errors can be not completely excluded. Publishing house,
Publishers and authors know a legal responsibility for incorrect data and their consequences neither nor
any adhesion take over. For improvement suggestions and referring to errors are publishing house and publishers
This work including all of its parts is in copyright matters protected. Each utilization outside of the close borders
the copyright law is inadmissible and punishable without agreement of the publishing house. That applies in particular to
Duplications, translations, microfilmings and the line-to-store transfer and processing in electronic
Systems. The commercial use of the models and work ge^eigten in this product is not permissible.
Ross® Trading, Ross® technology, Ross® method and Ross® hooks are registered
Registered trade mark of the company ROSS Trading Germany.
9. Edition February 1999
ISBN 3-932741-01-3
©1999 by ROSS Trading Germany
Herderstr. ã, D-65239 H och home/Main
Tel./fax: 06146/7204
eMail: service@ross
All rights reserve
For my son Scott B. ROSS. It contributed more to this book, than it will ever know.
Preface to the expenditure for original l
Introduction 2
Over contract sets 4
Over the revised expenditure of 1991 5
Over the second pressure edition of 1992 5
1. Definition of Day Trading 7
1. l a short view into the past 8
1,2 similarities between Day Trading and position Trading 8
1,3 differences between Day Trading and position Trading 9
1,4 differences between Day Trader and parquet dealer 11
2. Selection of the positions 15
2. l selection of a time horizon ' 7
2,2 selection of a market 18
2,3 selection of one point of entrance 19
3. Large entrance signals 22
3,1 the outbreak from a sliding zone 23
3,2 the outbreak from a 1-2-3-Hoch or a low 26
3,3 the outbreak from a border 28
3,4 the outbreak from a hook 32
3,5 summary: Large entrance signals 33
4. Middle entrance signals 34
5. Small entrance signals 39
5,1 priorities 40
6. Stop orders
6. l loss delimitation stop
6,2 profit taking stops
7. Orders for stock exchange
7,1 orders for entrance
7,2 orders for door
Table of contents
8. Bookkeeping
9. Broker
10. The commercial plan
10,1 the method
10. l. l alive remain
10,1,2 in the water remains
10,1,3 tarpaulin the work - work the plan
10,1,4 the plan
11. Filters of the positions
11,1 a Trading filter
12. Risk management and money management
12,1 risk management
12,2 money management
13. Consolidations are important
14. Attitude of mind
15. Selection of the best positions
15,1 control rooms on the correct business
Chartformationen preferred 15,2
16. The third contract
17. Strategy and tactics
17,1 continuation business
17,2 reversal business
17,3 quotation gaps
17,4 first outbreak and second outbreak
18. The Trading of the small entrance signal
18. l small entrance signals
19. Logic of the Tradings
19,1 points of pivot
20. Concrete examples
20,1 summary
Trend identification 132
Table of contents
22. Fifteen minute Trading 141
22,1 6 USD per Round turn 144
22,2 15 USD per Round turn 145
22,3 25 USD per Round turn 145
23. Thirty minute Trading 153
23,1 the average Volatilitaet as loss delimitation stop 155
23,2 falling highs and rising lows 157
23,3 segment counting 159
24. Transformation of the cash transactions into position business 172
25. Sixty minute Trading 175
26. S&P Trading 231
27. Trading methods 315
27. l the identification of consolidations 315
27,2 the identification of trends 316
27.2. l following each other new extremes 316
27,2,2 falling highs and rising lows 317
27,2,3 the method of the segment counting 318
27,2,4 the method of the genuine trend 319
27,2,5 the method of the genuine correction 327
27,2,6 summary 328
27,2,7 general remarks 333
28. The circle closes 334
28,1 the parquet 340
28,2 cup with handle formation 343
28,3 Hedging 345
28,4 loss delimitation stops 346
28,5 the Fibonacci deception 348
28,6 the receipt of the capital 349
28,7 the head and shoulder formation 351
28,8 I act thereafter, which I see 352
28,9 a few concluding remarks 354
Index 359
Preface to the expenditure for original
In the area of the technical analysis only few authors with such write a clarity
like Joe ROSS. An interesting thing with the reading of its books is that the reader
Feeling of one deja vu gets. The characteristics of the market, it as indistinct
Samples to have seen and become acquainted with, come now into the foreground. It is, as if
would have itself a fog dissolved. Now you can define the movements of the markets and
hopefully anticipate.
This book follows the style of its first book Futures Trading: Position business to that
Futuresboersen (Trading By the Book). Indeed there are many similarities in the form and
contents. This book, Day Trading: Cash transactions at the Futuresboersen, has however
its completely own messages. Surely it was written for the Day Trader, after
Minutencharts or Stundencharts acts, in addition, the position Trader, that its positions
several days or weeks holds, the value of contents of this book will recognize.
Joe and I are for some time friends. We have together at commercial techniques
worked, and I know in such a way, how he dedicates himself to the markets. In this book we
discover however the other side of Joe - the teacher of the large style. It informs us, " as one in
the markets to fish has ".
W.E. Dalton, MD
I was always a very private Trader. In the years, in which I to that
Goods option markets acted, I techniques and methods used, only me
by my family were made accessible and taught.
My family began with the trade at the produce markets more than 100 years ago.
My commercial style consists of the things, which I in the option markets discovers
has, paired with the wisdom of the old persons.
Before several years a long and serious illness, those met me suddenly my life
strongly changed.
Nearly my entire commercial knowledge with me would have died. It looked in such a way, as if I
would have only
still little time to the life remaining. Therefore I put myself, over over my
To write commercial methods. Futures Trading, I wrote my first book, primarily
for my wife and my children. I wanted to give them the possibility, the bases of the
To learn Tradings, so that they could continue the family tradition.
When I wrote Futures Trading, it was that first times that I possibly someone my
Commercial methods made accessible. I did, because I at that time firmly of it
was convinced to only have few months to the life remaining.
Since my dismissal from the hospital some time passed now. To everyone
Astonishment am I still alive - alive and back, around me with the daily
To argue happening at the markets. But that, I did not only discover also,
that me the letter please, and still more importantly, it makes fun, my kind of the Tradings for me
to teach.
Day Trading - cash transactions at the Futuresboersen is a manual complete for itself, it
a natural continuation in addition, is to my first book Futures Trading. The two
Books complement each other.
The success of Futures Trading encouraged me to write this continuation. Here
I will try to show many of the things which I learned, around successful
To be able to implement cash transactions at the Futuresboersen.
My Trading developed itself further over the years always. It was always my tendency,
to try out new things. I will also further make that. I am against none
Method, system or concept negatively adjusted, if these as can be prove over one
longer period successfully worked. So long your method in your Trading
functioned, to it nothing is to be objected.
With the beginning of the " Day Tradings " had I mean proven techniques that
To past new cheat add. Nevertheless the good, old ways, the methods, are
the more than 100 years provided for profits, still the backbone of my Tradings.
_ introduction _
I become also in this book like already in Futures Trading predominantly in first
Person write. I can say to you, how I accomplish my Trading. But I can you
does not say, what you must make. They will make that, what you would like, indifferently
which I legend.
I hope however, you would like to do it to the success of my own Tradings. The intelligent
Trader will try, my knowledge into its Methode(n) and in its personal
To integrate commercial style.
Most of the business shown in this book exclusively became for the letter
this book accomplished. Usually I act however with larger positions and too
lower commissions than shown in this book. With the business, those for this book
were transacted, are the used number of contracts, the computed senses of clerk and those
costs shown however as resulted as proven. In the series of commercial activities in
Future of the S&P 500, which I show in section 26 of the book, use I mean
usual position existence as a basis and take my normal costs.
With the Trading to the writing of this book hold I mean positions until late by day and
sometimes I die even then still new positions. This is not my usual kind, because
I act rarely late by day, as I it to the writing of this book did.
Due to the time, which I invested to the letter, I held it however for necessary. If
I before the monitor sat all day long and the markets observed, then tries
I more strongly to have at the end of the daily something for presenting. I would like mine wages
this day have, and I would like to be able to show my readers somewhat.
If I act for the writing of a book, then I strive strongly, so mechanically
to be acted as possible. I would like that my instincts and intuitive feelings the business
do not affect. With each business the method is to be the center of attention. It is me
however not always possible to separate my feelings from my doing to. Where that is the case,
if I strove, mean thought process to explain. For what I make, it gives
a reason. If I deviated from the pure form of the method, I tried,
to describe my reasons for this behavior. They will surely find examples of it,
that I deviated without explanation from the method. Behind it no intention, I stands is
no perfect Trader, I misses movements, counts quotation staffs and sections into that
Charts wrongly, counts me at points and with the money, sees certain Chartformationen
not, etc.
I put and not the stress in this book on the technology on my general
Kind of acting. So that I can explain to you somewhat, I am forced, degrees a path
to walk on.
In practice I filter each cash transaction by means of the Tagescharts. I try only in
To act markets, which are on the Tageschart in a clear trend. Only in
Direction of this trend I die positions, what applies particularly if itself
Market in a correction finds.
If I write over my Trading, then I can do me not always on Tagescharts
refer. In this sense is the business shown from the context of the reality of the
long-term market happening taken out. In some examples I am, around one
_ introduction _
determined themselves point illustrate, with intention positions received in a market, that
not in a trend ruled.
In my own Trading I am very selective. I select only such business, with those
I the feeling have that they are strong - in my opinion practically secure business.
Additionally to my technical signals paid attention I to unusual things, in that
To market happen, which appears to me as the best choice. These characteristics go however far
beyond the framework of this book. Also there are many details, which I gladly into this
Book would take up also, which is not possible however for practical reasons. I have
to put neither the time nor the desire me, and a book with 10.000 sides too
writes, which describes each last detail of my Tradings. Perhaps I become one
Daily a video over my Trading note. Then it will be possible you, much of
which I make to see and hear.
The readers, that know me from my lectures and seminars, know that I problems
with counting has. In my Trading I make terrible and careless errors.
Breaks do not seem to be straight my strength. My computing lack come still out
my childhood. I suffer from strong read disturbances. I make a quantity of errors: I
think, I have a profit, although that like that is not, and I think, I have a loss,
although that like that is also not. Frequently I use due to calculation errors too much or
too little contracts, in order to cover my costs. It is amazing, but this weakness has
never my Trading really affects. I continue simply my work, and
somehow is it like that that at the end of the week my wife, my books substantially more exactly
ever leads as I it could, to me comes and says that I made everything good. " which
always it is, which you do, say " her, " Mach of far so good work ".
In the parts of the book, itself with the counting of quotation staffs and sections
employ, secure I mean night position by means of a Spreads with the following
Delivery month. But this special topic goes over the framework this book outside it
to know been sufficient that I mean positions in the markets, during the night acted
become, frequently by means of Spreads or by stops in the kassamarkt and/or in foreign
Option markets secure. This is a concept, many of my readers and seminar participants
confused. As said, it leads out the far over framework of this book. The readers, also
it trusts such tactics is, knows that I secure thereby my commitment. The reader,
that not white about what I speak, should now be encouraged, one of our seminars too
visit, in order to learn such techniques, before it comes to large kapitalverlusten.
Over contract sets
In the first description over the use of contract sets I suggested, repeated ones
to act from three contracts to. In this expenditure I prefer it, at least one set of
two contracts, then three, to use four or five. One wants more than five contracts
act, then I recommend position increases around in each case five contracts, thus 10, 15, 20,
25, etc.
Arises the question, which brings better results: One is in a market a position
with a odd plumb bob (odd number of contracts) open or is it better, a position also
to settle a odd plumb bob? Based on my own commercial evaluations gets
one the better results, if one closes a position with a odd plumb bob.
_ introduction _
This question will make for you more sense, if it the remainder of the material in this book
studied. If a business develops, then you ask yourselves: " target I means
And then four contracts open position with nine contracts for kostendeckung
liquidate, with which five contracts (round number of contracts) remain, around the position with
to close? Or it is better, a position with 10 contracts (round number of contracts) too
open to take four contracts for kostendeckung and with six (oddly) contracts
to leave the market?"
If you act a odd plumb bob, then it comes to more slip PAGE (Schluepfuengsverlust through
Bad execution of an order for stock exchange) during the execution of their orders. It has itself as
better proven, with a odd plumb bob too and slip PAGE at winning leave the market the one
To deliver position to go as with a odd plumb bob into the market and slip PAGE at the cost end
to deliver a position. In the long run the reader becomes this question for itself in the context of its
own commercial style to decide must.
Over the revised expenditure of 1991
When I began to write this book I wanted a very special kind of the Day Tradings
describe, which turns around the concept of the parallel consolidations. This concept
in practice to use, however for many of my students as difficult proved.
They do not have simply the necessary experience, around these parallel formations too
recognize and profitabel to act to be able. Some however come with this kind of the Tradings
well clearly. Partially is it like that that these parallel consolidations by the eye of the
Viewer to be noticed. It to act, is somehow very intuitive. One
Description, as one recognizes it, is surely subjective.
In this expenditure I will again take up this concept for the readers, those
sufficient experience in the markets gained, around the parallel consolidations well
act to be able.
I inserted additionally methods for the Day Trading, the few or no area for
Interpretations leave. The method of the segment counting becomes the reader step for step
explained. This method is so precise that it under a form of artificial intelligence
to be automated could. In my opinion it functions however better under that
Influence of human understanding and evaluation this method occupies the larger part
this manual and follows after the represented concepts for parallel consolidations.
If parallel consolidations appear to you as too difficult, then you act after that
Method of the segment counting. This has itself in the position Trading since more as 100 years
successfully proven and is still successful. It does not play a role, after which
Time horizon is acted, it must only a definite Chart be present.
Over the second pressure edition of 1992
I added a more complete description of the different possibilities, it
make possible to discover a trend in its emergence.
For the purpose of the clarity and around smaller misprint to repair, has I unite small
Corrections made.
Bases the Day Tradings
1. Definition of Day Trading
I have this book under the use of the Intraday Charts (Chart, that those
minuetlichen movements of a daily shows) written, but the methods and techniques,
which I accomplish and show, can be converted easily on the Tageschart. Trader, those
in the daily trade actively is not, can, where I the relationship between one
Tageschart and a Minutenchart show, the same methods in the context of the relationship
use between a Wochenchart and a Tageschart.
Essentially a Chart, also, has a few exceptions under each time framework the same
A character.
In the first parts of this book nearly everything turns around consolidation ranges, which one
on each Chart under each time framework to see can. In later parts of the book describe
I my behavior, if I concern myself with trend formations. It is just as important,
to recognize successfully the beginning of a trend, like also positions in existing and
established trends to take up.
The large differences between the Trading after a Minutenchart and the Trading
after a Tageschart have with the different time factor and with the Volatilitaet too
A deep-going comparison between that five-minute-nC-hard and the Tageschart follows up
the next sides.
If one works with Minutencharts, decisions must be made faster, there
the tradable formations and samples faster form.
Up to these differences the Trading in the reason remains the same. In the last section
this book I will again enter with it.
If it comes to the question of the optimization of entrance and door, then one must
assume in most cases the Day Trader., which works with real time courses
opposite the Trader oriented at longer term, which does not use real time courses, certain
Advantages has. If the cash transaction is made correct, then it can lead to the fact that smaller
Losses develop as with the long-term Trading without Intraday entrance. The correct
Use of real time courses is however not simply it requires large discipline with that
correct application, so that it does not come to over positionings.
I would like to define the word Day Trading in such a way here, like it in this book
one uses. My definition could differ from others, therefore I would like
makes clear, what I understand accurately by it. Day Trading is defined usually in such a way,
that the entrance to or after the market opening and the door to or before that
Commercial conclusion of the market takes place. That adds my definition of Day Trading each
or each system in addition, which uses a real time course transmission system, around Einstiegsund
To receive door signals for a market. This became also hand signals, that
Observe an electronic course volume or even the use one the old
electrical clacker boards include
1. Definition of Day Trading _
I know that Day Trading without real time courses is possible. I have a few Trader
become acquainted with, which work in such a way. I know two men, whom literally moves its
make, by calling every few minutes, in order the quotations of their contracts to experience,
they during the daily act. According to my definition is this no Day Trading, also is
according to my definition the trade after temporally retarded quotations no Day Trading
The most fundamental concept of this book teaches that it is of paramount importance too
learn, how each Chart before an outbreak of the market looks. It, one is just as important
To recognize consolidation as early as possible. This presupposes that a Chart a certain
Appearance has. I show many Charts, which have this appearance in this manual. This
Charts must have a sufficient long time unit, so that they can form themselves well.
Five minute Bondchart usually develops the exact opposite of the kind of
Chartformationen, for which I look. I become later a five minute Bondchart and
other Charts shows, which is not to be acted with my methods.
1,1 a short view into the past
When I began, at the goods option markets of cash transactions to transact, it was impossible,
to find any book concerning this topic. I acted without previous knowledge over it, how
the Day Trading functions. I did not have notion, which would expect me. I knew
not whether the methods, which had always successfully worked for me also further
would successfully function. Therefore learning the Day Tradings was in for me
new adventure and a large challenge.
In various regard cash transactions, those differ after Minutencharts transacted
become, not much of the trade, which is based on Tagescharts.
1,2 similarities between Day Trading and position Trading
Between the Intraday trade and the Trading after Tagescharts there are numerous
Similarities. With some exceptions Intraday Charts see the Tagescharts very similar.
The used has an influence on it, how the Intraday Charts looks optical,
Course transmission system. I tried different systems out next to each other, and it
there differences in the manifestation of the individual quotation staffs, those gives to the Chart
form. Frequently the systems deviations show where a staff opens or closes, and
where the high and the low lie. There are also differences due to me used
special software. The optics of the Charts varies between the different SoftwarePackages. I tried several out.
With some programs also the time stopped by me in the computer makes one
Difference, as the software sees the individual staffs. There are differences in the kind, how
the data from a computer program to the next to be transported. Even those
Installation of the same program on two computers with different
Clock attitudes leads to a difference into it, like the individual staff on the Chart
1. Definition of Day Trading _
Intraday Charts essentially form the same formations as the Tagescharts. It gives
Commercial consolidations, which are connected by trend phases. It gives
Corrections, lateral movements or sliding zones, tracing, gaps and waves.
I assume, if Trader had the time to study Minutencharts in the kind like it
Monthly -, week and Tagescharts study, then they could also on in minute
Chart emerging cycles observe, as them these on a Tageschart find.
I know Trader, - based on star phenomena and ocean movements - during
the daily act.
Each part from the tool crate of the technical analysis, that nowadays for the use
in the markets it is available - whether Fibonacci -, Gann and Elliott Tecnniken, fan lines, speed
Lines, Pitchforks, oscillators, sliding averages, RSI, stochastics, DEMA, MACD,
Commodity Channel index, Volatility stop, Parabolic stop, cycle projections and other one
more -, can be used also for the trade after Intraday Charts.
1,3 differences between Day Trading and position Trading
One finds some differences optical in the certain kind, like the used Charts
look. The 30-Jahre-Bond-Terminkontrakt, euro dollar, in principle all interest contracts,
appear on one five-minute-nC-hard flat, completely differently like it on the Tageschart
look. On most commercial days the Chartformationen of these markets catches only then
on to look similar as the Tagescharts, if one the movements of the quotations in
Represents to staffs of 60-Minuten-Intervallen. For the date interests are payable contracts a 120
pleases me
Minute-nC-hard however still better, because he usually points from me the wished
Chartoptik up
Differences in the Volatilitaet show up in the fact that a movement, those on an in
Minute-nC-hard happens, over which whole screen height can go. On the Tageschart
on the other hand this movement does not continue to be noticeable, because it joins itself there as
more normal
Quotation staff. The Charts of the fewer actively acted contracts and some that
volatileren contracts are in practice badly to be analyzed and not tradable, because them
exhibit no tendencies to symmetry and formations. I would like to see these however,
if I act in these markets.
In the cash transaction the slip PAGE is a larger problem than in the long-term position Trading.
In relation to a Tageschart the amount of slip PAGE on a Intraday Chart is proportional
more largely. In the cash transaction one has less time, in order to absorb slip PAGE. Therefore is
to keep as small of large importance, the slip PAGE as possible.
So that I can hold the slip PAGE on a minimum, it is necessary that I with the trade
after a Intraday Chart, than I give more strongly limited orders it with the trade after
would do to a Tageschart. I would like to guarantee before my placing of order that I
knows exactly, where my order - within a range from or two Ticks - implemented
The attempt, the slip PAGE to minimize, has also influence on the used number of contracts.
I must be endeavored to act plumb bob sizes those normally on the parquet acted
10 1. Definition of Day Trading _
become. I would like the trade with odd guide avoid e.g. with 23 contracts
Orange juice or with nine contracts crude oil.
Very frequently I liquidate a number of contracts, those for the purpose of the kostendeckung more
largely than
is necessary. But there are two reasons: Either I would like one which can be liquidated simply
Number of contracts for the case remaining keep that I must close the position fast, or I
only a small slip PAGE would like to guarantee have, if I a profit position
With the trade after Intraday Charts the fundamental data play only a small role. But
Messages affect the course formation for opening and have naturally an influence up
the daily movement. Intraday Charts are affected strongly by messages and rumors,
during the daily enormous the course jumps and for commercial opening large
Quotation gaps to cause can
A long-term minute business, acted after one in-minute-nC-hard, can out
exist approximately twenty quotation staffs. Frequently occur a business within
only five to ten staffs, and occasionally a quotation staff is sufficient for one
Commercial decision.
Saisonalitaeten in the conventional sense can as possible entrance technology used
become. Refrained from it they are practically not usable for the Intraday Trading.
With the Day Trading is obtaining good order remarks of large importance.
If the entrance and door take place during the same short term quotation staff, then there can be by
the fact large problems that one at the time, if one the order to Settlement gives, not white whether
the execution of the position opening already took place.
Even 10-minute-numerical control-hard offers in some fewer actively acted markets and in Times,
in which a market is fast, not sufficient time for the confirmation whether in one intended business
the order for the position opening already one implemented, before that Order for position locking
is given. In the cash transaction is the order execution an important factor. In the further process
of the book I will be received on it in the detail.
With the Day Trading the amount of the commissions who can be paid plays a particularly
important Role. At the disposal and the range of the movement is to there less time to absorbing
the transaction costs than in the position Trading, meant that is smaller, it is crucial for commercial
success, as lowest a commissions per Round turn as possible pay extra must.
In contrast to the Trading after Tagescharts that changes with cash transactions Commercial
managements completely and the Trader must with the Trading after Minutencharts other strategies
and tactics use. Please you note that I of commercial management speak and not of risk
management or money management. The large difference with Commercial management has to do
with the fast way, with which I during of the Daily to act must.
With commercial management I mean the mechanisms, those the entrance and door from one
Position determine.
_ 1. Definition of Day Trading _ ] _
The readers, that read my book Futures Trading, know that I the practicability the trade after
fundamental data reject to a large extent. The reason for it is that I as individual person neither the time
nor the money has, around the supply of sufficient to be able to guarantee fundamental knowledge for
my commercial decisions.
For my trade after the Intraday Charts I also reject it, the numerous technical Commercial tools to use,
nowadays are available. An exception is that Knowledge about it, where Fibonacci points lie, and the
occasional use of simple sliding averages. As far as it concerns the Fibonacci relations, I use those
visual correction conditions only as a filter, which says to me whether itself a market normally holds
back. I do not use Fibonacci Ausweitungsrelationen, which could serve for it, me To give course goals
for my positions. Their calculation stressed too much time and they are for the kind, as I mean cash
transactions accomplish, absolutely unnecessarily.
If you more over the bases of my commercial philosophy experience and these completely to
understand would like, then I recommend my book Futures Trading to you. Much of what It in Day
Trading: Cash transactions at the Futuresboersen will find, lead themselves from that old truths off,
over which I wrote in Futures Trading. Introduced the there Concepts are together with the many tips
and techniques shown to the largest part up the trade under practically each time horizon applicably.
With the Trading after Intraday Charts I use at all no " technical " tools, except occasionally the sliding
average mentioned above. This is more exactly said in sliding three-staff average of the closing
quotations, that temporally around three staffs after in front is transferred. I normally use this average,
thus I my Trading something to vary can and always accurately in the same kind does not act.
Although I pay attention where the Fibonacci points are, then I use these nevertheless strongly
deviating from the " standard ". I do not act on the basis of the Fibonacci-Points of relation, as most
Fibonacci Trader makes it. Rather I use these Points as reference to whether a market develops after
my conceptions. For me the Fibonacci points no more than one are good " to wissen" information.
My method for cash transactions is based altogether on which I before me in form one Staff diagram
see. The quotation staffs of this Charts show opening, high, low and Conclusion of each time interval.
I mentioned already that I practically no technical
Aid in my Trading uses. What is the reason for it? I have the feeling, this
technical means serve only to entangle the picture. In addition it comes that they are that, which
most Trader uses - and if one believes the statistics, then one knows that those
Majority of the participants in the markets sequentially loses!
1,4 differences between Day Trader and parquet dealers
I come the truth about the happening in the markets next with that
Course movements, which rise off on the computer screen to and. Consider, I said
" next ". The staff diagram is the best, which I can use, but it says to me also
not the whole truth.
12 1. Definition of Day Trading _
I know a number of Tradern, which thought, because they used a real time ratio system,
they could act the markets in such a way, as it would do a dealer on the parquet. That is however
absolutely not possible, even if the offerers convince you of course systems gladly of it
it became that you could feel with a real-time system in such a way, " as if you would be in
Moment together with the dealers on the stock exchange parquet ".
On my course transmission system I cannot see, how much Trader in the boersenring
stand. The conversions, which my Chart shows, are at best an approximation to those actual
on the stock exchange parquet of transacted conversions. I can recognize not immediately whether
a market thinly
is, but I can only assume it or ask my broker. I cannot do those
Emotions or tendencies on the stock exchange parquet feel. I cannot determine also whether
it more buying orders than orders to sell gives or in reverse.
I can determine only late that a market began, to become " fast ". One
further weakness is that I cannot see, who straight acts. Is not conscious to me,
when a " commercial one " or a large Trader on the parquet comes and suddenly
strengthened begins to buy or sell. My probably largest disadvantage exists
in the fact that I the numbers for " bid " (buying rate), " ask " (selling rate) and " size " (size of
not to see can. These numbers are available over my Day Trading software, but too
my use come they too late. They are always temporally retarded.
A further important lack is the fact that I the movement of the market not so
as can hear the parquet dealers. They react to the noise levels - I cannot do that.
On my commercial style and my results these restrictions which can be changed do not have
an influence to act my kind must the lack of " truth " compensate, with that
I it to do have, if I act from a computer screen.
A further important restriction is the time factor. I cannot with the " natural "
Points of pivot (fulcrum) work, which are down on the parquet of importance. I can
also the same points of supporting and resistance do not use, those that
At the disposal are to parquet dealers. The difference is that that the dealers are there, in
Boersenring, and to the course movement to immediately react know. As said, those
Parquet dealers have the advantage that they " hear " the action on the parquet to be able.
Although my data stream takes place " material time ", then there is nevertheless a delay of
approximately 10 seconds between the time, when I quotation-tick see and when
this trade actually on the parquet took place. In addition the further comes
Delay, which is to due to my computer program. It results from those
Time interval, during that my program the data receives and these then to the market
passes on, which I act straight. Also the exchange of each new tick on that
Screen causes a delay. These delays are something, with which I live
must; the parquet dealer does not depend on it.
A further problem lies in the time delay, which I - in contrast to the parquet dealer thus it suffers that I must telephone, so that I mean order place can. Also those
whereupon the following order clarifying procedure, which is necessary, thus my order into that
Boersenring comes, costs time. Even if I can call directly to the parquet, one develops
Delay by the letter of the order and the way or signaling to
Parquet dealer.
1. Definition of Day Trading \3_
The time intervals, which I in relation to the topicality taking place on the parquet
lose, become in such a way for me an enormous Handikap. This must I by my
Commercial methods go around.
Also my commissions are higher than those, which have to pay the parquet dealers.
Even a low Round turn commission outside of the parquet is still several marks
more expensively than the commission, which unite parquet dealers are computed.
Finally I must get along with the fact that in my course transmission system frequently
Ticks do not arrive or bad Ticks emerge, regularly in everyone
Course transmission system to find are. Usually these dip always exactly at critical
Decision moments up. In the cash transaction they are a large annoyance, particularly those,
which one cannot see, because they are appropriate for the current course movement within the "
standard ".
I already pointed out that technical indicators only drove in addition, the picture too
confuse. Everyone, which knows these indicators, knows that the version of three staffs one
sliding average, the moment around oscillator, Channel index, the DEMA, that
RSI, which looks stochastics, etc. differently and differently behaves than the 18-Staebe-Version of
resemble technical indicator. On which version is one to depend? All technical
Indicators develop from the conception. They are created by the Trader and drove for
the Trader to different commercial decisions. These depend on that
used length of the basis of the indicators.
Technical indicators are inclined to smooth things if the reality, on which they are based,
everything else as smooth is. Stock exchange quotations have the tendency to jump on and off and
occasionally they make fast large movements.
My kind to act consists of acting after the reality and those reflect
Quotations against, which I can see before me on the computer screen. There what I
there see, which can come truth next, is it for me the truth.
If one acts after Intraday Charts, it is at the end of the daily on the kuerzerfristigen
Charts come to a large number of quotation staffs. In-minute-nC-hard a one
Commercial daily can show e.g. 260 staffs. That corresponds many month with the trade after
Tagescharts. Additionally to these 260 staffs still those, those come already at the beginning of the
Daily left of the screen disappeared. This particularly meets the Charts that
Currencies, the interest and the share indices too, since these relatively long commercial times have.
Those are a quantity of quotation staffs and them offer a multiplicity of
Commercial decisions on. Became I each time, if itself on that in-minute-nC-hard one
Commercial opportunity shows, my position changes, could I be moved... and mine
Broker surely also.
Therefore I do not act in such a way that I die all day long long positions and again
closes. It costs me to simply too much sweat. If my commercial style would be so fast (how
that the parquet dealer), then I would be completely simply burned out at the end of the daily. In
Act know I someone, which got a nervenzusammenbruch in this kind
I legend not that others thus cannot act. I legend, I cannot do it. It is too
arduously for me, and it too much similarity with hard work has.
14 ]. Definition of Day Trading _
I am frequently asked: " making it Day Trading?"
The answer should be clear now. Yes, I act in the cash transaction. But I cannot do it those
whole time exercise. For cash transactions one needs much energy. It requires a large
Effort of concentration.
Sometimes I intensively operated Day Trading for some days, but afterwards I had
me and the markets absences rest. The disadvantage at this kind of the intensive trade
it is that I do not know always, when I have enough. I determine that only mostly then if
I too much money lose.
The effort of the cash transactions affects me like a kind Hypnose, so that I after
one while the feeling get to see nothing at all more. I become slow-acting. Mine
Perceptivity over the market movement is not any more sharply. I am satisfied and
my spirit solidified.
The Day Trading costs much energy, and the costs in mental and physical regard
leave seen, problematic it, from a practical point of view become.
With this realization over the Day Trading I do not stand alone. A friend of me, that
**time-out** since 24 year professional Trader be, it say, that he in this way only two or three
Days in each month to act knows.
Another friend, who has a stock exchange seat at Chicago board OF trade, told me that it
is simpler to act down on the parquet than before a screen cash transactions too
transact. It acts for 36 years and is one the completely large ones of the Tradings.
Since the Day Trading is so arduous, and because I do not bear personally too much of it and more importantly still, the larger profits become under a long-term time horizon
made -, I try, outgoing from the Intraday Charts long-term positions too
initiate. I try, whenever it is possible, a cash transaction into a position business
to turn. As I make, I will show in a later section of this book.
Position Trading is many more relaxed. The positions more or less fit on itself
up. I must use not too much attention on it. After I only once
Cash transaction turned the position into a position business, must do I only
going by observe to change around my profit taking stops and the position
to close, as soon as my course goals were reached. Usually mine is correct
Profit taking stop with my course goal. I would like with a profit
are out-stopped. Before long time I gave it up to try the highs and
To get low of the markets.
2. Selection of the positions
In this book I will use many illustrations, in order to clarify, about what I
speak. So far the discussing is to serve as background, to unite so that we now
Commercial concepts to turn into can. We begin us with an individual quotation staff, that into the
anatomy of the market brought in is (fig. 1).
This is a market:
Fig. 1
If we look exactly, which we can say about this market? Which one can do in
see to this market? Which truth can in this individual pictogram of a market
are found?
One can say the fact that the market at its high opened and close at its low closed. Has
the market a high? Does it have also a low? Is this market in a sliding zone?
Surely it is in a sliding zone. This sliding zone lies between the high
and the low.
Doesn't apply to all markets? Each existing market is in a sliding zone
between the highest high and in the past, registered in the past
registered deepest low.
I mentioned some other truths, which this market reveals. It resounds one
Opening price and it had a closing quotation. The opening and the conclusion of the
Trade must not have taken place however necessarily at the levels shown. Those
Levels represent rather a consent of it where the opening and where the conclusion
took place. The opening price published at the end of a commercial daily knows strongly
from originally the quotation provided on the beginning of the trade deviate themselves likewise
the closing quotation published by the " official ones " after conclusion of the trade drastically
of the quotation, to at the end of the commercial daily business differentiates finally
16 2. Selection of the positions
Although I can see, where the high and the low were, then I have nevertheless none
Conception of it, how many business at these points took place or whether at all on
these levels one acted.
I do not know also, like strongly the conversion and like highly the number of open contracts in
this market was. I will experience both only, if it is too late, over with these
To be able to begin information much.
Up to now is these information - in connection with the trend, if one is present everything that I have and on which my commercial decision can be based, I should these
Market select, in order to be received a position.
If I regard and tighten a market that he itself in a sliding zone between that
it finds historical high and the historical low then I can also state that
within this entire sliding zone many smaller handelsbereiche exist. Over longer
Seen to time these smaller sliding zones occur practically on each level of
Commercial activity, which a market has
These handelsbereiche do not exist however from each other independently. Normally are they
connected. The formations, which connect them, become trend formations
called. A market points an anatomical structure over a certain time seen up
Which I can see in a market am handelsbereiche, those by trend formations
are connected. Trend formations again consist of shorter
Handelsbereichen, quotation gaps (gaps), movements with relatively large quotation distance
and progressively rising or falling quotation staffs.
Excuse, if all this appears all too simple to you, but I must somewhere
begin. I try to create a basis for, which will follow.
I explain here the fact that a market can be divided - divides into its compound
anatomical parts. There are ways to act everyone of these compound parts. It gives
Ways to act sliding zones. There is ways, progressively rising or falling
To act trend formations. There are ways, trend reversals (reversal), outbreaks
(breakout) to act back setters (retracement) and corrections. And there are ways, those
To act markets in the cash transaction.
In this book I explain, like one the different situations act, those in the markets
happen. The methods shown are applicable to each Intraday Zeithorizont. Many that
by me concepts shown can be also used, if one after a Tagesoder
Wochenchart acts. The emphasis of the concepts shown becomes however on that
Minutencharts lie.
The trade after this Intraday Charts requires something other strategies and tactics than
that one, which for the Trading after daily -, week or Monatscharts applied feast
can. I earn a good part of my income by the use of Intraday
Charts. This book and this course are exclusively based on Intraday Charts, and Charts
with larger time horizons are used only if it itself on a Intraday Chart
2. Selection of the positions 17
It is possible to act these different formations mentioned for itself taken.
This kind of the Tradings can be very successful. I hope however, you, before this book
ends to have shown like my commercial kind automatically the individual compound
Parts, of which a market consists, with includes. This technology become I " segment counting "
Some things, which I in this book legend, concern only the concepts of the Intraday Chart
Tradings; they stand nevertheless in no way in conflict or contradict the things, those
I in Futures Trading said.
There are many ways, how one can begin a book of this kind. In Futures Trading began
I thereby how one acts the outbreak out of a sliding zone. In this book I become also
the concept of the position selection begin.
For me the position selection consists of two things: the selection of a market and that
Selection of one point of entrance.
The first mentioned is simple; the secondarymentioned requires somewhat more explanations.
2,1 selection of a time horizon
I cannot recommend most Day Tradern, after a smaller time horizon than that
to act the five minute Charts. If one acts time horizons, which are smaller than that
then it is so well sure of the five minute Charts that it in the case of the order execution too
a disaster comes. Most Trader, even if they work with real time courses,
sometimes do not act, under those they in the five-minute market possibly
to compete can. Why is like that?
In the five-minute market " large " Trader and ex parquet dealer act, to a large part
from the screen act now. This group of market participants increases constantly,
since the parquet dealers become " encouraged ", to leave the boersenring. Many of them have
a seat at the stock exchange. Practically all of them call directly to the parquet. As that can
average Trader, which makes little conversion and a relatively small account has,
regarding the time or the costs with them compete? A further large group, those
within the time horizon of the five minute Charts, is the CTA's (Commodity acts
Trading Advisers).
The large dealers, the ex parquet dealers and the CTA's act those somewhere with costs,
between six and fifteen are appropriate for dollar per Round turn. They do not have those
Time delay, with which most Trader must live. They do not have a broker
call, which must write again an order for stock exchange and then the parquet calls. For
many Trader, which do not belong to one of the groups specified above, fall even still more
Intermediate steps on
Even I can do, based on five-minute nC-hard formations, hardly a tidy
Execution get, even with the low commissions, which I pay, and with that
quick order execution, which I get.
18 2. Selection of the positions
2,2 selection of a market
The only markets, in which I, based on one five-minute-nC-hard, cash transactions
will make, are:
The currencies: Japanese Yen, Swiss Franconia, German Mark and British Pound
The share indices: S&P 500 and NYSE
Gold and crude oil
I do not act the bonds or the euro dollar after one five-minute-nC-hard, there those
Movements of these markets in the shorter time horizons on the Charts " do not form out ".
The markets, which I act, have all sufficiently liquidity, and which is most important, them
form on five-minute-nC-hard protruding Trading samples. I act those
Soft goods, grain or meat markets after one five-minute-nC-hard only if I
an entrance or a door for a long-term position to optimize would like.
Frequently I already made my money in a currency or in the gold, before that
Stock market opened at all. In this kind I can observe the S&P, without me
to have to concentrate on something else. It pleases me also, the S&P after 14 o'clock
(Chicago time) to act, if the bond market closed. If in none of these
Somewhat it happens to markets then I begin to observe the crude oil in hope that I
there something movement finds. If the crude oil market volatil is, it leaves itself good in the cash
If I had to select four markets for the Day Trading, then these would be the S&P 500
(or the NYSE Future), gold, crude oil and a currency. The selected currency would be those
with the highest existence of open contracts and the largest conversion.
If I had to select two markets for the Day Trading, then these would be either that
S&P 500 and gold or the S&P 500 and a currency. The choice would fall on the market, that
the higher Volatilitaet would have.
If I could make Day Trading only in a market, then I became between the S&P
and a currency select. I would act the market, that best to my style of the
Day Tradings fit would do.
If it occurs that the liquidity of the stock market is thin, like it after the Crash of
1987 were, then I would act a currency, a gold and a crude oil.
2. Selection of the positions l 9
2,3 selection of one point of entrance
My methods to the selection of points of entrance are very simple and straight-line.
My entrance techniques into a market are based on three entrance levels, out
develop for different time horizons.
I will classify these levels as large, means and small. They have all a thing
together - the thrust!
I do not believe to buy or sell back setters or corrections. I believe
also not to buying within a trend channel or a sliding zone or too
it is, the trend channel or the sliding zone sells is broadly enough, around those
To make possible execution of a profitablen business. If itself a consequence of
Business within a sliding zone or a trend channel plays, then is pure coincidence
and it does not depend surely on the fact whether I trend channel lines drawn or in any
other way a sliding zone defined. The same applies to upward or
Downtrend lines. Except for the visual perception I do not use these, and I
act also no back setters, who occur within such market ranges.
I can successfully be received a position in the markets, without taking any signal,
by the Tageschart one generated. However I prefer it, a cash transaction only then
to be received, if it is based on an important event, which from the long-term
Momentum (momentum) of the market comes.
Do you remember the market pictogram?
This is a market:
Fig. 2
What would lead in this market to an important event? Which is the most important
Thing, which can happen? I state that the only important thing, which can happen,
an outbreak by the high or the low of the market is
Why? Because, as I said, itself this market in a sliding zone between its high
and his low finds. Within these borders the market stagnates.
It really does not go into any direction, before it not to a new high or one
new low advanced.
20 2. Selection of the positions
But which is, if the market would as follows take the high of fig. 2:
Fig. 3
Could I make money, if I act this outbreak by the high? The answer
whereupon is! And it is a basis for the Trading after five-minute staff diagrams.
I speak here about thrust. For the moment you let forget us, where the market closed.
That is of no importance. For a long time before commercial conclusion I am made my money and
the position closed.
It is important that the market on a certain level opened and sometime during
the daily the high exceeded, which was because of this opening level. As this high
was that was taken an important event. Profits could have feasted made.
Note! With the trade after one five-minute-nC-hard I am interested only in which
today happens. I am not interested in the commercial conclusion. Up to then follows still 60 to
75 quotation staffs. I am not also on tomorrow interested - tomorrow a new consequence finds
of events instead of. I am not interested in which happened yesterday - yesterday is
History -; except, which yesterday happened, or the day before yesterday, or before the day before
yesterday, could
are connected with that, which will determine my current actions. More over these
Connections later.
Although I will consider, a short term cash transaction into a long-term
Position business to turn - according to certain rules, which are explained later -, then I must
in addition, a rule for my cash transaction have and this rule is absolute: Before
I not a transformation into a position business consider, never become I
Cash transaction over night hold! I become always my position the commercial conclusion
close. That is it, which makes this business a cash transaction. The position is
not over night to be held. If I consider it holding the position then this has
Position their status of a cash transaction lost. I become it into a position business
converted and begin then to consider another sets from rules to.
The truth about money making in the markets is that most money is made, if
the market " slams " and then begins to tend. There is the connecting trends between that
Consolidations, which offer the largest profit potential.
2. Selection of the positions 21
Fig. 4
We keep in memory and come now to the entrance signals: the large one
Entrance signal, the middle entrance signal and the small entrance signal.
3. Large entrance signals
In this section place I mean large entrance signals forwards. They have those for me
highest priority, and they are derived all of the Tagescharts:
outbreak from a sliding zone (English trading ranks).
outbreak from a l-2-3-Hoch or a low.
outbreak from a border (English ledge).
outbreak from a Ross hook (English hook).
With all these techniques, which are based on the Tageschart, I become outbreaks also
Quotation gaps ignore. Gaps prevent mean entrance into a market. I would like
only the entrance into such positions select, with those the market through mean
Point of outbreak is through acted.
The readers, that read Futures Trading, become immediately my large entrance signals
recognize. The readers, that did not read Futures Trading, would like please mine
Explanations concerning the large entrance signals special attention to come leave.
Each entrance signal is explained in detail, on the one hand, around the memory of the former readers
to refurbish, and on the other hand, in order to introduce the new readers to these concepts.
We go through now the large entrance signals in the order specified above.
_ 3. Size of entrance signals _ 23
3,1 the outbreak from a sliding zone
Before the beginning it comes to a sliding zone on the Tageschart very frequently either
a quotation gap or to one day, that, based on its movement of the daily high
a relative to the daily low, large quotation distance exhibits.
Fig. 5 illustrates this point.
Fig. 5
After I quotation gap, consequence of gaps or one commercial day with one
my first step noticed, consists large quotation distance of it, on the beginning of one
to respect itself developing sliding zone. Usually it comes thereby to the following
24 3. Large unity stairs signals _
•First the quotations in the course of a quotation gap or a large in become
Daily movement upward or downward the quotation level reach themselves, to in
Will form a sliding zone for run of the time.
it becomes a leg (this is a leg / or this \) against the thrust that
Quotation gap or the large daily movement comes.
a second leg will develop, which itself again in the direction that
Movement of the quotation gap or the large in daily movement moves. At this
Point have we a market, its last movement, from the " bird perspective "
regarded, then looks / \ or so \ /. now I know a horizontal line by that
highest high and a parallel running horizontal line by the deepest low draw.
Usually about 10 days offense up to this market situation. The formations / \ and
\ / are " market momenta ".
the next few days a third leg will form itself, so that the formations then
so / \ / or so \ / \ will look. This is the beginning of what itself as one
Sliding zone to put out can. I draw again horizontal lines by that
highest high and the deepest low, if the old, parallel lines of the market movement
were broken through. I have now a initial envelope (delimitation that
Market movement) designs, that by drawing in a simple horizontal
Line by the high of the sliding zone and drawing a parallel line in through
the soil of the sliding zone one determines.
next step consists itself of it, the number of quotation staffs, on that
Tageschart formed to count. Sometime between 21 and 29 days becomes in
a fourth leg for the rule formed. Then the sliding zone sees so / \ / \ or in such a way \ / \ /
out. If it in the course of this last leg to a new high or low or both
would have come, then would have ich.den envelope to draw again again. Often is however
not necessarily.
If itself the market now to these quotation levels, those the outside borders of mine
Envelope mark, near-moved, then I am warned (I can do me these
Quotation levels notice or I use the alarm function of my computer). Everyone
Outbreak of the market, quotation gap does not have and by these levels through
one acts, offers to me one point of entrance for a cash transaction.
This will be to few frequently occurring entrance technology, but it is one that
Best one. The thrust by the envelope through becomes frequently a profitablen business
The Chart in fig. 6 on the next side serves for the illustration of this point.
_ 3. Large entrance signals _ 25
Fig. 6
My point of entrance is at the place, because of that the courses by the point of outbreak through
are acted. The point of outbreak is the highest high or the deepest low that
Sliding zone. I buy in the place of the outbreak or before it. I do not die a position,
if it comes at my point of entrance to a quotation gap.
26 3. Large entrance signals _
3,2 the outbreak from a 1-2-3-Hoch or a low
Fig. 7 clarifies, which a l-2-3-Hoch or a low is:
Fig. 7
Note: In an upward trend do not drop back the movement up to the point 3 so far,
that the point l is reached. In a downtrend the movement up to the point 3 rises
not so far that the point l is reached
So that I am referred before a forthcoming outbreak to these key points,
I notice its quotation levels and/or use myself the alarm function of my computer.
I will die a position only if the market through mean point of entrance
through one acts.
1-2-3-Hochs or lows develop only at turning points of the market, the large or middle
Highs or lows are. I pay attention to l-2-3-Tiefs if it has the appearance that
Market a soil forms, or if it came to a correction of the market, the 50 % or
more the preceding upward motion corrected. I pay attention to l-2-3-Hochs, if
it the appearance has that a market forms a high, or if it to a correction of the
Market came, which or more corrected 50 % the preceding downward movement.
My accurate point of entrance always becomes in the place of the actual point of outbreak
or before it find.
The Chart on the next side (fig. 8) illustrates this entrance technology in action.
_ 3. Large entrance signals _ 27
Fig. 8
The 1-2-3-Tief is characterized by the fact that the downward movement to zurrt
Point 3 before the point l for holding comes. A l-2-3-Hoch becomes by the fact
characterized that the upward motion up to the point 3 before the point l for holding
28 3. Large entrance signals _
3,3 the outbreak from a border
Fig. 9 shows like a border (lateral movement) to look could:
Fig. 9
A border is determined by the following points:
I do not pay attention those to a correction or a lateral movement, at least three staffs, but
more than 10 staffs is long. The border is characterized by the fact that the highs and lows
form optically a square or a square. The flatter the square is the better. Best
perfect are squares.
I act the potential outbreak in each direction. My opinion over those
Market movement may not exert influence on my commercial decision. I do not know in
which direction the outbreak will happen. For each alarm, which I on side the that
Border placed, gives it an opposite alarm on the other side of the border.
I can decrease/go back only up to the first leg of the preceding market momentum, around
to find suitable high or low.
Fig. 10
_ 3. Large entrance signals _ 29
If I act a border, then I give the possibility to the market of saying to me in
which direction it will go. In a certain sense this technology is a " Straddle " (English:
with both parties hold, with both directions of the market work). It is not
Straddle, as one knows it from the stock market or from the option trade.
The Straddle used by me has the advantage that the market, during it on the Chart for
a number of staffs runs sideways, it possible me makes, with my purchase and
Orders to sell, which are placed by supporting and resistance at the natural points,
to wait for the outbreak of the quotations.
As soon as I can draw a line, the two highs, two lows, a high and a low, or
a low and a high connect, whereby the interconnect points on the same
receive the connected points their meaning are appropriate for quotation level. I become one
Position are received only if the quotations break out of the border and by those
High or low (or both) through to be acted. I will not die a position,
if the quotations with a quotation gap by my points of entrance through
break out.
I terminate the attempt to act a border after more than 10 staffs on the Chart
developed I wait, to the market again begin to tend, or to itself one
complete sliding zone formed
Why does this entrance technology function so well? It has the advantage that it with that
natural points of supporting and resistance works. An outbreak by one
natural point from supporting or resistance normally becomes with a good
Momentum (momentum) happen. It should enough explosive strength for a profitables,
short term business give.
I show you the application of this technology on the two next sides in the pictures
11-13, the Charts Swiss Franconia:
Fig. 11
30 _ 3. Large entrance signals _
Fig. 12
_ 3. Large entrance signals _ 31
Fig. 13
I act a border only with an outbreak without quotation gap. The entrance can at that
Place of the point of outbreak or before it take place. The point of outbreak lies, where I those
Line drew, which connects two suitable highs or two suitable lows. Consider
It, this line does not have the absolute high or low of the lateral movement on that
Tageschart connect.
32 3. Large entrance signals
3,4 the outbreak from a hook
Fig. 14 shows, how a Ross hook (local high or local low) looks:
Fig. 14
In a certain sense a hook is a part of a l-2-3-Formation. With a hook must
are not present however a definite high or low of the market. The hook can then
develop, if the market of a consolidation phase breaks out, in addition, if
another, formation which can be identified not accurately is present. Ross hooks develop only in
tending markets. On the other hand l-2-3-Tiefs or l-2-3-Hochs develops only at middle or
large turning points of the markets.
So that a Ross hook can develop, no more than one correction staff is not on the Chart
necessarily. In a downward market you find a hook, as soon as a higher low is present. In
you find a hook to an upward market, as soon as a lower high is present.
The Chart on the next side (fig. 15) shows the Ross hooks in a practical example.
_ 3. Large entrance signals _ 33
Fig. 15
The Ross hooks shown above could be acted, because no outbreaks also
Quotation gaps were present. Further hooks are to be seen, but due to
Gap openings were not tradable it. The arrows show, where the points of entrance
would have been.
I showed also a l-2-3-Tief, around the difference between 1-2-3-Tiefs and Ross
To demonstrate hook.
An automatic alarm should be placed in the moment, at that the market on that
Tageschart a hook made. I place the alarm at one point before the point
the hook.
3,5 summary: Large entrance signals
outbreak from a sliding zone.
outbreak from a l-2-3-Hoch or a low.
outbreak from a border.
outbreak from a Ross hook.
Note: Sometimes can some these signals both among themselves and with some
the middle ones and small commercial signals collapse, which are still presented.
4. Middle entrance signals
These are my middle entrance signals:
outbreak by the deepest low of the last three days.
outbreak by the highest high of the last three days.
outbreak by each individual low of the last three days. This closes also that
Outbreak by the low from yesterday
outbreak by each individual high of the last three days. This closes also that
Outbreak by the high from yesterday
The outbreak must take place in such a way that the quotations mean through through point of
are acted, case the market with a quotation gap behind my point of entrance
opens, then the position is not entered.
These are very simple techniques, which do not require many explanations. If it to one
the events described above comes, then I become in the moment of the outbreak
my position open. The better business usually results from an outbreak
by the highest high or the deepest low of the last three days. Sometimes break through
the quotations the extreme of the last three commercial days with much momentum. That is
not always the case. Occasionally the movement is nearly already terminated at the time, if that
Outbreak happens. One must experiment with these outbreaks, so that one can learn,
as one acts it best. The three-day out break can as filter for fewer business
The following four Charts (fig. 16-19) show examples of my middle entrance signals.
_ 4. Middle entrance signals _ 35
Fig. 16
The arrows show the point of outbreak on the actual outbreak day.
36 _ 4. Middle entrance signals _
Fig. 17
The arrows show the point of outbreak on the actual outbreak day.
_ 4. Middle entrance signals _ 37
Fig. 18
The arrows show the point of outbreak on the actual outbreak day.
38 _ 4. Middle entrance signals _
Fig. 19
The arrows show the point of outbreak on the actual outbreak day.
5. Small entrance signals
In the following I describe my small entrance signal, its use am released.
The signal develops if it to a second outbreak from first
Commercial consolidation comes itself, to the opening of the market on the Chart
formed. This knows also a consolidation continuation from the preceding day
To the current time there is one to explain as it no longer much I goes again only then
Position, if the quotations mean through point of outbreak are through acted.
After the market opening I use limited stop orders (stop limit order), over too
prevent that my order is implemented after a quotation gap. They experience more
in addition in the chapter concerning orders for stock exchange.
Fig. 20 shows an example of what I mean.
Fig. 20
40 5. Small entrance signals
5,1 priorities
Now it becomes time that I mean priorities describe. I would like in the first place the large ones
and middle outbreaks act. This presupposes that I have a conception on the one hand,
where these outbreaks will happen, and on the other hand, like I have a plan these
Outbreaks will act.
I explained the outbreaks acted by me in the preceding sections. Those
Large commercial signals do not have a special priority over the middle commercial signals. That
Outbreak by a large point of entrance is not better than the outbreak by one
Middle point of entrance; also the outbreak is not by the extreme of the last three days
necessarily a better signal than the outbreak by the individual high or low
of any of the last three days. The middle entrance signals do not have lower
Priority as the large entrance signals. Like the difference between the large ones
Entrance signals and the middle entrance signals nevertheless my Trading affected, becomes in
a later section of this book discusses.
The small entrance signal has however a lower priority. The large ones and middle ones
Signals are more important than the small signal. If it is possible, then I always prefer it,
to act a large or a middle signal instead of a small signal.
If I do not need action in my Trading necessarily, then I act only most
Large and middle signals and let the small entrance signals pass.
The next three Charts (fig. 21-24) show additional examples of the small
Entrance signal.
5. Small entrance signals _ 41
Fig. 21
42 _ 5. Small entrance signals _
Fig. 22
_ 5. Small entrance signals _ 43
Fig. 23
6. Stop orders
I use two kinds of stops: Loss delimitation stop (protective stop) and
Profit taking stop (objective stop).
6,1 loss delimitation stops
It is very difficult to say to someone where the stops must be placed. That lies
to the fact that placing of stops is a function of several variables. The size of the
Surely influence on the stop placing has accounts. Also is the mentality of the Traders and
its ability, pain as consequence from losses to bear, an important factor. I can
do not say to another Trader that it the stops a certain percentage of its
Point of entrance far away to place is. That does not make a sense. If the stops too close to
becomes it is appropriate for point of entrance with business, which could have been profitabel, to
come. If the stops lie too far far away from the point of entrance, it gets
Losing transactions would have been larger losses than necessary for.
I cannot say to anybody that he its stop a certain number of points of
Entrance far away to place is. I do not know the account size of the other one, and I know
not, which has commercial mentality this person
I would be very argwoehnisch opposite someone, which wants to say to me, where I mean stops
place would have. An exception is present then, if the business from a consultation
would take place. Then naturally I must use the stops recommended by this person,
otherwise I could not profit from for which I pay this person.
Since I will not dare it to say to someone where the stops are to be placed, leave
me say, where I have the tendency to place my stops.
After I died a position, I place a mental stop 10 Ticks of
removes for my point of entrance. I keep this stop, as long as it is appropriate, as
mental stop upright. Hold if I only one position in a market, then I wait up to
last possible second, before I notify by telephone my stop. I would like it
avoid that the foxes in the boersenring - in former times as absolutely necessary - know, where
itself mine
Stop finds. They love it to fish after the stops and the market, whenever it them
is possible to move in the direction of the stops. Hold I however a number of
Positions at the same time in different markets, then place I mean stops, as soon as I
my positions open. I will place immediately also then my loss delimitation stop,
if I die and see a position that the market is fast or becomes fast.
As soon as it is possible moves I my loss delimitation stop. In the markets for gold,
I think for pulling crude oil and currencies tight to it, my stop, as soon as I eight to ten
Ticks made. With the S&P I usually pull tight my stop, as soon as I four Ticks
in the market in front are. Note that, if I tick legend, I over the minimum
Quotation fluctuation, which a market can make, speaks. In all markets, in this
Book to be acted, is ticks one point. An exception make the British Pound
and the S&P. The Pound moves in two points per ticks, and the S&P moves in
five points per tick.
_ 6. Stop orders 45
6,2 profit taking stops
I differentiate between two kinds of profit taking stops: One serves for
Covering of the costs (costing hitting a corner stop), and the other one serves for the realization of
With most cash transactions I try initially, with a part of my position
to cover my costs and to make a small profit.
I can not generally say that it is necessary, a certain number of contracts
at the same time to act has. But I will give an example of my tactics, and thereby
you will see that it is necessary for me, at least three contracts in a position
to hold.
My stop for kostendeckung is exactly what says it. I liquidate a part of mine
Position with the intention of covering my costs. Even if I thereby still another small
Profit makes, then that is beautiful, but only coincidental. Later, if I over the average
Volatilitaet speaks, I will explain more exactly, like I a part of my position as
Kostendeckung uses.
My best minimum configuration is a three-plumb bob (existence of three contracts). If
I for financial reasons would be forced to act less than three contracts then
I would think about it, the acting like contracts to the Mid American Exchange too
use. I always die a position with my replicated system approach. After I
then it sees that I reached kostendeckung and 1OEOe USD at paper gain
developed, liquidate I a part of my position (with a three-plumb bob usually
a contract), in order to take thereby this profit from the market. I do not make myself
Concerns over the slip PAGE, but I take, which I can get. At the time, if
my order for settlement reached, I get the stock exchange parquet perhaps only
I do not annoy 60 USD, 70 USD or 80 USD. over it, I take myself, which I get.
I would like to have this order now on the parquet! I ask for a lightning execution (flash
fill) - and wait for the confirmation of the order execution. If the market is fast, then is
perhaps possible for the confirmation to wait, but at least I do not have it for it
ensured that my order will come on the parquet.
Positions (contract sets) should from three, four, five or multiples of five contracts
I pull tight fast my stop to to the break even point, as soon as I with the settlement
a part of my position covered my costs and made a small profit.
With the fact I mean that I move my stop up to my point of entrance. If I then
I am not out-stopped anything lost. I am still alive and can to a later
Time a new attempt start. It will give many new possibilities.
If I am not out-stopped, then I wait, until the market corrected. If that
Market then next time in an upward trend the old high or in a downtrend
the old low breaks through, pulls I my stop for the remaining contracts around further
five Ticks after.
46 6. Stop orders _
Each mark, if the market breaks through its old highs and continues to rise, I move mine
Stop. I try, at least half of the developed paper gains by stops
to secure. As paper gains I define the earned money or the reached
Point number, if I at the most distant quotation, those the market since mine
Position opening had reached, my position would have liquidated.
If it were not possible me to act with at least three contracts then I became
as long as with two contracts it acts until I would so far have developed my account that I
at least one three-plumb bob to act could.
With the trade with a two-plumb bob I became exactly the same, as with the trade with a threeplumb bob
close also, a contract, as soon as I would see 100 USD at profit on my screen.
Likewise I am not annoyed at resulting slip PAGE, but I would take, which I would get.
Even if I got only perhaps 60 USD, 70 USD or 80 USD, I did not become
annoy, I would take, which I would get. I would like this order for settlement now on that
Parquet have! I would ask for a lightning execution - and on the confirmation that
Order execution wait. If the market is fast, it would be perhaps not possible on those
Confirmation to wait, but at least I would have ensured that my order on that
Parquet would have come.
Then I became stop for my second contract fast to to my break even point
pull tight, i.e. until at my point of entrance, case I would then be out-stopped, would have
I anything did not lose, and I could start a new attempt at a later time.
It will give sufficient new possibilities.
If I am not out-stopped, then I wait, until the market corrected. As soon as that
Market then next time in an upward trend the old high or in a downtrend
the old low breaks through, pulls I my stop for the remaining contract around further five
Ticks after. As soon as my second contract would have reached 100 USD at profits, I became that
Market with one mark gate that (in the best way or order for approving of) leave. Again I became
do not annoy at the resulting slip PAGE. My goal would be it here to develop my account in such
a way
that I would be able to follow the market and make my profits, as soon as
Market begins to run.
If I could act only one contract, then I became approximately with 100 USD my
Profits take. Conclusion, out, end! I would take the money and thus my account
increase. I would scratch so for a long time at the market, to I enough money in my account
would have, in order to act a two-plumb bob. I would be patient. Growth could slowly
come, but it would come. I would be patient \
Another, my Trading point concerned is that I after a loss the tendency
has to double with my next attempt in a market, my position size. I
do not make that always, but I make it frequently, if I immediately again into a market
enter. My percentage of profitablen business is highly enough, so that it itself for me
disburses to be received again a position with the double number of contracts. I become
this technology later in this book show.
7. Orders for stock exchange
7,1 orders for entrance
Whenever I write from now on over a contract set, I speak, if not differently
noticed, over the entrance into a market with three contracts. If I more than three or
four contracts to act wants, then I act with five or multiples of five contracts.
Which always I make, I would not like to act with odd positions. It is heavy
enough to get good remarks with the trade with a number of contracts also
other Trader use. I spoke recently with a Trader, that in the market for orange juice
a completely bad execution had gotten. The slip PAGE with its order for door
50 points amounted to. When I asked it, how much contracts it concerned, was its answer 23
Piece. Disbelievingly I had to vibrate of mine head. Here it generally was in one
acted not very liquid market at a season (spring) as the market for orange juice
thinly like paper was, and it acted a 2ér-Lot. It is any miracle that it one
Slip PAGE of 50 points had?
It is also important to give limited orders with numbers those probably without slip PAGE
are implemented.
For example one point is worth 1.50 USD with the orange juice, and normally that ticks
Market with 5 points. That does not make it extremely heavy to place orders a slip PAGE
will have. If I am used it to use intervals from five dollars to then become
I with numbers act, which end with zero or five. But 1.50 USD does not leave itself smooth
divide by 5 USD. Something similar meets on gasoline (unleaded gasoline), fuel oil (4.20 USD per
Point), the meat markets and building timber too. In addition the liquidity of these markets is too
in order to act it as beginners. If a Trader is not safe, which decimal places good
Remarks bring, then he is gotten difficulties, should he these markets
In the cash transaction the order placing has large importance. If I an order
place, then I first always strive to remain calm and avoid greed. I
place all my orders for entrance as stops at my entrance price. That means, I
use orders for stop limit. Where it is possible, place I mean order as stop with limit.
" with limit " meant that I give one quotation span, in which I am ready, one
To get execution. If the market somewhat continues to run and I means execution somewhat
more highly get, then I am not annoyed at it. The slip PAGE is into my commercial method
taken into account by giving one quotation span for my execution, I am in that
Situation to control the amount of slip PAGE accepted by me. In some markets am I
however in a forced manner to use the regular stop of orders.
The use of stop limits and stop with limits brings it with itself that I many business
miss. If happens, I do not disturb myself to it. If I do not have it in my kind
can, then I would not like the business. On the parquet have stop-limit-lays on
low priority. The dealers will not always give me an execution.
Generally I do not place orders before the market opening. With the exception
Large points of entrance does not have I open orders in a market. Only if itself
48 7. Orders for stock exchange _
Market my point of entrance due to its direction toward the Minutencharts approaches, then and only then - I place an open " today only " - order in the market.
Frequently the market will open after my entrance signal with a quotation gap. Well
and! I miss the business. I tried to learn to think in this kind: " if it
so happened, as I want it, then do not let I it be ". I do not put myself and gruebele:
" Oh, if I had only taken now one to mark gate that, then I would have a fortune
to make can ".
The position must through entrance course through acted mine and in of me
required to be implemented kind, otherwise pour I it. I look then in other markets
after new possibilities.
In this manual I will point out again and again that I this kind of discipline
to have must. I am received only positions, those after my thinking to happen and accordingly
mean instructions to be implemented. Everything else let I pass.
1,2 orders for door
Exactly the same as I with my order for entrance am careful, would like I mine final
Order for door precisely specify. I leave the market RK-THE-MARKET. I give no " more orbetter
"Orders. For my final order for door I do not use " market if touched " Orders (M/7-Auftrag). It lasts to for a long time to cancel an M/T order and by a atthe
to replace mark gate that. Not only that, it could happen that I me on the wrong
Side of the market finds, if the order does not reach fast enough the parquet. Those
only, kind for the final door, which can be preferred, is RK-THE-MARKET. As soon as I see that
Quotations my goal reach or beyond that are, liquidate I RK-THE-MARKET. I
that can stress not enough. Yes, it will give slip PAGE. Yes, I do not become always mine
Price get. Yes, I will find many reasons, mean the market, brokers and those
to verfluchen!%'*x&%#USD _ parquet dealers in the boersenringen. But at least I become
the market usually with something profit leave.
All above the saying presupposes naturally that I the market actively by means of a EchtzeitCourse transmission system observe. I would like to point out that I in the case one
M/T order or a Buy or a Sell stop in the market to place can, if my course goal reaches
will and it me is not possible to pursue the course movements. In the case of the MTT order
is it like that that it becomes one mark gate that, as soon as the quotations at my goal acted
become. In the case of a stop order that becomes stop a in the best way or an order for approving
and I get my execution, as soon as the prices by my goal quotation through
are acted.
I must be very fast and cancel all stop orders, those as loss delimitation stops
are placed, if is justified due to a sufficient market movement. I
it would not like that the market returns and meets to my loss delimitation stops.
If the position runs against me, steige I out. I liquidate at my stop, or I
liquidate now, if I am uncertain, if itself the business not according to my plan
to develop seems.
J. Boersenauftraege 49
Yes, I may be disappointed grummeln and. Yes, I may feel annoyance and despair, but I
must take the loss and step out. This was not my business. Perhaps I got
a really bad execution; perhaps met the market a few messages and he
moved fast against my position. Which the reason is always, it admits only one thing
do - liquidiereñ.
Will I make that? Not always. I have the discipline, my orders accordingly
to place my method and my plan? Yes, usually! I would like to the majority
from Tradern belong, which lose in the markets? No! Thus I must make that, what I
here wrote.
I remind: With entrances, where it is possible, stop limit or stop with limit orders
use. With doors, RK the market Orders uses. Except if I am forced,
with simple stop orders to work, it gives in these situations
- never - another way!
8. Bookkeeping
There are days, there is fast and wild the Day Trading. Therefore it is necessary that I
exact recordings across my positions lead. I must know the time, when I
a position was received, and I make sure that I of my broker for everyone
Position an order number gets. I must know about how much contracts
I in each position hold. The cash transaction easy and simple is not natural
As soon as I see that the quotations mean point of entrance on and through through acted
becomes, I assume I got an execution. Then calls I mean
Broker on. I draengle this brokers that it me the confirmation for my
Order execution gives. I cannot wait a half hour to I experience whether I one
Execution got. I must now know, to which quotation my order
one implemented! That costs me a quantity of trouble. Perhaps I observe several
Markets. In this case I try to note, where I am in each market.
While I wait for the execution, I must call my broker and him merciless
draengeln to he me says whether and to which quotation my stop order was implemented.
In order to make all, I must be a outstanding accountant. If I not very well
I am organized problems am gotten. I write all my potential
Points of entrance up. Of these quotations I must keep account. If I an order
note I give the order number. Order 123 bought three gold contracts to 401,90.
I note it. Order 345 sold a gold contract to 402,80. I write it up
" and now, how much gold contracts are still openly?". Whoa! Wait one minute. For that
Order 678, sales of three S&P contracts to 309.10, I did not get execution; that
Market opened more deeply with 309,00. Fast, this order must be cancelled. " cancelling
It order 678, sales from three S&P to which????" How was the number? " ah, there is it,
309,10. God is thanks, noted I it. " so, where was I... Ah... how much gold contracts
hold do I now still? Two!". I write it up
I do not exaggerate. Under no circumstances. The Day Trading after a five or also a 15
A geschaeftiger job I is minute nC-hard can it only short time make. Everyone, that
a nervous type is, thereby is eaten alive. I must have exact recordings.
I must be safe that I know, whether I left the market or whether I still one or
several positions hold. It happened to me that my broker called me, in order to say to me that
I still positions openly would have. It was mistaken. My recordings were more exact than
its. It had not occurred that my broker called me, in order to say to me, I would have
Positions more openly. I could not be safe its, because it had on this day in
In disorder given, and I had noted not everything. On the next day to
Market opening grinste me a loss of 2,900 USD in the D-mark on. I had one
Error made. The bookkeeping of my broker was not more exact than my. Afterwards I caught
on to note my orders on tape.
It happened to me that my broker called me, in order to say to me that I in the Yen still one
Purchase position would hold, and it asked me whether I before commercial conclusion do not
settle the position
wants? My bookkeeping and my tape recording showed me that I no more
was engaged. It could not be safe its, because the market was fast
been, and he did not know whether all orders were already worked on and accounted for. Which
_ 8. Bookkeeping 5j _
would have happened, if I had sold a Yen contract " RK the market "? I would have to
Commercial conclusion a Yen contract as empty sales position held. On the next morning
there was a gap opening upward, which amounted to 3,700 USD. Fortunately was not I
unintentionally an empty sales position received.
Is it necessary to lead exact recordings? Absolutely, reliably, \ around it I write
everything up, everything, in addition, everything.
If I miss an order number, then I recall and leave her to me from mine
Brokers give. I note it. Whenever it is possible, I write all orders
before up. Then I read out it to the broker, because I make in such a way less error. I use
it as a script, so that I " do not buy " legend, if I " empty-sell " my. I take
each order on tape up. Sooner or later the day will come, on which I
despairs a market abandoned wants and " to empty-sell " instead of " to buy " will say, over
to liquidate my position. I must know, what I said, and I must hear, what that
Broker said. I hear the volume again, only thereby I to be safe can.
Each order receives a date, by I legend: " this is the account 12345, it is 8.22
Clock, on 12 July, ".
In the eagerness of combat I must be particularly careful with what I legend. In the hurry, also
which I want to leave a position, I could say the wrong. If I have enough time,
I will note mine order for door.
I hate it to admit, how often I regarded an empty sales position as three contracts and
my position by five or ten contracts to increase wanted, and in the hurry - during I
still observed two or three other positions - I said to my broker, " buy five
D-mark RK — the — market ", when I actually " empty-sell " to say wanted.
I hate it to say, how often I regarded a purchase position as three contracts, then my
Position around five contracts increased, which developed business well, and I with the door
said, " empty-sells five, and it forgot that I held still eight open contracts. That is
the reason, why I note everything! I keep my house clean.
9. Broker
Nothing is for my Day Trading more importantly, than which I one much responsible persons and
akkuraten broker has, who leads my account. I will discuss some the problems, up
which I push in the cash transaction in this connection.
My Trading will be at times fast and wild. Perhaps hold I a purchase position of
five contracts and my position would like to increase by 15 contracts. If this in more than
a market happened (which the case is frequent), then I need a broker, with
Administer my positions experienced is. No broker, except if itself this broker
perfectly to my Trading dedicates, is able, my entire positions too
administer. I need a watchful broker with very competent coworkers, all this
know about my Trading.
I need a broker, who can get the orders fast from the parquet back. It
she must get with all speed implemented.
If the markets are fast, then it gives time, there must I means position to close, before
I know exactly, to which quotation my order for entrance was implemented.
I cannot carry it for me out to work with an inexperienced broker. On the other side
an established broker will have other customers, him importantly is and also the its
Attention stress.
I cannot carry it for me out to work with a broker who is not ready, with me on that
To act basis from Diskount commissions to. The absolute point, which I afford
can to get at commissions computed is substantially lower, than many Trader
pay a Discount broker.
Which I pay hang of my handelsumsaetzen, my account equipment and to one
certain extent of it off how very my broker needs the business.
Whenever it is possible, I try to be able to call directly to the parquet.
I need a broker, the one good position on the parquet and a good position in
Boersenring has
Such brokers are difficult to get. I know. I looked for a long time and hard for it,
If I found one, I will together work as for a long time as possible with him.
In the heat of the Tradings it gives time, there I have difficulties to remind me exactly
where and which my different positions are. My broker becomes me in this case
support hopefully well.
I need also a broker, who permits it to me in the cash transaction, with 25 % (no more) that
To act minimum initial at the beginning of. With minimum initial margin I mean from the stock
for a market determined minimum initial margin and not the minimum initial margin of the
9. Broker 53
Some brokers offer it to me to act the S&P 500 with 25 % of the minimum initial margin.
That is not enough. I would like to work with a broker, who permits it to me, in
Cash transaction all markets with 25 % of the minimum initial margin determined by the stock
to act.
In this way it is possible for me, my positions with sufficient additional contracts
to supplement, if that is necessary. That is also the reason, why I the market forwards
Commercial conclusion abandoned must. It may come in no case to night positions, except I
my daily position decided me into a long-term position business
to convert.
Thus I must take the load the time also into my calculation. There is a definite obligation
the time. I must my money in the time of the opening of the market up to the commercial
earn. If I did not create it up to then, closes I mean position - profit
or loss - and steige out
I absolutely guarantee that I have a solid relationship with my broker. The broker
works for me. I delegate each mark, if I give him orders to sell or purchase,
certain measure of authority.
I prefer it to have a broker who does not act its own personal account. I
it would not like that the broker uses my business for itself. I need also no broker,
me pieces of advice gives. If it offers recommendations to me, I reject politely and explain
it that I would not like to hear it. Broker recommendations can to the fact drove that I that
Courage to my decisions loses.
Also I would like to co-operate with a broker, my activities confidential
treated. I would not like that the broker my commercial decisions other customers
I had, hung myself brokers on to my positions. A broker had, after those
Confirmation of order back came, the best remarks for its account taken and me
the worse remarks given. They can assume this happens, if
it begins that they get constantly bad remarks or if its broker none
Order numbers spends.
10. The commercial plan
Warning! Nobody should try, cash transactions after one five-minute-nC-hard too
transact, if he is not a fast, decision-strong philosopher. If a person those
Tendency has to get panic if somewhat wrongly runs, then should this person not after
Five minute Charts act. Who more than altogether 25 USD at commissions and costs
paid, should not act after one five-minute-nC-hard. Who does not have the possibility,
directly to the parquet to call, should not act after one five-minute-nC-hard.
I up to now emphasized the different conditions for the Trading. I have
over the selection of positions, over points of entrance, stop, placing of order, broker and
Bookkeeping spoken. Now I particularly become on the Day Trading and on the Day
Trading after Minutencharts are received.
10,1 the method
My commercial method is simple: Make money! So that that is possible, I must in
Business remain and may not make not failure. The other side of this explanation is: Lose
no money! Refuse it to lose.
Into the Trading manual I offered a consequence of characteristics, from everyone
a better Trader would make. These characteristics are it worth, repeated too
become. I quote:
" self-discipline
_ 10. The commercial plan 55 _
Consequence "
" in addition to the attributes specified above belong total honesty and accuracy. I
must know me and my weaknesses, must emotional, mentally and to be physically fit,
and must be ready - without hesitating - to the act to walk, if it is necessary. I must it
create to control my greed and I need a self-control, it me
makes possible, not only my emotions to control but also my thoughts.
That is a long list, but it is not yet enough. I must also to a first-class
Manager, who plans, steers, organized, controlled and delegated ".
Nothing of above the saying changed, since I over it for the first time into that
Trading manual spoke. It meets even still more the Day Trading than long-term
oriented position business too
10,1,1 alive remain
The primary elements of successful cash transactions are retaining my capital
and mine became.
I cannot carry it for me out, in the markets financial or emotional impacts too
gotten. They undermine my self-assurance, and I will lose the courage, mine
To stand decisions. Without confidence and without the courage, to my conviction too
stand, act I better not. I invest then better my money in supplying shares.
It is better to take a series of small losses (150 USD - 250 USD) than of
a only one large loss to be met. I will state that I not everyone
Day to win can.
The losses will be always there. I must get accustomed to it. But they do not make anything,
as long as I can remain alive in the markets, until a large profit comes.
If it does not fit me to accept losses then this is the wrong business for me.
10,1,2 in the water remains
Trading is a business, which acts to remain in the water. I act, get small
Losses and small profits, until I meet the large hit, which I can bring to the bank.
I cannot win, if I do not remain in the water. I cannot remain in the water,
if I am demoralized. If I lose continuously more than I win, mine becomes
Confidence undermine. I will begin to experiment. I will begin, mine
Flat to change, and I will become a statist.
56 10. The commercial plan
10,1,3 tarpaulin the work - work the plan
One of the oldest plates of the world says: Plan your work - work your plan. That
Cash transaction is a business, therefore I must have a business plan.
Why doesn't one only act the outbreak after the market opening and otherwise not? That
very little planning requires. Why one does not only act the S&P after 14 o'clock (Chicago time),
if the influences, which come from the bond market, stopped? Frequently it gives then still
a good movement.
My business plan should bring me to be received such positions some high
Have probability to become winners.
10,1,4 the plan
Why is it necessary to select the business in such a way how I make it? Now, my
Selection methods force me to include the large picture with. By I that
Tageschart regards, it me possible to get a perspective. I would like on it
refer to that the Tageschart is five minute nC-hard 60-75 times more largely than that. Between
7,20 o'clock and 14,00 o'clock it becomes on the Chart of 74 quotation staffs of five minutes of length
give. One can lose easily the forest before loud trees from the eyes.
Outbreaks by the daily highs and lows exhibit usually enough thrust, over for
to throw off me a profit. It may have the appearance that with increasing meaning
an outbreak also the probability increases that the thrust sufficient far drove, over
to bring me a profit. That does not have to be however always like that.
I would like it in my kind, or I would not like anything. It does not care me whether the business,
which I missed, one million dollar would have made. If it does not happen in such a way, as I would
that it happens, then I do not take the position. I miss many super+good business, but
at least am I still here, in order to talk about it. I would like and will only the positions
are received, which in my kind are implemented, according to my specifications. If
I at the beginning of a business one mark gate that give, then I become at both ends of the
Business too much slip PAGE have. That is not good. It does not fit into my plan.
My plan must permit slip PAGE and losses and also that one misses business. It
does not annoy me, if I miss a business. There are enough possibilities, more than I
to master could. Wishful thinking over missed business is nothing one but one
Manifestation of greed. If I am greedy, I will lose.
My plan requires that I liquidate a contract, better still two contracts, as soon as I
70 USD to 100 USD at profit see. Yes, the position could keep running and 1,000 USD
Profit bring. Nevertheless, it could also continue and bring 1,000 USD loss.
Steige I with 70 USD to 100 USD out, as it requires the plan, then does not control me
greed, and I will lose everything sooner or later.
In my plan also time delays are taken into account. If I mean order
to place, the telephone wants to ring to my broker with first is not always taken off _ 10. The commercial plan 57
or even still with the respected mark ring. This time delay must in my plan taken into account
I regard a purchase position as three gold contracts. I saw straight, how my
Position the profit goal of 100 USD reached. I take the telephone receiver off and press
the button, which stores the number of my broker. The telephone rings a mark I sees,
as my profit from 100 USD to 60 USD shrinks, as the quotation arrow on the Chart
fast downward ticks. The telephone rings a second time. The arrow ticks upward and mine
Profit amounts to 110 USD.
The broker takes the telephone off. I call: " account 1234, 9,15 o'clock, 15 November, empty-sells
a contract December gold RK-THE-MARKET, I waits ". The quotation arrow makes one
Upwardtick and I see again 120 USD profit. I hear the broker say, " ticket 1234
if a December gold sells, market ". The arrow ticks downward on 90 USD. I hears that
sell " Fred say parquet, a December gold, market ". The arrow ticks downward up
80 USD. I hear, like my broker say, " account 1234 get it ". Then I hear, " O.K.".
My broker says, to " thanks ". Then he, " Hey Joe, says you has your price ". I legend to it,
" thanks ". I legend to me, " pitch, which for a bad execution. I have already
120 USD seen and everything that I get, are lausige 80 USD less commission ".
Then I remind, the plan include myself that happens. I am within that
Parameter of my plan. At least I lost nothing. I covered my costs.
In a business I cover always first my costs, before I think about profits.
to " times sees wools we o.k., what me the two remaining contracts still bring ".
I am alive, I have expectations. This small profit gets me on the correct
Foot, and I keep the courage to my conviction. Now I have something
Staying power. The plan functions, and I work the plan. Up to now I have me
held by the rules.
Why is it so important to get this small profit? It does not only give me
moral support, but, as I said, it covers the costs. I must always first
think about my kostendeckung, before I can think about profits. It
me again and again, how much Trader are not able, this basic concept surprises too
realize and into the practice to convert. Even Trader, the obviously successful
Businessmen are, ignore that, if they act at the Futuresboersen.
Since the plan requires the fact that it goes to my kind gives it naturally also day, on which I
at all do not act. To the fact it lead will that I mean plan change? If so
is, then I am not only greedy, but I would not be consistent also.
Although it occurs rarely, it gives day, on which I do not act at all, because nothing
into the parameters of the plan falls. Surely looks differently, if I am ready, one
To act outbreak out of the first consolidation after the opening. The more largely that
Time horizon is, after I am ready to look for my entrance signals the more
potential days there are, on which I cannot act at all.
This is then a favorable time, in order to visit a museum or the zoo, or one
To play extra round gulf. I could go also to fishing rods. Why? Because the plan exactly now
a small break requires. I take my wife and go with it shopping. Why otherwise
58 10. The commercial plan _
do I try to make money? I am pleased about the profits, which I in the markets
obtain. I never keep more, than for the Trading is absolutely necessary. I take that
Remainder and invests papers bringing in shares and in interest.
One does not have to act each day. Trading is there in order to make money; if I
but each day act or also only each day a certain time, then lose I mean
Flexibility. I will have only weak evaluation ability. My concentration
is lost. My decision strength loses at strength. With a word, I become too
a player - perfect except control. I become into a Trading Zombie
transform. A few red, greedy eyes stare at a stupid tube. It becomes too
Boredom come. I will have emptied my source of adrenalin. I become
become feelingless. I will act not to the kind and react, like I it should,
and I will lose.
My desire to make money becomes my new God. I become slaves of the
My solution consists of taking regularly a tracing from the Day Trading to. I plan it
and it guarantees that I take it. I remain at least one week in the month far of
Screen. I plan and take also two to three vacation in the year, in which I of all
Stay away from markets. Additionally I do not act, if I teach and questions of Tradern
answer, which would like more assistance. I can earn mine living costs, if I only
in the year of cash transactions make so few days in the month and less than 12 months. Yes!
Let me the plan outlined up to now repeat:
position entrances develop the large ones, middle ones after and then the small ones
Signals. In this consequence I set the priorities.
note all potential orders. I note it exactly the same, as I give her
become. Some can be repetitions from the preceding day.
set points of alarm in each kind, as I can. My software makes possible for me both
visual and auditive signals. If I the alerts not by means of a computer
to generate could, then I would observe the quotations of only so many markets,
as it would be comfortable for me, so that I could work nevertheless as Trader. To
Beginning only or two markets could be. I set my alerts five to
ten Ticks forwards mean point of entrance, so that still time remains for me for reaction.
guarantee that with limit gives all orders for entrance with — stop limits — or stop
become. If a market opens to my point of entrance with a quotation gap,
I wait up to the next day, in order to try it in this market again.
In addition, perhaps today still developments occur, which say to me that I it further
to try should.
the case that it should not be possible me, stop-limit-or stop with limit orders
to use, and the market through mean stop order hunts, and I an execution
to my point of entrance, live I get thereby. If the market mean
Point of entrance reached, I however no execution gets, and it then to one
Correction comes, then I am grateful.
_ 10. The commercial plan 59
should have reason to the acceptance, I could an execution have gotten (that
Market was acted at or after my entrance quotation), then I torment mine
Broker is enough in such a way, until I know reliably, where I am in this business.
I act two contracts, then I liquidate the second contract, as soon as I
70 USD to 100 USD profit in the business see.
the case that I act more than two contracts, I leave the contracts,
Kostendeckung are remaining, keep running and move my stops regularly after,
to secure my profits.
take regular tracing periods of the screen and of the Trading.
The knowledge, which I gave so far, is by far not complete. There is a special
Kind, as I act the mentioned outbreaks.
In the next chapter I will begin to explain these in the detail.
11. Filters of the positions
I explained in section 3 that I would like to act the thrust, which results from the fact that
the quotations by a certain point through break off. This point of outbreak
is at one sliding zone, 1-2-3 a high or a low, a border or one
Ross hook. All these outbreak formations are based on the quotations one
I am also ready, the outbreak by the highest high or deepest low of the last three
Days or an outbreak by an individual high or low of the last three days too
act. Also these outbreaks are based on the happening of the Tagescharts.
In all cases I would not like to act, if it for market opening at mine
Point of outbreak to a quotation gap comes.
Finally I am also ready to act an outbreak out of the first consolidation those
after the opening of the market with the fact is possible it formed that these
Consolidation a continuation and thus a part of the consolidation to be can, itself to
day of yesterday to the commercial conclusion developed. This outbreak, that on the Intraday
Consolidation of a five minute Charts be based, is a component of the next
Commercial concept.
11,1 a Trading filter
A Trading filter serves several purposes. It permits it to me to use a small stop.
He helps me to avoid wrong outbreaks. It makes it for me possible, the outbreak too
antizipieren and in former times into a position to enter, as I it me normally possible
would be.
I will explain this filter and will give an example.
If a market approaches one my large ones or middle points of entrance, I become
an outbreak out of the consolidation act, normally briefly before such one
Point of entrance on a Intraday Chart develops. I become only in the direction of the
antizipierten outbreak, which I deduce from the Tageschart, act. There are still more
Refinement to this filter, and these are shown all in the course of this manual in the detail
become. But first, you let a new market regard us
Fig. 24
11. Filters of the positions 61
If I see a quotation staff, that looks similar as in fig. the 24 on the Tageschart
and that the quotation movement of an individual daily represents, then I see the entire
Commercial happening of this daily compresses in this only staff. The picture, this staff
shows, is deceptive much over the fact what actually on the day in the market happened.
I can the market opening see (left line), but into which direction went that
Trade after the opening? The market was first lower acted, before it more highly
one acted? Or fallow the market first upward out, reached its daily high and
lower one acted then all day long, over for the end of the daily in the course of a Rally
to reach its closing quotation (right line)?
Opened the market possibly low and became then up to its daily high
acted, he turned the direction toward it due to a message, fell up to its
Daily low, and came it finally to a Rally until to the point, where we the commercial conclusion
These questions are part of the reason, why simulated commercial systems, those on Tagescharts
are based, hardly function, if one tries to act it. I have so far none
seen, that functioned.
Fig. 25 shows a Tageschart of the crude oil market.
Fig. 25
62 11. Filters of the positions
The framed quotation staff in the Rohoelchart, which represents one day, looks similar as that
Quotation staff in fig. 24. This picture tells as far as possible the truth, if one
a time horizon of one day has
If one has however a time horizon of five minutes, then this daily staff exists out
many five-minute staffs. These quotation staffs are in the framed range from picture
to see 26.
Fig. 26
During the daily there were a few consolidations, which are interesting. Based on that,
which I said so far, you can recognize, which there is, and why I at these
are interested?
11. Filters of the positions
Fig. 27
At the first consolidation shown it is important that it an outbreak by the high
from three days ago shows. The second consolidation shown places an outbreak by that
Highly of two days ago. Both are important events.
64 11. Filters of the positions
I emphasize these points again on the Tageschart of the crude oil market in fig. 28
As one can see on the basis the broken lines, the today's quotation staff broke through
the high of three days ago and the high of two days ago.
That is a component of my commercial plan and fits the parameters of my commercial signals.
The high four days ago was about 3450. The high two days ago was about 3485. The prices
moved after the first large price momentum (\ /) in a close sliding zone under
3400 - varying between 3375 and 3400.
A buying order placed with 3401-3403 was definite correct.
11. Filters of the positions 65
I could have said thus to my broker: " purchase of three contracts December crude oil
3401 stop, 3403 limits ", or " purchase three December crude oil with 3401 stop limits " or "
three December crude oil with 3401 stop ". I would have figured out that I in no case
Problems would get, if the prices reach the resistance with 3420. I would have fifteen
Points below my cost price a loss delimitation stop by means of a conditioned
Order (order contingent) to place can: " case implemented, then empty-sell three
Contracts December crude oil 15 Ticks under the execution "
I placed the order with 3401 stop, 3403 limits and received for the three-contract set one
Execution of 3403.
When the prices reached 3410, I took the telephone receiver and placed for a contract
a RK-THE-MARKET order to sell. The market ticked feverful on and off, and I got
my execution of 3415. When the market reached 3420, I sold second
Contract RK-THE-MARKET and received for this with 3416 my execution. A contract remained
remaining, which would possibly provide now for profits. I increased my stop for this
Contract on 3405 and already cancelled the two loss delimitation stops for those
liquidated contracts. I sold the last contract during the following
Consolidation at a price of 3458. My entire profit here was one
nice reward for my efforts.
What correct did I make in this business? With the first contract covered I mean costs.
I guaranteed that I had a profit with the second contract. I secured that
Profit, which had accumulated in the third contract, by increasing my stop, and
finally I let this contract up to the next consolidation run and rose then out
I took with success, which I from the connection between two consolidations get
could. (note: Frequently I separate from two contracts at the first opportunity
to the liquidation).
Later I will present and will show the concept of the average Volatilitaet, like one
it uses, so that one knows, how much contracts one at which point for kostendeckung
to liquidate must.
66 11. Filters of the positions
We look now, what happened in the last commercial hour.
After my door in the consolidation within the range of 3460 the market fell again
back. Afterwards an arranged recovery began and the market rose during most time
the last 60 minutes.
Fig. 29
11. Filters of the positions 67
During the last hour I did not participate in the trade, since I otherwise engages
was. Also without in the last outbreak to have participated, it had been issued me well.
I will show a further example. It now passes straight on my monitor, during
I this write. It is a perfect example of what I would like to explain.
Fig. 30
Now I will show, how this business developed.
68 11. Filters of the positions
Fig. 31
When the high of the consolidation marked with #1 was taken, I went with one
first contract set a purchase position. I did not buy because it the high of the
preceding daily was (that was coincidence). Rather I bought, there an outbreak from that
Consolidation took place itself, briefly before a possible outbreak by the high of
yesterday had developed.
As the high of the consolidation marked with #2 was taken, went I with one
second contract set a purchase position. This place lay only few Ticks under the high
from the day before yesterday.
I would like to stress the following. I follow myself the outbreak from the consolidation, forwards
the outbreak by the high or low of my signaled entrance daily finds!
l L filters of the positions 69
So, which would be my steps and results, if my contract sets only in each case from three
Contracts would have existed?
1. Purchase of 3 contracts with 6604 (tick over the high from yesterday),
3 loss delimitation stop with 6589, l contract liquidated RK-THE-MARKET with 6612
(tries with 6614).
2. Cancellation of 3 stops with 6589 and re-instatement of 2 stops with 6594.
3. Purchase of 3 contracts with 6616 (l tick over the high of two days ago).
Purchase position consists now of altogether 5 contracts.
4. Cancellation of 2 stops during 6594 and re-instatement of 5 stops with 6601
(15 points under my last cost price).
5. Liquidation of 2 contracts with 6624. Profit-taking with the second contract of the
first sets and kostendeckung with the first contract of the second set.
6. Cancellation of 5 stops during 6601 and re-instatement of 3 stops with 6611.
Now still 3 open contracts, I let which run.
7. Liquidating the 3 contracts with 6650 (not shown).
8. Cancellation of the remaining stops.
Now I can count my money, the business am made.
Does it function always so simply? We look times.
70 11. Filters of the positions
Fig. 32
I bought 3 contracts British Pound with 19338, in the picture with #1 shown. My first goal
the kostendeckung was with approximately 19358. I placed 3 loss delimitation stops
19318 (risk 125 USD per contract + costs = + / - 150 USD per contract).
I liquidated a contract with exactly 19358 and secured myself for this contract 100 USD
Profit after costs. So far, so well. I replaced my 3 cancelled
Loss delimitation stop with 19318 by two loss delimitation stops with 19328
Then the market against me and I ran became with the two remaining contracts
19328 with a total loss of approximately 165 USD including costs out-stopped.
The market fell further and climbed then back into the same consolidation range, in that
it had already by day before been and in which it in former times on the today's day was
11. Filters of the positions 71
There the outbreak by the high from yesterday for my earlier three contracts
important event had been, is a renewed outbreak now probably also in
important event - possibly even a still more stronger.
Fig. 33
Again I bought 3 contracts with 19338, in the picture with #2 shown. My first goal was those
Kostendeckung with approximately 19358. I placed again three loss delimitation stops
19318 (risk including costs approximately 150 USD per contract).
The market marched upward and I liquidated a contract with 19358. I cancelled
and it replaced my three loss delimitation stops with 19318 by two
Loss delimitation stop with 19328. Now I had only a risk of 65 USD per
Contract. I tried to settle a second contract with 19378, got however my
Execution of 19376 and made about 220 USD profit with this contract. Now was I
again in the black numbers. I moved my the latter loss delimitation stop after
19338. When the market up to its daily high had risen with 19420, and with the next
Quotation staff a correction of more than 100 % made, realized for me that it time to
Door was. I liquidated this a contract with 19390 with an additional profit
including costs of approximately 300 USD. It was not a great commercial day in the Pound, but
because I had followed my plan, I made more than 350 USD profit per
Contract in this market.
12. Risk management and money management
They became acquainted with the basic concept of my Tradings now. I have also loss days.
Some I will show, before this book ends. Compared with my profit days are
it however only few.
Next I would like to show you one of my special commercial points. It is in addition
let us serve to introduce to my concept of the risk and money management. In fig. the 34
Rohoelchart shown can serve for it as example.
Fig. 34
They see here one five minute nC-hard, which covers four commercial days. I have the important
Range of the Charts with a framework emphasized. Make sure please that the prices
to each individual these four days sometime this range reached.
I had already tried the day 2, when the prices fell into this range, with an outbreak
to be received by the consolidation low from the day l an empty sales position. I got
however in addition no possibility, since the market within the consolidation range closed. On the day
I went with the outbreak out of the small consolidation, those on the level of the opening
from day 2 lay, and as whose consequence the prices had then fallen below the low from the day l,
an empty sales position
_ 12. Risk management and money management _ 73
As one can see, I did not have one of my best days on the day 3 in the crude oil market.
Nevertheless it was more or less typical for the kind of Trading, which I obey. I show
this day more exactly in fig. 35.
Fig. 35
The market opened l with 3400, rose briefly, and fell then by the low of day with 3390. I
waited with 3389 with a sales stop for this movement and my order to sell came
with 3388 for the execution. I took mean first profit with 3377 and mean second
Profit with 3365. I kept thus a contract, I could run let which. However
the oil ran never correctly. It fell only to 3340.
I developed a very firm philosophy for it, which I with the contract or that
For contracts make, which I " run " leave. I try, never more than 50 % so far
reached maximum paper gain again to give. Thus I moved, after the prices
3340 had reached, my profit taking stop, in order to secure half of the profit.
With 3340 for my last contract 48 points profit had accumulated. I moved mine
Profit taking stop after 3364 and was out-stopped there this contract.
In the following I would like more deeply on the philosophy of my money and risk management
are received. They differ from each other and must be explained. Both are
A component of my special commercial points.
74 12. Risk management and money management _
12,1 risk management
With exception of the Aktienindexfutures and the Treasury bond am I usually not
ready to risk in a market more than 150 USD per contract. With that
Aktienindexfutures risk I usually 250 USD and with the bonds 315 USD per
We assume I ideal-prove three to five or a multiple of five
Contracts for my first position entrance use. Further I would like mine
anfangliches loss delimitation stop 150 USD per contract of my entrance execution
place removed. Let me repeat: 150 USD of my entrance execution
removed, not from my point of entrance.
What means that? If my point of entrance for a business in the gold market with 360,00 USD
is, if I however my execution about 360,20 USD gets, then I place stop
358.70 USD - there it finds then 1.50 USD under my execution and I risks itself in
this business 150 USD per contract.
If I place stop with 358,50 USD (1.50 USD under my point of entrance), then
I risk not 150 USD, but 170 USD.
Permit me a question. If I get an execution with 360,20 USD,
my stop with 358,70 USD lies, and the prices on 361,20 USD rise, as high are then
my risk?
If someone says 150 USD, then I now already know that this person in the long term into that
Markets not to win can. Let us see, why like that is
If I got an execution with a gold contract with 360,20 USD, mine
Stop with 358,70 USD lies, and the prices on 361,20 USD rise, then I risk 25 now
Points or 250 USD.
But that is not yet everything. I did not include something. What is with the costs? I
must also still my costs in the form of commissions and fees consider. It
part of my risk is not in the sense of the account processing, but I must consider it,
if I mean losses calculate and these from my profits take off.
Let me again the criteria of my risk management summarize: In
other market, with exception of the share indices and the bonds, I do not risk in that
Rule more than 150 USD.
For gold and crude oil it means e.g. that my initial loss delimitation stop
150 USD (including commissions and fees) from my remark price removes
one places.
We assume, I pay 18 USD per Round turn to commissions and the fees
if 2 USD amount to, then I must in the gold market my stop 13 points of mine
Remark price far away place. If I am out-stopped, I lose 130 USD plus
20 USD at commissions and fees.
_ 12. Risk management and money management 75
That means it that my initial loss delimitation stop in the currencies 10-11
Points from my entrance execution removes lies (20-22 points with the British Pound).
I legend, somebody else am not to place so its stop. I legend only that there my stop
lies. If somebody else liked to be received more risks, then it should its stop further
place removed. The most important at the risk is that it is portable for me. In this kind can
I " my thing " make, without having fear to be destroyed. I use
always pleasant stops. Later, if I speak about the average Volatilitaet,
I will modify this concept to a certain measure.
If I made enough profits, perhaps then I am in addition able and would like
my risk increase. The choice is with me. I cannot say someone else whether he it
to make is or not. I can describe it only in such a way: If I me due to some
good profits comfortable and full feel and then my risk increase, usually pass it,
that I a cold bath get and on the soil of the reality am brought. I turn
again back to my used, lower risk it was greed, me again
had packed. After some larger losses I swear myself, never again my risk too
increase. For any reason these oaths seem to hold however never for a very long time.
Since the risk management is a so extensive topic, I know each reader only in addition
encourage, as much as reading possible over it. The best information over
The books, which were written by successful players, contain risk management.
Trader should strive to become masters of the risk management.
12,2 money management
Money management and risk management belong together. They overlap, and
but they differ. Perhaps they are two sides of the same coin.
Risk management says, " I cannot not carry it for me out to lose so much ". Money management
asks, " which can I as profit for the risk expect, which I died?"
I am ready to risk 150 USD in the gold market. Which I can do now as profit for this
Risk expect. I must set my priorities exactly here. The best, which I for me
it did, is that I limited my risk. Now I can with greedy, shining
Eyes forward look and me calculate, how much I could probably earn. But one
after the other one. Before I can earn something, I must cover the costs. The costs in
develop for this business from different sources.
There is slip PAGE, it gives commissions, it gives fees. There are obvious, direct
Costs. What however is with the indirect costs? I must the costs of my Quotesytems, those
Stock exchange fees, the costs of the software and hardware and the costs of my time
gain. Reliably my time is also somewhat worth.
Also the time of my broker is somewhat worth. I know the each mark, if I see, how much
from my incomes to it flow. How does it stand with my time as Trader? Is my time
somewhat worth? Better it is like that, and better, I realized. Which is with all the costs of
76 12. Risk management and money management _
further books, commercial systems, equipment, subscription, etc., which one must buy, thereby
one its Trading training to complete can?
So many, with which I spoke, even professional Trader, call the Trading
" play ". Hey, if that is a play, then is it one the most dangerous world. Mine
financial life stands here on the play. Not only that, also my self respect, the picture,
which I have from me, my whole life perspective can in this so-called
" play " to be destroyed.
Trading is a business. Ever in former times one it as such treated, ever rather becomes one in
Winners become. If I am not a good businessman, then I become also not in
good Trader its. I must understand risk, and I must understand, like one from it one
Profit makes.
I would like to show in the following, like I my money manage, whereby it due to that
Number of contracts, which I liquidate for kostendeckung, to easy variations to come can:
soon as I with one or two contracts of my contract set a sufficient profit
liquidate I see these contracts. Thus covers I mean costs of those
remaining contracts. Dependent on it, like fast the market moves and
how steep the movement is, I move then my stop to from two a possible
Positions - either to my break even point (my remark price, because I have
already with the first contract my direct costs covered) or to a level, where
I any more than 150 USD do not risk (250 USD for the share indices and 315 USD for
the bonds). I compute these levels outgoing of where I the first contract
Here is an example: In the gold market I was received a purchase position with 360,00 USD.
My initial loss delimitation stop is about 358,50 USD. The market rises to
361.00 USD. I liquidate a contract with 360,90 USD. I have now with this
Contract 90 USD earned and can cover thereby my costs. If I two contracts
liquidate, I will have made a small profit.
Now will it time to move my stops. I know my stops for the remaining
Contracts after 360,00 USD move. There is my break even point. With liquidating
the first contract already covered I my direct costs.
I can place my stops also an amount far away from 150 USD from 360,90 USD,
thus with 359,40 USD. In this way I risk still 150 USD. leaving you me that
repeat. I risk further 150 USD and not the 60 USD, those the difference between
359.40 and 360.00 constitute.
I can combine also above the saying. It would be e.g. possible, for a contract that
To place stop with 360,00 USD (break even point), and for the last contract a stop
to select with 3 5 9.40 USD.
Did I make a profit with the 90 USD for the first contract? No! As it sees
with 100 USD or 120 USD out? No and no. I only reached so far that I mean
direct costs covered. If my costs at commissions and Gebuhren of the three
Contracts 60 USD were amounted to, then I would have now 30 USD remaining - thus I would
have one
_ 12. Risk management and money management 77
Profit made, correctly? Wrongly! Which is with the cure transmission system, the software, that
Books, the commercial systems and subscription? What is with my time? So far I have
still nothing at all earns!
, how then the profit comes purely? If the gold price continues to rise, so that I
further 80-100 USD profit see, then I will give one to mark gate that, around that
to liquidate second or third contract. Hold this contract I since 360 USD. gold
stands now with 362 USD. With with 362 USD implemented a mark gate that I become
make approximately a profit of 200 USD per contract. Become I now a profit
have? Possible. Perhaps, and only perhaps, I have now my indirect costs
covered. It depends to a large part of it how much refuse dumps I still out
previous losing transactions has. Aha! Now we come finally on the point! Those
Truth is not that I did not earn anything, so long I my developed before
Losses balanced has. The losses resulting up to now are part of mine
general costs. Even the tax office will agree that. They leave me these old
Losses against my current income up-count. For some Trader are losses in
very large hole, from which they have rauszuklettern.
" Oh!", someone will say, " I must become old 100 years and win each day, around all
mean old losses to adjust ". Wrong does to me. But it is never too late, with S pielen
to stop the Futures play and to operate the Trading as a business. I hope and
really wish it that this book helps my readers to create.
, which is with the last contract? With 362,00 USD I wear 200 USD
Paper gain. Where do I place stop? " I would like that me this contract that
Ham home brings. Young one, I sets large hopes into this contract.
Perhaps I should place stop further far away, so that this contract really
to run can, correctly?". Wrongly! That is fantasy, which is the play plays. I want me
hold back in business. I would not like to play. I become that stop in a place
places, where I, I should be out-stopped, at least something for of me
received risk is gotten. I will place that stop with 361,00 USD
and me thereby a guaranteed profit of at least 100 USD for this the latter
Contract secure. I become never more than 50 % of my not realized profits
. Which happens now, if the market corrects next time and my the latter stop
one does not reach? Then I can pull tight my stop further. In addition it gives
different possibilities. I can use a stop, 150 USD of the latter
Is highly, which this market made, distant. I can a stop each time, if
the market brings, around 50 USD pull 100 USD tight profit. I can my stop under
the last correction low place, which the place is, of from the market after one
Correction again its movement in a profitable direction continues. I can do mine
Stop on the way pull tight, by I it or two Ticks on the other side
a sliding average, which shows an enclosure of the quotations, place. Where I
stop sets, is a question of the choice.
78 _ 12. Risk management and money management _
With my risk and money management philosophy as background, you leave me mine
short business in the crude oil again repeat.
Fig. 36
The market opened l with 3400, rose briefly and fell then by the low of day with 3390.
Whereupon-waited I with 3389, and I got my execution with 3388. I took mean
first profit with 3377 and mean second profit with 3365. I kept thus one
Contract remaining, I could run let which. However the oil ran never correctly. It fell to
and then a large Intraday recovery began 3400.
When the prices had reached 3340, I moved my stop, around half of my open
To secure profits. With 3340 I had 48 points profit in the crude oil. I moved mine
Profit taking stop after 3364 and was out-stopped there. That brought me net
24 points profit.
I would like to communicate an amazing statistics, which I had from a good source to you: In
each position, which is opened in any market, 80 % the Trader rise on that
correct side of the position. The predominant majority of these Trader becomes nevertheless after
the position settlement lost money. How does that come? The Trader becomes from that
Moved and watch greed, how their profits disappear again. They do not take
Profits! Instead they try, still somewhat more from the market out crimpings.
If the market moves away from its point of the highest profit, then they hold those
Position in hope that the market runs again into their direction.
_ 12. Risk management and money management 79
Instead the market will move against it, perhaps gradually or perhaps
suddenly. In each case the Trader, which did not take profits, turns out into those
Defensive one. They will see their profits disappearing either again or a loss
suffer. They would commit rather suicide to move as their stop further thereby it also
remain synchronous for the market movement. Before they know it, them the fatal tick reached
have, and they leave the market with a loss. If I straight mean readers now
described, then you are calmed down. There is a way to go around these losses - it
do not have to happen to everyone.
Do I follow what I said? Do I take the profits, while they are still there?
Do I take it systematically and after a plan following? Its can be safe you. I
straight showed, how I make it. Do I have to say still more?
For a successful Trading probably gives it no more important maxim, than possible
to let not become profitable business losing transactions.
13. Consolidations are important
I would like to repeat first some from the material discussed so far. Afterwards explain
I further refinements.
For the entrance into a market I would like to act with an outbreak, out of one the mine
Large or middle signals develops.
The actual entrance into such a position takes place then with the outbreak from one
Consolidation, which lies exactly before my point of entrance. In this way I can into those
Position very early or somewhat in former times enter.
This outbreak from the consolidation, which takes place, before my point of entrance of
Market is taken, is my Trading filter. This outbreak is important, because it gives me
a projection/lead in the market.
If I died a position very early (the range of the last Intraday
Consolidation is far from the point of outbreak on the Tageschart), becomes those
Quotations nearly with security the range of the high or low test, that the basis for
my entrance signal is. The thrust, that the quotations from the outbreak the Intraday
Consolidation up to the range of the high or low drove, is the movement, with which I
my money will earn. That will be also the case, if the quotations only the high
or low test and never really break through.
If I died a position only somewhat in former times (the last Intraday
Consolidation is briefly before the point of outbreak on the Tageschart), becomes those
Quotations nearly with security a new high or low reach. The thrust, that those
Quotations from the Intraday consolidation to the new high or low drove, is then
the movement, with which I will make my money.
I would like to illustrate this point on the basis a Charts.
The daily staff from yesterday could look in such a way (fig. 37):
Fig. 37
_ 13. Consolidations are importantly _ 81
Five-minute-nC-hard from yesterday could look in such a way (fig. 38) Fig. 38
I prefer it forwards to enter with an outbreak from the consolidation range itself
the high or low from yesterday finds, and not with an outbreak by the actual
Highly or low from yesterday.
But which I, if there is no outbreak from a consolidation range, make on that
an entrance to be based could? Exactly such a situation occurred in the currencies
(see fig. 39), and it drove to an additional refinement in my Trading.
Here is a rule. If the quotations - relative to the past days - new highs
or new lows make, then I can, based on an outbreak without quotation gap
by the high or low from yesterday, a position are received, I would like to show you, what
I mean.
82 _ 13. Consolidations are \vichtig_
If itself the today's opening on the level dei of yesterday
Closing quotation finds and after the opening comes it without
Quotation gap to an outbreak, then throws I hei one
Van, wade E buy outbreak by the high yesterday * more simply,
if the courses on the height of the conclusion level would consolidate.
But it would be also possible that it after dei opening immediately after
squint above, so that I would not get a possibility,
to enter on this level.
< - high
< - conclusion
1-02 13:45 0 7925 h 7931 L 7925 C-7928 u
T 0 t 0 T picture
With a view of the quotations I can see that it at the high no preceding
Consolidations gives, on which an entrance could be based. If today the quotations
somewhere under the high or even at the high open, then I know an outbreak through
this high as my entrance take. In this case I however a higher risk am received,
because it could be that the quotations after a fast outbreak a reflex correction
make and the supporting at the high test. If I this position with one
fast outbreak by the high it is received I must be prepared for the fact that I more than
normally it would risk, in order to guarantee that I on board am.
It would be a substantially more conservative beginning to be waiting and observe. If those
Quotations under the high open and to far on the level of the closing quotation
are acted, then I have the consolidation, which I look for as my entrance signal.
_ 13. Consolidations are importantly _ 83
If the quotations break through the high after the market opening fast,
I can wait those for a possible reflex correction, the supporting at the level, which
the high was, will test.
I know my risk with 150 USD per contract maintained, if I this more conservative
Strategy follows. In fig. you see 40, what actually happened.
Fig. 40
I will explain this business step for step. The market open more deeply, tested its
Upward trend line and rose then, around the high from yesterday with 7935 around one ticks too
break through.
Since I do not act contacts of trend lines, I waited for the fact that itself a kind of
Consolidation forms. I would let this business pass, should the market further
rise and on the level of the commercial conclusion of yesterday do not consolidate. I would like it
in my kind or not at all. I do not worry about if I a large
Movement misses, which was however not my movement
On the basis of the new high with 7936 the market put back then, around a kind
to form \ / / VFormation. I figured out that this movement of me
desired consolidation next came, and so I placed an order, over
to buy an outbreak by the high from yesterday to. I got my execution
84 _ J3. Consolidations are important _
When the market was acted with 7944, I placed one mark gate that, with 7946 to
Execution came. There it came then to the next high. I had now 10 points profit
in Swiss Franconia, and I in such a way moved loss delimitation stop for my two
remaining contracts to the break even point with 7936. There I was out-stopped.
The courses made in the following stronger consolidation and fell back into the range
the conclusion of yesterday. I have the entire consolidation range in fig. 41 to
simpler view frames.
Fig. 41
Since the break-through was good for the earlier entrance already by the high, I bought again,
as the courses broke out again upward. This mark did not have I difficulties, my
Goals were achieved all.
Simultaneously to the business in Swiss Franconia I made a business in the D-mark. That
only difference consisted of it that the D-mark did not make the wrong outbreak, in
Swiss Franconia after the opening took place briefly.
14. Attitude of mind
I show my commercial secrets. Many become what I legend, with skepticism to regard.
Who is already so stupid and tells everyone, how one can make money in the markets?
Also many Trader lost the interest in new methods, because became over the years
too much garbage sells. One stated again and again, the " magic " way of the Tradings too
I would like to answer some the many questions, which placed Trader to me, and then
my method and my attitude of mind for the Trading in the markets commentate.
In the autumn 1987 I became very ill after some days with serious belly pain. I
did not know, what was loose, and so more or less was I bed bed, although I
tried to attend to far my occupation as Trader.
After eight days very serious swallowing difficulties and I developed visited mean
Physician, in order to see whether it could help me. While I was with it, he made one
Routine blood test and took urine samples. The results of these tests were so alarming that
it me into the emergency admission of the hospital transferred immediately.
My wife leads me there. It came to some short discussions with different
Physicians and the result it was that I had to agree a surgical interference. I know
no more whether I had again left the Notaufhahme. My next memory - also
Exception of nightmares over mean asphyxiation death - I had only two and a half months
later. Someone told me that my broker one of with position held in the corn market
had liquidated, because the contract ran out and the broker did not assume I one
Charge corn to have supplied wanted.
In on this day the following weeks I slept predominantly and only later became me
consciously that nobody had thought, I would survive. I would have actually due to
several causes to die must, the complications of the surgical interference, one
Brain skin inflammation, bad respiratory embarrassments and a pneumonia, on my
Blind intestine break-through with serious peritoneum inflammation had followed
Then it became conscious me that the physicians assumed, although I survives somehow
it had that I could probably never run again. They thought also that those
Possibility was large that I could never speak again.
I hungerte myself nearly to death, because I could not take up meal. I was safe me,
that it became for me time to go there where my ancestors before me gone
If someone thinks that such is like the experience made by me something, what one
behind itself leaves easy, then think it again. Which happened, my life, and it changed
changed the kind, as I act. I got a completely new attitude of mind. This
Change in my thinking was the reason, why I was ready, this book too
86 14. Attitude of mind _
I was exclusive up to the time of my " unusual experience "
private Trader. I had to do practically nothing with other Tradern. I did not know anything over
their activities, which publications, which read it, which concepts, after which they acted, or
that most Trader made most time of losses.
My Tradingausbildung was derived from sources, which were far from distant, which those
most Trader ever discover. It would lead too far, if I on it in this book
more deeply would be received. (I tell more about it in my book Trading am a business).
I made my first commercial experiences with the long-term Trading, on the basis of
Tagescharts. Later I set the compiled techniques and methods also with the Trading
after Intraday Charts. I modified tactics, around her the changed time horizon
to adapt.
With the beginning of my long persisting recovery I found then enough time, over over one
To think quantity of things.
My children were not yet old enough, in order to be able to act. They were not simply yet
ripely for it. My wife did not have the smallest notion, which Trading is. I decided
to note, what I knew. If my family ever their living costs
by the use of the markets to earn, would have it wanted at least something input of me
Before I was finished with the writing of the book, I mentioned opposite one
other Trader, which I did. It had called, there me it a few questions to that
Commercial software had, which I used at that time. The programmer of the software company was
not in the city and the Trader to me had referred. I agreed, him its questions in such a way
well as possible to be answered, because I had similar support in the past
get from the programmer.
When the other Trader heard that I wrote a book, he asked me for a copy. That
against-strove me first and in the fun said I, I it to him for 750 USD would sell. I
was safe, which would deter it enough. Instead I got a cheque from him
for the book - I should send it to it, if it is finished. Then I received a further
Call of someone, which I had not ever met. It wanted also a book - again too
a price of 750 USD. it asked me, what the title of the book is. I had still none
and I said in such a way spontaneously " Trading By The Book (Futures Trading) to titles for the book
". It
said: " sending it it me, as soon as they wrote it finished ".
I sold in this way some books. It did not constitute me anything to divide my knowledge.
Some this reader called me, in order to place to me questions. It came to discussions, and
to teach I also asked, my Trading. This time became conscious me, which for
a large desert the Futurestrading was. It did to me very pain, when I found out, how much
Trader around their advantage were brought in the markets.
For me a new life had begun. I stated that I any longer do not live so intensively
could, as I had in former times done it. The condition of my weakened body became that
do not permit. For some time I did not even know a real time ratio system
observe. The effort of the cash transaction was more, than I could bear. If
_ 14. Attitude of mind 87
the adrenalin began to flow, doubled themselves the pain in my belly and became too
an agony. I had been limited to a usual Trading after the Tagescharts
Further people called me or wrote me and required for my book. My
Discussions with them were - which mindeste, which one can say - demoralizing. Here are
some typical quotations:
" I act for 27 years and had only one profit year - and only by coincidence ".
" I act for 15 years and 2.5 million dollar lost ".
" I act for 12 years and my whole inheritance lost ".
" with my Trading in the last 30 years has I mean family into the poverty
led - everything that we had, is lost. Now I will work in the days
must, in which I had actually expected, mean to be able retirement to enjoy ".
I spoke men with enormously successful businessmen - with gigantic
Income. These men had them with all success, which they had ever tried, but
failed erbaermlich, if it came to the Trading to the Futuresboersen.
I know a foreign Ambassador, who lost 700,000 USD alone in the year 1989
I am a man, who has compassion. Much of my compassion developed from bearing
physical pain and misery. Not only because of my last illness, but also out
earlier problems with my health.
The quotations, paired with dozens, specified above, more similarly or still worse
Disaster stories over the markets, led to the fact that I wanted to help.
Yes, I have the serious desire to help others thereby it in the markets success
have. Thus it came that I the books Futures Trading, Day Trading, Trading is a business
and Chartformation Ross hook wrote and made available. Everyone, which do not understand that
can, must live with his skepticism. It will not begin much with this available book
The largest problem, which I discover, if I inform other Trader, am their
uncontrolled greed. The people do not create it to bring itself to it a small profit
to take, if it is there. They hesitate, because they would like more. Which is to it wrongly if one
in the S&P earns 100 USD? Which is to it wrongly, if one covers first the costs, and then
for profits strives? I steige out, if profits are there. I can again and again into that
Market return!
Hand in hand with this terrible greed the hurry goes. Trader, which I inform, have it
so hasty to enter into the markets. It is nearly like that, as if the last spaceship became one
dying earth leave. It should be exactly different. My advice is slow, steige in
a market, but leave it fast!
88 14. Attitude of mind _
Many Trader have a further large problem: They do not know, like them something, that
functioned, to use are, without they try to change it. They say, they would like
know, how one acts, but which they would like really, the wheel is to be invented again. This
Lack of discipline is the ruin of many Moechtegern Tradern. If somewhat functions, leave
it so. I am surely, despite the whole debris there outside, must it some methods or
Systems give, which function. But there are only few Trader, those the system of someone
other one to follow can.
That is the reason, why I do not even try to represent this book as system. I
white, only few will follow him. Instead I tried, the fundamental
To present tools and the conditions, which are necessary, over in the markets
win to be able.
Another problem, which emerges, if I am occupied with other Tradern, is their
unbelievable self addiction you think, if somewhat functions, should it secretly held
become. Why? Because they are afraid, if everyone begins to act on the way it becomes
any longer longer do not function.
This mode of thought contradicts the facts and the truth. I doubt seriously that of
all people, which bought my first book, only 5 % steadily therein the explained
To methods, cheat and techniques use. I actually doubt even whether it
at all gives still 5 %, which act in the markets!
The same will apply to this book. Of the thousands of Tradern, this book
to buy could become actually only a few hundreds to buy. And from these becomes only
a small percentage really makes that, what I legend. From the remaining become within
do not act most no more of or two years.
I am frightened over the lack of business attitude, which I with most
Tradern finds. I speak with men, who are unbelievably astute businessmen.
But if it comes to the trade to the Futuresboersen, then they forget to their
business background completely and become headless players.
Persons, who are masters of the good management, fall from each framework, if it to
Management of risk and money comes. Persons, in their daily job and under that
business stress calmly, deliberated and calm are, become hysterischen and raving
Fools, if it comes to the trade to the Futuresboersen.
The markets are from such kind that each weakness and each character error by that
Trading is revealed. Someone, which is a liar, no matter how smartly he is, becomes
deceive. He will say to itself that a market rises, if each fool can see that
it falls.
Someone, which is greedy, will destroy itself by the fact that it remains to for a long time in the
Someone, which is dishonest, will end by the fact that it is dishonest to itself, and that
Market will destroy it.
Someone, which is sceptical, will have never the confidence and the zuversicht, over successfully
act to be able.
_ 14. Attitude of mind 89
Someone, which is distrustful, will never have the courage to its convictions, and it
soon its commercial account will have ruined. And in order to make still worse all, become
it most of the " professionals ", who it will meet in this business, little encouragement
give to such confidence. Generally the Trader of a whole Schwaerm becomes
from vultures robs, a whose only goal it is, the Trader as fast as possible from its
To separate money. Such a situation hardly promotes confidence and zuversicht.
If I would try, me the best character-promoting invention, which ever create
became to present I could not find anything better than the markets. The markets place those
ultimative challenge at self mastering, self-discipline and self-check.
The markets attack the largest of all human weaknesses - the vanity. I can me
presents nothing different one, what someone humiliate so fast in such a way make can, like it the
The only way, which I know, in order to win steadily, consists itself of it, the markets
to approach with large reverence and respect. Then, after one realized completely,
how furchteinfloessend the markets are real, one must decide, each human
To master error, which one can find in itself.
Honest, deep and thorough self-checking is necessary, or one becomes from the markets
One must look for the simplest things, not for the complications.
It is really unbelievably, if one sees, like the people tries, their Trading complex too
arrange. It seems to be like that, the more complicated a formula is represented, the more people
it thinks that that is the holy Gral of the Tradings somehow. Which for a nonsense! The truth
the markets lies in the simplicity of its movement. A market rises, falls or moves
If a market rises, and if I am honest, I can see that he rises. I need
no logarithmic, parabolic standard deviation volume, which says to me. A child
could say to me. " Oh dad, the market rises ".
If a market falls, I do not worry about how much trend lines desert sliding
Averages I on my Chart to draw knows; they will not stop the market. Holds
drawing a trend line under a trend in any magic way the market
of off falling? If the quotations reached the soil of your computer monitor,
mean does that, it can not further fall?
I became acquainted with Trader, which told me, should the prices by a trend line fall,
we become witnesses of a significant event. Is that true? We both became those
Trend line to the same place draw? Became exactly alike one of us it two times
draw? And if the quotations make a new low, and it then to a Rally
come, does draw does we then a trend line with a smaller angle? Is that now somehow
the magic line, which says, drawn into the sand, " courses, you do not know this line
90 14. Attitude of mind _
That is just as bad as the saying that the divergence of an oscillator a meaning
has. Do not look, I are a large mathematician, but I know, if one an oscillator
detendiert, he begins to float. There are many times, there tends a market apparently for
the oscillator (each oscillator) always and at the same time tends into accurately the opposite
Direction. If a market upward tended and an oscillator tends downward, that is that
Proof for a divergence? Naturally this market of a daily will begin, itself downward too
move. But up to then now on still months could offense from. If it so far is,
the large Prognostiker will say: a " it could have known seeing you, you that the market
will fall, look you only on this divergence!"
Excuse me, but I believe, each four years old child to you have said could,
that something, which rises will fall at the end. Who needs an oscillator, so that he knows?
If the Trader the time, which they use, around the markets with technical analysis too
master, would use, in order to master itself, then it became much less loser
give and many more successful Trader would today still be in the markets.
If the Trader use the search for simplicity and truth so much energy insert
became, as they use time, in order to make things complicated and wrong, then became
today still more Trader among us its.
If the Trader would examine itself with the same expenditure of time, like her time
spend, in order to examine a crossing from two or three sliding averages to, then
they would fare substantially better in the markets, than they do it now
The summit of the foolishness consists for me of if one takes a sliding average,
it detendiert, in order to get an oscillator, and then a combination of that
Oscillator and that straight detendierten sliding average act.
The technical tools, whose application I became acquainted with in the markets, are,
with exception with very limited and suitable application, to the largest part worthlessly.
In Futures Trading I said the following to this topic:
" you would carve from a piece wood a doll and then would in front of it-set yourselves, around them
anzubeten? Wherein the difference lies to make to take or an oscillator
the somebody else created to act and then after the signals of this oscillator?
Who can say whether the oscillator on five time units, ten time units or twenty
Time units to be based is? If we all the oscillator on different time units
become we are based different results and thus different
Commercial decisions get ".
I summarize again: There is not such a thing as over-sold, and it does not give in such a way
something as over-buys. At present the minute of this book the Canadian dollar is since
over-buys nearly three years and he continues to rise still. The rate of silver falls already since
just as long time. Who can say, when and where the price purge will stop?
I have a friend, who is a strongly kapitalisierter and large Trader. As the rate of silver in
November 1988 with 6,40 USD stood, said it: " man, here will make a soil for silver.
I think, within a yearly the rate of silver 12 USD will reach. Everything
_ 14. Attitude of mind 91
Fundamental data say, that silver must rise. All my technical tools say,
that it is over-sold. I will begin buy and each mark buy in addition, should have done it here
to a new low come ". That was in the year 1988. It has since then regularly silver
bought, because it is " absolutely over-sold ". It has regularly into later delivery months
changed and is now with 900.000 USD in the loss as I recently with him
said he spoke: for " you can be appropriate man, if you have money, always correctly ".
I assume that he could have enough money. If silver ral-read makes, then they bring it
much, because its average cost price are too high. Surely, a daily becomes
the rate of silver stop being over-sold and the price will rise to 12 USD.
Perhaps my friend is presupposed then again the break even point to reach -, silver
before the neck does not break to it. Hmm - I ask myself whether he tonight well sleep
becomes. Silver made straight again a new low. It is now under 4 U$D.
Me of all the people, this year the British Pound reminds with a level of
1.80 USD sold, because it was over-bought. Now the Sterling with 2,00 USD. flirts
I do not admit, I am an exception. I was move enough, crude oil PUTS to a base price
to buy from 18 USD to, when the crude oil reached 28 USD, because it was so over-bought. With
35 USD
it was then surely over-bought. Didn't all oscillators say that? Now is
the price with 40 USD and my PUTS will probably worthlessly purge. I ask myself whether
it is over-bought now?
One can hope, by what one sees on a simple Chart, the truth to
next to come, except natural, we are like the old Trader, those, by them only that
Read course volume or knew the click-hereditarysaved observed, what in the markets happened.
There is still some these gesegneten souls among us. They make far their money into that
Markets and enjoy about what they do. Of them we could do all or two
thorough lessons learn.
Reading the course volume seems to go the same way as all good things. It becomes
to a lost art. These old professionals know the market with one click-hereditarysaved
successfully in the cash transaction act. It shames me, if I imagine that I forwards
an expensive computer sits, extraordinarily expensive course data uses, still more expensive
Stock exchange fees to pay must, and not able are, only a little better to act than
the Trader, which are limited to reading the numbers. They do not need
Fundamental data, no technical indicators, no cycles, no Saisonalitaeten, none
Star phenomena, no oscillators, no sliding averages, no Parabolik, none
Trend channels, no speed LINES, no head shoulder formations, no Pitchforks, none
Fibonacci, no Elliott waves, no Fraktale, no chaos theory, nothing of all that. It
make themselves only profits, based on truth - the truth, by the movement the that
Quotations reveals.
My best advice at everyone, which would like to act, is, to work and learn on it, how maert
the simple course movement interprets. Learn to read these and you learn too
recognizes, what says it.
92 14. Attitude of mind _
The problem with most technical instruments is that it the minuetlichen details
it away-smoothes and these are exactly that, on which I in my Trading respected. I know, possibly
someone will say to me that I do not have to react to each small fluctuation of the market.
But which make young down on the parquet? They react to each detail. They have
no sophisticated studies before itself; they know only, where the quotations are, and they win,
and most different not!
The parquet dealers must pay attention to each detail. They must the quotations on that
Course boards observe. They must decide and react to that, which happens, and which
most of them bring their bread home. If they do not create that, they become soon
no more parquet dealers its. The parquet dealers make their money, by them those
Quotations observe. Old veterans, who observe the clicking hereditary rescuers (it gives still
some of it - I mean clicking hereditary rescuers - no, I mean both), make money, by her those
Quotations observe. But many the Trader, completely proudly on their refined electronic
Equipment are, lose house and yard
We keep in memory, and look ourselves we now some additional refinements
15. Selection of the best positions
For each Trader it is of enormous importance that it learns, the optimum positions too
This identification of potentially good positions can itself from a person to the other one
differentiate, since we bend all to see positions different. Which for one how
a consolidation looks, sees for another more after Volatilitaet out, and so on.
But everyone can learn recognize, what passes in a market and the condition for
successful business creates.
After one recognized or two methods and techniques, those steadily
function, are very important to adapt these in such a way that it within the personal
Reference framework, the attitude of mind and the mentality of the Traders to the highest
Probability of profit to lead know.
We do not act all directly. That is the reason, why it is obviously ridiculous, itself
to ensure over it, how much persons buy this book and will use. The stops
all are not placed at the same level, because each Trader behaves after one
differently large accounts have other level of risk tolerance, all Trader and everyone
feels comfortable with different contract existence. Also it is probable,
that to a certain measure in different markets one acts, because the personal
Perceptions over what is tradable, differ from Trader to Trader.
I can come to meet my readers only so far, by showing exactly, what for me
is comfortable. They know then my methods according to their own mentality
The trick consists of identifying success and at this sticking remaining. If something
functioned, then one does not change it. I do not experiment with something, the money bring.
I remain with the best positions, which I can find. There is no reason, behind one
To run market. I am slow, if I enter into a market, and I am fast,
if I step out.
If I am convinced of a business not absolutely, then I do not engage myself. If
a market not accurately so developed, as I like it, then I stay away myself from the market. I
wait for such business, those accurately my specifications fit all different leave I
pass. If I cannot act today, which makes it? The market likes for someone
others the possibility offer, a fortune make - no problem for me. I
discipline me to know my business and then I take only these positions.
I do not permit that greed takes possession of me.
How does a good business look? Let me you show, how it looks for me. It
may be not exactly the same like what could like somebody else, but it will be similar.
94 75. Selection of the best positions
Fig. 42
In 42 Rohoelchart shown in fig. I am interested in a business, on one
Outbreak from the consolidation bases itself, next to the high of the
preceding daily occurred. The prices had consolidated scarcely before the high and
before commercial conclusion again into the consolidation range had then dropped back briefly.
On the next morning the prices opened lower. By a bundling of closing prices
on the same level as the group of the flat highs of the vortag plus the high, that
from a short outbreak, formed a square, box shaped formation resulted
the prices, since all these quotation staffs within the same range consolidated.
In accordance with mine in the preceding chapters, I would like formulated plan one
Outbreak out of the consolidation act, at the next for the high of the vortages
formed. If it is somehow possible, I do not wait for the fact that the high
one takes.
15. Selection of the best positions 95
Why? I would like to already be in the market, if and if the high taken from yesterday
becomes. Why would I like to be positioned in the market already before? But there are two
1. If the consolidation is broken through upward, then is the probability
largely that the prices will test further to rise and the high from yesterday. If that
happened, I can realize a small profit. I become also in the case one
Early start have, if the prices rise, the high from yesterday to break through and itself
move still further more highly.
2. If the prices take the high from yesterday, then that is exactly the place, to the one
whole quantity of buying orders will come into the market, there many Trader usually their
Purchase stops at such points place. The momentum, which these purchases will release,
it pushes the prices still more highly whereby I with such an event a outstanding
Chance has to make my large profits.
A detailed view of the Chart will show exactly, what happened.
15,1 control rooms on the correct business
The whole idea, which stands behind my Trading, is that it does not constitute me anything, a small
To take loss or to have perhaps only costs, if I for it in the moment in
Market to be can, in it begins to run.
Normally I am not out-stopped with a loss, my whole
corresponds to received risk. If the markets from a consolidation range
break out, point they to usually sufficient momentum to over to guarantee that I
at least to cover knows my costs with this movement. Then become I mean stops on
the break even point draw, and I am not hurt, if the quotations again
drop back. The purchases or sales should be sufficient, those in the place of the
actual outbreak into the market get ahead, around the quotations little
carry, then I will settle mine second contract.
In the case, in which the quotations have sufficient momentum and which continues to run market,
I am gotten with my third contract mine portion of the movement.
Do I expect to get everything up to the profitabelsten point of the daily? No. Everything which I
would like, is a piece of the movement. Sometimes I get more, sometimes less, but
at least I am gotten something. With a whole heap of these pieces earn
I mean living costs.
It often occurs that I am out-stopped, and few or nothing at all for by me
received risk gets, and then to see must, how the market expected in from me
Direction runs. Will I then chase to the market? No! If it does not happen in such a way,
how I would like it, then I forget the business. The business must be my business. It
must happen in my kind, according to my plan, or I would not like anything, all the same which
in the following happens. None " however if ", no " if only ". My way or no way!
96 15. Selection of the best positions
I will show another position now.
Fig. 43
If the courses from the consolidation level of the framed ranges upward
it breaks out then the probability is large that they will test the high.
Which I would like to see on the next commercial day gladly, would be a somewhat lower opening,
followed of somewhat more trade on the height of the framed level.
An outbreak would bring me into the market, and I would have sufficient area between that
Outbreak level and the high, in order to cover at least my costs. If the courses
continue to rise, could realize I a profit, and if the market runs, I become one
strong profit realize.
If it does not happen on the kind expected by me, I let the business pass
75. Selection of the best positions 97
Fig. 44
The framed ranges show a critical consolidation range.
The first box shows that on this price level much was acted, and briefly forwards
Commercial conclusion formed a wimpelmaessig formed correction.
The second box shows that the prices on the following day for market opening this
Consolidation again continued. It would have been a good business, a purchase position
to be received an outbreak from the consolidation shown in the second box. I
ignore the point highs and/or point low (spike). Which me those is interested
Fact that the prices were so often acted on the same level.
The third box shows that the prices later on the day again on the old
Consolidation level were acted, after they had reached the daily low now.
98 75. Selection of the best positions
The lows in the fourth box are approximately in the center of the consolidation,
which one can see in the third box. With the outbreak from the consolidation, those that
fourth box framed, one could have died an empty sales position. As one see
can, the prices submitted a pretty movement. Although the gold price did not run, so
realized I nevertheless I with all three contracts a profit.
The fifth box shows the consolidation level, which developed at the end of the daily. It lies
approximately on the height of the earlier consolidation range, which is to be seen four in box
I would not enter on the following day a purchase position, exclusive with one
Outbreak from the consolidation is based, which one can see in box five, because it is not
the consolidation, which is next to the high.
Fig. 45
Instead I would wait for further developments. I would want to see it that still
once at this level one acts. And then I became the outbreak from this
Range act, which offers itself best.
75. Selection of the best positions 99
Fig. 46
Fig. 46 shows a nearly perfect business in the S&P 500. The left box shows that those
Courses before commercial conclusion consolidated briefly, after they had reached a high. To
next morning opened the market more highly with a quotation gap, and the courses fell
then again back into the consolidation range. Afterwards the courses for one varied
And they finally broke while then from the S&P ran up to the commercial conclusion.
100 75. Selection of the best positions
Fig. 47
Although I do not act the bonds after one five-minute-nC-hard, then I wanted nevertheless
shows this classical example, because it explains about what I speak. It happened exactly on
one day, when there was enough activity in the bonds, thus itself the courses on a FuenfMinute-nC-hard " form out " could.
J5. Selection of the best positions 101
Chartformationen preferred 15,2
Best please me box shaped, flat, jumping consolidations
Next I prefer myself consolidations, on a same quotation level
repeat. Examples of it are the S&P Chart and the Goldchart in the preceding
I make sure that the box range, measured stretched from the high to the low, not too
is. I ignore point highs or point lows and see it dearest, if itself those
Openings and conclusions, the highs and the lows of the individual five-minute staffs
altogether within a narrow range bundle.
I am made possible for the opinion that it is necessary to have a software it that one
to at one time see knows at least three days of commercial activity on the screen. That
meant that it is possible, at the same time 240 five-minute staffs on the screen too
see. Then one can recognize on a view, where itself the daily highs and low that
last three days find. Alerts can be set then accordingly.
16. The third contract
If I with the first contract my costs covered and with the second contract
a moderate profit realized, which happens then with the third contract? How
do I act this?
I would like to be in the market, if he runs. Most large profits develop, if that
Market runs.
Here is my method: I am fast to take profits around my costs too
cover. I call my broker, as soon as I see that my position a profit of
about 100 USD close comes. At this time I liquidate the first contract. I move
at least one of my remaining contracts to the break even point. Usually
I prefer it however to secure both contracts at the break even point with a stop.
It is a question of the mentality. I become frequent the second contract as well as that
First liquidate.
If I not already liquidated the second contract, then I place him smoothly, as soon as I
further approx. 100 USD at profit see. In the case, in that the market itself no longer further
moved, I am probably out-stopped at the break even point. This happens relatively
frequently. The market could move on then without me in a profitable direction. That
does not disturb me.
I would take about 100 USD profit with my second contract and with third
Contract to be out-stopped case it comes in such a way, I nothing lost. Paper gains are
only paper. I cannot bring it to the bank.
However two or three times in the month, sometimes more frequently, a market a good movement
have. That is it, on which I wait. I remained with patience in the water. I have everyone
Times, if I act, it means toe in-dipped, in order to see whether today my day is
While I waited for my day, perhaps I lost a few dollar, or
I won a few dollar.
On the days, on which the market runs and I created it to remain in it becomes
my stop at the break even point held. Now the market begins itself, into one
To move direction, which brings me profits.
Am I gotten the whole movement? Probably not. I will create it, those
To recognize pointed one or the low? Surely not, I would not even try it. I
will be content, if I make a profit. Profits to make is the goal of mine
entire plan. Why am I here? In order to make money - however not, in order to suffer thereby.
Have does I mean position made understandable? Then it is good. Leave they me the saying
in the context of a further example summarize.
16. The third contract 103
Fig. 48
A - the high from yesterday shows. B - the opening from yesterday shows. C - those shows
Main consolidation, which is at the next at the kursniveau of the high from yesterday.
CD - the kursniveau, at which I bought, shows exactly over the high of the consolidation
(I should have somewhat in former times entered, not completely there but I was and bought only
at the high).
E - it shows that I my initial stop 12 points per contract under my entrance
placed. F - the kursniveau shows, at which I with the first contract my costs
covered. G - the kursniveau shows, at which I with my second contract of profits
made. H - the kursniveau, at which I was forced, with the third contract shows
To take profits.
104 16. The third contract
The sequence I-K is practically a repetition of the sequence AH, and it should so far clearly
its, which happened. The sequence I-K will be the introduction into the next area, over that
I to write would like.
Fig. 49
I do not take always the additional contract set, to its trade one in the sequence I-K
to see can. Yes, I white, I made, correctly thereby a large part of my profit?
Correctly! But that was also the position, with which I was received additional risk. As
I at the point I with the second set of contracts had entered, risked I that I
everything that I had earned in the sequence AH, again to lose could. That must also
are taken into account. It is part of a good risk management.
As is possible it me to estimate, when I can die this additional risk and
when not? I hate it nearly to say it but it has to do something with waves. However, if
16. The third contract 105
it turns out that it has to do something with Elliott waves, then believes you to me, which is
pure coincidence. I do not take Elliott waves seriously,
Normally I act additional contract sets (i.e. continuation positions) with that
Outbreak from the first consolidation after the first upward leg of the market. But
not always. The sequence I-K is a continuation of the second upward leg of the market. I
immediately thereafter one return.
Fig. 50 shows, what I mean:
Fig. 50
There are however exceptions, and therefore I said " normally ". I must those
Time in the eye keep. I must be safe that I die such a position only then,
if the market, which I would like to act, is opened still at least one hour. This
Business is best, if they happen early on the commercial day.
Everything clearly! Thus why I acted in the business, which I had shown, not second
Outbreak from the correction, which had developed at the point G? Here is the reason! I take
such outbreaks then only if the second consolidation is relatively flat. I take that
Business not, if the consolidation looks like a flag (fig. 51). I lost very much
Money, until I had found that out. I cannot say how much. But you believe, it to me
was a quantity. On the other side, I should say to you, " why ".
If a flag formation developed, then it looks in such a way:
Fig. 51
In a downward market it looks exactly the same, only then the flag blows above.
106 16. The third contract
The problem with this formation is, there it a serious back setter of the market
it represents that the quotations must use a large part of their momentum, only
so that they the point of the flag again to reach can. There it usually does not become then
give more enough momentum, which the quotations drove on. The quotations become
consolidate probably only again.
If the quotations however an l \ l \-Formation or one \ / \ / - formation formed,
then the thing looks differently. Then it would be possible for the quotations, itself a good piece
to move further.
I legend that I would like to see more consolidation, before I am ready again in the risk too
go. Particularly close consolidations please me. I mean also close that I a larger
Consequence of individual quotation staffs sees, their points, lows, openings and conclusions
on approximately same levels are.
An exact view of the Chart will show that I for this reason only the outbreak out
the next consolidation acted, which formed after the flag.
Let us about continuation positions with a third outbreak speak. The rule is
the same: It must be present at least still another one hour commercial time in the market,
if these outbreaks come. The outbreaks must from the preceding
Develop for consolidation.
I never take, under no circumstances, a fourth outbreak, all the same which happens.
Remember, I must my position to the commercial conclusion settle. The days are
rarely, at which a market will offer a fourth outbreak. Until then it becomes however too
late on this day its, in order to risk a business. Usually fourth drove
Outbreaks also not far. Elliott fans have for it probably an explanation. Whoai
Do not say it to me, I would like them to know. Fig. 52 shows you examples of those
Flag formation.
Fig. 52
16. The third contract 107
In addition, it can be acceptable to take a flag outbreak as the first entrance.
To fig. 53 I point you by an example, what I mean.
Fig. 53
Sometimes it is best to wait in peace for the closest consolidations itself
occur. The close and flat consolidations are the best. They save a quantity
Concerns and annoyance. Most of us already saw it.
108 16. The third contract
Fig. 54
I learned it to pay attention to this kind from consolidations to. They are a quantity money
worth. Up to now everything that I showed to a large extent, is in tending upward
Happens to markets. Can I somewhat for the fact that everything rises, while I write this?
The accurate opposite above of the saying applies to markets tending downward. The flags
blow then upward instead of downward, but they convey nevertheless the idea.
Upward market, downward market, it is everything the same. That is one of the reasons for that
Futures Trading, not truely? Downward, upward, it does not play a role. I know my money also
each direction earn.
After I now showed, how one acts continuation positions, I can to one
new topic come, which is in reality an old, revised topic Commercial strategy and tactics.
17. Strategy and tactics
I have mean plan shown. The plan shows my strategy in the markets. Strategy is those
Planning and controlling of my commercial operation. I plan, at certain quotation levels
To take profits. I plan to cover my costs. I plan, mean third contract
run to leave. I plan, how and where I will die continuation positions. I point
mean brokers on to implement the orders which I place.
Tactics however is the way, with which I mean positions into and around consolidation ranges
around arrange and maneuver. By tactics I set myself in the markets themselves into those
best position, in order to draw advantages from the quotation movements, those by the momentum
the market develop
One sees my tactics in the methods, which I for my order placing, my
Stop placing, my profit-takings, etc. uses.
In this connection strategy is the planning and controlling of my positions, against which
Tactics for their execution and movement to be used.
17,1 continuation business
I showed, as and when I a continuation business (CONTINUATION trade) on one
Five-minute-nC-hard will be received. I become an outbreak from the next
Consolidation, which comes to the first outbreak, mean initial act
Entrance generated. It must be remaining still at least one hour commercial time, thus I one
such position is received. I become a further outbreak from a following
Consolidation act, if for it still enough commercial time is present. Summary:
On only one day I will not accomplish than three business in a market any more,
those in the same direction go.
It gives a few additional criteria for continuation business:
Normally I die a continuation position only if itself my third
Contract in the profit finds and not by a back setter or a correction of 50 %
one out-stopped.
The best continuation positions develop at the points of the Ross hooks. If a hook
a flat high or low has, then you may not expect that the continuation so far
like it with a Ross hook will be formed, the one pointed high or low will lead
17,2 reversal business
Is there one time, on which I will turn the direction of a position? Yes, it gives
Sometimes a market will make one external day (outside day). That means, the market
the high from yesterday could take, toward it the direction turn, and then the low of
yesterday fall below. The external day can be so long from its high to its low,
110 17. Strategy and tactics _
that it takes the highs and lows of several days. I pay attention to such a day, if
in the markets prevails to feverful activity.
The rules for a change of direction are identical to the rules for the Trading into one
Direction: I act those with an outbreak out of the longest and closest consolidation,
before an extreme occurred.
It can be that I early on one day hold a purchase position, and later am I
then in a sales position. It can even occur that I the market in the run one
Daily of three further marks in the opposite direction to my initial position
I do not speak here about the reversal of a bad position. In addition I come later.
About what I speak, flexibility is in my planning. Which I would like to say am that I one
Attitude of mind needs, which realizes that such things can occur, and that I
a plan need, which permits such eventualities. On one external day I do not become
my tactics change. I die further positions and place positions smoothly, but my
Strategy prepares me for it, which is to be done to a situation in such
17,3 quotation gaps
How do I deal with quotation gaps (gap)? If the quotations my
Entrance consolidation with a quotation gap break through, then I leave the business
pass. But if the prices drop back again into the consolidation and then again
break out, then I act, as I had originally planned it. In fig. you see 55,
on which I respect:
Fig. 55
Consider, those quotations must at or in the proximity resemble again
Quotation levels consolidate, where they did it also at the vortag. The preceding,
parallel consolidation can be past up to three days.
_ 17. Strategy and tactics 111
There is a further way, as I after a gap opening will act, I goes into
this case a position, if the quotations with a gap open, then by one
preceding sliding zone correct and then again in the direction of the opening
break out.
Fig. 56
What will I make, if it comes to wrong outbreaks? I become this last Chart
to fig. 57 again point.
Fig. 57
17,4 first outbreak and second outbreak
The second entrance attempt shown in fig. 57 brings us to a further point, the mine
Trading concerns.
There is a more conservative way to act these outbreaks out of consolidations itself
before the actual point of outbreak occur, which is based on an entrance signal. I
explain better more in detail.
112 _ 17. Strategy and tactics _
I am ready to enter a position those with an outbreak from a consolidation
been based, if I can assume that this will be an outbreak, that those
Requirements of one of my entrance signals will fulfill. For example a market stands
briefly before breaking through the high of a sliding zone. I look for one
Consolidation, which takes place briefly before this outbreak. Up to now I showed that my
Technology exists to act the first outbreak out of the consolidation itself forwards
the middle ones or large entrance signals formed for the actual outbreak from one
A more conservative beginning is it however, the second outbreak from the consolidation too
take. A quantity of good business is missed. But also a quantity becomes
short term back setter avoided. In fig. I illustrate 58, about what I speak. Partially is
it a question of the perception.
Fig. 58
Consider, which must fall below second outbreak the low of the first outbreak.
The Rohoelchart in fig. 58 shows that the prices on the level of the low of the preceding
Daily at the point A consolidated. Afterwards they consolidated for commercial opening to
next day again at the point B. as the prices the consolidation lows with 3260
broke through, would have an empty sales position with the first contract for kostendeckung
led and for the second contract a profit of approximately 10 points would have resulted. Those
following short Rally would have reached that stop at the break even point and the business
would have been past. Thus it actually happened, when I accomplished this business.
_ 1 7. Strategy and tactics _ 113
If I would have waited however for the second outbreak, which is to be seen C at the point, then
would be
the results for the third contract better failed, even if the entrance something
lower, with approximately 3240, would have taken place. Sometimes there is no Reflexrally or
Reflex correction and this kind of business are missed perfectly. But if it to one
Reflexrally comes, and then a second outbreak follows from the Konsoelidiefuengsbereich,
then the chances for profits are higher.
The Trading of the second outbreak goes hand in hand with my small entrance signal,
and thus the last example transfers outstanding into the next topic.
But before we come to it, I would like the Chart of this picture-bookful business
show, which I write straight in the gold market, on the day as I this, made (fig. 59).
Fig. 59
18. The Trading of the small entrance signal
About the small entrance signal I spoke the last mark in detail in section 5. I
again the signal would like to repeat and you then show, how one acts it. It is
however not my preferential commercial signal. I became always each large one or middle one
Signal prefer.
18,1 small unity stairs signals
In the following I describe my small entrance signal. Its use is released.
An outbreak from the first commercial consolidation, itself after the market opening on that
Chart formed, generates the signal. This applies also, if the today's consolidation one
Consolidation continuation from the preceding day is
There is here an option: I know either first or the second outbreak
out of this consolidation act. If I take the second outbreak, then I act those
more conservative of both methods. It behaves as with the signals of higher
Priority; the second outbreak is safer, but one often misses the entire movement.
I tend to take the first outbreak if itself the consolidation very much into those
Length pulled. Otherwise I draw a second outbreak forwards
Frequently the first outbreak exhibits not very much thrust, except it lies one
Continuation consolidation from the preceding day before
In the case, in which the first consolidation with a larger commercial signal coincide,
it is acted after this. Otherwise it is acted after its own nature. One
such consolidation occurred in the gold market on the next morning after the beautiful
Goldgeschaeft, which I showed in fig. 59. Fig. 60 shows, how the consolidation looked.
_ 18. The Trading of the small unity stairs signal _ 115
Fig. 60
How one can see clear, so far nothing happened. So far only one develops
Consolidation. It is not the consolidation, which is next to the low, because
such lies below the current consolidation. At the current time I do not have
Notion, in which direction - if it in addition comes - the outbreak will happen. For
the remainder of the daily the market could be acted also further sideways. We become
sees later, what actually happened. For the moment however is not the market particularly
tradable. I now a gradual upward motion to expect, followed of one
Market reversal, which breaks through the lows. But as Prophet I tend to it, wrong prognoses
to give. If it concerns my actual Trading, I would here probably not act
look and for better situations.
116 _ 18. The Tradmg of the small unity stairs signal _
Fig. 61
How one can see, much did not happen. I wait for thrust, which I so far however not
_ 18. The Trading of the small unity stairs signal _ 117
Fig. 62
There could have been possibilities here, if the market first downward drifted and then
by the consolidation would through upward have broken off a Ahwaertsausbruch
I would act only then, if the market by the extreme lows of the consolidation, those
next to the lows from yesterday are, acted would be.
118 J8. The Trading of the small unity stairs signal _
Fig. 63
The outbreak comes late on the day, too late, in order to be able to expect much from the business.
I did not act this outbreak, since he took place too close at the range of the supporting.
_ 18. The Trading of the small unity stairs signal _ 119
Fig. 64
Today there was no business in the gold market. But we look times, what on the next day
happened (fig. 65).
120 _ 18. The Trading of the small unity stairs signal _
Fig. 65
Let me explain, what occurred.
Early to tomorrow I stated that my ratio system did not function. The signal indicator
each received signal announced according to and clearly, but due to one
Transmission problem were there no optical signals.
The market opened o'clock at 7.20 a few points more highly - however lower than the Chart shows.
Since the price transmission began only at 7.56 o'clock again, had I sieve quotation staffs
on the Chart misses. I spoke with my broker, in order to examine the price history,
and it said that the market was easily more highly acted after the opening.
Short time began later to fall the market. I placed a stop order for one
Leerverkauf exactly in the place, where I would have done it on the preceding day, i.e.
exactly under the small, narrow, framed range. The remainder is self-describing. The market
did not run, but I made profits with all three contracts.
19. Logic of the Tradings
Behind my kind to acting is a definite logic and reason. I become these
Point in this section explain. By explaining, why I make, what I make,
will it you perhaps possible to add it me.
At the beginning of this book I mentioned the fact that the most fundamental concept which is shown
will, of it consists, recognizing how a Chart looks short before an important outbreak
In the next chapter I become you as a kind overview for the commercial method, which I
so far presented, numerous examples of it to show. But first you leave me my
Opinion over it explain, what happens in the markets, and why I after from me
selected method act.
19,1 points of pivot
Since I do not have the advantages, which the Trader on the parquet has, I am forced, those
Disadvantages, which the Trading brings after a course transmission system with itself, too
compensate. I mentioned this in one of the first sections of this book.
I pointed out that I cannot use the same points of pivot, those that
At the disposal are to parquet dealers, because my Trading is in contrast to the correct
Live Trading, which takes place in the boersenring, an inevitable time delay
Here is now my version of the happening - it is based on it, like I the happening on that
Parquet visualizes.
If I see groupings of openings, conclusions, highs and lows, itself on that
resemble quotation level bundle, whereby to or two Ticks come deviation
it can then I notice that these the natural supporting and points of resistance down up
the parquet are. I call it points of pivot. I explained already in earlier place that I
these points not to act knows. That is because of the fact that itself the quotations within of the
Period, that of my reaction to the seeing up to the arrival of my order up
the parquet can offense, be able from these levels crucially to move away.
Fig. 66 shows, how these consolidations look:
122 19. Logic of the Tradings _
Fig. 66
If these events in the proximity of one of my points of entrance signal take place, go
I of the fact out that one of two things will happen:
1. The parquet dealers will push the quotations up to the bend point and then
stop moving the market. In other words, the quotations become one
high or deep point of signal test.
2. The parquet dealers will push the quotations up to the bend point, and then
the public will move the quotations beyond the extreme. With others
It will through give an outbreak to words, here by one point of signal.
My technology consists now of concerning these consolidations from both sides. If
the quotations begin themselves to move, then I will lose the points, those those
Parquet dealer between the center of the consolidation and the outside borders that
Consolidation to earn know. Due to the time delay, I am exposed to which, must
I give these points to the parquet.
If the parquet dealers continued to drive the quotations up to the extreme, but not, then
I can expect to make with the distance a profit between the outside
For borders of the consolidation and the bend point is appropriate, which represent the entrance
Which happens at the bend point, then each additional Profitabilitaet of the position determines.
It is important to follow what I describe now.
So that this concept can function, the distance between the outbreak from that must
Consolidation and the bend point sieve at least to ten Ticks amounted to.
If it comes to the outbreak from the consolidation, then I usually become my
Position with three contracts open. As soon as I in this business 70 to 100 USD on
Profit sees, becomes I an order the settlement of one or two to contracts
give. Occasionally an open MIT order (market if touched) at the quotation level has
lie, at which I will be 70 to 100 USD in the profit.
_ 19. Logic of the Tradings 123
In this situation, in which I liquidate two contracts, has I mean costs covered and
a small profit earns. Now I move immediately my stop for the third contract on
the break even point.
With the outbreak, which gave the entrance signal, I will make money, there then those
Public into the market comes and the quotations continues to push.
We remember that my large ones and middle entrance signals on the Tageschart
meet with bedeutenen events. Thus a realistic expectation develops,
that with the outbreak from one sliding zone, 1-2-3 a high or low, a Ross
Hook, a border, the highest high or deepest low of the last three commercial days, that
Highly or low from yesterday will enter, etc. the public into the market. Those
Public are position Trader, daily Trader and Day Trader. Their market entrance becomes
the quotations of far in the direction of the positions drove, in which I already positions
are. Their market entrance is presupposed me for some my contracts profits to give, I
are engaged and with my third contract one do not out-stop still, if I these
at the break even point secure.
It will frequently occur that I with my third contract at the break even point
one out-stop. That is not a problem. I do not have always, if I shoot, one
Direct hits land. I am covered at least my costs and a small profit
realized. I will be alive, and I will be ready, it for a later
To try time again.
If I see for my third contract further 70 to 100 USD profit, mine becomes
Verlustbegrenzugsstopp to a profit taking stop, by I fifty per cent of mine
Paper gains safe. This stop in most cases becomes briefly after its placing
activated. I am content with this situation. I do not break myself the head over it,
how much I could have earned, if I had remained in the market or stop further
would have left removed.
Several marks in each month will not take the quotations off and no more
back-look. Those are the cases, in which the market gives me a fat profit. If that
happened, I follow the market movement with my stop temporally either by means of one
set forward sliding average, which covers the movement well, or I place that
Stop scarcely outside of the natural supporting or points of resistance.
On well defined Ross hooks or borders consider I the admission of
Are always conscious of continuation positions, but I me over the fact that additional contracts
additional risk contain. Continuation business always carries the risk in itself that I
everything loses can, which I gained so far so hard.
On the time, on which the public comes into the market, I have opposite that
daily Trader the same advantage attains, as the parquet dealer has him over me. In that
I placed thereby the daily Trader to act into the shade that I the outbreak out
the sliding zone act, those briefly before the outbreak by the extreme (mine
Entrance signal developed). The business ends with the fact that I sell, if the daily
Trader buys, or that I buy, if he sells. In the case, in that the market entrance that
daily Trader sufficiently thrust generates, around the quotations strongly in the direction of mine
Position to move, will throw my third contract large profits off.
20. Concrete examples
I act the outbreak briefly out of the consolidation, those before one of my entrance signals
lies. To what do I particularly pay attention thereby? How do these consolidations look? The
becomes many successful commercial opportunities drove. Watch out well.
A market open with a quotation gap and looks in such a way:
Fig. 67
The fig. 68 and 69 show further examples of Intraday entrances:
_ 20. Concrete examples _ 125
Fig. 69
The next three Charts (fig. 70-72) show entrances, those with each large one or middle one
Signal to be made.
Fig. 70
126 _ 20. Concrete examples _
Fig. 71/72
_ 20. Concrete examples _ 127
Fig. 73 shows one of the best business, which one can make: A far consolidation,
followed of a " bang ", followed of a close consolidation. This kind of signal leaves
with each large one or middle entrance signal act.
128 20. Concrete examples
A summary of the tradable samples follows:
The market opens with a quotation gap by the high from yesterday, which
but under or is appropriate for several of the highs of the past three days (picture
Fig. 75/76
_ 20. Concrete examples 129
A quotation gap, followed of a Reflexrally by the consolidation, itself
next to the low of yesterday, and then an outbreak from that finds
Consolidation. A position could also with a break-through by the low of
yesterday, in the following the outbreak from at the next to the low present
Consolidation, to be received (fig. 77).
A quotation gap, followed from a reflex correction to the highs that
Consolidation, which is next to the high from yesterday. Today it comes
then to a consolidation, and afterwards an outbreak follows from the today's
Consolidation, which is more near because of the high from yesterday than the consolidation of
yesterday. Act the outbreak out of the consolidation lain more highly, if those
two consolidations, measured from the high to the low, equivalent highly are otherwise
act the outbreak out of the closer consolidation (fig. 78).
Fig. 77/78
130 _ 20. Concrete examples _
Fig. 79 shows examples of if the quotations on a new high for the last three
Days open:
Gap opening to a new high
for the last three days. No reflex correction
into any preceding consolidation
the last three days. NO BUSINESS!
Gap opening to a new high
for the last three days. Reflex correction to
into the center or up to the soil of
a preceding consolidation that
last three days. THIS BUSINESS IS O.K.!
Gap opening to a new high
for the last three days. Reflex correction through
a consolidation of the last three days also
a following outbreak back into those
Direction of the gap opening. THIS BUSINESS IS O.K.!
Liickeneroeffnung to a new high
fiii the last three days. Reflex correction into the center,
to the soil or by a consolidation that
past freely day. Whereupon today one follows
Consolidation of approximately same height.
To empty sales positions the reversal of all applies.
Fig. 79
_ 20. Concrete examples 131
Fig. 80
20,1 summary
If there are two consolidations, those from its high to their low of approximate
same height are, then we would like the outbreak from the higher with purchase positions
act and with sales positions the outbreak out of the lower act. Thus
we avoid it, in above ohmic range or in one
to act underlying supporting range. Are the two consolidations however
by sufficient Ticks from each other separated, then it is into order, with expectation Kaufoder
To place orders to sell that we liquidate the position if those
Quotations under it or over it lying consolidation range reached.
21. Trendfindimg
This chapter shows a method to find a trend if it is still young - straight,
if it is born. In the course of the next sections of this book I become you
Variations to this method show and to it develop. The variations consist of it,
as I count the quotation staffs. The variations too more or less lead
Commercial decisions. In this section I begin under use of the S&P 500 also
the most conservative method. Several sections I become later with to few
conservative method stop, again under use of the five minute Charts of the S&P.
The difference arises as a result of less (more conservatively) or more business (less
conservatively). Which I show, step for step will transfer into the segment counting.
We regard the Chart in fig. 81.
It would not be marvelous, a such pretty trend in the S&P
to carry forward? Retrospectively it is really simple ', this trend
to regard and say, " with this movement I would have?iel
Money to make know ". To recognize trend,
if one regards it retrospectively,
is the lightest thing of the world.
But there is a way,
to discover it in former times?
As one would have into these
Movement in former times to enter know,
perhaps in former times as each, others?
l it gives a way, which I you up
the following pages will show.
First I become the parts of the Charts
cut off, which we not
to regard must. And then become
I increase the Chart, so that I
Them to show can, what I mean.
2,389 10 11 12 l 2,389 10 11 12 l 2,389 10 11 12 l 2 3
Fig. 81
1. Trendflndung _ 133
I will begin with some very simple rules: I must see three quotation staffs, those
in consequence made higher highs. If I see, I will try, with one
To buy outbreak by the third high. If I cannot enter, because the market after
the third high corrects, then this third staff becomes the point of a Ross hook
constitute. I will then buy, if this point is taken by the market. Mine
initial stop is placed under the low of the last correction. Afterwards it always becomes
exactly under the last correction pulled tight. I will cover my costs, as soon as I four
Ticks in the business has.
As you can see 82 in fig., I had bought, as the courses the high of the third staff
from sequential higher highs exceeded. I bought in the place, also
" purchase is marked
11 12 l
Fig. 82
134 1. Trendssndung _
Consider that I was short after my entrance able, in the S&P with four Ticks
to cover my costs. Here I acted then " freely " of costs. With that
a two-staff correction, those did not begin next quotation staff my stop however
reached. If the correction had long lasted four staffs, I would have if I not
my purchase position would have become already out-stopped settled and would be the market of
the sales side concerned. If it with the fourth staff going into a direction too
new highs or lows comes, then I regard this staff as the beginning of a new
3 8 9 10 11 12
Fig. 83
1. Trend identification _ 135
After an upward trend was established by four quotation staffs, I regard everyone
Movement downward as a correction. If I see a correction, then I try
to be received my position at the outbreak from the extreme of the correction staff. In this case
I would try, with an outbreak by the high of the first downward correction staff
to buy. It does not come to an outbreak by the high of the first correction staff,
then I would try, with an outbreak by the high of the next correction staff
to buy. In this case I got an execution at the outbreak by the high of the
second correction staff. I marked this point with the arrow. The outbreak
happened at the staff, that followed after the second correction staff. After I mean
Execution had gotten, moved I, to be seen as on the Chart my stops more highly.
< - ' - all stops here
2 3 8 5 10 11 12 l
Fig. 84
136 1. Trendssndung _
I did not act the next correction. With all honesty, I had the feeling that this
Business to be to risky could. The market looked in such a way, as if it would make a summit.
At the time, when it came to the next correction (an in staff correction), saw that
Chart so out, as they can see it in fig. 85. How one can recognize, were those
Courses still in a sliding zone, and although I would have not very much money risk
must, then this was nevertheless not one the most inspiring Charts, which I had so far seen.
I had the feeling that it would be better to wait for the further developments. I hoped
on a good outbreak from the sliding zone, in which the market was straight. So long
the upward trend remained however intact, admitted it no reason, my open positions
Fig. 85
21. Trend identification _ 137
Suddenly the S&P began to move. The market made three large upward staffs,
whereby it with the conclusion of the third upward staff to an outbreak from the sliding zone
came. I waited now for reflex correction. If the quotations from a sliding zone
break off, it very frequently to a kind of correction will come. I now was
decided not to miss my chance to the position enlargement I caught with that
Attempt on, with outbreaks by the highs of the correction staffs DO buy I got my
Execution in the place shown. As soon as I mean costs had covered, I moved waie
shown all stops.
Fig. 86
138 1. Trendflndung _
I marked in fig. 87, in which places I mean position increased, and like I
up to the final dissolution of position late by day my stop pulled tight.
Fig. 87
Here are some clarifications. If a quotation staff a new high and also a new
Makes deep (external staff), then regard I this staff not as a correction staff, except those
Closing quotation of the staff is below from the low of the preceding staff (that
Opposite would apply to an upward correction in a downward market). If a staff
an interior staff is (high and low of the current quotation staff are within that
Quotation span of the preceding staff), then I regard him not as one
Correction staff. I will implement this point later, if an interior staff with that
Segment counting as correction is regarded. For the moment it is not it.
27. Trend identification 139
To the series of business, which I showed straight, there are several things to say. That
first would be that I remained " in the water ", until the trend had so far developed that money
to be earned could. With my last entrance I lost also money. That is a part of the
Tradings. I do not know a way, as I can know, when a business past is, before I
one out-stopped. The same principles would be used, if this a Tageschart,
sixty-minute-nC-hard or would have been fifteen minute nC-hard. I have in this
Series from business to the purpose of the simplicity acted with intention no Ross hooks.
I have also intentionally no temporally set forward, sliding average for defining
the trend uses. In this series of business I have all reversal staffs also with intention
(reversal bar, in an upward market: Opening highly - conclusion low, and in one
Downward market: Opening low - conclusion highly) ignores. The concepts omitted here
become detailed in Futures Trading and in my stock exchange and apprenticeship certificate Traaeers
Notebook describes.
Everyone of the omitted concepts would have this series of business to make still more profitabler
can. In the following chapters I will turn also to Charts, some larger
Time horizon cover. I become also different combinations of techniques in the kind
show, how I acted it at the times, which show the Charts.
I white, as other Trader over it do not think, in different markets for acting. I
white, some prefer it to act only in one or two markets during other 30
or 40 markets pursue. I belong to 12 to those, which pursue approximately 20 markets,
Markets observe and - dependent on where at most happens - in approximately eight to twelve
Markets act actively.
My personal preference is variety and selection. It pleases me, on the basis that
Tagescharts and the Intraday Charts by the different markets to showers and for
to select me most promising. Sometimes I remain at a certain market
" stick " and act this, until it becomes slow-acting and uninteresting.
It pleases me also, in order to act the selection of will, in different time horizons.
Fortunately I successfully developed a set of commercial methods, so that I
not always to pursue has the same things. I do not believe that I so long Trader
would have remained, if I had not had the variety in the Trading, those my interest upright
held. It is well-known me that some system Trader up to a half dozen
different mechanical systems act. Perhaps they close that, around variety
reach. Trading can become very desert, if one always the same markets with that
resemble method acts. I endorse it in addition, periodically a " mono technology " too
act. This corresponds what I in the S&P business in this section made
has. By acting only one basic method, I can prove myself that the method
still functions, and I know the current results with in the past obtained
Results of this method compare. This makes it for me possible, at the fine tuning of mine
To work methods to drop or not use and the methods temporarily, those
so well do not work, as I would like it. The variety brings it with itself that me mine
Trading fun makes. If somewhat apparently does not function in such a way, as I would like it gladly,
I am able to change to another method. By combining
It was possible for mono techniques me to produce enough tension around my interest over those
To keep awake years.
Day Trading
in practice
22. Fifteen minute Trading
In this section of the book I become a quotation staff brought in, under that
Designation Doji admits became. The moreover I will show a way, like one
by means of a simple counting finds the trend, and I will explain, like one those
average Volatilitaet computes. The two points specified last form that
Emphasis of this section.
One my favored, simply to acting goods is the Sojaoel (soybean oil). I call
it the " small S&P ", because on the Tageschart tends to Sojaoel very similarly as the S&P up
that five-minute-nC-hard. Frequently I return to my old friend Sojaoel, after
I in the markets a hard time had. This market helps me somehow, my perspective
again to recover it is the commodity, at which I mean teeth polished had. If I
in the Sojaoelmarkt act, then I turn again and again to the most fundamental
Commercial techniques back.
Attentively I follow the trend. Carefully I count the quotation staffs, into one
Direction point. Particularly in phases, if the market does not go apparently anywhere, I respect
attentively ascending lows and falling highs.
Sojaoel is for me a market, in which I can be more courageous, as I it in most different
Markets are. It is an old acquaintance, and somehow I have with the Trading in this market
the feeling, which is everything like that, as it must be. Very frequently I do without the large
Challenges. Sooner or later I turn back to the comfort and to
Confidence. If ever the day comes, on which I fail in the Sojaoelmarkt, then is that that
Day, on which I will always stop with the Trading.
In most cases the Trading in the Sojaoel has low risk. If it straight also
Cash transactions to begin and a quantity money not to risk would like, then is this market
the correct instrument for the introduction to the Day Trading. Also with the worst
Nearly each Sojaoel can act remarks after one fifteen-minute-nC-hard. Another
interesting point with the Sojaoel is that I, except during that very volatilen circumstances
while, in the market also over night can remain for a dryness, without large fear forwards
to have had a terrible quotation gap on the next morning. If I nevertheless
all too much over the Volatilitaet are anxious, then I can by a Spread against Sojaschrot
(soybean meal) my night position secure. If I see then that itself the market again
calmed down, liquidates I the weak leg of the Spreads.
142 _ 22. Fuenfaehn minute Trading _
Fig. 88
In the following I would like to show a typical series of business in the Sojaoelmarkt. Nothing
spectacular, but only the normal way, as I make money with Trading. Sometimes
I win, sometimes lose I. Sometimes at all much does not happen. Perhaps it helps
the reader, if I show the " reality " of my actual Tradings, a correct
To receive perspective for its own Trading.
This series of Gechaeften began at a time, when I needed my old friend. That
link arrow in fig. 89 shows the first Fuenzehn minute staff, which I regard. Of this
Staff up to the staff, which the next arrow shows, was not possible it for me, three
to count successive new highs or three successive new lows. I have
this entire range frames to be seen as in the Chart.
On the next day I was received with 10 contracts a sales position, after it to three
successive lows had come. At the fourth staff I sold with the outbreak
by the low of the third staff. My stop was 10 Ticks far away, the typical
Amount, which is ready I to risk in a business. My entrance price was 2023.
As one can see, the staff, at which I empty-sold, developed to one
Reversal staff (lower opening, higher conclusion). The market ran nearly immediately against me,
and the staff closed one ticks over the high of the preceding staff. I have this
Staff as the staff l of the correction numbers. Afterwards two additional correction staffs followed
_ 22. Flinfzehn minute Trading _ 143
Fig. 89
When it became obvious that the third correction staff would develop, I gave one
Order to close my sales position and with an outbreak by the high of the
to be received third staff a purchase position. I covered my sales position up with 2033
and at the same time a 20's-plumb bob bought (point B). After the prices up to a high of 2055
had climbed, were possible me to cover my entire costs and my stop in
to bring a position, so that my profits were secured. Here is it
importantly to push a short discussion in over costs. They can do an enormous
Difference in the result of the Tradings cause.
We look at ourselves three different situations. These are of large importance, because
everyone, which would like to make cash transactions, must understand the consequences, out
different costs arise.
144 22. Fifteen minute Trading
22,1 6 USD per Round turn
I pay 6 USD at the CBOT for each acted contract Round turn commission. That
meant that with the last series of business, first from a lOer plumb bob and then
a 20's-plumb bob in the Sojaoel, my costs existed altogether 180 USD amounted to. If we
in addition add the 10 points per contract (l point in the Sojaoel corresponds 6 USD), which I
had lost, before I turned the position and my purchase position was received, then I would have
a total loss including costs had by 780 USD. Around my entire direct
Costs of the two business in the form of commissions to cover, I would have 180 USD
earn. In other words, I need for kostendeckung
30 points for one of my contracts. If I regard the Sojaoelchart, I can however
see that those more points are, than the average Volatilitaet in this market exhibits.
I can compute the average present Volatilitaet, by I the sum that
Differences between the high and the low of the last five quotation staffs take, and
this by five divides. In the current example the average Volatilitaet lies,
including the staff, at which I had bought, something over five. In other words,
amounts to average the range of the quotation staffs of Sojaoel from the high to
to the low five points. Sometimes I use the average Volatilitaet, over both
mean stop /oss point (point of loss delimitation) and mean point of costing hitting a corner too
set. If the average Volatilitaet is larger than the amount, which is ready I too
risk, then I act either not at all, or I use a 10-Punkte-stop-loss.
And perhaps I set also a smaller costing hitting a corner stop. On the other hand I do not go
Position, if the average Volatilitaet is so small that it more than half of mine
Position would need to only cover in order the costs. In these cases I use those
average Volatilitaet as a filter for the reduction of potential business.
For the current position meant the if I a realistic chance to have would like, over
to cover my costs - that I must settle six of my twenty contracts, as soon as
I five points profit in the Sojaoel see (6 contracts times 5 points times 6 USD). This
I must place order for kostendeckung as MIT order, whereby I little slip PAGE
risk. I can also sieve my twenty contracts at five points profit ALSO
liquidate, in order to adjust the slip PAGE, which I could get.
I made the decision to liquidate seven contracts in hope that I at least
the costs of this and the preceding business would cover. Like it was it shown,
I had 22 at the time, when the prices reached their high of 2055, in this position
Points on not realized profit I could seven contracts with 2039 liquidate. Instead of
Slip PAGE got I by a favorable execution one point profit. As soon as itself those
Prices had sufficiently moved on, pulled I mean stops to the break even point, and as
the prices with 2055 their high reached, moved I again mean stops, around eleven points
(50 %) to secure profit in this business. I was out-stopped with 2044. This happened
at the quotation staff, that followed after, that had reached 2055.
I was thus out-stopped with thirteen contracts with eleven points profit per contract
and thus altogether profit had obtained 143 points. That results in 858 USD at profit.
From it I had to take 600 USD off, with which for the entire series 258 USD remained for me.
In addition I can add the 42 USD profit by the favorable execution, which one
Total profit of 300 USD results in.
_ 22. Fifteen minute Trading 145,
22,2 15 USD per Round turn
Let us look now, what the result of this series of business would have been,
if I had paid 15 USD per contract at Round turn commission.
My costs, which I would have had to absorb for this series from business to, would be too
the time, when I turned the position, from 180 USD risen to 450 USD. I would have
thus altogether 75 points to make must, in order to reach the break even point. That
meant, I would have 15 contracts with in each case five points with the intention of the
(the average Volatilitaet) profit to liquidate must.
Thus I would remaining have kept only five contracts, with which I the 600 USD at suffered
For losses would have had to adjust. With each of these five contracts I would have 20 points
Profit to make must, over in this series of business again the break even point too
In the business shown correct would have been, there the market after mine
Point of entrance had run 22 points. A possible slip PAGE taken into account, I would have mine
Order for the liquidation of these five contracts with 2054 WITH to place must. I would have
probably with 2053, 2054 or even 2055 get my execution. But in each case
I would have been very glad, if I had not made a loss in this business and I
would have been still luckier, if I pulled from the business a few dollar profit
would have.
22,3 25 USD per Round turn
With costs of 25 USD per Round turn it gave under use from me of the shown
Geldmangementplans no possibility of earning with this series of business money.
The best, which I could have reached, would be a reduction of my losses been.
With 25 USD I would have me with 750 USD at costs plus 600 USD at losses from mine
failed sales position argue.
That means it that I would have had to lose altogether. It means only that I mean
Money management plan much would have had to change.
Please you remind, it were yourselves possible in this business 22 points profit. Thus was in
best case with a position of 20 contracts a profit potential of 2640 USD
available. With a sum of 1350 USD for my total costs and losses I would have
still to make know a strong profit, if I the entire 20 contracts
would have held and on the point would have liquidated, at which I had 22 points
Obviously such an acting is not probable very, also it does not fit
human nature. After I had 22 points, I would not then have tried, 25 or 30
Scores to get?
If I were an absolutely brilliant Trader, I would have possibly my position to
Conclusion of the quotation staff settled, that made the high. But I am not so good. That
best, which I can see, if I had held all 20 contracts, would be a door to
146 22. Fuenfeehn minute Trading _
Conclusion of the staff following on it would not have seen been so long I that the staff
no new high makes, I the position would have held and with hope would have continued to live.
This next quotation staff closed with 2041. The best result, which I under realistic
would be 960 USD on the plus side could have reached conditions in this business
opposite altogether 1350 USD on the minusseite been.
A further possibility would have been, another filter for the entrance into this position
to use. I would have had to see in any case ones substantially more Volatilitaet, before I in that
Situation would have been to be received a position. Perhaps I would have even a completely
different one
Method to use must, like the entrance with a large signal after the Tageschart.
What would I like to say to you? Do I try to hold the people from cash transactions? Those
Answer is no! It is simply like that that me so many Day Trader and Trading beginners
call and to me say, they pay between 25 USD and 65 USD per Round turn. Then
say they to me that they lose in the markets.
Is that a miracle? As someone can after one five minute nC-hard or even one
Fifteen-minute-nC-hard act and hope to earn under such costs money? It
does not count itself simply. This Trader said to me without exception that her after in minute
Charts, two minute Charts, three minute Charts, five minute Charts, Sechs-MinutenCharts, ten minute Charts, twelve minute Charts, etc. act.
If I ask it whether they call directly to the parquet, is the answer " no " or " I know it
not ".
It is simply not possible, even if one gets a very good execution, with these
high costs and the long length of time, which pass, until the orders reach the parquet, in
to compete the very short time horizons.
The Trader, which is subjected to such circumstances, is to frustration and failure
If someone insists on acting the short time horizons then a way must
are found to call directly the parquet and a way must be found, also
to act a low Round turn commission. Leave to us now with the Trading in
Sojaoel continue.
_ 22. Fifteen minute Trading _ 147
My next opportunity came, when it was possible for me, at the outbreak by third
successive new low with a lOer plumb bob an empty sales position to be received (picture
90). I marked the counting on the Chart. I got my execution at the beginning
the fourth 15-Minuten-Stabes 211 a price of 2041. My initial
Loss delimitation stop was with 2051. The prices fell then strongly and fast.
I covered my costs on the basis of an average Volatilitaet of three. Over
to reach, I liquidated four of my ten contracts. As the prices itself fast
moved to far, pulled I mean stops to the break even point. In the course of the moreover
Decline in prices began I, half of my not realized paper gains in the business
to secure.
Fig. 90
148 _ 22. Fifteen minute Trading _
As after such a sharp movement to be expected, the prices corrected. I caught also
the attempt on, with an outbreak by the low of each correction staff one
To be received sales position. As the prices the low of the second correction staff
fallen below, I received my execution with 2004 for a 10-er plumb bob (marks by that
Arrow). I placed all stops with 2014.
Fig. 91
My number for the average Volatilitaet was now eleven. The meant that I to
Kostendeckung a contract with a price of 1994 to liquidate had. This price
however before the next correction one did not reach.
_ 22. Fuenssehn Mimiten Trading _ 149
When the prices corrected again, I tried again, with an outbreak by the lows
to sell the correction staffs. I received my execution at 1998 for a lOer plumb bob. For
this plumb bob placed I mean loss delimitation stops with 2008, and all other stops
moved I after 2004. My average Volatilitaet for this entrance amounted to six.
The meant, I would have had to liquidate two contracts at 1993 for kostendeckung.
Fig. 92
With the next quotation staff the prices up to a local low at 1988, and I ticked
came into the situation to cover my costs of the entire open contracts. I moved
all stops after 1998, whereby I secured and guaranteed profits, with my the latter
To make position at least no loss. I held now six contracts from mine
first business, nine contracts from the second business and eight contracts from mine
last business.
Here it is necessarily that I present a formation, always very important for
me was. I had in former times never a name for it, but since the introduction of the Candlestick
I call Charts this formation Doji
A Doji occurs whenever the opening and the conclusion of a quotation staff
on same or nearly same quotation level are. It plays thereby no role, up
the equality to which level of the quotation staff passes. It can do on or close at the high,
on or close at the low or between them lie somewhere. The substantial is that a Doji one
Meaning has. It belongs to the kind, how a market speaks. It is my job to hear. A Doji
150 _ 22. Fuenfaehn minute Trading _
it points out strongly that a change in the direction of the market can be approaching.
Doji interrupts a trend and shows a hesitating. The market is not safe, in which direction
it to go is.
In fig. 93 I have the Doji with the letter " CD " marked, usually react I to
Doji, by I, depending upon trend direction of the market, my stops scarcely under the low or
over the high of the Dojis move.
The meant for the business shown that I mean stops after 1995 moved, as soon as that
Doji was completed. I did not try also, there the Doji a new low made and for the case,
that the trend continued to sell with an outbreak by the low.
With everyone of the next two quotation staffs I tried, with an outbreak by the low
to sell. With none of these staffs I got an execution.
Fig. 93
I was then out-stopped at 1995. I had three points with eight contracts, nine points
with nine contracts and 46 points with six contracts made, what altogether 381 points
resulted in. There my costs were already covered, amounted to my net profit 2,286 USD.
_ 22. Fifteen Mirmten Trading _ 151
The Chart in fig. 94 shows, where I was out-stopped at 1995. I had thereafter still several
Paint the intention of being received a position but a Ilandelsmoeglichkeit never resulted
after three following each other new highs or lows.
Fig. 94
I showed a straight very simple and fundamental commercial method. The main part
this method is counting three following each other new highs or lows, so that
I with an outbreak by the extreme of the third bar of this consequence to act can. I
also clarified, as important a money management plan for my Trading is. I must
correct money management plan have, which with the time horizon, in which I act, that
Amount at commission, which I pay, and which Volatilitaet of the market, in which I act,
is compatible. This is to be acted only one from many successful ways to. It is simply one
Question of the realization, as one joins the different components.
From now on the Dojis in the Trading shown by me will become important. I become
also a formation show, which I call reversal bars (reversal bar). Umkelubalkeii are
not the same, which others call a key reversal (key reversal). It holds back sees in such a way,
that key reversals can be reversal bars, but reversal bars cannot do
Key reversals its. The reversal bars, which I will show, are different. In their
Meaning are somewhat stronger they than a Doji, and they drove to the fact that I essentially in
to it react to same way.
Before we continue, consider please the l-2-3-Markierungen in fig. 94. In the next
152 22. Fifteen minute Trading _
I will show section, as one counts segments, around additional commercial opportunities too
I will show the segments in connection with the Trading of a thirty minute Charts.
They leave themselves however just as well in minute nC-hard on one as on a Monatschart
use. The truth is always the truth. The only difference exists in that
Adjustment money -, risk and commercial managements.
After you the next series of business reconstructed and the signals of the Dpjis and
Reversal bars understood, could it favourably be, again the positions of the
To study S&P 500 and the positions in the Sojaoelmarkt, in order to see, as different
the business to develop can.
I would suggest also, again the business under that, made so far
To analyze criterion from other commission sets to. It is extraordinarily important,
under the real costs, each individual is exposed to which, a reliable plan
to prepare for the profit-taking and placing the stops. Although I in
is impossible it will show further process of the book some combinations, everyone
To discuss commission and cost structure, which the readers could have. Obviously
it is like that, the more highly the costs of a person is the larger, must the acted time horizon
its and the further the stops must be placed, thus itself a profitables
Business to develop can.
23. Thirty minute Trading
It becomes now time that we look at ourselves something trade after the thirty-minute staffs.
The Trading will give you the possibility after this Chart, more from that
Anatomy of the markets know and to understand to learn. In the next series of business
we will discuss some valuable lessons.
This section will begin with a thirty-minute price staff of the corn market. Those
lessons shown can be applied practically to each time horizon. I acted
this series of corn positions particularly for this book. Usually I do not act corn day
day out. I selected corn therefore, there, if he profitabel with 25 USD per Round turn
to be acted, one can act then all markets profitabel can.
The Chart (fig. 95) begins with a downward movement of two following each other
Days. This downward movement drove into a price range, to that finally to one
Consolidation range becomes. How can I know that this is a consolidation range?
There are some ways to recognize and this is a good time, at least two of
to present them.
Fig. 95
154 _ 23. Thirty minute Trading _
In order to identify a consolidation, I will count first the market momenta. Two
Momenta consist of four legs, and these make then always a consolidation out
These momenta look in such a way: / \ / \ or \ / \ /. I have its structure on the Chart
marked. In this case there were three momenta during the consolidation.
Here another marvelous possibility is, as one to recognize can, when itself a market in
a consolidation finds. In addition we use the concept of a series of reversal staffs,
a series of Dojis or a combination of both.
Which I look for, looks in such a way:
Fig. 96
Now I will again show this Maischart. Look yourselves that
Consolidation range in fig. 97 exactly on
Consider the age nation of " opening high conclusion niedrig" staffs and " opening
low conclusion hoch" staffs during the consolidation period. Between that
Reversal bars lie some Dojis, whereby itself this however more frequently close at the extremes of
Consolidation range find.
Fig. 97
_ 23. Thirty minute Trading 155
Just as importantly, as to know, when a market is in a consolidation, is it
to know, when a market stands before it, of the consolidation to break out and it begins too
Everyone can back-look and see that a market tended or itself now in a trend
finds. But it is substantially more difficult to recognize, when a market begins m tends
I already showed, how the beginning of a trend can be anticipated. This
happens, by one either with the outbreak by the extreme third
or with the outbreak by the extreme one buys successive higher highs
third successive deeper lows sells.
A view of the Maischart in fig. 97 shows however fast that it in corn no such
Opportunity gave.
How could one have known then that corn stood before it to break out? As one would have
Person before every different one into this market to enter know, by one the beginning of the
Trends saw, when corn broke out upward of the consolidation?
Markets speak. For those, which work with Charts, the markets speak a graphic
Language. I made, understand it my task of life to be able, what the markets
say to me. By learning to understand, in which way a market speaks, I can better
communicate and with the market in the consonance its. I learned, the markets calmly
to listen and carefully. Let me you show, how one reads the graphic language
can, which the corn market in a few very important places in the market movement speaks. That
next topic drove in addition over.
23,1 the average Volatilitaet as loss delimitation stop
The reader should take to the knowledge that I in the following corn business of that
Use of an absolute stop to the use of the average Volatilitaet as
Design fundamentals for loss delimitation stops changed it place themselves the question,
when does one make this?
The following discussion shows the only way, how I can answer this question.
Placing of stops is a very difficult thing. Many things must
are considered. The size of the Trading account must surely considered
become. Also the number of open positions and their current status must - these are in
Loss or in the profit? - to be consulted.
Likewise and taken into account, as fast is the market must be asked and which is those
current ticking size? Both points should with placing a stop very exactly pursued
Are the Trader and which remark time how quickly can it from its broker expect?
Although the Trader can react very fast to the market, it can the broker perhaps
not or in reverse. Surely those must in the cash transaction with placing of stops
156 23. Thirty minute Trading
Export time in the calculation to be also pulled. The market moves on, no matter how
the Trader or its broker to be fast likes
A further important factor with placing of stops is the mentality of the Traders.
If the Trader with the stop is not content, there it either too close or too far of
far away is appropriate for the current quotation of the market, then that becomes stop probably not
effectively its.
The method of the stop placing by means of the average Volatilitaet, shown by me, is
a way, as the market can dictate placing the stops. This is simply a further
Concept apart from the kind, as most Trader places its stop, by her it on that
Basis of a percentage, a certain number of points or one
certain money far away from the entrance set.
The concept is not new. There are programs, those computes what as " Volatilitaetsstopp " Study admits is. Typically as a reversal system is used, but under
Application of my commercial methods can be used it also only for the stop placing.
An application method, which I saw, takes the Volatilitaetszahl and adds it
And it subtracts empty sales positions for lowest closing quotation with purchase positions
of the highest closing quotation. This application differs from my work
mainly by the fact that I the Volatilitaet in contrast to the closing quotation of mine
Point of entrance adds or subtracts. A further difference is that that
" Volatilitaetsstopp " a multiplication constant for the increase of the Volatilitaetseffektes uses.
I believe that the " Volatilitaetsstopp " is suitable just as perfectly for the Trading of the methods,
which I showed in this book and will show. If it is used, I became those
Parameters to 5,1 set. The number of 5 would correspond to the number of quotation staffs, which
one to
Computation of the Volatilitaet uses, and the number of l became the multiplication constant
replace, those with the Volatilitaetsstopp study are normally used and usually
is appropriate for 2.8 or 3,l.
Sometimes the " Volatilitaetsstopp " can do that in contrast to the average Volatilitaet
Stop from the entrance far away continue to set. At other times it can set for stop more near,
since it of the closing quotation of the preceding quotation staff is computed.
_ 23. Thirty minute Trading _ 157
23,2 falling highs and rising lows
The upper arrow in fig. 98 shows three successive falling highs. The lower arrow shows
the quotation staff, at which I transacted a leerverkauf with 246,50 with a lOer plumb bob. Mine
Loss delimitation stop was with 246,50.
The average Volatilitaet for the last five quotation staffs amounts to 1,10. As my
Factor for kostendeckung I must select either 1.25 or 1.00. There 1.10 more near at 1,00
lies, select-calibrate 1,00.
I know that most readers of this book pay more at commissions and costs than
I. Therefore I selected 25 USD for this and the following business as the amount for
Commissions and costs, since I think that this will be a good average. Nobody,
that in the markets to exist would like to pay, should however more than this amount. Who more
paid, no Day Trading should make.
If I pay 25 USD per Round turn, then I must for this business 250 USD on
Costs cover.
In order to be absolutely safe with my kostendeckung, I must with 245,50 six of my
Contracts liquidate. Then, after the prices reached this point, I become mine
Stop to the break even point pull tight. I placed an order in the market, six
To buy contracts with 245,50 ALSO. I became about 60 commercial minutes later with mine
MIT order out-stopped. This happened at the last quotation staff of the daily.
158 _ 23. Thirty minute Trading _
Note that it is not necessary with falling highs that it also to new lows
comes, as it was with the example of the S&P, shown in section 21, the case. It is enough,
if a quotation staff makes only a lower high. After three successive
lower highs comes an entrance signal if fell below the low of the staff
becomes, which formed the third lower high. The opposite is the case, if one
rising lows counts.
On the following day the market opened more highly, tested the lows and began then to rise. I
moved my stop to the high of the preceding staff and became with all
Contracts out-stopped with 246,25. My result were in each case 50 USD from the six
Contracts, which I had in former times liquidated, plus further 50 USD, which I with that quarter
had earned, which I had made with the remaining four contracts. Always, if
I in a business do not lose, have I the feeling in the market to have won.
I hate it to lose, and therefore I use close stops and take profits then,
if the market is ready to give these me.
Later this day I tried again to enter into the market. The Chart in picture
99 shows a failed attempt. It is important to recognize that I try, in one
To enter trend, while I risk relatively little with my position.
Fig. 99
With falling highs paid attention I to three following each other lower highs. If I these
I find third with an outbreak by the low of the staff will sell, at that
successive lower high developed
_ 23. Dreissie minute Tradins 159
The opposite to falling highs are rising lows. For the admission of a purchase position
I would buy third with the outbreak by the high of the staff, at that
successive higher low had developed. This situation could as in fig. 100
look shown.
< — purchase it could look also s o.
Even if it to one
lower low come
was, the purchase would be correct.
Fig. 100
However none of the techniques shown so far would solve the next problem, which me in
met the corn business.
23,3 segment counting
Years ago, when I began with the Trading, I discovered a technology, me during
my Tradingkarriere good services carried out. It contains a connecting of corrections
and double staffs.
Look exactly, how I connected the lows on the Chart in picture luel.
160 _ 23. Thirty minute Trading _
Fig. 101
I connected a low with a second low. I have the second low with one
Correction low and the correction low connected with a double low.
I will buy its low third with an outbreak by the high of the staff,
Segment formed.
This technology will function in each market and in each time horizon, so long one up
the Chart well formed sample to see knows. I become the Maisgeschaft for one moment
interrupt, in order to show you, like the kind from Charts, no well formed looks,
for tradable samples for the methods form, which I use. The Charts in the pictures 102
104 contains formations, which are too flat, too boxful or too sketchy.
162 _ 23. Thirty minute Trading _
Fig. 103
Thirty minute Trading _ 163
Fig. 104
164 23. Thirty minute Trading _
Now I can continue with the corn Trading. For most grain is thirty
Minute Charts or larger necessarily, so that one can see tradable formations. That
resembles applies to the soft goods and to the meat markets. The interest contracts need 60-120
Minutes, so that tidy formations can develop.
The selected time horizon should be, in that at the best formed, tradable sample
to see are. If a market becomes fast and volatil, generally a shorter can
Time horizon to be used. If a market slow and volatil is not, should in
long-term time horizon to be used.
I wanted to buy a lOer plumb bob in corn, based on an outbreak by the high of the
Quotation staff, whose low completed the third segment, which I on the Chart
had marked. While I waited for my opportunity, I computed those
average Volatilitaet. Them amounted to 0.61 and were thereby more near at 0,50 than because of 0,75.
meant, in order to be able to cover my costs, I would have to liquidate all my contracts,
as soon as I would see a movement of 0,50 points in my direction. I had it also
to do a real dilemma. I would need the double Volatilitaet, over with five
To be able to cover contracts my costs.
This was a problem, with which I did not have to do it normally. But also
Commissions and costs of 25 USD it was material. The only possibility, which I saw and
me to convince it could continue, existed in the fact that the prices from their Indraday
Sliding zone would break off. They had already taken a small three-fold high, and
if they would exceed the last high, thereby also the double high of the latter would be
both quotation staffs broken through. If that would happen, those could
Movement explosively and me the amount will give, which I need, around my goal too
reach. The Chart in fig. 105 shows the conditions of the movement, as I means decision too
meet had.
_ 23. Thirty minute Trading^ 165
I decided to dare an attempt. Consider please, which influence those
Cost structure gets here. I do not only go this business alone with consideration
the segment counting, but I regard also the other factors, those in the corn market in
Are important to connection with the payment. Here the evaluation comes also into
Trading. Will I mean experience and my evaluation ability not to consider,
then I would be a robot, which acts a mechanical system.
When the prices broke out, I bought a lOer plumb bob. My entrance price amounted to 248,50. I
placed my stop with 247,50. The average Volatilitaet was about 0,61, therefore could
I only 0.50 as Volatilitaetsfaktor for kostendeckung select. The meant, I had to
Purposes of the kostendeckung with 249,50 half of my position liquidate.
Fig. 106
After I had died the position, I caught to repent on that I this business
had taken. My entrance staff presented itself end the conclusion as a reversal staff. It was
13 to o'clock and only a further staff would already give. I set up myself already
one loss day in corn. The last fifteen minutes were the most exciting of the
entire daily been. I do not know, what happened, but someone supported a rocket
corn and the price main header off. There the prices also the highest high of the last three days
had exceeded, decided I, to hold the position over night.
I covered the costs with 249,50 with a ër plumb bob. To the commercial conclusion I secured in
Business 50 % of my profits.
On the next day a reversal staff and I developed moved my stop exactly under
the low of this staff. The next quotation staff looked encouraging, and the following
Staffs rose even still more highly. Then the high came. The next staff wai a reversal staff,
therefore I moved all stops after 251,00. There I became two quotation staffs later
166 Thirty Mimiten Trading _
The results fiir this business looked in such a way: I had five contracts for kostendeckung
used. Five contracts became with 251,00 with a profit of 125 USD per contract
liquidated. The total profit amounted to 625 USD.
Two further points, which concern this Chart, need an explanation: Why I began
my counting not at the point " A ", and why I did not enter into the market, as the Doji
Staff at the point " b " was crossed?
Originally caught I mean counting at the point " A " on, but the market went then into one
Consolidation over. One can do this on the basis the reversal staffs, those the double low
formed, for the following Doji, a reversal staff, and then again two Dojis see.
At the point " b " I was not received a position, since I had the feeling, it would more importantly
then be, only
to enter, after the prices would have left the consolidation range, as simply only
to act after the counting.
Now it was time to work again.
When the prices began to correct from the daily high to I began the counting and connected
the falling highs. In the course of the consolidation I tried also, with outbreaks by those
Highs to buy, but did not come to new highs.
Fig. 107
As in fig. 107 to be seen, I got at the last quotation staff of the daily with 250 my
Execution (A) for a lOer plumb bob. The average Volatilitaet amounted to three-quarter one
Point. I was ready, if it would be necessary, this position into a night position
_ 23. Thirty minute Trading _ 167
to convert. In each cash transaction it is my goal, this, if it is possible, in in
to turn long-term position business. In this chapter I become later more
say. This cash transaction did not instruct however my criteria for transformation in
Position business up, and I decided in such a way, if the prices mean point of costing hitting a
would reach to step out with an MIT order I placed with 249 1/4 an MIT order
to the liquidation of the whole position. I observed the position very exactly, because if those
Prices 249 1/4 not to reach should, I the position to the commercial conclusion would close I
an execution received for five contracts with 249 and for the remaining with 249 1/4.
The business was done, now was it time, my money for the positions of the today's daily
to count.
I closed five contracts with a profit of 500 USD with 249 and with 249 1/4 ten
Contracts with a profit of 375 USD. That gross profit amounted to 875 USD. I had
Costs of 250 USD; thus a net profit remained for me by 625 USD. I began now, my
To plan business for the next day.
Fig. 108
The corn market opened, became lower under the momentum of the preceding daily
acted, and closed then on the high of the opening staff. This movement created one
Reversal staff. I could not enter, but after the next staff was present, I gave one
Order to sell corn with an outbreak by the low which with this
Quotation staff had developed this was the second staff of the daily. At the next staff
I got an execution with 249 for a lOer plumb bob, accurately at the point, at which I to
Vortag half of my position had liquidated. The average Volatilitaet amounted to l 1/4
168 _ 23. Thirty Mmuten Tradihg _
Points. I placed an MIT order for the settlement of four contracts with 247 3/4 and
placed my stop with 250. The market moved downward, but not so far that I to
Kostendeckung could have liquidated. The lowest price was 248 1/4. That
Quotation staff, that made the low, was a Doji, and so I moved mine
Loss delimitation stop exactly over its high with 249 1/4. There I became with a loss
of 375 USD including costs out-stopped. The day was however not yet past.
Fig. 109
When the prices of the low corrected, I tried with outbreaks by everyone that
to sell following staffs. I intended, with an outbreak from the Ross hook
an order to the purchase one 20's-guide to place. I caught thereby on, the higher lows too
it counts and stated then that the average Volatilitaet only one three-quarter point
amounted to. The meant that I would have to liquidate fourteen contracts for kostendeckung.
the more than half of my intended entrance size was, had I on the entrance
to be leave to this place.
To short before commercial conclusion there were no further entrance possibilities and in such a
way was it again
once time to make a cash fall. To say sadly enough - I had a loss
of 375 USD.
With an exception these results were to be acted typically for my kind:
If I do not act for the letter, then I act more contracts. Nevertheless can
They see good, what determines act my kind. Usually I follow the market, to he
me a profit gives. I do not expect to win in each series from business to. I
tries to remain simply only so for a long time in the water, until a large movement comes. I
knows never, when a large movement before the door stands.
_ 23. Thirty minute Trading _ 169
Fig. 110
How you can see 110 in fig., I could count three downward prominent segments. Mine
Entrance into an empty sales position would be with an outbreak by the low of the staff
taken place, which had made the third falling high. The expectations of profit were however 711
low - the average Volatilitaet amounted to only a half to one three-quarter point
The meant, I would have only for kostendeckung more than half of my position to liquidate
must. I have a rule, which means that I will not die a position, if I
for kostendeckung more than half of my position to liquidate must.
The next day supplied an opportunity, in order to explain a concept, from larger
Importance is on a Tageschart never acts I a gap opening, if itself those
Quotation gap outside of the sliding zone of the preceding daily finds. On one
Intraday Chart I will act however a gap after the opening, so long itself these
within the handelsbereiches of the last three days finds.
170 _ 23. Thirty minute Trading _
Fig. 111
The prices opened more deeply with a quotation gap, however still were within of the
Handelsbereiches of the last three days. The prices stood now briefly before it, with one
To produce outbreak by the deepest low of the last three days an entrance signal.
I opened an empty sales position with 248 with a lOer plumb bob. This price level
represented an outbreak by the deepest low of the last three days (TT3T). Those
average Volatilitaet amounted to one point. The meant, I would have for kostendeckung
to liquidate five contracts. My stop was one point far away with 249. I had however
never a chance to cover my costs there the prices first somewhat lower acted
became, but reached then my stop with 249. My total loss including costs
750 USD. amounted to
The prices opened with the second staff of the daily on the same level as first
Staff. Since the price level of 248 enough was good for my first entrance, I regarded it
also as well enough for a second entrance. I sold 20 contracts now with 248, and
(with the second break-through) the position developed well
I covered my costs with a new average Volatilitaet of l 1/4 points.
In addition I needed eight contracts. Corn its daily low reached two staffs later. As itself
the next staff as a Doji put out, moved I my stop, around half of mine not
realized profits in this position to secure. I secured 1/2 from the 4 3/4 for 2 points, those
in the position had accumulated. I tried, both with an outbreak by the low
the Doji staff and with an outbreak by the daily low, that now a Ross hook
was to sell.
23. Thirty minute Trading 171
When the next quotation staff exceeded the high of the Doji staff, closed I to
Commercial conclusion the position. This staff was a reversal staff. I liquidated 12 contracts
and gross profit of 1.800 USD. of it had 245 had I the 750 USD off to take,
which I had lost in former times on the day. My net profit amounted to 1,050 USD.
I acted long enough corn now, in order to prove one point. One knows corn
successfully after one thirty-minute-nC-hard act, even if the commissions and
Fees 25 USD amount to. They can imagine that my results with substantial
lower direct costs look much better.
It is for each Day Trader important to try, the lowest possible costs too
received. On proportional basis they affect each cash transaction enormously.
It is of similar importance that a Day Trader strives and guarantees for it, those
to receive optimum export times. So that that is possible, one must know, how
one orders places properly. No broker house leaves a Trader direct to the parquet
call, if this Trader is not able to give exact orders. The orders, those
I usually in my Trading use, discuss I in my book Trading in detail
is a business.
24. Transformation of the Tagesgegeschaefte into position business
A very important role in my Day Trading takes the possibility, a cash transaction
to change into a position business.
Perhaps I acted to long positions. I cannot simply the temptation
resist to make conversion.
For many years the Trading was to be acted by positions my only kind. I had that
Impression that with the cash transaction simply too much money remains lying on the table.
If I am in a Futures contract in a profitablen position, why should
I then the position over night do not hold? One of the oldest commercial rules does not say,
" keep firm at your profit positions "?
With the time I developed an understanding for it, which cash transactions one best
into position business converts.
I try to hold each cash transaction, which I as result of one my large ones
Entrance signals were received. If I am in a cash transaction, if itself
Large entrance signal occurs, or if I a cash transaction due to a large one
Entrance signal are received, then I make each attempt to hold this position over night.
My large entrance signals are the outbreak from a l-2-3-Hoch or a low, that
Outbreak from a Ross hook, the outbreak from a border and the outbreak from one
Sliding zone.
It admits a medium-term signal, which will animate me to the attempt, a position
hold and they into a position business to convert. This signal is the outbreak by that
deepest low or the highest high of the last three days. For the purposes of conversion has
this signal the same implications as a large entrance signal.
After the position is converted, hold I it as a position business. As far as
possible I observe the position during the daily, but I do not act her any longer on that
Basis of a cash transaction. I try to remain in the position. I become only then
Cash transaction hold and it to a position business convert, if it to one that
mentioned signals comes oneself and the position to the time also in a profitablen position
finds, if I decide me to hold it.
_ 24. Transformation of the cash transactions into position business _ 173
Although it is not necessary, then I would like nevertheless the position in a etablienen trend
That means that it gave an upward leg (or downward leg), a correction, and
then a Ross hook was taken (fig. 112).
Fig. 112
It does not please me still better, if I am in a profitablen position, those, how
one in fig. 113 to see can, by a correction was out-stopped.
Fig. 113
174 24. Transformation of the cash transactions into position business _
It pleases me best, if I in the course of the first leg of the movement a profitable
Position constructed, and it me then is possible, my position during the correction briefly before the hook is taken - to increase. Here is a rule. A correction
can only three staffs long last. Which lasts longer, I regard as the beginning of a new
Fig. 114
If I in a currency hold a night position, then I place a stop in the Forex.
If I am in a metal, in the sugar or in the cocoa, then I place a stop in
London. The stops are placed, in order to secure profits. If I me up to
Commercial conclusion in a profitablen position does not find, then hold I the position not over
Night. This is also then the case, if the contract gave an entrance signal, me
would bring to hold this position as a position business.
For the case, in which I in a grain or in the crude oil, in addition, with metals or
Soft goods, a night position hold, consider I a Spread against a backlying
To be received delivery month. Thus would like I mean position before a Lueckeneroeffiiung
protect, which runs against me. Naturally I lose then the advantage, from one
Opening gap develops, those for me runs which I gives up is the price for it, a good
To have sleep.
I do not hold night positions in the bonds or the S&P 500. If I act euro dollars,
then protects I mean night position by a Spread from a backlying date.
After conversion is implemented into a position business, hold I the position so for a long time
as possible, and I place my stops exactly under an optimized, sliding
Average or at natural points of supporting. The longer it me possible is, in that
To remain, I look position the less during the daily on the position. After
the position the first correction on the Tageschart got over, stops I, the position
to pursue during the daily. My techniques for this commercial method become to
best in the book Futures Trading explains.
25. Sixty minute Trading
I showed, like I five -, fifteen -, and thirty minute Charts acts. Next
I will show, like the same techniques profitabel with the trade after sixty-minute
Charts to be used can.
There is probably nothing that is to be acted more with difficulty than sugar, if he itself in one
Sliding zone finds. This market is really extraordinarily deceitful at times. Sugar
those is from the New Yorker stock exchanges also because of the annoying problem of the bad Ticks,
come to act particularly with difficulty. They can be never really safe, where itself that
Price actually finds. I made the following series of business, around her in this
To show book. The New Yorker stock exchanges should be ashamed for the garbage data, them
publish. This fact, together with the bad remarks, it
gotten, if you act there, the Trading makes there very difficult. I can only
it hopes that some the people, which have to say something in New York it reads this book
become. According to my opinion it would be the best, which could happen, if all Trader those
New Yorker stock exchanges boycott, until the problems are solved there. Beyond that are in
New York the fees both for the Trading and for the real time data more highly as in
Fig. 115
176 _ 25. Sixty minute Trading _
Fig. 116
I began thereby to connect the segments, which developed in each direction, and
marked the Ross hooks on my Chart. Connecting segments is much
important part of my Tradings. In the course of the next business I become this concept
explain more in detail. I hope it up to the end of this manual to have completely explained.
The first thing which can be noted is that it between the two first highs, which I in that
Chart in fig. 116 connected, an intermediate, lower high gave. In the shown
I had to connect three highs for case, in order to receive two segments. It can do more than one
intermediate quotation staff between the connected highs (lows in one
Upward trend) give.
An important, noting difference is that my counting not with three
successive lower highs and lower lows to begin must. Around one
Position to die, I need only three successive lower lows. In one
Upward trend need I only three successive higher highs, whereby each segment
from connecting two not necessarily successive lows results.
_ 25. Sixty minute Trading _ 177
Fig. 117
Before a definite trend through either a staff counting or a segment counting
to be identified knew, exceeded the prices a highly lying hook and I bought
10 contracts with 823. The average Volatilitaet amounted to rounded up 6 Ticks. That
meant, I would have to liquidate four contracts for kostendeckung. I placed a MITOrder
with 829 and a loss delimitation stop with 817.
The reason, why I was received here a purchase position, was that I with one
Outbreak by the Ross hook, which itself at the point of the highest high on that
Chart found, to be already positioned wanted. I hoped that the market entrance that
Public at this outbreak the prices would float still more highly. An entrance with 823
offered seven points until to the point of the Ross hook to me - enough for me, around my costs in
to cover the case that the price rise should end there.
178 _ 25. Sechìg minute Trading
Fig. 118
With ease I reached kostendeckung and liquidated four contracts by a good
Execution of 830, which me an additional profit of one tick brought.
The prices rose up to a high with 851, and therefore I moved stop, over
at least to secure half of my profits. My profit taking stop was with 837.
Since the outbreak had taken the highest high of the last three days, I thought of it
after to hold the position over night as a position business. At the time of the
Commercial conclusion I had decided to remain in the position.
_ 25. Sixty minute Trading _ 179
Fig. 119
The first quotation staff of the next daily brought still larger profits. I moved
my stop, in order to make for me the advantage. My stop was now with 844 and secured
at least half of the not realized profits in this business.
180 _ 25. Sixty minute Trading _
Fig. 120
With the next staff the prices my stop reached with 844. I had in this business
Costs of 250 USD, and after liquidating for kostendeckung remained for 63.60 USD.
In addition I added the 1,276.80 USD, which I had made with the six contracts, with what
a total profit of 1.340,40 USD resulted.
I placed an order, over with an outbreak by the high of the correction staff too
I regarded this staff as a correction staff, because the trend was due to the fact
further intact that it had given an outbreak by the high of the staff, that that
third segment of the segment counting constituted.
Note that I begin to number the segments of the correction as soon as one
Correction begins. I identify also the Ross hooks.
_ 25. Sixty minute Trading _ 181
Fig. 121
The next staff did not look straight exciting, yet it was important, because it changed
the picture. If the market speaks, then I hear too
I had now two segments, which led downward. The market continued to correct. The new
Interior staff established a Ross hook in the potential outbreak place of the preceding
I placed an order, in order to buy with an outbreak by the high of the interior staff.
I placed also an order, in order to sell with an outbreak by the Ross hook,
by this interior staff had developed.
Perhaps you have the impression, I are an aggressive Trader now. They are right. If
the market speaks, then I go very close near, in order to hear, what it says. I would like everyone
Word receive. Thus I receive also each of its movements. As one up
182 _ 25. Sixty Mimtten Trading _
the Chart to see, was ready I can to go with the market all the same which direction to be
became. I would like to dance with the market; I go, where he goes.
Fig. 122
I placed an order with 829 ALSO for the liquidation of three contracts the prices
reached accurately 829 at the low of the staff, at which I had empty-sold I got with 830
my execution, whereby my costs were covered and 52.40 USD remained. As
the quotation staff closed, liquidated I with 834 the remainder of my position. I had also
sieve contracts 5 points per contract made, what me additional profits of
392 USD brought. My net profit for the day amounted to 444.40 USD.
I analyzed the situation, in order to plan my business for the next day.
Since this was only the third correction staff in an upward trend, I became an order
place, in order to buy with an outbreak by the high, if itself the opportunity in addition
resulted in. I really did not expect to get an execution. Since I however disciplines
to act, tried I would like, to buy with an outbreak by the Ross hook.
_ 25. Sixty minute Trading _ 183
Fig. 123
When the prices exceeded the high from yesterday, I bought 10 contracts. As the prices that
Exceeded, I bought further five contracts to Ross hooks. There the Ross hook
Outbreak by the highest high of the last three days represented, became this position too
a candidate for a night position. The average Volatilitaet was too high for
me, thereby I it either for my loss delimitation stop or for mine
Costing hitting a corner stop could have used. Therefore I used for each position
Stop of 10 Ticks. For the night position I placed stop loss at the Londoner stock exchange.
Either it would hold, or the position would be liquidated.
After I had bought ten contracts with 853, I covered with 863 with three contracts
my costs. I moved mine stop loss to the break even point with 853.
Next I received my execution with 865 for the ër plumb bob. I placed mine with 875
Costing hitting a corner stop and with 855 my loss delimitation stop. I waited for that
next tick.
This entrance surely shows, how important discipline and obstinacy are in the Trading. I
go with the market, where it takes me. I reject it to judge a market or
to want to prognosticate its direction.
184 _ 25. Sixty minute Trading _
Fig. 124
When the quotation staff closed and, the new staff who can be seen in fig. opened 124, moved
I my stop from 853 to 860, in order to secure the profits for my lOer plumb bob. I became
there with a profit from 7 Ticks. With the first three contracts in mine
I made 86.00 USD profit the remaining seven contracts for lOer plumb bob position brought
548.40 USD profit, so that the total profit amounted to 634.40 USD.
It was not possible for me to cover for my ër plumb bob the costs and there the last staff also
a lower high closed, made I the decision, my stop one tick under that
To place deeply with 856.
_ 25. Sixty minute Trading _ 185
I out-stopped with my ër plumb bob with 856 my loss amounted to 629 USD. That
Quotation staff, that took me out of my position, was a reversal staff.
Fig. 125
Since the conclusion of the last staff lay more deeply than the opening, I saw a correction in such a
way, and
placed I a purchase stop over the high of the last staff.
186 _ 25. Sixty minute Trading^
Fig. 126
I received an execution with 869 for a lOer plumb bob. The average Volatilitaet was
further too highly, therefore I placed my loss delimitation stop with 859 and mine
Costing hitting a corner stop with 879. When the commercial conclusion came more near, I
decided for it, those
Position over night to hold and placed a stop in the Londoner market. The prices had
new highs achieves, and I got the feeling, it was worth the trouble to hold the position.
_ 25. Sixty minute Trading _ 187
Fig. 127
When the market opened, I cancelled my stop in the Londoner market, and I was later in
the situation to cover with a ér plumb bob my costs. I pulled my stop after 877, around those
To secure half of my not realized profit in the business.
188 _ 25. Sixty minute Trading _
Fig. 128
When the next staff closed, I moved on my profit taking stop somewhat
after 878.
25. Sixty Mmuten Trading _ 189
Fig. 129
I was out-stopped with 878. Since this was a correction staff, I placed a purchase stop
exactly over the high and was ready for the last staff of the daily.
190 _ 25. Sechzi% minute Trading _
Fig. 130
The last staff of the daily was also a correction. I marked my Chart, like you in
Fig. 130 to see know. I would wait for the opening of the tomorrow's daily and both
with an outbreak by the high of the last staff and with an outbreak by that
Buy highly the staff, that marks the point of the Ross hook.
_ 25. Sixty minute Trading _ 191
Fig. 131
When the prices opened above my point of purchase, itself however still within of the
Price range from yesterday found, decided I to enter with 875 into the market
the possibility for it should result. the meant, I would try would enter,
if the prices again back by the high of the preceding staff were acted.
I must admit, I forced this business, but I did not want to miss the chance it should come to it - to be early with an outbreak by the Ross hook positioned.
The average Volatilitaet was still larger than the amount, which I in this
Business to risk wanted. Therefore I placed with 875 my costing hitting a corner stop and
865 my loss delimitation stop. The prices fell up to a low of 868, and I had
for one while mean breath continue.
192 _ 25. Sixty minute Trading _
Fig. 132
The next quotation staff was cleared up the situation, there the prices more highly for moved and
the high would close. I could liquidate three contracts and earned after cost departure
I my stop moved 86 USD. after 881, in order to secure six points at profit.
_ 25. Sixty minute Trading _ 193
Fig. 133
When the next quotation staff opened, I received already soon my execution for a ër
Plumb bob, since the prices had broken out by the Ross hook with 890. I hate it, if I
an execution gets, the market one ticks in my direction goes, and the prices then
immediately against me run.
The average Volatilitaet was more than ten points, and so I placed stop
with 881 - to the place, where my other stop was.
I was out-stopped with 881 with both positions. My loss amounted to 250 USD on
Costs and 504 USD at points. On the other hand I knew 86 USD from the Liquditatioefl of mine
first contract set and 470.40 USD at profit up-count. My net loss for this day
177.60 USD. amounted to I win not always.
194 _ 25. Sixty minute Trading _
Fig. 134
When the last staff formed this daily a correction Dqji, I made the decision to
next mornings, right after the opening, a purchase stop both at the new Ross hook
to place and at the high of the Doji staff.
_ 25. Sixty minute Trading^ 195
Fig. 135
On the following day the prices opened lower. In fig. you can see 135, like the Chart
at this time looked. This was the second staff of the correction. I would try,
to buy an outbreak by its high and with an outbreak by the Ross hook.
196 _ 25. Sixty minute Trading _
Fig. 136
I got my execution with 879 fiir a lOer plumb bob. The average Volatilitaet held
itself further at approximately 12 points. That was still more than the amount, which I
ready was to be risked in a sugar business, which I after that sixty-minute-nC-hard
I placed with 889 my costing hitting a corner stop and with 869 my loss delimitation stop.
When this staff closed lower than it had opened, I placed an order, around the market
RK-THE-MARKET to leave. Why did I make that? Now, if I the Chart from left after
on the right of regarded, I saw a reversal staff, a Doji and two following staffs, those higher
opened as it had closed.
_ 25. Sixty minute Trading _ 197
Fig. 137
I could liquidate my lOer plumb bob with a loss of two Ticks per contract with 877.
In addition added I mean costs of 250 USD, and so my total loss in this amounted to
Business 474 USD.
As soon as I was from the position raus, marked I mean Chart in such a way, as you see 137 in fig.
can. The prices were now at a critical point. If the high taken
became, I could assume the three segments of the correction would past be. If
the low was taken, could assume I a new trend is present.
198 _ 25, sixty minute Trading _
Bued 138
The following quotation staff, the last one of the daily, was an interior staff. When it was finished,
marked I my Chart in such a way to be seen as in fig. 138. The formation, itself in the course the that
last four staffs had developed, was also a border.
In all honesty, I forced again a business. I tend to if I for mine
Letter acts. This is very aggressive exaggerated Trading and. I force myself practically
even into a position, by concerning the market from both sides. I would like to stress,
that such tactics are not necessarily good. Normally I search in other markets
after substantially better commercial situations. But if I act for the letter and
me obligate to act a series from business to the bitter end then I act,
as if this market would be the none in the world. I apologize for it and hope,
my readers will state that such Trading unbalanced and not sufficient
is selective
5. Sixty minute Trading _ 199
Fig. 139
I sold 20 contracts with the outbreak by the Ross hook. I used here
20's-plumb bob, because I have rarely two losses in consequence. I touch down in business like
the probabilities. I white, a quantity of statistics experts would say that my
Chances to make with this business a loss are just as high as with everyone
other business. This kind of thinking I cannot agree however. They can do that
perhaps mathematically prove, but mathematics does not describe always exactly the real
I got my execution with 864. I liquidated six contracts with 854 and moved
my stop, in order to secure seven points profit. I became with 857 with 15 contracts and
out-stopped with 856 with four contracts.
I made 172 USD profit, when I covered the costs, for 784 USD profit with 10 contracts
and 224 USD with four contracts. My total profit amounted to 1314.40 USD. I had my
earlier losses balanced.
200 _ 25. Sixty minute Trading _
Since the prices would close again within the consolidation range, I made the decision,
again to place a sales stop, where I had placed first before. I became
further ten contracts with 864 sell. At this level the entrance became with one
second break-through via the edge of the consolidation take place.
Fig. 140
At the following staff the prices opened with 866, for one while were more highly acted and
fallen below then the Ross hooks. My order for the sales lOer guiding got
864 for the execution. I placed with 874 a purchase stop, in order to secure me before losses.
I covered with 854 with three contracts my costs. After the staff lower closed
" induced I had my stop to the protection of the profits after 853. With it I secured myself those
Half of the 22 points of not realized profits, which had accumulated in this position.
_ 25. Sf>r.hìg minute Trading _ 201
Fig. 141
Since the next quotation staff ended as a reversal staff, I moved my stop exactly over
its high. I placed also - if the trend continued - an order to sell
exactly under its low
202 _ 25. Sixty minute Trading _
Fig. 142
I sold five contracts with a stop with 842 with 849; there also stop for those lay
remaining contracts my lOer guiding. The prices fell first, but it was not possible for me,
to cover my costs. When the prices came again back by the level, at that that
Staff had opened, liquidated I all twelve contracts RK-THE-MARKET. Surprisingly
all contracts were implemented with 846 at the same price.
The results were a profit and a loss. The sieved older contracts brought 18
Points or 1,411.20 USD profit. In addition I added the 86.00 USD, remaining
were, when I had covered the costs, so that my total profit amounted to 1,497.20 USD.
The ër plumb bob had costs of 125 USD. The loss of four points resulted in a loss
by 224 USD. my total loss amounted to 349 USD. If I approximately mean profit of
for me 1,148.20 USD up-counted, remained 1,497.20 USD.
I thought over it, a sales stop now under the low of this external staff
to place. The tomorrow's day would show whether that could be made or not.
_ 25. Sixty minute Trading 203
Fig. 143
The opening staff of the next daily brought a further correction I connected the two
Low. I placed also an order, both with an outbreak by the low of the
To sell correction staff and with an outbreak by the Ross hook.
204 _ 25. Sixty minute Trading _
Fig. 144
A developing Doji Innenstab did not bring much assistance. It made possible it for me only, one
To identify Ross hook and to connect with a line the lows of the correction I
now two correction staffs had discovered. I moved mean order to sell higher under that
small Doji staff and waited for further developments,
_ 25. Sixty minute Trading _ 205
Fig. 145
When the prices crossed the Ross hook, I became with 861 with a lOer plumb bob into one
Purchase position taken. The average Volatilitaet was highly enough, so that I a 10
Point loss delimitation stop and a 10-scoring costing hitting a corner stop to use could.
206 Sixty minute Trading _
Fig. 146
None of the two stops was reached, when the Doji Schlussstab developed. I
Commercial conclusion was past I three points. It cost me further 250 USD, over
to find out, what would happen tomorrow.
The inside Doji had let a further Ross hook develop. If the market at the night
not against me ran, then I would place at the point of the hook also a purchase stop.
_ 25. Sixty minute Trading _ 207
Fig. 147
On the next day the market opened more highly and moved in the course of the opening staff
to 873. Then the prices fell and were below the Eroffnungsniveaus. As those
Prices again by the opening were acted upward, left I the sales side
my position fall. I could cover the costs of my lOer plumb bob with three contracts.
Beyond that a small profit of 86 USD. remained I moved mine
Loss delimitation stop to the break even point with 861.
On the way after 873 the market reached with the outbreak by the Ross hook means
Buying order for a ër plumb bob. The purchase was implemented with 868. I placed with 861
Loss delimitation stop; there also stop for the seven contracts lay, from mine
Had remained for lOer plumb bob. Since the average Volatilitaet was high, mine amounted to
A costing hitting a corner goal 12 points, i.e., I had to liquidate a contract with 880.
208 _ 25. Sixty minute Trading _
Fig. 148
The prices continued to tighten. I could cover the costs of my ër plumb bob and pulled all
Stop after 872. Now everything was in a profitablen position.
_ 25. Sec.hzig minute Trading _ 209
Fig. 149
With the next quotation staff the prices rose even still more highly. I moved all stops
to the profit security after 878.
210 _ 25. Sixty minute Trading _
Fig. 150
Since the prices formed a double high and the last staff ended as a reversal, liquidated
I one minute before commercial conclusion the entire position with 891.
I feared the fact that the next day with a downward gap could open and pleased me
the existing alternatives not. A stop in the Londoner market did not make much sense, because
I would not know exactly, where I would have to place it, before I the Londoner opening
saw. The meant, I would have to rise in the middle at the night.
I did not want to spend also further 375 USD than insurance, by meaning position
by means of a Spreads against the March contract secured. The simplest thing, which I make
could, was to be stepped out. And I did
My profits amounted to 3,852.80 USD, based on a contract, which brought 12 points,
seven contracts, and four brought the 30 points to three contracts, which brought 10 points,
Contracts, which brought 23 points. After departure of the costs resulted a net profit of
3,227.80 USD.
_ 25, sixty minute Trading _ 211
Fig. 151
Although I would have missed with the opening a few points, I was glad that I those
Position had closed on the day before. The prices attacked all day long.
I placed a purchase stop over the three-fold high and waited for further developments.
212 _ 25. Sixty minute Trading _
Fig. 152
With the next staff I placed a sales stop under the Ross hook and
Purchase stop over the high of the interior staff.
_ 25. Sixty minute Trading _ 213
Fig. 153
I sold 10 contracts with 876 at the outbreak by the Ross hook. Mine
Loss delimitation stop was with 886 and my costing hitting a corner stop with 866. With this staff
did not reach the prices 866.
214 _ 25. Sixty minute Trading _
Fig. 154
The prices reached my costing hitting a corner stop and I liquidated for kostendeckung three
Contracts. Then I moved my stop to the break even point. The prices slipped fast
more deeply and then, again high preparatory work began itself. Briefly after the prices their daily
had reached, computed I, what half of my not realized profits in this
Business would be. I moved my stop, in order to secure 11 from the 22 points to, the this
Position had brought. I was out-stopped briefly before commercial conclusion with 865.
_ 25. Sixty minute Trading _ 215
On the next morning the sugar price opened more highly. The prices were now up
of the Ross hook of the past daily. The opening up of the low of the latter
quotation staff in addition of yesterday, picture had let a further Ross hook develop
155 shows, how the Chart looked in this moment.
Fig. 155
With the years I learned an important lesson. If an entrance signal once for
Profits was good, then it is good for a second profit. I must admit, I became
a little nervously, when I decided me to act the Ross hook. I was afraid, the prices
could fall after the opening only so far to give around me an execution and then in
the wrong direction take off. But I learned to act what I see, and not,
which I think. Since the older Ross hook was once good, it should be again good. For that
Case that the prices fell below the hook, I placed an order to sell to the sales
lOer guiding.
216 _ 25. Sixty minute Trading _
Fig. 156
The prices broke through the Ross hook and my lOer plumb bob with 874 were implemented. It
lasted not for a long time, until the prices my costing hitting a corner stop reached with 864. There
liquidated I three contracts with an MIT order. The order came with 863 to the execution,
which brought me a bonus of one point. The prices worked themselves far their way
downward freely, and I pulled that to stop for seven contracts to the break even point,
_ 25. Sixty Miniite>n Trfiding _ 217
Fig. 157
My order to sell for a ër plumb bob was under the last Ross hook and came with 853 to
Execution. Fast I moved stop for the seven contracts, around half that
To secure profits, which had so far accumulated. I secured 11 Ticks with a price of
863. Also stop for the ër plumb bob I after 863 I pushed had a costing hitting a corner stop
with 843. The staff of this hour closed with 862.
218 _ 25. Sixty minute Trading _
The next staff opened with 861, and I had hopes that itself the prices further
downward to move could. My expectations were smashed, as the prices after 863
ticked. It became time to place an order underneath the new Ross hook. During
I on the further developments waited, drew I balance. With a price of 863 I had
with each contract my lOer guiding eleven points made - first as I this price three
and then again as I liquidated contracts for kostendeckung for seven contracts that
Profit realized. My total costs amounted to 250 USD. Subtracted I these from
my gross profit of L232 USD, then a net profit remained for me of 982 USD.
With the ër plumb bob I had lost 560 USD plus 125 USD at costs, which one
Total loss of 685 USD resulted in.
When the prices were acted sharply upward after the opening again, I set for
me a mental sales stop below the opening of the staff. The prices those should
Opening fall below, then they could test the range of the Ross hook, which me those
Chance would give to carry a piece forward of the market.
Fig. 158
_ 25. Sixty minute Trading _ 219
Fig. 159
My order for the sales lOer guiding was implemented with 860; my stop to
Kostendeckung was with 850. The commercial hour closed those under my entrance price, but
Prices did not reach 850. My loss delimitation stop was now with 860.
220 _ 25. Sixty minute Trading _
The next hour, which daily, opened the latter, where the preceding staff closed
had. The prices remained in the next 30 minutes in a very close handelsbereich
between 858 and 855. Then they continued to move downward and reached themselves during that
next 10 minutes a low of 840.
In the course of this downward movement my costing hitting a corner goal was reached with 850.
I received an execution with the outbreak by the Ross hook with 851 for a ër plumb bob.
When the prices reached 840, I could cover my costs of the ër plumb bob with 841. I
liquidated two contracts. Fig. 160 shows, how the market looked, as the prices with 840
Fig. 160
I recognized too late that it would have been enough to liquidate a contract whereby I those
Payment of an additional commission would have avoided.
_ 25. Sixty minute Trading _ 221
Briefly the last five commercial minutes ago of the daily the sugar price in a fast caught
Market on to shoot upward. I had hardly time, mean neck to save I moved all
Stop after 851. My entire contracts were liquidated with 852, as the market over
my position away ran and until 872 moved. The trade closed with 868. I
could hardly believe, what I saw. " which in all world was happened?" I asked myself.
Fig. 161
The day was past, and so I drew balance. I was with 860 with 10 contracts one
Empty sales position received, had covered and became my costs with 850 with 852
out-stopped. That brought me 710.40 USD for this lOer plumb bob.
I had empty-sold my ër plumb bob with 851, with two contracts had I with 841 my
whereby for these two contracts 99 USD profit remained, and I it became covered for costs
then with three contracts with 852 with one tick loss per contract out-stopped. Mine
Loss thereby amounted to 33.60 USD. my net profit for my ër plumb bob amounted to 65.40 USD,
I to the 710.40 USD added, which I had made with my lOer plumb bob.
222 _ 25. Sixty Minuten~Trading _
On the next day the prices opened lower. I placed an order to sell, over
to be received an outbreak by the Ross hook an empty sales position. As that
Opening staff closed, placed I an order, over with an outbreak by that
To sell correction low.
Fig. 162
_ 25 > sixty Mimtten Trading _ 223
End the conclusion of the second commercial hour cancelled I mean order and placed him again,
in order to sell with an outbreak by the new low.
Fig. 163
224 _ 25. Sixty minute Trading _
The third staff of the daily made a higher high and a higher low than that
preceding staff and closed as Doji.
Fig. 164
_ 25. Sixty minute Trading _ 225
The last staff of the daily developed as a small reversal, and so I left everything, like it
Fig. 165
226 _ 25. Sixty minute Trading _
The first staff of the next daily opened something above the level, at that that
preceding day had closed. In the next ten minutes the market acted
somewhat more highly, and then he moved downward.
I had a buying order over the high of the conclusion staff of yesterday and one
Order to sell scarcely under the low places. Since the Ross hook was further intact, I had
an order to sell lie also there.
Fig. 166
The prices reached my sales stop with 851, and I was with a lOer plumb bob in
an empty sales position. My costing hitting a corner stop was 841 ALSO. The prices reached
841 and my order came with 842 to the execution. I moved my stop to those
Break even point.
The market began then to move upward stopped however briefly before my stop on
the break even point.
_ 25. Sixty minute Trading _ 227
The next hour did not bring much movement, and so I left everything, as it was
Fig. 167
228 _ 25. Sixty minute Trading _
The third staff of the daily was a Doji, therefore I pulled exactly my loss delimitation stop
over its high.
Fig. 168
_ 25. Sixty minute Trading _ 229
The last staff of the daily was not also very exciting. I closed my position briefly forwards
Commercial conclusion with 843.
Fig. 169
Thus my series of sugar business was terminated after the 60-Minuten-Chart.
I hope that my readers will see back-looking that the movements of this
Market were not particularly shining. With exception of the in-hour connection of
a sliding zone on the other hand, the sugar market moved altogether seen sideways in
a sliding zone!
I framed the consolidation ranges, as you can see 170 in fig..
230 _ 25. Sixty minute Trading _
Fig. 170
I assume, no book concerning the Day Trading am complete, if it not a full
Commercial day in the S&P 500 contains.
In the next section I will show, how I act this market.
26. S&P Trading
I act the S&P 500 after one five-minute-nC-hard. There is practically no difference
in the kind like I the S&P after one five-minute-nC-hard act and in the kind as I,
say we, Sojaoel after a Tageschart act. The only exception is that I with the S&P
a gap opening will act from a five-minute staff to the next, against which
I a gap opening with a Tageschart usually do not act.
But there is an enormous difference in the execution of the orders. I would like my
Readers before a set of things warn. I became acquainted with Trader, otherwise successfully
were, but the Trading of the S&P after 500 five-minute-nC-hard destroyed they
The S&P Trading is like that, as if one seizes into a basket with queues. They can fast
are bitten, particularly if you expect it to few. The S&P is fast,
volatil and frequently the unexpected makes.
If I with very low commissions do not act and exzellente order remarks
thus that I called directly the parquet, I would not even get about it would dream, that
To act S&P after one five-minute-nC-hard. This market is really extremely dangerous.
In addition it comes that one directly with the CTA's and with the professional parquet dealers
competed, which act under the conditions mentioned. If it is not possible, low
To get commissions and a fast order execution, then it is better, that
To act S&P after a 10 or a 15-Minuten-Chart.
Another criterion is that you must be fast on your feet. I must more speedily and
agiler Trader its, if I liked to act the S&P on the basis of five minutes.
Fortunately are my commercial habits so well verwurzelt that I nearly instinktiv
correctly act. My behavior patterns are well developed. I know that I mine
Method and my plan will follow. If that were not the case, I acted better that
S&P after a larger time horizon.
There is little time for thinking. The reactions must come practically automatically.
For me there is no possibility to know, as mentally fit each reader of this book its
likes. But I do not warn you again, the S&P Trading am anything for the Trader, that zaghaft
is had or not the capital necessary for this business. A Trader, only
small account has and only one contract at the same time to act can, or which acts with money,
which it needs for its living costs, for that this market is surely not that
correct place
With these warnings in memory I show a typical day of the S&P Tradings after
one five-minute-nC-hard. I did not select one day with intention, as the market
it tended because I would like to show that my kind functions to act, all the same whether the
during the daily tends or not. On the Tageschart the market made on this day
one external day, which followed after one interior day. The interior day ago there were again one
other external day, whose course distance exceeded the last external day. These days lay nearly in
the center of a sliding zone, which was five months old at this time. I selected also
one day, on which I did not give a seminar, and I permitted no telephone calls.
232 _ 26. S&P Trading _
If I act the S&P, I do not waste thoughts on the fact that I positions over
Night to hold could. I act this market exclusive in the cash transaction.
For the following business computed I mean normal commission of 6 USD per
Round turn.
The day began itself with a lower opening, however within the sliding zone of the
preceding daily found. On the preceding day the market had itself predominantly
in a broad sliding zone moved and with a downward gap opens.
In this section from this manual I become with already in former times the addressed
Concept it work according to which I each mark, if I can connect two points, of one
Segment will speak.
There are more than one way to use the concept of the segment counting. The following
Charts should be sufficient, so that everyone can understand the concept. At the end of the
Section I will show, like one an old segment fall leave and a new segment
takes up. During the segment counting an interior staff is counted as part of a correction. Therein
this concept differs from that, which I showed in section 21, because needed there
I three higher highs or three lower lows, before I could die a position.
The Chart in fig. 171 points like the S&P to the beginning of my Tradings looked.
Fig. 171
_ 26. S&P Trading _ 233
The second staff led to a higher low and a higher high. I began my
Fig. 172
234 _ 26. S&P Trading _
The third staff led to a higher low and closed close of its high. I increased my
Counting and could look now on two sections.
Fig. 173
_ 26. S&P Trading _ 235
Suddenly the courses began to rise strongly. The next staff opened with a gap and
moved by a good part of the sliding zone of the preceding daily. I
placed an order, in order to buy scarcely over the high of the last staff.
Fig. 174
236 J26. S&P Trading _
My order for the purchase of a 2ër-Lots became with the beginning of the next staff
implemented. The course was 37575. There I with 150 USD profit my costs to cover can and
the S&P me nearly always a movement of two Ticks (with the S&P corresponds tick
gives, liquidated 25 USD I with 37585 five contracts for kostendeckung and for achievement
a small profit. I had thus a first profit of 250 USD, about which I 150 USD
at commissions took off. This good start gave me the mental satisfaction, which helps me, that
To act S&P. When the staff closed, I pulled my loss delimitation stop, 250 USD
per contract far away was, because of the break even point.
Me it, my Trading pleases to begin with a positive note. A possibility for it is,
to be lucky with two Ticks (10 points) in the S&P.
Fig. 175
_ 26. S&P Trading _ 237
The courses continued their rise, however to become slower than them the highs began
the sliding zone of yesterday reached. I did not move my stop, around half that
realized profits in the business to secure. My stop to the safety device of 70 points
was with 37645.
Fig. 176
238 _ 26. S&P Trading _
The next quotation staff was an interior reversal staff, that let a Ross hook develop.
Since I had sufficient place, over with an outbreak by this staff my costs too
cover, placed I purchase stops for a 1ër-Lot over the correction staff with 37505 and for
a lOer plumb bob over the hook with 37715. At the same time I moved my stop scarcely under that
Deeply the staff with 37650. The point of the hook was about 37710.
Fig. 177
_ 26. S&P Trading _ 239
When the courses corrected again, I became with a profit of 70 points for everyone
my 20 contracts out-stopped. I placed a purchase stop, around a 2ër-Lot exactly over
the high to buy, and I that let exist purchase stop over the Ross hook further.
Fig. 178
240 _ 26. S&P Trading _
My order to Kaufeines the 2ër-Lots over the preceding high with 37700 became
implemented. The staff closed one ticks under my entrance course. Mine stop loss amounted to
was to 250 USD per contract and my costing hitting a corner stop about 37710, two Ticks over
my entrance course.
Bued 179
_ 26. S&P Trading _ 241
The courses opened at the next staff with a gap and tightened. I covered my
Costs of a 2ër-Lot, by selling a ër plumb bob, and my stop drew to those
Break even point. When the courses crossed the Ross hook, also my 1ër-Lot came to
Execution. I covered also of it my costs by the sales for further ër guiding.
After I had covered the costs of my 1ër-Lot, the courses continued to rise still I
moved my loss delimitation stop, around half of the profits of mine 20's-guides too
secure. In these minutes the courses still another piece rose more highly and I could my 10erPlumb bob secure. Then the courses dropped back within seconds.
Fig. 180
This market was now, according to my definition, in a consolidation. Four lay
Closing prices within the course range of the staff forwards, which I with a " x " marks
has. The lower limit of the consolidation represents the staff 2, also a Ross hook
contains. The upper border of the consolidation is the bar x, that likewise a Ross hook
242 _ 26. S&P Trading _
I was out-stopped and had to wait nearly the entire time of the next staff, over too
experienced, where my remarks had taken place. Were for 20 contracts in each case in
Points developed for profit of 20 points and for 10 contracts in each case a profit of 15.
After my broker had notified application classes to me, could I mean new
Orders above the new Ross hook place.
Fig. 181
J6. S&P Trading _ 243
Since the courses corrected, I placed a purchase stop both over the high of the
Correction staff and over the Ross hook.
Fig. 182
244 _ 26. S&P Trading _
Again I was with a 2ër-Lot in a purchase position. My stop was appropriate for 250 USD
from my entrance course removes. I knew five contracts with two Ticks profit
settle. That brought me a profit of 100 USD. my entrance course lay with 37735;
I covered the costs with 37745. The market rose to 37755, and so I moved my stop
after 37740, so that the remaining 20 contracts do not become any more loss positions
A 1ër-Lot was implemented with 37750; mine stop loss for these contracts was appropriate for 250
removed with 37700. I could cover fast my costs with two Ticks, about what I gladly
it was because I had doubts that the courses three staffs before the lying Ross hooks
clearly to exceed could not.
Fig. 183
_ 26. S&P Trading _ 245
The next staff opened the 20 contracts from the first position of this set with 37740 and
were out-stopped. That brought me additional 500 USD at profit. The courses gave to
37730 after, before they rose to new highs. I still was with 10 contracts in the market.
Fig. 184
246 _ 26. S&P Trading _
When the courses continued to rise, I moved my stop, around which half of the not realized
To secure profits in this business.
Fig. 185
_ 26. S&P Trading _ 247
The courses made a double high and a Doji. I moved my loss delimitation stop
exactly under the low of the last staff.
Fig. 186
248 J26. S&P Trading _
When I saw that the courses were in the process closing at the last staff more niednger as them
had opened, gave I an order to sell, in order to liquidate all contracts.
Fig. 187
_ 26. S&P Trading _ 249
I got an execution for the opening of the next staff. The day had itself so far well
developed. I had made 60 points or 3,000 USD profit with the lOer plumb bob, additional
the profits from the preceding positions.
I placed a purchase stop both above the three-fold high and above the high
the correction staff and began to count the correction.
250 _ 26. S&P Trading _
The next staff continued the correction, and I put my purchase stop exactly over the high
the staff. In fig. you can see 189, how the Chart looked at this time.
Fig. 189
_ 26. S&P Trading _ 251
When the next staff made a double high, I left my purchase stop in the same place,
but I moved my segment counting to over the second staff.
Fig. 190
252 _ 26. S&P Trading _
As you can see 191 in fig., now three segments pointing downward were present. Therefore
placed I both a buying order, over with an outbreak by the high of the current
To buy staff, and an order to sell, over with an outbreak by the low of the
to sell current staff. A new low became a potential Trendveraendcrung of
upward after downward constitute.
Fig. 191
_ 26. S&P Trading _ 253
I received an execution with 37775 for an empty sales position for 25 contracts. Then
the courses educated a Doji staff. That did not please me, and therefore I moved my stop
exactly over the high of the Dpji staff.
Fig. 192
After the third segment had broken through, I assumed now a new trend
was present. As far as it concerned my Trading for the moment, I was now in a new
Downtrend, even if the last course staff had closed as a Doji. This concept is
intending for my commercial method.
254 _ 26. S&P Trading _
I was out-stopped with 37790 with my 25 contracts. My loss amounted to
including costs 2,025 USD. The courses had formed a new Ross hook. I
placed a sales stop under the hook.
Underneath the correction staff I did not place a sales stop, because I needed at least
2 Ticks (10 points) to the kostendeckung. The difference between the point of the hook and
my potential sales point, which one tick underneath the correction staff lay, was enough
to the kostendeckung not out.
_ 26. S&P Trading _ 255
With the next staff the courses a Doji made, and as the staff closed, placed I under
its low an order to sell. This was the second correction staff.
There I could place a sales stop, because if I one tick under the low my
Execution would get, would give it for me to sufficient area for kostendeckung until to the point,
reach the courses the low of the Ross hook at that.
Fig. 194
256 _ 26. S&P Trading _
When the courses a further Doji formed, I could recognize clearly that the last four staffs
a consolidation developed, whereby itself the last four closing prices within of the
Course range of the fifth, past staff found. I cancelled that
Order to sell under the low of the preceding staff, but I left one
Order to sell under the Ross hook exist. I placed also a buying order over
the small, in former times made double high. In fig. you can see 195, like the Chart too
this time looked.
Fig. 195
The downtrend was not intact any longer. The market was in a consolidation. That
Ross hook formed the lower limit and the small double high formed the upper border for that
Consolidation. With an outbreak by one of the two borders I became
Entrance signal get.
_ 26. S&P Trading _ 257
I received an execution with 37770 for an empty sales position for 25 contracts. Mine
stop loss 250 USD per contract lay far away, and my costing hitting a corner stop was with 37760.
The courses fell to 37765.
258 _ 26. S&P Trading _
The next staff led somewhat lower and made it for me possible, with five contracts with 37760
to cover my costs. My efforts brought in 100 USD for me, and as the staff
closed, pulled I my loss delimitation stop to the break even point (G).
Fig. 197
_ 26. S&P Trading _ 259
The courses continued to fall still, whereby I could begin, half of my not realized
To secure profits. I placed my stop with 37750.
Fig. 198
260 _ 26. S&P Trading _
After the next staff had opened, the courses continued to fall still somewhat. Then they caught
on to rise fast. I made a rapid calculation for the not realized profits
and my stop moved after 37730. There I was out-stopped, as the courses with 37745
would close. I had made 40 points profit with each of my 20 contracts.
_ 26. S&P Trading _ 261
With the next staff the courses fell again. I hoped that I soon a chance to one
renewed entrance would get.
262 _ 26. S&P Trading _
The next staff developed as a inside Doji. Thus a Ross hook, that developed
I to act could, and so I placed a sales stop under the hook, but not under
the Doji. The Doji represented the first staff of the correction, however offered the distance to
to the low of the Ross hook not sufficient area for kostendeckung, if it to one
Order execution to come should.
Fig. 201
_ 26. S&P Trading _ 263
I received an execution with 37695 with a 2ër-Lot for an empty sales position. Mine
Stop was appropriate for 250 USD far away, and my cost liquidation goal was with 37685. I could
100 USD profit cover and made my costs in addition for a ër plumb bob. Then moved
I my loss delimitation stop to the break even point.
Fig. 202
264 _ 26. S&P Trading _
The market became very fast, and suddenly the courses fell. The next staff eroeflfhete
with a downward gap, and as the staff closed, secured I 35 points profit for 20
Contracts. My stop was with 37660.
Fig. 203
_ 26. S&P Trading _ 265
The courses fell further and achieved a new low. When a Reflexrally began, calculated
I the amount of my not realized profit for this position and moved my stop
more deeply, in order to secure further 15 points. I placed my new stop with 37645.
Fig. 204
266 _ 26. S&P Trading _
I became with 37645 with a profit of 50 points for each contract mine
20 contracts out-stopped.
The correction left a Ross hook and a sufficient area for kostendeckung, so that
I with an outbreak by the low of the correction staff to sell could.
Fig. 205
_ 26. S&P Trading _ 267
The courses corrected sharply. I began my counting. Also moved I mean
Order to sell under the correction low.
Fig. 206
268 _ 26. S&P Trading _
The courses educated an interior reversal staff. I moved my sales stop under the low
in addition this staff and both a purchase stop placed over the high of this staff as
also over the new Ross hook.
Fig. 207
_ 26. S&P Trading _ 269
I received an execution with 37685 for an empty sales position with 25 contracts. Mine
stop loss 250 USD were far away and my costing hitting a corner stop lay about 37675.
Fig. 208
270 J26. S&P Trading _
The courses moved downward, and I could cover with 37675 my costs and for 100
USD profit realize. I tried my stop to the break even point with 37685 too
move, but I could not place the order so fast, as it was my intention.
Before the staff closed as a Doji, the courses to 37685 ticked.
Fig. 209
_ 26. S&P Trading _ 271
A lucky circumstance turned out as that I not at the break even point
one out-stopped. But Dojis do not mean always a reversal. The next staff opened
lower, and then the courses to 37600 fell. There the courses stopped and moved
somewhat upward. I pulled my stop more deeply to 37645, and the staff closed with 37630
272 _ 26. S&P Trading _
When the next staff opened, the courses two Ticks to 37640 rose. I was nearly safe me,
that they would reach further to rise and my stop, but in addition it did not come. The courses
fell again. I moved my stop, in order to secure further profits. I determined,
that I had missed a Ross hook, which had developed in former times on the day. My new stop
was now with 37630.
Fig. 2l l
_ 26. S&P Trading _ 273
The courses moved somewhat lower and would close than Doji staff. I placed my stop
exactly over the high. Every time I see a Doji or a reversal staff, I know that
it in the market uncertainty gives. If the market cannot decide, into which
Direction it to move is, then I begin to prepare me for a door.
274 _ 26, S&P Trading _
With the next quotation staff the uncertainty of the market stopped, because the courses
moved in a strong correction upward. My stop was reached and I had
75 points with each of my 20 contracts made. Then I did, what me my plan
prescribed: I placed an order to sell under the Ross hook.
Fig. 213
_ 26. S&P Trading _ 275
The courses educated a reversal staff. I marked the Chart with my counting, placed
an order to sell under the low of the last staff and waited. If I act, am I
very consistently, but occasionally I do not miss a hook or it succeed to me, one
To seize commercial opportunity.
276 _ 26. S&P Trading _
I now so often showed this technology that I hope, the reader white exactly, why I
which makes. If there is still ambiguity, which shows Chart in fig. 215 that I
had counted now three upward segments. I placed a buying order over the high and
moved means order to sell under the low.
_ 26. S&P Trading _ 277
I sold 25 contracts with 37615 - at a place, which as a small Doji staff presented itself.
My stop was appropriate for 250 USD over my point of entrance, and my Liquiditationsziel to
Kostendeckung was with 37605. Up to the end of the last staff still another one minute remained.
my broker and gave it the order, my loss delimitation stop one called ticks
to place over the closing price of the preceding staff. Hesitating, which I in the market
saw, pleased to me not.
Fig. 216
278 _ 26. S&P Trading _
I had to make myself not all too for a long time concerns. The next staff opened somewhat lower,
then the courses fell sufficient, so that I came into the situation to cover my costs. After
the kostendeckung moved I my stop first to the Gcwinnschwelle and then, as that
Staff closed, continued to move I it, in order to secure half of my not realized profits.
My new stop was about 37600.
_ 26. S&P Trading 279
When the courses corrected, I was out-stopped with 37600. I realized with everyone mine
20 contracts 15 points. Since I am a disciplined Trader, led I mean usual
Procedure through. I placed a sales stop under the Ross hook. If it sufficient
Area for kostendeckung gives, then I in addition a sales stop under the low place
the correction staff. In this case there was not sufficient area for second
Order to sell.
Fig. 218
280 _ 26. S&P Trading _
The courses came up to one tick on mean order to sell near, as the next staff as
a double low closed. This mark I became also not the old, in former times on this day
made Ross hook miss.
_ 26. S&P Trading _ 281
I got my execution with 37580 with a 2ër-Lot. The courses opened with that
next staff with 37575, ticked then upward and there my order one implemented. I
placed my loss delimitation stop 250 USD per contract above mine
Entrance course. I should explain here that my stop as conditioned order
one places (contingent order), which is dependent on a coupled order execution
I do not place that separately stop. When the courses fell, I could with five contracts my
Costs cover, and then I moved my stop to the break even point.
In the course of the downward movement also a 1ër-Lot came to the execution, based on one
Outbreak by the older Ross hook. My loss delimitation stop placed I
250 USD over my entrance course, and I knew of this contract set my costs
cover. I liquidated also here five contracts. I moved all stops - from both
Contract set - after 37560. There I was out-stopped, as the courses end the conclusion of the staff
rose. I had realized 20 points profit with everyone of 20 contracts.
The kostendeckung had brought in additionally still some hundreds dollar.
Fig. 220
282 _ 26. S&P Trading _
When the courses corrected, led I mean usual procedure through. I placed
Sales stop underneath the Ross hook. In addition I placed a sales stop under
the low of the correction staff, because this mark gave it to sufficient area for kostendeckung.
Calmly I waited for further developments.
Fig. 221
_ 26. S&P Trading _ 283
The next staff continued the correction. I began my counting and moved mine
Sales stop upward, under the low of the new correction staff.
Fig. 222
284 _ 26. S&P Trading _
The next staff brought a reversal, in addition, a higher low. I could do now third
Segment count and moved my sales stop under the low of the last staff. There I
an outbreak upward by the double high as the beginning of a new trend regard,
placed I a buying order, if it should come to such an outbreak.
Fig. 223
_ 26. S&P Trading _ 285
One recognizes a good method by the fact that she keeps the Trader away from the market, if itself
this moves sideways. I do not know a mechanical method, which can do that. As itself that
next staff as an interior staff developed, moved the market, according to my definition,
Fig. 224
Note: Now four higher lows were present; thus the downtrend was broken. That itself
developing upward trend had come to a halt. The preceding staff did not have
new high made and was a reversal staff. Also the current staff did not have a new high
made and was likewise a reversal staff. Due to this fact it did not give any longer longer
an identifiable trend. I now did it to something, from which I hoped, with this series of
Business show to be able. I updated the segment counting. As I did, can
They in the Chart of the fig. 225 see.
286 _ 26. S&P Trading _
I moved the segments a stage more highly, so that her - as shown in the Chart - again
were numbered. After the new segment was present, I gave an order, over with one
To buy outbreak by the high of the staff, that had completed the third segment.
Fig. 225
_ 26. S&P Trading _ 287
The next staff ticked somewhat more deeply and moved then in the reverse direction like that
preceding staff. It gave thus a further reference to a not tending
How in earlier place already notices, it is to be known substantially and recognized, when itself
a market in a consolidation finds. Intestine I would not like to be in the market.
such market belongs to the parquet dealers and not me. They love it, if itself a market
moves sideways. They can " scalpen " then completely as desired the market. Therein I can
with them do not compete, because I can adapt never the speed, also
that to the action to react and their orders place can do it. The markets, which hate it
- trend markets - are the markets, in which I make my money.
Fig. 226
288 _ 26. S&P Trading _
Further confirmation for a trendless market brought itself the Doji staff, that next
materialisierte. The market was now, according to each definition, which I could introduce myself,
in a consolidation.
If a market comes into a consolidation, I will not act it, to I one
new trend to define and count knows.
Fig. 227
_ 26. S&P Trading _ 289
It continued and I made my thing. I began a payment. If the market in
Term was to go somewhere - sooner or later I would go with it.
Fig. 228
290 _ 26. S&P Trading _
The courses moved somewhat more highly, but the staff ended as a reversal staff. This is not
unusually, if a market is in a consolidation. There I now three
To count I knew, placed upward segments a buying order over the high of the latter
Staff and it waited, in order to see whether it would come there to an outbreak.
Fig. 229
_ 26. S&P Trading _ 291
The next staff destroyed the developing upward trend completely. I marked
the double high as a purchase place and waited again.
292 _ 26. S&P Trading _
Next there was an interior staff, that itself approximately on the same kursniveau as those
preceding consolidation found. I continued to wait. Note please that those
Correction of the downward staff a Ross hook to develop did not leave. Ross hooks come only
in trend markets forwards. This market was according to my definition still in one
Fig. 231
_ 26. S&P Trading _ 293
The following quotation staff went downward, and I placed a counting on mine
Fig. 232
294 _ 26. S&P Trading _
No downtrend formed. The next staff made no new low, and closed more highly,
as it had opened, whereby a reversal staff and a double low developed.
_ 26. S&P Trading _ 295
The following staff was again a reversal staff. What had happened? The sliding zone always was
still there, it had become only further. For me that means one more weakly becoming
Market. If a sliding zone becomes closer, I would expect an explosive movement.
If a consolidation extends however, then I do not expect short, tradable
Trend members. Only then, if the market extended sufficient, it makes again for sense,
to act the legs of the consolidation.
Fig. 234
296 _ 26. S&P Trading _
The courses broke out a little upward, but I did not expect that her in the course of one
Rally would break out of the sliding zone. Usually it lasts about 21 to 25 staffs,
before one can expect an outbreak. I could count now two upward segments and
marked this on the Chart.
Fig. 235
_ 26. S&P Trading _ 297
As one can expect it in a sliding zone, the next staff was a reversal staff, that
close of its low closed. Although it does not function perfectly, then this method has me
the segment counting, with which one identifies and recognizes a trend, when itself a market in
a consolidation does not rule, over many years outstanding held from it, in
to act tradable sliding zones and consolidation ranges.
This part of the book may not be so exciting, but the intelligent Trader becomes it nevertheless
to come lets large attention pay attention and to it, what I show here. The knowledge,
when one acts, and when one sits and waits, a fortune is worth. For me is it like that
Since I a market to judge not before will separate - in the opposite: I leave myself of
say to him, where it will move -, I always drew like my trend line and
numbered my segments. I placed a buying order over the high of the last staff
and waited.
298 _ 26. S&P Trading _
The next staff confirmed again the sliding zone and terminated the upward trend. There I
for the moment nothing to do had, counted I the staffs, that developed so far in the sliding zone
were. Were fifteen. In fig. you can see 237 that I the consolidation range
It pleases me to test my methods in order to see whether they still function. Around it for
me to make somewhat simpler to terminate this consequence from business to I have the Chart
shifted somewhat to the left.
Fig. 237
_ 26. S&P Trading _ 299
The next staff confirmed the consolidation again and definitely. I could do nearly already one
Formation see, which looked as / \ / \. the last staff was the sechzehnte staff that
Sliding zone. As in fig. 238 to be seen, I moved counting up upward.
So that I did not make errors, I numbered also the segments pointing downward.
Fig. 238
300 _ 26. S&P Trading _
The next staff remained in the sliding zone and completed a double high. I changed
the segments for the identification of the trend, by I the trend line over the last high
pulled. Here counting up was terminated.
Fig. 239
_ 26. S&P Trading _ 301
Alternating reversal staffs confirmed to the far consolidation. The last staff was that
eight tenth staff. It was now 14,15 o'clock Chicago time. The S&P 500 makes very frequently one
important movement between 14.00 o'clock and 14,50 o'clock I asked itself whether it at this
Day like that would not be. I renewed the inscription of the trend segments.
Fig. 240
302 _ 26. S&P Trading _
The observation of the S&P became slow somewhat boringly. It seemed in such a way, as if the
the daily past was. Since I made however these business the writing of this book,
I had to out-sit the thing. I did not know that there was to learn equal a large lesson
Fig. 241
_ 26. S&P Trading _ 303
When the last staff closed, I began to draw my segment lines. I identified it
fast. This was the twentieth staff of the consolidation. With the next staff could
something begin.
304 _ 26. S&P Trading _
The twenty-first staff of the consolidation did not let the straight earth tremble, but it had
good momentum. Was this perhaps the beginning of an upward trend?
Fig. 243
_ 26. 305
The two-and-twentieth staff of the consolidation moved properly upward. It had
perhaps good momentum and I, " is it thought \". a further staff and I could
mean buying order in the market place.
Fig. 244
306 _ 26, S&P Trading _
Now, " " was not it. I had to remain further calm. The reversal staff had that
Upward trend broken. I renewed the inscription of my Segmentzaenlung.
_ 26. S&P Trading _ 307
I was disappointed a little, but my training and my discipline forced me to it, those
To draw segments and numbers on the Chart. If it to an outbreak by that
highest high would come, I would buy. Otherwise I would be, according to the definition,
still in the consolidation.
Fig. 246
308 J6. S&P Trading _
The courses proved again that they consolidated. In order to show that the market no notion
had, into which direction it should go, the courses a Doji formed. Despite the fact that
I had moved upward the third segment of my counting, became I in no case one
Position are received, before the courses had exceeded the highest high.
Fig. 247
_ 26. S&P Trading _ 309
The S&P was still in a sliding zone. I would wait, in order to see whether those
Courses the highest high would exceed. My only other possibility would be that
I, before the market closed, downward get an outbreak of three segments
310 J6. S&P Trading _
The next staff terminated the upward trend again. Now I could do only three downward
pointing segments identify. Sometimes the S&P makes one short before commercial conclusion
strengthens movement. But today it was too late for me, in order to participate in it. It became
do not give any longer sufficient staffs.
Fig. 249
_ 26. S&P Trading _ 311
Two staffs before end of the daily I could look on a counting of three segments. Also
if it came with the last staff to an outbreak, I could not profit from it.
312 _ 26. S&P Trading _
I was not sad too over the fact that I had not taken the last business. That
Chart in fig. 251 shows, how the market ended on this day.
Fig. 251
I was glad that it past was. I had taken enough risk for one day on me. I
me, " next time thought I the NYSE will act ". A large advantage, if one that
NYSE Future acts, consists of the fact that one does not have to do it with the program dealers
This was not a good day for me in the S&P. I rooted itself by dozens of Charts,
in order to find one day, on which I had been a winner.
Which I showed here, was one Trading day, as it happened nearly exactly the same. In
Reality gave it a few business, from which I noticed that I would not have her take
are. But I did not have the feeling to show it would be a service on mean been readers.
They have sufficient bad habits, so that you also do not mean still some
to take over must.
_ 26. S&P Trading _ 313
Although I made small profits in the series of the business shown, then I acted
but too much and too aggressively. The positions were incompatible with what I tries
has to mediate to you. A daily I will make a video over one commercial day.
Then you will see some the moved things, which happen to me during the Tradings,
and hear. There are many days, there loses I more moneys, than I made on this day.
But altogether seen, I lie in front.
I do not act the S&P each day. Actual is it like that that I less than most
Trader acts. I am content thereby if I mean living costs with the Trading that
Markets to earn knows. I pursue the courses and prices of most markets, observe
some of it, and the majority of my Tradings happens in approximately eight markets.
I make most money in the currencies and the S&P or the NYSE. If I those
Choice has, pleases me the NYSE actually better than the S&P. with the Trading of the NYSE
it less competition and the market are not in such a way moved. It is about only 60 per cent like
volatil like the S&P. The order remarks are worse or two Ticks.
If I act, I am extremely selective in my position rushing choice. I like it, too
win. I hate it to lose. I will not act to only act in order. I lean it
off to act each day as if I would be somehow obligated to it - with the exception, if
I a book write.
Most Trader, which I met, means, they would have to act each day. Each day
look for they a possibility and enter themselves a position. As their brokers it love
I act for me, and not, around my broker lucky to make the Chart in fig. 252
shows, how the S&P looked altogether. Perhaps the reader can recognize, why I these
Share index for this commercial day selected.
Fig. 252
314 26. S&P Trading _
I assumed that itself the Future share index no longer all too for a long time within so close borders
would move. I had the feeling that an explosive day or part of a daily was fallig,
Although the courses moved only for a part of the daily strongly, then was enough nevertheless,
in order to earn some dollar in the S&P. After the initial Handelsvolatilitaet varied that
S&P simply again in the same sliding zone as on the preceding day
It is to be marked interesting that one can make money in a sliding zone, if that
Market volatil enough and the sliding zone from the high to the low enough is broad
If we regard the Chart in fig. 252, then it is obvious that itself the market,
altogether moved seen sideways. If itself the courses already on five-minute
Chart move sideways, how much trend can be possible on a Tageschart then there?
I look for potentially explosive situations, which I can act.
I showed these situations in this book. An outbreak from parallel
Consolidations, my four large entrance signals, my middle ones and small signals these are all explosive situations.
My own preference is with the large entrance signals. They do not come each day
forwards, and that is one of the principal reasons, why I do not act each day. If I act,
I look for the largest chances of success. Explosive situations offer this chance to me.
When I began with the Trading on this day, I did not have notion, like well it itself
would develop. Each of my commercial days ends so well. Nevertheless I have this kind
of commercial days very frequently. I believe seriously that for it my position rushing choice to
is responsible to large part. Ninety up to fuenfuendneunzig per cent of the Trader exaggerate it
Trading. They act too frequently and too much.
I saw many Futures contracts, those on the Tageschart a marvelous in daily
Movement submitted. But if I had acted this movement during the daily,
I would have been torn into pieces. On the other hand I saw " eventless days ", how
that, which I terminated straight in the S&P, at those on the Tageschart nothing happened: In
Cash transaction could earn I on such a day however a quantity money.
In the minute trade that is not unusual happening. If itself on the Tageschart one
beautiful movement occurred, which passes Intraday gradually, then I lose frequently, there I
by the strong corrections one out-stop, those in the course of the rise or descent
occur. On the other side it occurs that I have Intraday a good day, if
the market steeply moves and me a possibility for the entrance give during the daily
Chart a " eventless day " shows. That was the case with the S&P shown last
An important lesson, which I hope to have shown is importance that
Position size, which makes it possible, with a part of the position a few Ticks from the market too
take. If then the market runs, the remainder of the position for the large profits becomes
27. Trading methods
Before we come to the last section of this book, I become the techniques,
Identification by consolidations and suitably for the identification by trends beginning
are, again deepen.
27,1 the identification of consolidations
Consolidations are present, if on the Chart to seeing movements so / \ / \ or
look \ so \ / /.
Fig. 253
One finds the smallest possible consolidation, which \ looks \ so / /, if one a series
from staffs sees, in which the openings and conclusions lie alternating highly and deeply. One
such series consists of at least four staffs.
Fig. 254
Each series of four or more staffs, the changing openings and conclusions, Dojis, or
both exhibits, forms a consolidation.
Fig. 255
Consolidations are also present, as soon as there is a consequence of four staffs, their conclusions
within the course distance of a only one, preceding staff are applies also,
if or several of these staffs have highs or lows, itself outside of the range
the staff find, that covers the conclusions.
Fig. 256
27,2 the identification of trends
I showed several ways to the identification of a trend. I become this again
deepen and further present.
27,2,1 following each other new extremes
The first way consists of it that I wait, to I in a consequence of staffs an outbreak
by the high of the third, successive higher high see.
< purchase with the outbreak by the high
Fig. 257
_ 27. Trading methods _ 317
Accordingly I wait, to I in a consequence of staffs an outbreak by the low of the
third, successive deeper lows see.
Fig. 258
27,2,2 falling highs and rising lows
A second way to the identification of the trend is the search for falling highs and rising
Fig. 259 shows falling highs. One sells with an outbreak by the third low, also
if it did not come at all three staffs to new lows
Fig. 259
Fig. 260 shows rising lows. One buys with an outbreak by the third high, also
if it did not come at all three staffs to new highs
Fig. 260
27,2,3 the method of the segment counting
The third way consists of counting the segments until there are three segments, the one
Trend define. Fig. 261 shows the segment method.
Fig. 261
The next way is that, which I acted longest. It is the way, that me
originally one taught. At the beginning of my career I acted three years long after
this method, and I never dropped it. They find this method also in mine
Book Trading is a business. I apologize for this repetition, but those
Method is important.
J7. Trading methods 319
27,2,4 the method of the genuine trend
With the years I have the Trading much inside light and act somehow I also much
intuitively. That is because of the fact that I studies zigtausende of Charts and in each time horizon,
of a minute Charts up to Wochencharts, acted.
But Trading does not have to be intuitive and from the inside out come with the best Trading into
I made those for my entire career with a method, very simply and forward
is arranged
I will show you some extremely fundamental commercial techniques. These have me many
Years long outstanding served. I will begin with the first method, which I learned
has. With this method I began my Trading, and immediately I had thereby much success.
Actual was it like that that I in the first five months, in which I this method
used, my account of 5.000 USD up to 28.000 USD increased.
This method functioned immediately and it functioned still today. I do not doubt that
it will always function, because it is based on the truth. The truth is constant, it
does not change ever
They heard again and again that the trend is their friend. With this method
I will show you, how one uses the trend. They heard that them their losses
small and to your profit positions to adhere must. This technology becomes it you
make possible to do. The technology is so simple that many of you do not believe it
become. They heard that you should to be able to be said of the market, what to be done are. This
Concept embodies this wisdom.
It will be to your damage, if it not the simplicity of the absolute truth
accept, which I will show you. I can say to you that I in the first three
Years, in which I acted, mean to act living costs with this simple kind
earned. I did nothing different one to wait except until the correct event occurred.
Are you ready for it? O.k., then goes it loosely!
Fig. 262
The situation, for which I look, should offer the possibility, a trend line in one
to be able to draw tending market. When I began with my Trading, I did not have
Computer. I acted those after a set of bought Charts, weekly given change
became. I had to update my Charts with the hand. I drew those for each day
Staffs, those the opening, the high, the low and the conclusion showed. I can with one
Ruler no degrees of line draw, and so I hated each minute of this activity.
After the daily staffs were drawn, I drew the trend lines. In one downward
I connected the highs to tending market, and in tending an upward
I connected lows to market.
The Chart in fig. 262 shows that it was my task to act only if I one
clear trend line to draw could. This forced me to it, with my first business too
wait, until a market had corrected, so that I the preceding high with the current
Correction high to connect could. If that were possible, then an established trend lay forwards
My first obligation consisted of the fact that highest high of the last market movement with that
to connect first correction high. Afterwards I was allowed the last correction high only then also
connect for the current correction high, if the angle of inclination of the trend line into those
same direction pointed or had deepened.
After an established trend line was present, I tried only one contract with one
To sell outbreak by the low of each daily, at that itself the market upward in
_ 27. Trading methods 321
Direction of the trend line had moved. I did not act, if the prices with one
Quotation gap through mean sales point fell. I acted only, if the prices through
mean sales point were through acted. My sales point always was
one tick under the low of the preceding daily, an outbreak by the of yesterday
Deeply represented.
If I were in a position, then I held myself this as for a long time as the prices of
the trend line moved away, by making a lower high and/or lower
would close, when they had opened. My initial stop was 10 Ticks of mine
Entrance price removes.
I increased my position, if the prices of the trend line moved away, by I
with outbreaks, which were acted by the low, sold.
Below each Ross hook placed I an open sales stop. A Ross hook is
one point of pivot, which results from the fact that the market changes its direction only for one
In the case of a market tending downward this point develops, as soon as the prices at one
Day no new low make. In a market tending upward a Ross hook develops
then, if there is one day, at which the prices do not make a new high.
To no time I was allowed to permit it that, as soon as I 100 USD at profit in the position
a correction had over the high of the preceding daily leads, or that one
Correction so far leads that it more than 50 per cent during the last market movement
developed paper gain reduces. Further induced I to the commercial conclusion, after
I 50 USD at profit in the position had, my stops to the break even point.
I paid attention to it, on each day, on which the market closed more highly, than it had opened, my
To pull tight stop.
In a market tending upward naturally the opposite of these criteria for those met
Handling of the openings, conclusions, highs and lows too. In a market, that itself
upward, paid attention I moved whether the conclusion lay lower than the opening. I
tried to buy, if itself the prices downward against the weight of the upward trend
moved. I bought those with outbreaks, by the high of the preceding daily
were acted. I drew my trend lines from low to low.
With these simple rules in the memory we regard again the Chart of the Sojaoels:
Fig. 263
The point A of the Charts is exactly under a horizontal line, the one
Consolidation range shows. The prices found supporting on or close at this line,
The point B of the Charts shows downward gap, those from the consolidation range
drove out. The prices moved downward until to the point C then, at the following
Day, which with the letter E is marked, the prices corrected. Because on the day E
no new low was made, developed at the point C a Ross hook.
Since the point CD was the high of the preceding correction, I selected this place as that
highest high for my trend line.
I could draw that first times a trend line between the points CD and E. The day E
an in daily correction represented. I tried, with an outbreak by the low this
To sell correction daily. On the next day two orders to sell were implemented one as the prices broke through the low of the daily E, and second as the prices the mine
open sales stop at the low of the daily C, which broke through point of the Ross hook. To
Commercial conclusion had accumulated with two contracts a small profit: Five Ticks with that
first contract and four Ticks with the second contract. There nine Ticks in the Sojaoel
54 USD represent, pulled I mean loss delimitation stops to the break even point.
27. Trading methods 323
On the following day I for opening out-stopped I lost one tick with mine
first contract and two Ticks with my second contract. My total loss
68 USD. amounted to
The following correction broke by the place, in which the trend line was, and terminated
the downward series. It left however at the point F a Ross hook.
For the moment there was no trend line for me, but the day G broke through the Ross hook to
Point F, and I sold in such a way to a contract. To the commercial conclusion I had a profit of
then I moved 120 USD. my stop to the point, at which I at least 50 % mine
did not realize profits secured.
The opening on the following day I became with a profit of 5 Ticks or 30 USD
out-stopped. Of it had I mean costs off to take, whereby me a loss of 20 USD
remained. Altogether my losses amounted to now 88 USD.
On day I sold H again, when the prices broke through the Ross hook, thereby
it had developed that on the past day no new low was made.
At the time of the commercial conclusion I had 103 USD at profits, and so I moved
my loss delimitation stop, in order to secure half of these profits.
On the day I I was out-stopped again with a profit of 9 Ticks. Of it pulled I mean
Costs off. 4 USD remain to me in this business, and my total loss amounted to now
84 USD.
Between the points I and K came it to a correction. Each day I tried,
to sell an outbreak by the preceding daily low.
When the market at the point K terminated its correction, I knew a trend line of the point J
draw K to the point.
There it on the two days, which followed after the day K, to gap openings underneath of the
Lows of the preceding daily, I came no could die position.
On day I sold L, when the low of the preceding daily was taken. I
with a loss of 85 USD one out-stopped. I added this amount to mine
loss of 84 USD, already existing, whereby I was altogether 169 USD in the loss
The day M was the high of the correction, therefore I connected the day K and day M. there those
Trend line was further intact, set I means tactics away.
In the five days, which followed after the day M, I did not know empty sales positions
are received.
The day N let a Ross hook develop, because it did not come to a new low that
the following day m made a new low around one ticks and was at the same time the high for that
Correction. I drew my trend line and connected the points M and m.
On day O I sold a contract, as the prices the low of the preceding daily
fallen below, and a further contract, than the prices fell below the Ross hook.
For the commercial conclusion of the daily O I could not exhibit profits for this position. To
the prices moved the following day more deeply, and to the commercial conclusion I had with the two
Contracts altogether 18 Ticks profit made. I moved my loss delimitation stop,
in order to secure half of these Ticks.
Outgoing from this point up to my door on the day Z were my two
Contracts never in difficulties. My pulled tight 50 %-stop became of that
Prices does not reach.
Let us continue, because it passed still more.
The prices opened one on the day P tick above the level, at which I an open
Sales stop had placed, over with an outbreak by the low of the preceding
To sell daily. On this day I sold to a third contract, to
Commercial conclusion a profit of 22 Ticks exhibited. Of it I secured 11 Ticks by means of one
Purchase stop.
On the day Q the prices continued to fall, and to the commercial conclusion the third contract pointed
Paper gain of 29 Ticks up. Of it I secured 5 Ticks for 1. On the following day R I became
with a profit from 90 USD, about which I mean costs from 25 USD took off,
with which for this contract a net profit remained for me of 65 USD. The reduced my
It had losses on 104 USD. I still two open contracts which ensured that I money
The prices corrected R up to the point, and the day R became the next junction point
for my trend line.
On the day S the prices were acted by the Ross hook of the daily Q. Here
sold I again a third contract. To the commercial conclusion the position pointed to one
Profit of 16 Ticks up. Of it I secured half.
Loss delimitation stop was not reached, and on day T I sold fourth
Contract, when the prices fell below the low of the daily S.
End the conclusion of the commercial daily I induced T my stop for the third contract, around 14
Ticks profit to secure (half of 27 made Ticks). I moved also my stop
for the fourth contract to the break even point, there I with this contract 9 Ticks in
Profit was
On the day U the fourth contract at the break even point was out-stopped. My remaining
Positions remained safe. My total loss amounted to without the value of the open positions
154 USD.
On day I sold U again with an outbreak by the low of the preceding
Daily. This position was now again my fourth contract. To the commercial conclusion I secured
50 % of 37 Ticks.
_ 27. Trading methods 325
On the day V I secured 50 % of 16 additional Ticks, so that I altogether 27 Ticks on
Profit secured.
On the following day I was out-stopped with this profit, which brought me 162 USD.
From it I took 25 USD off at costs, whereby 137 USD remain to me, which I with mine
Losses of 154 USD charged thus was my current loss for this series of
Please business on 17 USD. On the other hand I knew the value of my three open positions
place, which were now well in the profit.
The prices corrected the low up to the day W. on the following day sold I, as the prices
the daily fell below W. End the conclusion of the commercial daily my position instructed 78 USD
Profit up, and I pulled my stop to the break even point. This was now again my
fourth open position.
On the day I moved X my loss delimitation stop, in order to secure 22 Ticks or 132 USD.
On the following day I was out-stopped. My net profit for this position amounted to
107 USD. My account was now 90 USD in the plus.
The prices corrected Y Ich up to the day sold with an outbreak by the low of the
Daily Y and was out-stopped on the following day with a loss of 85 USD. Mine
Account was now 5 USD in the plus.
At the time of the daily Z I secured 50 % of 108 Ticks, my third contract since
the outbreak by the low of the daily Q up to the conclusion of the daily X had constructed. I
with this third contract with a profit of 324 USD one out-stopped. Less
To me a net profit of 299 USD. my account remained to costs was 304 USD in the plus.
End the conclusion of the commercial daily Z, a " Blow OfF' day, I induced my stop exactly one
Tick over the high of the daily. On the following day I became there with my two
remaining contracts out-stopped. With these two positions was 105 and 106
Ticks at profits accumulated. The entire amount of dollar amounted to 1,266 USD, less 50
USD costs, with which a net profit of 1.216 USD remained. In addition added I mean
preceding profit of 304 USD, and my total profit amounted to 1,520 USD. in such a way
What does it depend on now? I would like that you see, what Trading am real. I would like,
that you see, why them your losses to keep small to have.
They saw, how often I tried to enter into this market and how much small
Losses I to take had, before I could really make points.
That is it, for which it goes with the Trading. Remember that calculated the losses good
Losses were. There were many of it, but they were all within the parameters of mine
Commercial plan. Would this method function also in the today's markets? Whereupon
know you bets! One would have the consequence of business, which I had shown you straight,
with a Chart of the Sojaoels of the July contract 1991 to make know, its trade in July
1990 began. The first business shown was the sales positions on the day F, that
4. October 1990.
Did I make these business real? No! Why not? Because I at this time in
other markets acted. But the truth is the truth. I showed you, like I
learned to act. I long exclusively acted three years according to this method.
My family and I lived on my Trading. I learned to remain calm and up
to wait tending markets.
The method, which I used, forced me to wait. It was me never permitted, afterwards too
act, which I thought. I was allowed to act only thereafter which I saw. The truth, after that
I to act had been always seen, was before me on the Chart. There were no different
Truths. I did not have an oscillator and no sliding averages. I used only
a trend line.
When I regarded the Chart again, I saw that I ignored an interconnect point
had. Since I had already used all letters of the alphabet, I connected the day M also
the day m.
Is that the only way to act Sojaoel? Surely not, but the Trading after this
Forced method me to learn many valuable lessons.
I learned that the trend was my friend, as long as I honoured it. So long itself the prices under
the trend line found, entered I only empty sales positions. If itself the prices over
the trend line found, then I acted only purchase positions.
I learned that I had to take many small losses. I learned not to be afraid it. I
learned, the profits, which I had to maintain and protect. I did not learn, these profits
to return again completely to the market.
The losses came, if I made few or no profit in a business. I had
the losses keep minimal. My first account was only 5,000 USD largely, and it was not
my own money. I had borrowed the money, and I had to protect it it was money of
Used, and I was allowed to lose this money in no case.
My arrangement with my uncle, which had borrowed the money to me, was strict business.
It had to be like that, and today I am glad over the reasons. If me the money simply so
given would be, I it would have lost. But like that it was not money, which I simply
to throw away could.
I had to managen the money. I had with each penny knausern. I had my Trading
as drove a business. This was not a play. This was reality. The roof over mine
Head restraint and on the play.
It was necessary that I learned to try the entrance into the market more than once. I
had to be able numerous attempts to get over. So that that could be possible, I had mine
Principal ones retain. If I had made a large loss with my first attempt,
then I would not have had no more the courage or the capital try it again.
Can you understand that? If you permit it that them in a business a large
Loss make, then you do not only reduce your capital, but you weaken also their
Sake to dare a renewed attempt.
Although we cannot be safe always over a trend (he is he lasts there, so long),
so we can be safe never over the timing. Nobody knows exactly, when a market
_ 27. Trading methods 327
begins to run, or when he will continue to move. Consequently you must
prepared its to dare several attempts.
It is like that, as if you would like to put and feel a toe into the water whether it still too hot
is. If you burn yourselves, pull fast again your toe out. They will wait.
If you think, you can again try it, put you again your toe into the water.
Perhaps now the time is there to take a bath. Otherwise, try it again.
But you will jump never into the tub and itself voluntarily burns third
Degree get.
If you are received a position and suffer a large loss, then you become much
burned. It will be issued you like a struck dog. They become into one
Corner forgiven and your wounds lick. They do not become any more the courage their
Convictions have. Do you know, what you will then make? They probably become
a new commercial system buy.
I do not know, where I read that, but the saying goes in such a way: " if a Mrs. one
bad day has, buys you a new hat. If a Trader has a bad day,
he buys a new commercial system ". If you know, who that first said or written
lets you it has me please know.
If I accomplish a Mailing for my books, do you know, who buys then which? Yes,
correctly, there is the people, which have a straight heavy time in the markets.
If I repeat the same Mailing, I become the same number of books
sell. Why? Others will have lost this mark.
The winners throw nearly always mean letter into the garbage. Who would like a book concerning
read, if it wins? Like many of you, 2,500 USD or 3,000 USD will be ready
to spend on a new system, if you lie in front in the Trading?
27,2,5 the method of the genuine correction
I call a method, which I use frequently, the " method of the genuine correction ". It has
Similarity with the method of the segment counting, differs however in the fact that one
Line, which connects two segments, to be only then drawn can if a genuine
Correction was present
In fig. 264 I will show the difference between both methods, by I her
place next to each other. Left they see the method of the genuine correction (MEK) and on the
right of those
Method of the segment counting (ms).
The difference consists of the fact that I according to the method
the genuine correction a segment not to count knows,
until the low fall below-became. A segment cannot
are counted, before a new low was made.
l. i does not exist here a difference, because the correction has
' l n M di e intermediate lows fell below.
i. i however look themselves you the difference in the Zaehhmg
T > \\U. here on, if there are higher lows in the following.
The method is obvious
the genuine correction more conservatively.
Fig. 264
I have the five commercial methods mentioned in the sequence from the most conservative to
to the most liberal specified:
The method of the genuine trend
Successive one new extremes
Falling highs and rising lows
The method of the genuine correction
The method of the segment counting
I suggest, you select myself the method, best to your temper and
Their commercial style fits. Then you should remain with the selected method. If it also
the use of a method, can you are bewandert begin to master the next.
With the time it extremely well therein, a trend just in its emergence too
discover. They should not use these methods exclusively mechanically, a good
Evaluation should flow when using these methods also. Always look up
the large picture. Turn to a larger time horizon. Lean back and
regard the whole Chart pulling you the quotation staffs together and look you
itself the entire situation on
27,2,6 summary
Here a repetition and a recess of the different methods are for identification of the
Beginning of a trend.
The method of the genuine trend (MET): Downward
The method of the genuine trend does not need counting or shift. It requires only those
Ability to draw in a market already tending a trend line. With the method
the highs become and in tending an upward in a market tending downward
Market the lows connected. If you analyze a downward market, then
_ 27. Trading methods 329
connect the highest high of the last upward member of the market with the current
Correction high. Afterwards you repeat the procedure, by them the current correction high
connect with the next correction high.
In a downward market you may interconnect only the highs of the correction staffs.
The method requires a only one higher high (one in a downtrend
Correction staff), in order to make a connection. That is, you need only one
Connection (a correction staff), in order to draw a trend line. After it one
established trend line have, try, with an outbreak by the low each daily too
sell, at which the market moved toward the trend line
The sales point is to one ticks under the low of the preceding daily, that, after
the trade began, an outbreak by the low of yesterday represents. They hold their
Position, as long as the prices of the trend line move away, by it a lower
Make highly and/or a conclusion, which lies lower than the opening. They come to a hold their
Position each mark up, by selling with outbreaks, if itself the prices of that
Trend line to be moved away and by the low of each correction staff be acted. It
in addition place an open sales stop under each Ross hook. The method of the
genuine trends cannot be regarded as a counting method. They do not count anything. It
connect simply correction extreme with correction extreme.
The method of the genuine trend (MET): Upward
The method of the genuine trend does not need counting or shift. It requires only those
Ability to draw in a market already tending a trend line. With the method
the lows become and in tending a downward in a market tending upward
Market the highs connected. If you analyze an upward market, then
connect the deepest low of the last downward member of the market with the current
Correction low. Afterwards you repeat the procedure, by them the current correction low also
connect for the next correction low.
In an upward market you may interconnect only the lows of the correction staffs.
The method requires a only one deeper low (one in an upward trend
Correction staff), in order to make a connection. That is, you need only one connection
(a correction staff), in order to draw a trend line. After it an established trend line
have, try, to buy with an outbreak by the high each daily at that itself
the market toward the trend line moved
The point of purchase is appropriate for one ticks over the high of the preceding daily, that, after
Trade began, an outbreak by the high of yesterday represents. They hold their
Position, as long as the prices of the trend line move away, by it a higher low
and/or a conclusion make, which lies more highly than the opening. They come to a hold your
each mark up, by buying with outbreaks, if itself the prices of the trend line
to be moved away and by the high of each correction bar be acted. They place
in addition an open purchase stop over each Ross hook. The method of the genuine trend
cannot be regarded as a counting method. They do not count anything. They connect simply
Correction extreme with correction extreme.
The method of the successive new extremes (MANE): Downward
The method of the successive new extremes requires counting, but none
Shift. If one regards a downtrend, the method needs three
successive staffs with lower lows. They must three staffs with lower lows in
see to a consequence. They need to concentrate only on a side of the staffs: on those
Low, if you count downward, and on the highs, if you count upward. The method
required not that you wait for a correction staff. They sell simply one tick under
the low of the staff, that represents the third segment.
The method of the successive new extremes is a counting method. Before one
Position entrance must be present a counting of three segments. With this method is
no shift connected. They sell with an outbreak by the low of the staff,
the one third, successive lower low made
The method of the successive new extremes (MANE): Upward
The method of the successive new extremes requires counting, but none
Shift. If one regards an upward trend, the method needs three
successive staffs with higher highs. They must three staffs with higher highs in
see to a consequence. They need to concentrate only on a side of the staffs: on those
High, if you count upward, and on the lows, if you count downward. The method
required not that you wait for a correction staff. They buy simply one tick over that
Highly the staff, that represents the third segment.
The method of the successive new extremes is a counting method. Before one
Position entrance must be present a payment of three segments. With this method is
no shift connected. They buy that with an outbreak by the high of the staff,
a third, successive higher high made
The method of the falling highs and rising lows (MFH & MST):
1. Falling highs (MFH): Downward
The method of the falling highs requires counting, but no shift.
In a downward market three following staffs with lower highs must be present. It
may no intermediate staffs give. They need only on a side of the staffs too
concentrate: On lower highs, if you count downward, and ascending lows, if
They upward count. With falling highs it is not necessary that it comes to new lows.
Only lower highs must occur. Each lower high counts than one. Three
successive lower highs drove that in the place to an entrance signal, at that
Deeply the staff one falls below, that formed the third lower high. With falling
Highs pay attention you to the three successively following lower highs, selling you with one
Outbreak by the low of the staff, the third successive lower high
The method of the falling highs is a counting method. Before a position entrance one must
Counting of three segments are present. With this method no shift is connected.
_ 27. Trading methods 331
2. Rising lows (MST): Upward
The method of the rising lows requires counting, but no shift.
In an upward market three following staffs with higher lows must be present. It may
no intermediate staffs give. They need only on a side of the staffs too
concentrate: On rising lows, if you count upward, and on falling highs, if
They downward count. With rising lows it is not necessary that it comes to new highs.
Only higher lows must occur. Each higher low counts than one. Three
successive higher lows drove in the place to an entrance signal, where the high
the staff one exceeds, that formed the third higher low, with rising lows
pay attention to the three successively following higher lows. Buy with an outbreak through
the high of the staff, that made the third successive higher low
The method of the rising lows is a counting method before a position entrance must one
Counting of three segments are present. With this method no shift is connected.
The method of the genuine correction (MEK): Downward
The method of the genuine correction requires both counting and shift. If
one a downtrend analyzed, must resemble the method the genuine correction for
Staff a lower high and a lower low exhibit, before one with the counting
begins. The staff, that follows after the staff, that led to the highest quotation, must
a lower high and a low low exhibit, around the staff l of the segment counting too
After the first segment was designated in this way, this method in everyone follows
Regard the rules of the method of the segment counting. That means, which one for those
Segments 2 and 3 only lower highs needs. If the staff, that the segment 3
represents, by which next staff one does not fall below, then you shift the counting
the segment l to the right and begin again with the counting.
The method of the genuine correction is a counting method. Before a position entrance one must
Counting of three segments Tn a downtrend are present try you one tick under
the low of the staff, that represents the third segment to sell.
It is important to recognize that between the segments several intermediate staffs
to be present can.
The method of the genuine correction (MEK): Upward
The method of the genuine correction requires both counting and shift. If
one an upward trend analyzed, must resemble the method the genuine correction for
Staff a higher low and a higher high exhibit, before one begins with the counting.
The staff, that follows after the staff, that led to the lowest quotation, must in
higher low and a higher high exhibit, in order to become the staff l of the segment counting.
After the first segment was designated in this way, this method in everyone follows
Regard the rules of the method of the segment counting. That means, which one for those
Segments 2 and 3 only higher lows needs. If the staff, that represents the segment 3,
by the next staff one does not exceed, then you shift the counting of the
Segment l to the right and begin again with the counting.
The method of the genuine correction is a counting method. Before a position entrance one must
Counting of three segments are present. In an upward trend you try one tick over
to buy the high of the bar, which represents the third segment.
It is important to recognize that between the segments several intermediate staffs
to be present can.
The method of the segment counting (ms): Downward
The method of the segment counting requires, like also the method of the genuine correction,
both counting and shift. If one analyzes a downtrend, then
needs the method of the segment counting only three lower highs. They try with that
To sell outbreak by the staff, that represents the third segment.
The highs of the segments do not have to be successive lower highs. Between
the connected highs can several intermediate staffs be present. The method
requires three segments and an outbreak with the next staff, or you must
Their counting to the right shift and begin again again to count.
Into a downtrend an outbreak that the low of the staff is fallen below, means that
the third segment represents. They do not have to wait for a correction. They sell simply
with an outbreak by the low of the staff, that represents the third segment.
This method works well with the S&P Day Trading. They use the MS counting, over
to be able to determine the end of the consolidation. After the outbreak took place,
stop the counting and act the trend.
The method of the segment counting (ms): Upward
The method of the segment counting requires, like also the method of the genuine correction,
both counting and shift. If one analyzes an upward trend, then
needs the method of the segment counting only three higher lows. They try with that
To buy outbreak by the staff, that represents the third segment.
The lows of the segments do not have to be successive higher lows. Between that
connected lows can several intermediate staffs be present. The method requires
three segments and an outbreak with the next staff, or you must their
Counting to the right shift and begin again again to count.
Into an upward trend an outbreak means that the high of the staff is exceeded,
that the third segment represents. They do not have to wait for a correction, buy you
simply with an outbreak by the high of the staff, that represents the third segment
_ 27. Trading methods __. 333
This method works well with the S&P Day Trading. They use the MS counting, over
to be able to determine the end of the consolidation. After the outbreak took place,
stop the counting and act the trend.
27,2,7 general remarks
The method of the genuine correction (MEK) and the method of the segment counting (ms) are
both counting methods, which require also shift. The only difference consists of it,
where you with the counting begin.
With the method of the genuine correction you absolutely need with counting up
higher low and a higher high for the same staff, before you begin with the counting
can. Afterwards you need only higher lows. During the segment counting against it are
necessarily for all three segments only higher lows.
If you downward count absolutely need you a lower high and a lower
Deeply for the same staff, before you can begin with the counting. Afterwards you need
only lower highs. During the segment counting against it are for all three segments only
lower highs necessarily.
With both methods it is substantial that it, whenever the extreme of the staff, that that
the counting represents third section, by which following staff one does not take
shift to the right and with your counting begin again there.
28. The circle closes
In the preceding sections of this book I showed you, as I after
Minutencharts of cash transactions active.
Despite my trips into the Day Trading I have however never the position Trading after
Tagescharts given up. Where it is possible, I mix both commercial styles. In the following become
I you show, how I make, and drove me back to the first sections
this book.
Every time a business from one of my large entrance signals develops, I have one
perfect candidates for a position business.
If the quotations e.g. from a sliding zone or from a border break out or if
the quotations a l-2-3-Hoch or a low or a hook break through, then is offered
an opportunity to supplement the position with additional contracts. These additional
Contracts are held together with the other open contracts over night.
I will not continue to enter with how I act these positions, because that was in
Topic of my book Futures Trading. It is clear that my position entrance, on that
Optimization is based, which I get by the inclusion of the Intraday entrance, everyone
Position business better and more profitabler makes, as if I this position exclusive after
a Tageschart are received.
With optimization I mean that I am positioned usually in former times, if I in the situation
are to be received a position due to an outbreak from the Intraday consolidation those
before the actual point of outbreak on the Tageschart happens, as if I exclusive
after a Tageschart mean entrance would select. That means it that the other Trader,
those their position only with the outbreak by these important large points of entrance
are received, due to their entrance mean contracts already positioned one frequent
Thrust give and the position in the direction continue to drive, in which I act.
With optimization I mean to risk no more moneys than is necessary.
It is about like that as what some professional Trader and parquet dealers, which I know, also
make for the sliding averages. They pay attention where itself the 9-Tage and 18-Tage
Averages to cross will position and itself already before in the market, with that
simple intention of being already positioned before the sheep, these signals as goettliche
Truth acts, into the market comes and by his entrance the professional the profits
zuschaufelt. Believe me, which become professionals fast to step out, and back remain that
Sheep, which asks itself, what with the position passed.
**time-out** other professional observe other thing, of which they know, that these the " baby " (it
Word, not mine) into the markets will bring.
I would like to speak on the last pages of this book about these general things Things, from which I hope that they are from interest.
If I do not know in my Trading, what it is loose then I do not act. This is one
Commercial rule, of which they heard surely already before.
_ 28. The circle closes 335
I know however that many Trader ignore this rule. I know thereby, what me to
Telephone and in letters is said.
In order to become a good Trader, is necessary it, in phases of the uncertainty the market
to stay away.
Trading is hard work. It is not simple. I spend 85 % of my time thereby, me up
the Trading to prepare, and only 15 % of my time I spend with the Trading.
That means it that I mean analysis work make before I act. Like otherwise I can know,
what is loose? I cannot depend on messages. I cannot on the opinion of
others hear. I must the market analyze and then after act, what there I see.
I never try to act thereafter which I think, but only after it, what I see.
My opinion is worthless, and which I think, are my opinion and nothing different one.
In the following I show you, how was taught to me to make my analytic work.
First I go through all my Charts, in order to get an overview of the markets.
During this time I look for tending markets. I draw trend lines on those
Charts, which exhibit a pitch angle of 30° or more largely. Until I to it get accustomed
had, as these angles looked, I used a protractor, around the angles too
determine. This method helped me to identify the trend.
Next I regard again all Charts and look for the medium-term trends, those
move against the long-term trend. Thus I become attentive to the markets,
those soon again to begin could tend.
Then I look in my Charts for Ross hooks. I mark each hook with a red
" H ". Then, dependent on my account equipment, I try to select the markets, those
the impression make to exhibit the largest potential and I place stop orders for
mean exact entrance over or under the hooks. These orders become as open orders
in the market places. I try to never miss a hook. I place my
Orders daily again
How can I know, which markets will have the largest potential? The answer is
simply. I select the markets, which have the strongest trend lines.
With this procedure there is a trick. It does not please me, if an angle is too steep,
because in an upward market that signals frequently that the end of the movement is close
Markets, which break out too fast and go steeply upward, offer rarely one
Entrance opportunity, before they begin to consolidate. Markets, with a moderate
Angles rose, and suddenly the angle begins to become steeper gives one
Warning that the movement could be soon past.
In downward markets I am ready to accept a steeper angle because becomes frequent
a market three times faster downward move, than it rose upward.
According to which I search at most, tending markets are, itself however for the moment in one
Correction find. I can try then an entrance, after the market corrected, in
336 28. The circle closes _
the proximity of the trend line came, and it the appearance has, as if it became its trend again
take up and then the Ross hook break through, which had resulted from the correction
Sometimes I must wait weeks, before the markets begin to tend. That was in former times
so and is also today still like that, nothing changed. Normally it gives ever few
Also times, in those no market gives markets, which are in a trend, but
Yes, I make my homework for each day. I cannot know, when itself more importantly
Outbreak, which will occur beginning of a trend, if I not daily my analytic
Work makes.
Finally will I mean work the side to put and a break for the dinner to make.
After the meal, if my head became clearer again a little, I become those
Charts again regard. I will then do my best, around a commercial plan
to arrange. I become superior, what I have to do. I become one million
times the question ask, " which are, if that happens or?". I try to antizipieren, which
in the market to happen could.
Frequently this kind of thinking will lead to the fact that some my potential business
become less interesting. Sometimes also it occurs that a second view of those
Charts in the question resulted, " why I have that not before seen?"
For example it happens that I regard a market, which approaches its trend line. Is it
then not reasonably, if I ask myself, " if this market breaks through the trend line, which
am I to then make?" I ask myself, how such an event will change the picture. If
I a position hold, then I consider whether I am to keep her further. If
I a position do not hold, then I ask, " am that an event that to it will bring me,
a position oppositely to the direction to take, into those the trend goes?" If it
such event is, is I then, something outside of this trend line, an order for stop limit
place for the entrance? It occurs very frequently that itself the courses, if it itself
within a trend channel of a trend line approach, already in a Gcgentrend to
Trend channel find. That means it that with an outbreak by the trend line one
Continuation of this trend developed again develops.
Finally put I mean work to the side and go to bed. On the next morning I become
my Charts to me again regard. Afterwards become I mean notes for my orders
note, which I would like to place.
I will again repeat in its such case, as I mean orders to give
All I make that and more, before I enter into a position. Most Trader however
analyze, after the position entrance is done. And they make their analysis too frequent,
if the position is running against it.
Very frequently Trader enter into a position and then, if they are positioned, say it
to itself, " oh, why do not have I that before seen?" As they would have seen it before
can, if they did not look before, again to have looked, then over it
thought and to have finally perhaps again looked?
_ 28. The circle closes 337
Also it occurs that many Trader in the search for a justification, why it those
Position were received, their analyses make. " now I am in the position, then I want
but see once whether I cannot find for it a few well reasons!"
If I want to exist as successful Trader, then I must be hard. Hard to me and
hard to my broker. I do not mean that I must be a rat or impolitely or
veraechtlich. I do not have only, I must in everything that I make, surely its I can it me
carry out, with the things, which I make, " Micky mouse " to play. This is a business. I
must my affairs commercially lead.
As a businessman I must managen my business. One of the major tasks of the
Management is planning. I must plan my positions. Other things, to which I pay attention,
if I go through my Charts, are: l-2-3-Formationen, Untertassenfnnnatinnen,
parallel consolidations, reversal staffs and Dojis. These are all component of my plan.
I have a good reason or good reasons, why I die a position. Other one
Trader make it too frequently exactly differently around. After they were received a position,
search they whether there was for it a good reason. In this way they justify before itself
even that they did the correct, if they actually did the wrong.
The terrible with this Tradern, which do not analyze and examine a position, is,
that they make themselves more thought over it, they which ice sort are to eat, as it
Thoughts to it lose, into which market they are to enter when and how.
By not taking themselves the time for preparation, they end with the fact that them not sufficient
Time find to really argue with pros and cons for a position into those
it enter.
They do not have to state time that the courses in the past two Ticks of their
Entrance removes forty times supporting found. They did not see time that them
exactly into the resistance inside act. They do not have to recognize time that, if the prices
the high from yesterday break through, the prices probably also a Ross hook take
become. They did not see time, where the prices are in relation to the trend line.
They do not have to really realize time, into which direction the superordinate trend goes,
or where the wave moves, which runs against this trend. They do not have time, really
to think about where they will place their stop. They do not have time, the market too
reads and to see, what them could say to these.
All these things could be antizipiert before. But there this Trader not their
Homework made, it to the fact will come that they run the markets afterwards in
the desperate effort to enter in " the large motion ".
Here is a detail, to which I pay attention, if I am in a position. It is a piece
Information, which was taught me before long time. Surprisingly it is now by that
Use of the Candlestick Charts very EN vogue become. It has to do thereby, what I so far
always called a " reversal staff ".
Fig. 265 shows an example of according to which I search.
338 _ 28. The circle closes _
There are essentially two kinds of reversal staffs. Individually seen is more important than
the other one; in combination they both are equivalent important.
The less important is that, which the Japanese a " Doji " call. I love this expression
and it into my commercial vocabulary integrated. This reversal staff looks in such a way:
The main thing, it with a Doji too
considers gives, is the fact that those
Opening and the conclusion about approximate
are appropriate for same height.
The opening and the conclusion do not have
accurately directly its, but they should very close
together lie.
Fig. 265
If I see in a tending market a Doji, I am alarmed, because in a high
Percentage of the time passes it then that the market with the following quotation staff into those
opposite direction to the Doji runs.
But one sees a more important reversal staff if in a downward market a conclusion
happened, which lies more highly than the opening, and if in an upward market a conclusion
happened, which lies lower than the opening.
_ 28. The circle closes _ 339
Still an important note to a imminent trend change gets
one if there is a combination of a Doji and a reversal staff (fig. 266).
Fig. 266
The best indicator for a trend change develops, if it a combination of two or
gives even three successive reversal staffs, or if a combination of Dojis
and reversal staffs is present, that are separated by or two staffs, those
into the sample of the trend fit.
Note: I do not confound mix from staffs in a tending market with mix
of staffs in a consolidation. A view of the consolidation ranges of everyone
Chart will show that there usually nearly each day reversal staffs emerge.
If I a consequence of reversal staffs (opening more highly than the conclusion on one day and
Conclusion than the opening on the next day) sees higher, then closes I mean position. If
I a position do not hold, I engage myself only if I watch an outbreak or
the statement it come that the market tends again.
These combinations of reversal staffs and Dojis occur in a downtrend,
while I see still lower highs and lower lows. Turned around they occur in
an upward trend, while I see still higher highs and higher lows. With others
Words, for the usual viewer it looks in such a way, as if the trend is still intact. But
if a Trader knows, how one reads a market was taught, as it me, then are these
Reversal staffs and Dojis strong signals.
If I hold a position, if these combinations occur, then it becomes time for
me to narrow my stops. I prepare to jump off.
I would say that individual Dojis in 55% of the time functions; in combination with one
Reversal staff in approximately 70 % of the time. An individual reversal staff becomes a trend
change of
signal at least to one staff in approximately 65 % of the time. A pair from reversal staffs becomes
an against-arranged trend movement to approximately 70-75 % to the time indicate. These
numbers are
only estimations, which are based on my experience. I never actually counted, over
340 28. The circle closes _
to see, how the accurate prozentzahlen are. I know only that these staffs its signals
give. They are an example of it, as one can be said of the market, what it will make.
If a Trader knows, how one reads a market, and if he a good conception of it
has, which the market will make, then it is in the situation, with the market in the equal step too
go following and this.
28,1 the parquet
Many Trader, which act from at home, ask themselves: " which in all world is there down up
the parquet loosely? As it that the parquet dealers always create it, does not come on that
To overreach parquet action? Has to be like that? As it comes that the parquet dealers
against the trend to act can and nevertheless their cut make?"
It seems, as if the parquet dealers would have obviously opposite all other Tradern
an advantage. Do they have this advantage really?
It is important to know the truth. For the Day Trader it is vital that it knows,
where and when the parquet dealers an advantage have and where and when it no advantage
Let us a few things place correctly.
The parquet dealers is issued it altogether seen, so far it success in this business
concerns, not better than others. The suicide rate among the parquet dealers is very high.
They begin the business with their money and go just as broke, as it Day Tradern and
Position Tradern happens. They suffer the same losses as other Trader in the markets
They have a few advantages. Here are some of it:
1. They can act with substantially lower Round turn costs than I it can. Per
Round turn they pay to about 1.50 USD.
2. They know the Bid/Ask prices (demand and supply) and the size of that
coming in orders see. There they to the asking price sell and to
To buy it knows, seems demand price in such a way, as if the parquet dealers against the trend
to act can.
3. They can see, who comes with its orders on the parquet.
4. They can " hear " the market. They can on the noise of a geschaeftigen market
react. They can move with the market, as soon as they feel its tension.
5. They do not suffer from the bad time delays, with which we have to do it,
if we give our orders on the parquet. They are already there and can so fast
react, as that is humanly possible
I can sell only at the demand price and only to the asking price buy. I pay also
higher commissions. I always asked myself, why the computed commissions so
are unfair. It costs the brokers more to buy or sell a 50's-plumb bob than a ler
Plumb bob? It would not be fairer, if the commission dependent on the contract number one guide
would be? In addition I would like also gladly the same stock exchange fees as the parquet dealers
_ 28. The circle closes 341
I have the inevitable time delay, which results from the fact that I the telephone number
my broker to select it must and then on the fact waits that at the other end someone takes off,
my order noted, the commercial table on the parquet calls that my order notes there
it becomes and that then by hand signal or runner into the boersenring (pit) it conveys the order
In order to make still worse all, I must pay exorbitant commissions, those
several marks more highly are than those the parquet dealer. Although I directly to the parquet of
Stock exchange calls, at which I act, passes time by noting the orders.
Due to these disadvantages I, as far as it is possible, must act to my favour
How do I make that? Pay attention carefully to it, what I will show you.
Since I cannot see the offer and demand prices, I may only in the direction of the
Trends act. I must in upward markets a buyer and in downward markets a salesman
its. After a boom trend is defined, I must buy each mark, if I can. That
meant, I try after corrections, if itself the quotations again of the trend line
move away to buy with outbreaks by the highs. After a fall of prices trend defines
is, I must sell to each opportunity. That means, I try correction days,
if the quotations move again in the direction of the trend, with outbreaks through
to sell the lows.
Thus it moves to appear may, statistics show that itself the probability for
successful business doubles, if I take up a position toward the trend,
if the quotations in the course of a correction of the trend line approach. The best time
for the admission of the position is present if the quotations again toward of the
Trends turned.
I may not try to act in Seitwaertsmaerkten. The Seitwaertsmaerkte is mentioned,
Sliding zones, which destroy the Trader,
Sliding zones are handelsbereiche. They are a range, which one exclusively that
Parquet dealers left should. They are the " range of the dealers ". They belong only that
Tradern, which have the shortest time horizon. This applies, all the same whether I after one
Tageschart or after one five-minute-nC-hard acts. Handelsbereiche belong that
Dealers - which parquet dealers, those, which are located down in the boersenringen. I hold
me of the sliding zones far.
How can I neutralize the time advantage of the parquet dealers? I can do that thereby by
I placed open stop orders to the entrance or door into a market. On these
Way is my order, if the prices achieve my goal, already down in
Boersenring, and it can be implemented so fast, how it is humanly possible
The only way, how I can come to still lower commissions, consists of it,
by needing no consultation and with Diskount Brokern working. I try permanently,
to get from them more favorable commissions. I never give on lower commissions
to require. And naturally the Trader could bombard the stock exchanges with letters, in those
it say, how they feel, if they are robbed with each business.
342 28. The circle closes _
I can do unfortunately nothing against it that I cannot see, who with its orders into that
Market comes, and that I cannot hear the trade, as parquet dealers can do it. It
hope exists that this disadvantage disappears, if the parquet dealers of a daily not
more in the boersenringen, but before monitors act.
I often asked myself, what would happen, if the Trader, those with ratio systems
work, would require, to be able to see on its monitors the Bid/Ask Spreads.
Surely it will like that be that the parquet dealers, if no more in the boersenringen
stand, but before monitors, such information sits to be received, and then should
these also the Tradern with ratio systems are available.
The next question arises: I have at all any in relation to advantage that
Parquet dealers? Whereupon you know bets. I can maschieren with tail wind, I can
the trend act!
A parquet dealer, some Scalper (stock exchange dealer, only completely short market movements
acts) is, and those are most, only a few Ticks tries to make, and then rises
it out. Very frequently it occurs that the market, after the Scalper stepped out still
a set of Ticks keeps running. The Scalper lets these lie on the table, thus I it
to take can.
How can I use this situation for my advantage? If the Scalper begins, their
To liquidate, the market will somewhat correct positions. There is the liquidations of
Scalpern and at short notice oriented parquet dealers, those to small back setters into that
Drove to markets. Greatly! I wait for the back setter. As soon as the prices again into those
Direction of the trend run, steige I in
The parquet dealer can literally lose its shirt, if a market a large,
sudden movement makes, as it in the stock market in the year 1987 and again in the year
1989 happened. In these cases the public controls the market.
During these times it came in the markets to some real horror stories.
Let me William F. Eng quote, a professional parquet dealer, over such
Situations wrote. I made myself of it a copy for my documents which it
writes, is very interesting:
" it happens not only in boom markets, but also in downward markets that the professionals in
Turn out for embarrassment, if the public controls the market. After the world-wide
Crash of the market from 19 October 1987 gave it plentifully to horror stories. The first day
with substantial downward forces was Friday, 16 October. Many professionals, those on this day
still in the business it was, told me that it to the commercial conclusion of Friday substantial
Profits had made. When the markets opened on Monday, they held
Leerverkaufspositonen and realized immediately far unbelievable profits. Thus a professional said
to me: ' I could not help myself. The market dug the money for me only so too '. But
during the further process of this Monday, 19 October, that changed
Picture, and the professionals came into serious difficulties. The market opened substantially
lower, then it came to a Rally, and finally a dramatic sellout followed.
Some professionals covered their empty sales positions up for opening. There itself the market
downward, caught it moved 150 points to buy lower on, then they bought 200 points
_ 28. The circle closes __ 343
lower, then 300 points lower, then 400 points lower. It looked in such a way, as if those became
Low of the century to be tested. To the low of the downward movement they placed their
entire positions with enormous losses smoothly ".
That was also the calamity of the Fibonacci Trader. Fibonacci Trader buy
Correction levels of 38,2 %, 50 % and 61.8 %. you expect that the market turn there
becomes. Can you introduce yourselves, like badly it to this Tradern during that
Market collapses of 1987 and 1989 was issued? As the market, bought it began to fall
at these levels, because they expected a forthcoming reversal. After it itself
finally had decided to settle their purchase positions who was then there, around it
to buy from them to? They had to swallow these positions. Most, which I know,
demands for additional payment got and went to failure. Such losses could they simply
do not withstand.
28,2 cup with handle formation
Before several years I subscribed the business magazine Investor's DAILY one. With first
Copy came also a free book, which the publisher of the newspaper had written.
In the book a formation was described, which it called " cup with handle ". I
took over this formation for my own Trading, and since then it has me good services
carried out. I will divide it with you.
In fig. 267 you see a Chart of the crude oil. It shows the cup with handle formation. It
one presented oneself on one also as a parallel consolidation formation, as
Minutenchart to see could.
Fig. 267
344 _ 28. The circle closes _
I thereupon-pointed in earlier place that itself parallel consolidations both up
Minutencharts, Tagescharts and Wochencharts occur.
The cup with handle formation results to that from a quotation break-down, one
Consolidation follows, which exhibits rising lows to its end.
If one acts the cup with handle in the stock market, then one expects that the market
will rise. If one generally acts Futures, then one expects that the outbreak in
each direction to happen can. That is an important difference.
Make sure carefully that, whenever it a close consolidation with rising
it gives way to lows to an outbreak will usually come and a strong movement
to expect above is.
The reversal also applies. A close consolidation with falling highs becomes in that
Very soon a sharp downward movement follow rule.
Fig. 268
_ 28. The circle closes 345
Also the parallel consolidation ranges offer a outstanding possibility, in one
To enter market. The upward tendency of the rising lows gives a good reference point,
in which direction the prices will break out. The Chart in fig. 268 on that
the opportunity gives me preceding side to present a further concept - that
Hedging (secure) of a position.
28,3 Hedging
On the day, which is marked with the arrow, the market closed substantially more deeply, than it
I held a purchase position in the June contract of the crude oil and secured these, by I to
Conclusion of the commercial daily a same number of July contracts of the crude oil sold.
If the prices for the opening of the next daily with a downward gap the trade begin
should, then I would have a chance, the losses, which I made with the June contract, through
to adjust the profits of the July contract. Thus the profits would be secured, which I
up to then had made.
The Hedge functions as follows: I had bought in the June contract at 1951. That
Market closed with 2048. Per contract in the June date 97 points profit had accumulated.
If the prices would open on the next day with a downward gap - crude oil becomes
over night in London acted -, then I would be able, the majority of my profits too
To the commercial conclusion the May date was the strongest contract, which was next-strongest
June and the weakest date was July.
My consideration was that, if the prices moved downward I more with that
I earned weak July date with the stronger June date would lose as. If
the prices however upward moved, then I earned more with stronger June
Date as I with the weaker July date would lose.
Altogether it preserves itself paid, in a market, which floats over a quotation gap,
To place stop.
If I had placed exactly my stop under the low, and I would be there out-stopped
then correct would have been, and I would have saved 95 or 96 points. I
then no more would not have been in the market and would have to a higher price level again
to enter must. If the prices however with a quotation gap by my stop
would have fallen through, then I would have I a good part of the made profits again
to deliver must. So however had I mean position in the market secured. This made possible
it me to give to the crude oil each chance to continue its upward trend.
346 28. The circle closes
28,4 loss delimitation stops
Placing of stops is the area, where we separate the chaff from wheat. Those
Placing of stops lies only in your responsibility, there you the manager of their
Commercial transaction are. With it you must to deal be able. Correct placing that
Is appropriate for stops in your hand.
I would like to show you, why her, and only it alone to decide to be able, where a stop too
place is. In addition there are several considerations:
The equipment of their account has the largest influence on the stop placing. If it
Business regard and see, where that should be appropriate for stop, or where you place it gladly
it would like then you must your account regard and decide whether it for them in question
comes to really think about the business.
Their mentality. Even if you have sufficient margin, in order to place stop, where
they it to place would like, and even if this point for the business is logical, then it can
but its that you feel not well with the stop, if it so far away (or also so
close) lies. They will decide then in addition, the position not with one so far
removes lying stop to take, or they will pull that to stop further back, there it
obviously too close at the current price level lies.
The Volatilitaet. They must take the Volatilitaet of the market also in the calculation, if them you
Loss delimitation stop place. If a market, which normally ticks with five points,
suddenly begins to tick with 20 points then you must surely consider that.
They could state that them your stop regarding the equipment of your account or
regarding their commercial mentality too far far away to place must.
If you use mental stops, then there are two other considerations, you with that
Placing your stops considered must. These are: The speed, with that it
Their orders to place know, and the speed, with it broker the orders
to place can. Let us with both considerations somewhat more in greater detail enter.
The speed, with which you can place your orders, hangs of it off, as fast
Their reaction is. This is determined by three factors: Perception, decision and
Action. Like for a long time you need, until you recognize that the time there is now, that
To take telephone and to place your stop in the market?
After you made a perception, like for a long time it lasts then, to you one
Decision over the perception make? Decide sclmell on their
Perceptions? And finally, you act fast, after them a decision
Some of us are very fast in all three areas. Some from us are too slowly, over
to be able to use mental stops. Only you can, from your in the markets made
Experiences, say whether you are fast enough, in order to be able to use mental stops.
Further factors, which play a role, depend on your commercial environment. Act
from at home from or from your office? If you are disturbed in your Trading, then
you should not even remember to use mental stops.
_ 28. The circle closes 347
The speed, with which your broker can place the orders, hangs of its
organizational mechanism off
If you have a broker, who talks gladly, then you watch out. Even if it perhaps
not straight with you a Schwaetzchen holds, nevertheless perhaps then he converses with one
other customers, while your order on it-waits, to be placed.
If you have a broker, who acts even much, then it can be that it itself more over
its own positions cares, before it thinks of your positions.
Further considerations are; Have the possibility, directly the commercial table on the parquet
to call, and better still, you can directly call someone, that its place close to
Ring has
If you use mental stops, then you should itself the time of your placing of order
note. Determine, how much time between the time of removing of the
Telephone receiver up to the time it passes if you hear that them your execution
got. Test this procedure in different markets and to different
In connection with the order execution you know my rule " tick per half
Minute " use. For each half minute, which passes during its placing of order - from that
Time, if you seize to the telephone receiver, up to the time, if it their
Execution get -, you add one tick to your mental stop. If these
Slip PAGE is not crossed, then you can use mental stops. Treat
these stops as orders for lightning, because your mental stops should be market Orders.
The number of positions, which already hold you in other markets, knows an influence on it
have, where you will place your stop. If your account is already well loaded, then it can
its that you do not afford it for financial reasons or for reasons of the comfort
know to be received a further position with a loss delimitation stop in the place those
They consider correct. In this case it is the best to let this business pass
or you liquidate another position, so that them comfortably the intended position
to be received can. Remember, if you exaggerate your Trading, thus too many positions
hold, because then you come into difficulties and must place their stops too close.
There are still further considerations, which have to do these with special situations to have
an influence on it, where you will place your stop, and whether you a position it is received
becomes, if you see, where this stop will lie.
The substantial point is that that you should not take the position, if them that
To place does not know loss delimitation stop, where it should be.
I think that you should to be after the preceding discussion able recognize,
that placing of loss delimitation stops a good part of planning and of the
Thinking stresses. It is part of what it in 85 % of the time of your activity as Trader
Why is like that? The markets tend only in 15 % the time. They should in each of the markets,
you act, only in 15 % of the time act. In the remaining 85 % of the time you should
348 28. The circle closes _
plan, organize, delegate, arrange and control. That is it, which a good manager
makes. With the possession and the practice of your commercial transaction is tidy
Management connected. If I the appropriate time with the preparation, the administration
and the management of the business spend, then I do not intend time, all day long
to sit a monitor. I do not have to exaggerate time, my Trading. I am thereby
employed to pursue which passes straight. I fill out order sheets, I telephone
regularly with my broker, and I hear myself the orders noted on volume still
once on. If one observes me, then looks, as if one became too fast one
played film regard. I am busily, busy and busily. I think ahead:
What is, if happens or happens or happened? " which is, if the prices of this
Deeply break through? Which I will then make?" Which is, if this reverse hook
one takes? Which I make then?" " this looks like a consolidation. Which become
I next do?". I plan, I antizipiere, I give orders, I cancel orders. I
move stops. I draengle mean brokers, so that I mean remarks get. I
it examines, in order to see whether I make sufficient points. I manage my commercial transaction.
28,5 the Fibonacci deception
If I inform, I mention frequently the use of Fibonaci techniques and
Concepts. Many of my readers know that I use these only in two kinds: I
use it on the one hand, in order to make projections, where the market could go, so that
I profit goals to set can. I use this concept only in a situation: with
Outbreak from an Fibonacci envelope, which was placed around a sliding zone (part of l of
Futures Trading). This is an expansion concept. Second application is in
Correction concept, whereby I determine, where I in a market supporting or resistance
to expect can.
I believe in no way in any kind " magic ", from Fibonacci numbers or Relations goes out. I would never consider really never, on its basis
To buy corrections, with an exception: If I an entrance into an established
Would like and the prices between a Fibonacci relationship and a one plan trend
by four days temporally set forward, sliding average find (part of II of Futures
I pay attention if the prices at a Fibonacci correction reflect, but I became this
Situation never for itself alone taken act. It must always with something different one
meets, in the case mentioned is it the 4/1 sliding average. I became
place never, under no circumstances, only an order for entrance, because
Fibonacci Korrekturniveau was reached.
For me the use of Fibonacci conditions reduces, with which above mentioned
Exceptions, whereupon that they say to me, whether a market behaves normally.
I would like to now explain exactly, why Fibonacci Trading is wrong - a wrong God -, in
Cheat, who will sometimes let a Trader win, only around the same Trader
to decrease other opportunities the more from its prosperity. If a Trader those
" golden conditions " acts, then it is condemned to it, regularly again everything
to deliver, which he gained so hard. I call this section: The receipt of the
_ 28. The circle closes 349
28,6 the receipt of the capital
In my book Futures Trading I showed a set of things, which I here
again to the language to bring would like.
So that one drove its Trading as a business can, sufficiently capital must be present,
with which one can act. With this capital one becomes control over
Commercial opportunities attain, which offer themselves. The more capitals for the Trading
is, the more opportunities will be offered, in order to let work the capital. On these
Way knows the Trader its career as commercial Trader drove.
With the Trading there is a set from possibilities to control of the risk. Those
Stop placing is one of it. In order to retain the capital, there is however only one way:
The business must be planned. A Trader must learn to think the positions out
so that it can guarantee, where in the position the risk lies. The capital risk lies into that
intended business.
In Trading a business is I about it in detail spoke, why so many Trader
a wrong view over the markets have. I also explained, why the Trader one
wrong expectation over it have, which will bring a position. Typically try
the Trader always to land a direct hit instead of being content thereby, regular
to realize smaller profits. Only the market can ensure that the Trader one
Direct hit makes.
In Trading is a business has I also tried to show that most Trader
intelligent, well trained university graduates or pensioner are, the many years experiences
have. And they lose money nevertheless in the markets.
It is the high intelligence level, which controls the Trader, and whereby he itself of very much
mathematical concepts for the Trading of the markets feels addressed. There is however nothing
mathematical in the markets, and therefore is the attempt to act the markets thereafter
to failure dooms. Yes, I white, it gives much advertisement, which says that the markets cyclically,
astrologically, mathematically, symmetrically, geometrically and many other kinds of " isch " are,
but you do not believe in it!
The Fibonacci Trading is mathematical and addresses therefore the high-intelligent Trader.
In reality it places itself out, as one can see, as a wrong God.
Introduce yourselves, a Trader see that itself the crude oil market in an upward trend
finds. Then the market begins to become weaker and it falls up to a FibonacciSupporting level. First, generally accepted supporting level is with one
38.2 %-correction of the preceding movement. The Trader places at this
Correction level an open buying order.
We continue to ourselves introduce, the Trader had a margin account of 15.000 USD, and
that the margin for crude oil amounts to 1,500 USD per contract. The Trader goes now with one
Contract a purchase position. It expects a " magic " Fibonacci movement. Nothing
happened. The Trader makes the decision to hold the position over night.
350 28. The circle closes _
We continue to assume the Trader placed in addition an open buying order,
in order to buy to 50 %-Korrekturniveau a further contract. Fifty per cent is that
so-called " golden relationship ". The Trader and most other fighters of this Idols
at the " golden relationship " open orders will have placed, and so it should there
according to supporting give to cause enough around a recovery.
The parquet dealers, who also the " golden relationship ", there, over with that, are natural
To help execution of their golden orders.
As said, the entrance of the Traders and different one here should for a recovery
are sufficient, and the market could make a Rally of a few Ticks. However, if those
Fundamental data in strength remain, which agitated the market downward, then become the Rally
for a long time do not last, and the market will break through the " golden relationship " and itself
induce to the next magic number downward. At this point, the 61.8 %-correction r
waits the Trader with large expectations for the fact that now to rising prices come
Let they us look now, how the account of the Traders developed. For first
It must carry 1,500 USD for contract out as capital invested, so that it can control the position. As
the prices the " golden relationship " reach, are further 1,500 USD than capital invested
to make available. In addition it had to risk the amount, which it between the distance that
38,2%-Korrektur and the 50%-Korrektur lost. We assume that this distance
a value of additional 2,000 USD had. Thus are, as the Trader at the " golden one
Relationship " its position is received, 5,000 USD necessarily for control of the position.
In the place of the 61,8%-Korrektur the market moved around further 2,000 USD downward.
There it placed an order for the purchase of a further contract, whereby further
1,500 USD as a check of the position to be made available must. Additionally it continues
this place 4,000 USD at losses from the first contract and further 2,000 USD on
Losses from the second contract. Those are the losses, those in its past positions
There is now altogether 10,500 USD necessarily for control of the position. Slowly begins
to become scarce its margin. It does not have resources for further purchases remaining the next
Correction level is with 75 %. thereby it the positions to to this place to hold can, becomes it
into its margin account fresh money to deposit must case the market against it continues to run to
to the 75%-Fibonacci-Niveau, then he must liquidate there and he becomes one
Demand for additional payment get enough said? The list in fig. 269 shows those
Development of the positions again on a view.
_ 28. The circle closes _ 351
Sales level
38.2 %
50.0 %
61.8 %
75.0 %
Commercial losses
Total loss
Capital invested
Capital invested
Additional payment
Fig. 269
28,7 the head and shoulder formation
A further part of the mythology is the so-called head and shoulder formation. Those
Formation is material, at least in the eye of the viewer. Which is wrong, is expectation.
Everyone, believes to know, in which direction head and shoulder formation break out
becomes, should its own head (and perhaps even its shoulders) examine. Around my
Point of view to prove, I would like to show you two examples (fig. 270 and 271).
Fig. 270
352 _ 28. The circle closes _
Fig. 271
Excuse please the wordplay. But my kind is sometimes, as I over those
Conceptions of some people think, which state, for acting after such samples. Some
exclusively of these formations depend on the eye of the viewer. Blames me ask you
not for what I see. I do not only have no notion of mathematics, I have also
strong read disturbances. These read disturbances would know the secret of my commercial successes
its. Perhaps I should write a book concerning how one gets read disturbances.
If I can act after a Chart, on which I see everything wrong, then should the reader
surely in the situation its still more successfully to act since he sees the things correct.
28,8 I act thereafter, which I see
Here is something, which is a topic again and again. I will say to you, for which it
goes. It is so often something, to I to learn had to think, with all my strength, and I
could. I made it for me the habit to note this. I have it there
hung, where I would read it each day, and I ensured for the fact that I read it and everyone
Day over it thought. The majority of the Trader will understand it academically, but not also
_ 28. The circle closes 353
the depth of the spirit, as I it created. I had to come to the point, where I
really understood, what I will say you. The understanding had to become deep. Here is that
Poster, which I made for me:
What I, is only a further opinion think - my. Most learned,
that their own opinion is just as good as opinion of possibly someone else. That is
correctly, but it is also wrong. I came to see it in such a way that my opinion exactly the same
like the opinion of possibly someone else is bad.
It is the old aspect whether a cup is half full or half empty. Which concerns the Trading, so
the cup is half empty.
As long as I try to act thereafter which I think, I become according to my opinion
If the prices with an upward gap break out, and I missed the business, then
I think that it is now too late for an entrance. That is, which I thought. The fact was,
that the prices rose. Then, as the prices again began to return, thought
I that the prices really do not rise. That was again my opinion. The truth is, I
did not know and I could not really know, into which direction the prices would go.
Therefore I learned that I had to try buy, if I saw that the prices again
began to rise. I learned, in a boom market with each opportunity, which was offered to me,
to buy. I look for reasons, which justify a purchase. I buy in the minute,
if the prices begin after a correction again to move upward. I buy
today, if the prices exceed the high from yesterday. I buy with an outbreak
by the Ross hook, which developed, when the correction began. I buy, buy, buy. That is
the only way, which I learned, in order to earn in this business money, if those
Prices rise.
If I see that the prices fall, then I sell! If the prices from that
Consolidation break off and downward move, then I wait for a correction.
As soon as the prices fall then again, I sell with an outbreak by the low.
I actually try in the entire time, if the prices correct, with outbreaks
to sell by the lows. After the prices fall again and the trend is established,
then I sell with each opportunity, which is offered to me. I sell each day with one
Outbreak by the low of the daily before. I have open orders to sell under each Ross
Hook places. I sell, and I sell still more. That is the way, as I in
Fall of prices markets make money.
I act thereafter which I see. I act with the trend. I buy in boom markets. I
sell in fall of prices markets. I can see, if a trend is in strength. That can do a small
Child see. I do not need an oscillator, which says to me, into which direction the trend go.
I draw a trend line in the Chart. If the trend goes upward, I buy. If that
Trend downward goes, sells I. I act thereafter which I see.
If I think, the market cannot rise still further, and the trend is upward arranged,
then I buy nevertheless. I act thereafter which I see, and not after it, what I think.
354 28. The circle closes _
If I think that the low is reached surely now, and the trend is downward arranged,
then I sell. It counts what I see.
As humans one got accustomed thus to act thereafter what one thinks that it heavily
is to separate from his own opinion to. I have most time of my life after
my head acted. In the markets however that will destroy a Trader. Trading is
simply; but it is heavier, which one sees from which one thinks to separate. I left
this concept deeply into my thinking penetrate. It is part of each fiber of my nature
become. It cost me to much trouble to come so far.
28,9 a few concluding remarks
I experienced somewhere that 80 % the Trader with the entrance into a market on that
correct side of the position are positioned. And they become during the settlement that
End to position as losers. Why is like that? When I heard of it the first time, it made
me stutzig. How could be?
Here is the answer: Beside the pure players, who always are in the markets, there are many,
many Trader, which read and studied everything intensively, what it afford could too
buy or kept free. They are very much endeavored and very industrious around it, around itself in
To train aspect of the Tradings. Only in one not - they never learned, like one money
That is correct! They learned to act. Really, they know, like one act! Which it
do not know is, how one makes money. Believe me, between these two things lie
As one makes, of it I showed some in this book. The remainder become you in
my book Trading is a business find.
The knowledge, how one acts, is another thing than the knowledge, like one with Trading money
earned. Beside Trading a business is I such a book never saw or of
that belongs to one avowedly. If there is such, let it me please know.
Many of my readers know, how one acts. They are actually very good in it. But it
does not seem to know, how or when they can make profits.
I dare to say it that many by me informed the Trader and Trading beginner with
Trading better and more astute are, than I am it. But nevertheless they are in the markets
regularly and/or by balance loser. Trading is avowedly detailed a business those
Reasons for and shows explicitly how one makes profits in the markets.
I am firmly convinced of it that we will come soon to one point, at that nearly everyone,
that in the markets to survive wants to control, a form of the cash transaction must.
With the progressing of the computer-assisted Tradings the markets become continuous, 24
Hours on the day, to be acted. The Trader will be forced to it, a position
to open and close on the same day, there it itself otherwise the following morning enormous
In relation to quotation gaps see, because during they to sleep remain the world and the markets
_ 28. The circle closes 355
do not stand. Already is it like that that the more experienced Trader stop in the Forex markets
place, in order to avoid in the currencies losses from several thousands dollar to, over
Night to develop know. Such stops will become for everyone the habit, the one
Position over night to hold would like.
It will give thereby some advantages, too many, in order to enter with it now more deeply, but e.g.
one could take up early in the morning after waking up a position and these late
in the evening, before the sleeping going, to close.
The parquet dealer, as he today existed, will disappear. It becomes before a monitor
are banished and to act in such a way will have, as we are already used to it.
A movement is to be seen for thinning the boersenringe out. The costs of the
Parquet trade and the requirements for the trade on the parquet rise, whereby
regular river of dealers the parquet leaves and begins, above before a monitor too
act. This Trader must again learn, how one acts. I know it, because I have many
from them informs.
This exodus of the Trader is now a Troepfeln, but at the end it will be a river. Already
it comes by it down on the parquet to increased Volatilitaet. By the decrease that
Parquet dealer is not only affected the open interest, but the parquet becomes
by more anfalliger by emotions and hysteria to be steered. and it already happens
will increase.
The competition, which comes from the foreign Futuresboersen, paired with the age
the computer, sounds oneself like the dead ringing for, which probably the last bastion
free capitalism is - the trade after the open call.
Whether this will be good or bad, is a purely philosophical question. I assume, it become
a mixture from both its. The important thing is that it to a set of
Changes and adjustments will come. Much that functions in the past
has, in the future will no longer longer function.
I do not speak about entrance or door signals. I do not speak about technical
Analysis or over Chartmuster. These will not change. It becomes the same
Signals as before give. There is commercial tactics, expectations on each level, and
the risk and money management, which could differ.
" restaurants " more than every different one will be affected by it, a new kind of acting
learn to have. They will have to learn, after a Chart or after a Kursticker too
act, or after any other way, as they would like to notice the quotations.
Some of them never in this kind acted.
They could become the victim of the same time delay, with which I must live, which I
Visavis of my telephone sits. This point is for me for the moment still unclear.
Perhaps it will be again possible them to give their business direct into a system. It
in addition, it is possible that they just as much or more of which see passed can, so
as they could do it before.
356 28. The circle closes _
We all will come into the position that we our orders with a computer
place or a broker call, who will place our orders with the computer.
A computer will connect the purchases and sales.
I can imagine that those, which have stock exchange seat and perhaps also the LOCALS in that
Situation will be to reach the computer directly. The remainder from us becomes still also
a broker preference to take must, which can reach again the computer. To one
certain degree will remain thereby the same relative unfairness received, today in
exists to the markets. The brokers will become further rich, since it will be permitted to them,
to exhaust us again in the same way as so far the blood.
I do not speak about the broker, the analyses make and commercial recommendations give or
Accounts administers - a commission is entitled to this broker. About what I speak am those
Diskount brokers, in addition, the full service brokers, who plunder the Trader, the its
own business to have implemented would like.
It would be beautiful, but it is not probable, if the Tradern, no brokers
need or would like, which would come to same privileges. It would be beautiful, if it
each Trader, which is computerized and which has appropriate telephone equipment, possible
would be to place direct and without the assistance of a broker an order. Perhaps is for this
a letter campaign necessarily.
The systems and methods, which do not consider the changes, which take place now,
the connection will miss. Nobody knows the full extent of the changes, those
will come, or the strength, which they will have. But if it so far is, then
I intend to take to me the necessary time around my personal Trading to those
to adapt new order. I expect that particularly the timing and the remarks
critical ranges will be. I intend to act very carefully until I know,
which kind of remarks the new order will bring and like I the timing mine
Entrances and doors into the markets to arrange will have.
I would suggest that he begin, a larger part of its to each Vollzeit Trader
To put back income for the time, if we all perhaps somewhat more slowly, also
reduced incomes, to act, while we learn, as one must in a new world
its Trading organizes.
At present unanswered questions are like, whether it will give meetings there, the one opening
and a conclusion have, or it a sequential Trading, around the clock, will give? If
it will not give meetings, what will happen regarding the stock exchange conclusion? Becomes it
a commercial conclusion give? Otherwise, which will happen with all the technical indicators,
are dependent on the conclusion? Which is with the mechanical systems, of them
Commercial parameters are aligned to the conclusion? The same questions meet those
Systems too, which depend on the opening.
There are so many Trader, which look on an outbreak for opening, around an idea for it
To get Trading. If there is no commercial conclusion, will it then give an opening?
I do not believe actually that it will not give an opening and no conclusion. It becomes
surely give commercial meetings and sections. In any case one must it a terminator point
give, at which accounts can be made.
_ 28. The circle closes 357
What will happen with such chief markets such as corn, soy beans or wheat? Becomes it in
suddenly more Trader give these markets? This is hardly probable. Against what now that
entire corn trade in a meeting is completed by approximately five hours, becomes
then all, which act this market, with one period of 24 hours argue
It will then probably give no more corn, and more Maisalso hardly becomes Trader its, but the conversions in the corn trade become there over the nearly
fivefold time
distribute. Which kind of hysteria will then control the trade in these markets? How
will the slip PAGE be? The ex parquet dealers able will be to steer the markets only in the one direction, and then into the other one?
Which will pass with the conversions of all the Tradern, those now their trades so
it organize does that they give their orders and then to the work go? Become they still
always so with restraint, or they will wait, until they come from the work home, it
Dinners take, and then before their monitor sit down, in order to act - which? - one
Night session or a sequential meeting? Everyone, that the night session in the bonds
acted, white, as terrible this can be. At present one can do it as one
thin market characterize, which goes somewhere rarely.
Beyond the borders of my up-to-date knowledge the question goes, what from the television
becomes, if those, which looked so far Monday night football, put themselves instead,
in order to act. Will we transform into a nation of players? Who needs still
Lotterien, if one its money for the chance to become rich in the markets to throw away
The average age of the Trader will become younger, if the young people, the their
Parents each evening with the Trading observe, to addicted ones markets become?
The influence, which the 24-Stunden-Handel will have, remains determining still.
When the Stabchart, as we know him today, which emerged first time, he revolutionized that
Trading. Who would have thought before that he could have a so large influence?
This Chartform advanced many people to the markets, otherwise never there come
would be. It made the emergence of the whole Chartdienste possible. It was indirect for those
entire technical analysis responsible, which we know today, because the Chartlesen
changed from the pure pattern recognition to the Chartanalyse after technical
Indicators, as they are today used. Even the Candlestick Charts leads itself from that
Concept of the staff diagram off
Think of all the books, stock exchange letters, advisor and magazines, all this of the concept
the Stabcharts and questions to its analysis use pulled. Which those became
Trailers of Andrew, Gann and Elliott without the Stabchart make?
Is a similar revolution in the Trading approaching for us?
Because of the permanent changes and shifts, those in the world of the Tradings
happen, and because it is impossible, all in a book or also in a consequence of
Books to accommodate, I publish a stock exchange letter and a new type character for some years.
358 28. The circle closes _
It is not a letter with commercial recommendations. One of its purposes is it, my readers over it
to keep informed, what happens in the markets, and how Trading affects it. In that
Stock exchange letter show I more commercial techniques, than it is possible for me, in my books
show. I dive deeply into the refinement of the Tradings. It is an informing stock exchange letter,
and I called it Traders Notebook. It appears monthly also as German
Translation with ROSS Trading Germany. If you want to become acquainted with concepts, those
beyond in my books the shown go, then you should subscribe it you to have
into the books, which I write, invests. The stock exchange letter keeps this Investment current and
up to date.
Exactly the same as in my earlier books I would like also in this book on my seminars
refer to, with which I am active as teachers and teachers. In a typical seminar meeting
I teach you, how one acts, and how you makes money with your Trading. They can itself
the slow and painful method shorten, with which you learn the Trading. They become
learn to act from the outset correctly. They become less bad habits
have, which must correct you later. There are introduction and topic seminars and
Professional min acres. Prospective customers turn please for further details to ROSS Trading
If you have already bad habits, then I become you on the seminars
show, how you can correct these, and how it your Trading again on the correct course
bring. I in most cases need less than one hour, in order to find out, what
They make wrong. I will terminate this book with an advice. In a certain sense
it serves as transition for Trading is a business. Do not exaggerate your Trading!
Do not think, you would have to take each business, which offers itself. Wait for those
really good business. Wait for the sliding zones forming before the outbreak,
those briefly and closely, or long and thin are. You are selective in your Trading remaining you
calmly. You are very careful, if you enter into a market, and are very easy you
convinces to step out. Only because you or two new cheat learned,
meant that not that you must act it each mark, if you think it give one
To possibility, this cheat to use. If you act consolidations, remember,
that the best business develops if there is a far consolidation, on in
steep outbreak follows, after which a close consolidation follows. If one only this
Consolidations would act, then one could be to 90 % on the winner side.
If you do not act consolidations, then you try to find a trend and also
to go this. Decide to act in this way. Decide,
recover to commercial habits to establish.
I welcome all comments and criticisms at my work. Exactly the same as every different one
I would like to learn. If you write me nice things, then that, more encourages me for you
to do. If you refer me to my errors, then I hurry to correct these
so that the book for the next becomes better, which buys it.
Successful Trading!
sets from 28, 58
Orders for door 48
Orders for entrance 47
Contract set 47
Order numbers 50
from consolidation 105
first and second 111
Tape recording 50
Broker 52
Record keeping
Recordings 50
Tape recording of the orders 50
Order numbers 50
Time stamp of the orders 51
Definition of 7
Doji, Chartformation 149, 338-339
Orders for entrance 47
Entrance signals
Large signals 22
Small signal 39, 114
Middle signals 3 5
Priorities 114
a deception? 348
a Trading filter 60
average Volatilitaet uses as 155
Use of the consolidation as filters for a crude oil business 63
Flag formation 105
Continuation business 109
Continuation contracts 103-105
360 ___ index _
Attitude of mind 85
Profit taking stop 45
Large entrance signals 22
Outbreak from a l-2-3-Formation 26
Outbreak from a border 28
Outbreak from a Ross hook 32
Outbreak from a sliding zone 23
Summary 33
Commercial plan
Method 54
Flat 55
55 remains alive
in the water 55 remains
Hedging 345
Principal attitude 349
as Trading filter 60
Importance of the 80
Contract set 102
Commissions 54
Border, like it looks 28
Market, anatomy of 15
Market momenta and legs of the momenta 28
Middle entrance signals 34
odd plumb bob 5
Points of pivot 121
Position selection
Selection of the best positions 93
Selection of a market 18
Selection of a time horizon 15
preferred sample 101
wait for the correct business 95
like a good position 103-106 looks
Risk and money management
Risk management 74
Money management 75
Crude oil,
Expiration of a business 60-69
Ross hook, as it looks 32
round plumb bob 5
Index 361
Segment counting 159
Slip PAGE 9
to the profit taking 45
to the loss delimitation 44
Strategy and tactics
first outbreak and second outbreak 111
wrong outbreaks 111
Continuation positions 109
Quotation gaps 110
Reversal business 109
Similarities between Day Trading and position Trading 8
afterwards act, which one sees 352
Thirty minute Trading in the corn market 153
a few words over the parquet 334
Fibonacci deception 348
Fifteen minute Trading in the Sojaoelmarkt 141
Trade after one five-minute-nC-hard 231
Trade after one fifteen-minute-nC-hard 141
Trade after one thirty-minute-nC-hard 153
Trade after one sixty-minute-nC-hard 175
Hedging 345
Identification of consolidations 315
Indentifizierung of trends 316
Intraday formations 124-127
Principal attitude 349
Priorities 40
Cup with handle formation 343
Sixty minute Trading in the sugar market 175
Slip PAGE and position size 12
Transformation of the cash transactions into position business 172
Differences between Day Trading and position Trading 9
Comparison between Day Trading and position Trading 7
Warning of the Day Trading 54
Summary of the Intraday formations 128
Trading logic 121
particularly in the S&P Trading 139
successive new extremes, clarifications 139
the fourth staff in a new trend 134
Find from three following each other new extremes 133
Trend identification in the corn market by falling highs 157
Trend identification in the corn market by successive new extremes 153
Trend identification in the S&P 500 by the method of the segment counting 231
Trend identification in the S&P 500 by successive new extremes 132
Trend identification in the Sojaoel by segment counting 159
Trend identification in the Sojaoel by successive new extremes 141
Trend identification in the sugar market by the method of the Segmetzaehlung 175
362 index
Trend identification
Falling highs and rising lows 157
Find the trend 132
Method of the successive new extremes 316
Method of the genuine correction 327
Method of the genuine trend 319
Segment method 159
Trend identification methods
Summary of 328
Reversal staff 153
Loss delimitation stop 44
Volatilitaet, average
Use as filter 144
Use as stop loss 155
Use for kostendeckung 144
Computation 144