Tutorials

  Setting up trades that can be initiated with limit bids or offers is the main focus of this lesson. Such trades are a built-in feature of all ‘mechanical’ entries, and we can use them to trade single-share lots of a $3000 stock if we so desire. There will inevitably be losers now and then, but if the initial idea was a good one, there is no reason why we shouldn’t attempt a promising trade a second time. There are some examples in this lesson to illustrate the point.

https://vimeo.com/692022709/761f046dbc/   We used a potentially important rally target at 172.05 in AAPL to execute an inspired 'reverse-pattern' short that must be seen to be appreciated. The expiring at-the-moneys (Mar 25 172.50 puts) were not acessible due to a problem with Tradestation, but for the record, they went from 1.66 to 2.23 in the minutes after the stock topped 18 cents above the target. AAPL has been struggling for loft since, so you should check out its chart when you read this to see how things turned out.  

  Stocks were in an epic short-squeeze, allegedly reacting to “hopeful” news from Ukraine. This allowed yet another demonstration of ways in which Hidden Pivot entry tactics can dance a sprightly jig around even the most violent price action. Trade set-ups during the session focused mainly on the E-Mini S&Ps, where we squeezed off two easy winners in 30 minutes, the first of them good for a very quick, $800 gain on paper. The larger goal was to get short ahead of a potentially important top in this bear rally -- and so we did, as you can see for yourself.  

A pretty good session, our hour together featured a ‘forced’ trade in gold futures that made a theoretical profit of several hundred dollars in just a few minutes. The set-up was framed within an rABC pattern, but the trigger used ‘mechanical’ levels so that we could initiate with a limit bid. We also pondered rABC logic in the context of several popular symbols, including Chipotle, Beyond Meat and the E-Mini S&Ps.

We spent most of the session trying to force trades in symbols that looked busy, but we were stymied by a mid-morning lull that followed gap-up openings in many vehicles. The lesson was not without its rewards, however, since merely chasing trades requires all of our logic circuits to be firing properly. Check out the gambit in March Crude, which involved cutting risk down to size in a futures contract known for its nastiness.  

There are some big ideas here that are geared toward avoiding traffic at ‘D’ targets, which have become all the rage with ABCD-pattern players. For starters, we have determined to invert our rules when the patterns are too obvious. This implies, for one, that we will look to get short the first time a C-D rally-leg touches the green line. And we need to be prepared for trends to narrowly miss hitting their targets when we are attempting to trade against the trend. Toward the end, there is material concerning the midpoint pivot, which we used to produce a quick, high-confidence winner in the E-Mini S&Ps in real time. Check it out!  

We considered some of the subtler aspects of rABC trading, including the usefulness of attaching ‘mechanical’ levels to the tail end of reverse patterns. This allows one to get long/short via limit bids/offers, as opposed to using the green line for stop entries. As always, we took a magnifying glass to trades that on first glance looked to be easy winners. Some were, but in a few cases the trades failed by a hair to trigger. Nearly the entire session was spent trying to force trades, which are usually in abundant supply when the lesser charts are used for this purpose.

Our focus lately has been on ‘reverse ABC’ trades, but this time we revisited some old-fashioned ‘mechanical’ set-ups, some of them with ‘camouflage’ added for protection. The session served as a reminder that it doesn’t take sophisticated set-ups to make consistent money. Conditions were ideal, because stocks were in a rare downtrend strong enough to favor ‘mechanical’ plays. 

Have you ever gotten long or short with bullseye precision, only to exit with a small profit just ahead of the big move you’d expected? With hindsight, the chart glares at you with two or three hellacious bars where all the big money was made. Relax, it’s not you. In this lesson we pondered the reason why almost NO ONE made money on those wickedly steep price bars. In addition, we looked at the usual gallimaufry of mechanical, camouflage and rABC set-ups, advancing the state of the art by yet a couple more useful steps.