Tutorials

Stocks were falling when this lesson began, but we went cautiously against the trend in Google to come up with a winner that took all of three minutes to play out. Who cares about the trend when one can make $500 in just a few minutes by catching a small twitch up or down in a $900 stock? In an average day, Google probably twitches hundreds of times. You may be surprised at how easy it is to spot the nervous ups and downs that can deliver quick, painless profits. ________________________________________________________________ By Brian Catalucci on August 1, 2013 Two losing trades stopped us out for small change during this session, but that was a small price to pay for the lesson learned. What are the limits of system trading on a day so trendless that the Dow was barely able to move 10 points up or down for the entire six hours? You’ll find an interesting and enlightening answer to that question in this recording.

Two losing trades stopped us out for small change during this session, but that was a small price to pay for the lesson learned. What are the limits of system trading on a day so trendless that the Dow was barely able to move 10 points up or down for the entire six hours? You’ll find an interesting and enlightening answer to that question in this recording.

Tedium on Wall Street provided an excellent backdrop for some finely nuanced reasoning and a couple of ‘Aha!’ moments during this session. Disciplined thinking is essential to the process of turning one’s Hidden Pivot knowledge into street smarts, and that is why we should take pains to think through every trade thoroughly, even trades that have not worked. Pay particularly close attention to the reasoning behind a scalp-trade we considered in Google, since it contains some useful ideas for making money on even the most trendless days.

Just ahead of the Fourth of July holiday, the markets were even more squirrelly than usual. This proved especially challenging, since a few of the camouflage opportunities we considered came and went in the blink of an eye. Our solution was to use some old tactics, including bottom-fishing the ‘D’ correction targets of patterns that looked like they would work perfectly. For a close look at them on the 15-second bar chart, have a look at this recording, since it contains some excellent specimens.

Sometimes a seemingly perfect camouflage set-up will fail to produce a profit. We’ve all seen instances where a trade initiated at x caught a ride to the p midpoint but went no further. The tendency is to think we’ve done something wrong, but you should consider a second possibility – i.e., that the trend is simply too weak to reach the ‘D’ target of its minor camo pattern. In such situations, the best response is to jump on the next signal taking you in the opposite direction. This logic is demonstrated nicely in the recording. We were able to foresee a nasty reversal in August Gold later that day because of the failure of a minor, very tradable, uptrend to perform.

Just when it started to seem like the E-Mini S&Ps were becoming too overtraded to be of use to us, a beautiful bottom-fishing opportunity popped up during this session. If you want to see what a perfectly predictable price target looks like, and how to make hay with it, check out this recording. We also pondered the Big Picture in two key vehicles -- the U.S. dollar and T-Bond futures -- and took a sobering look at GDX, which is skirting an abyss.

With the goal of reaffirming how easy it can be to make $1000 a day using camouflage, we jumped on a shorting opportunity in Tesla.  The trade was unusual in that most of our camouflage trades have been done from the long side.  That’s because the technique itself was developed and honed during a four-year period in which stocks nearly always went up.  The trade worked out nicely and used an entry signal from the two-minute chart that met all our rules.  Check out this recording if you have doubts that you could do this stuff yourself.

Comex Gold and the E-Mini S&Ps had already made their moves, and try as we did to force a trade, the picking were just too slim. This held lessons for us nonetheless, and it also pushed us onto the 30-second chart, a hitherto unexploited Tradestation feature that promises new vistas of opportunity. Be sure to check out the final ten minutes of this session, since we found a trade in Google that paid off at terrific odds less than an hour later.

There are some fine nuances of camouflage in this lesson, including the use of the very subtlest of ‘external’ peaks to get us long in June Gold two days earlier. The trade had gotten stopped out earlier the same morning, providing a further opportunity to discuss in detail the technique of creating stop-losses based on impulse legs. The chief value of such stops is that they allow us to, if not ‘swing for the fences,’ then to weather adverse moves that would tend to eject traders using conventional stops placed just beneath prior lows. ____________________________________________________________________