Tutorials

Here’s a concise primer for spread-trading options. Specifically, we found a very low-risk way to leverage a 323.59 rally target in DIA that could be applied to similar situations. If your eyes glaze over when the discussion turns to deltas, gammas and implied volatilities, rest assured that even an English major could understand this material. There is also a tightly reasoned set-up to get long in the E-Mini S&Ps that combines a ‘mechanical’ set-up with a ‘camouflage’ perspective.

A chat-room trade in eHang (EH) was well in-the-money when this session began, so we looked closely at the conditions that had made it so enticing. The opportunity had gestated in what I call the ‘discomfort zone’, just off a low that must have looked scary to most traders. That is how we should feel ourselves when we initiate a trade: a little nervous. Were it otherwise, we’d have too much competition from too many who are acting on the obvious. This session takes a close look at the ‘psychology’ of trading ABCs.

T-Bonds have been a steepening correction since March, but on this particular morning Rick put out a buy in TLT that went profitable instantly. The trade came straight from the ‘discomfort zone’ that so often produces the biggest winners. This lesson details the set-up, which comprises an rABC variation on the old-style ‘counterintuitive’ entry. It is a must-view for anyone looking for high-odds alternatives to ‘mechanical’ entries.

This lesson contains the most impressive and illuminating demonstration to date of drilling down on a lesser chart to find almost riskless opportunity. Although I did the trade in real time over a period of about ten minutes, there was no video or audio to allow students to follow my steps. This video has reconstructed the trade after-the-fact, along with my risk-management logic each step of the way. For the record, the trade used the E-Mini S&Ps and a 15-secord bar chart to produce a quick, profit of around $500 with a by-the-numbers mechanical entry.

The bear market begun in 2009 may finally gave breathed its last! This seems at least plausible, given that a half-dozen vehicles that I track were at or very near potentially important Hidden Pivot resistance points. If The Top is in, it will require some adjustments in our thinking as we reverse the polarity of 'mechanical' trades, among others. This session focuses on such concerns and should be considered a must-view.

'Mechanical' set-ups are particularly well suited to buy stocks when they swing violently. That's because our entry points are calculated to get us aboard just as the last of the psychotic bulls who trade such stocks have been shaken out. What better opportunity could we have than the shares of small biopharmaceutical companies? They are notoriously volatile, frequently doubling or tripling in the space of a day or two. Are 'mechanical' set-ups up to the challenge? The answer is 'yes', and this lesson will help you to understand why.

This session had the highest attendance of any Wednesday tutorial session held to date. It features some timely examples of 'mechanical' set-ups, but also a refresher on rABC trades, which have been out-of-fashion lately because of the emphasis I've put on set-ups that are companionable with TradeExchange.com's platform. There are some very subtle points, previously undiscussed, that concerned the use of p1 and p2 levels for 'mechanical' buys.

Once again, the emphasis on 'mechanical' set-ups and the two ideas that drive them: strong impulse legs followed by pullbacks from the sweet spot of C-D. One exception noted here concerns instances where C-D takes forever to achieve the sweet spot, then falls to the green line either suddenly or in ratcheting fashion. A bonus in this lesson is a no-brainer trade coming up in IWM, an ETF the tracks the Russell 2000.

We spent the entire hour dog-tailing the E-mini S&Ps, and it paid off with the discovery of exceptional opportunities in patterns big, small and in-between. Most of them were what we used to call 'camouflage' trades, a tactic that has been refined by adding in 'mechanical' and rABC set-ups. By 'refined', I mean to imply that the adaptations allow us to control more tightly for risk and to initiate trades with greater confidence. This lesson will appeal in particular to intermediate-level Pivoteers who want to up their game.