Tutorials

We continue to look for, and to find, increasingly subtle nuances in rABC set-ups. Split the same hair enough times and you come up with trades of such small degree that they ALL work – which is to say, produce a profit. But sometimes the expected returns can be so meager that it’s hardly worth the bother. No problem, since we always have the option of zooming out on a chart to find the kind of winners than can make one’s day/week. The simple rule in any instance is to look for set-ups on small charts only after you have found a corresponding opportunity on a chart of larger degree.

Only subtle nuances remain to be added to our rABC arsenal at this point, but it is becoming clearer with each session how easy it is to make money with these set-ups, even when forcing trades. Toward the end of the lesson we looked at a way to trade a relatively small account using UBER, which sells for a mere $34 a share. You could trade four round lots all day long without pushing a margined account above the $8000 threshold. An additional attraction is that UBER and LYFT are supposedly talking about merging - a story that, whether true or false, will push both stocks higher for the foreseeable future. With a 'guaranteed' bullish bias and the wind at your back, you will not have to look quite so hard for perfect rABC entry set-ups. Moreover, if you find consistent success with the stock, you could conceivably scale up your size so that you're trading 2000 or more shares at a crack. Do the math and you'll see why this can produce more than just pin money for the household.

We looked for trade set-ups on various hourly charts, but with particular care, since it is becoming increasingly obvious that profitable trades are all-too-easy to find with hindsight. Even so, a comforting feature of the rABC trade is that getting stopped out the first time often sets up a second trade with even better odds. If you’re looking for a money-making opportunity, check out the final 15 minutes, which contains an in-depth look at ways to leverage a $425 target in TSLA.

Far from being the “wild week” traders were expecting, the first three days have been a snooze. Finding good trades was particularly challenging as a result, but we still managed to come up with some promising set-ups. Check out the gold gambit toward the end of the recording, since the February contract took a crazy leap after pussyfooting earlier in the session. For the record, the short we’d pondered triggered late in the afternoon off a point ‘C’ high well above a 1478.10 midpoint pivot that had engaged our attention.

Here’s why, from a post in the Trading Room: “Richie, it was a great tutorial. They are always invaluable to me as a rookie, as I'm sure to many others. I tend to review the same tutorial at least twice before the next week’s tutorial. Many thanks go to Rick for providing the videos for us to learn. I for one, need to understand the process before taking the trade, which this has provided.” And another: “The first 10 or so minutes were very insightful, and go over his reasons for being long ES.” And another: “I for one will be reviewing today's tutorial tonight. I picked up at least three "a-ha! insights."

We covered a lot of ground during this session, some of it fun stuff that was not directly related to trading. For the first time, students were encouraged to come up with their own trade set-ups and contribute them to the group. This they did, diligently, providing mostly rABC trades that showed promise for generating profits right then and there, or perhaps later. This has become the driving purpose of the Wednesday sessions, since the trading tactics themselves are by now well known to the core group of attendees.

Lest We Forget... Lest we forget how useful ‘mechanical’ trades are, we dusted off our technique during this session to consider some appealing opportunities. One in gold that filled but did not yield a result before the class ended went on to produce a profit of around $1000 per contract later in the session. It was rated ‘6.8’ – good enough to keep us occupied on an otherwise dull day. There are also some rABC trades, which nearly always seem to work. Because of this, we were particularly careful in determining on the lesser charts whether these trades had actually been do-able.

We worked the lesser charts artfully during our hour together, producing a string of small winners -- and one small loser -- that could have added up to a $1000 day. Once again, we pored over each trade with a magnifying glass to make certain the trades were actually do-able and that there were no stop-outs hidden from view in those deceptive spaces between bars. Using rABC set-ups, can we read price action so well that we are able to get inside the heads of other traders? Check out the material on ‘psychoanalysis’ for a persuasive answer.

Winning rABC trades seem to be everywhere we look. Because that sounds too good to be true, it behooves us to scrutinize each and every rABC set-up closely in order to ascertain the following: 1) Was there enough time to manually enter the order and execute it; 2) once triggered, did the stock or futures contract return to our stop-limit bid in a way that would have filled; 3) would be have been stopped out on the first try; and, 4) did we diligently follow all of the rules applicable to rABC trades? With those questions in mind, pay close attention to the set-up in AAPL toward the end of this session. Could you have done this trade yourself? As you hone your Hidden Pivot chops, that question is the one that will matter most, not whether your teacher is able to execute trades that look impressive at first glance. (On that note, I’ll mention that we exited the AAPL trade before it really took off.)