WELCOME TO THE ELITE STOCK TRADING COLLEGE WEEK #2
WELCOME TO THE ELITE STOCK TRADING COLLEGE WEEK #2
STOCK STRATEGY #1
DISCLAIMER
Hypothetical or simulated performance results have certain inherent limitations unlike actual performance record: simulated results do no not represent actual trading. Also, since the trades have not actually been executed, the results may have underor overcompensated of the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No presentation is being made that any account will or is likely to achieve profits or losses similar to those predicted or shown.
STOCK COLLEGE CURRICULUM Week #1 – The Foundation and Building Blocks of Stock Trading
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Week #2 – Stock Strategy #1
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Week #3 – Stock Strategy #4
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Week #4 – Stock Strategy #8
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Week #5 – PET-D
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Week #6 – Advanced Trade Management /Putting It All Together
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WEEK #1
REVIEW
STOCK COLLEGE WEEK #1 System vs. Strategy
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Concepts 1 & 2
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Edge #1 - Buy/Sell Line
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Edge #2 - Confirmation Method
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The #1 Chart Pattern
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Homework Assignment
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SIMPLICITY EQUALS CONSISTENCY
MY GOAL IS TO TEACH YOU HOW TO TRADE WITH THE SPECIALIST’S EDGE
STOCK STRATEGY #1
Strategy #1 Highlights • • • • • • •
Strategy Is Based On Concepts #1 and #2 Designed to Trade Pullback Moves Intensity Level (1-3): 2 Main Indicator – Donchian Channels Any Time Frame / Any Direction / Any Market Learn the FULL Strategy – Paper Trade First! The Specialist’s Edge - Consistency
STRATEGY #1 INDICATORS • 50-period Simple Moving Average (sma) • 21-period Donchian Channels
STANDARD VERSION All Members (Beginners – Advanced)
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Pullback Strategy
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Traders Who Are Looking To Catch Swing Moves
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Strategy #1 Rules - Buys CONCEPT #1 – TREND:
1. Price must be above the 50-period sma - AND All 3 Donchian Channels must be headed in an upward direction. CONCEPT #2 – PULLBACK:
2. Look to buy when the rising price bar first begins to decline and eventually touches the mid-line of the rising channel. (SET-UP) 3. Enter long position on the first confirmation of price trading above the previous bar’s high. 4. Place your protective stop below the lowest low of the pullback. 5. Sell (exit) when price touches the highest Donchian Channel.
STEP BY STEP
Step 1 Price must be above the 50-period sma - AND All 3 Donchian Channels must be headed in an upward direction.
Step 2 Look to buy when the rising price bar first begins to decline and eventually touches the mid-line of the rising channel. (SET-UP)
Step 3 Enter long position on the first “confirmation” of price trading above the previous bar’s high.
ENTER
Step 4 Place your protective stop below the “lowest low” of the pullback.
ENTER STOP
Step 5 Sell (exit) when price touches the highest Donchian Channel.
EXIT
ENTER STOP
STRATEGY #1 SELL RULES
Strategy #1 Rules - Sells CONCEPT #1 – TREND:
1. Price must be below the 50-period sma - AND All 3 Donchian Channels must be headed in a downward direction. CONCEPT #2 – PULLBACK:
2. Look to sell when the declining price bar first begins to rise and eventually touches the mid-line of the declining channel. (SET-UP) 3. Enter short position on the first confirmation of price trading below the previous bar’s low. 4. Place your protective stop above the highest high of the pullback. 5. Exit (buy to cover) when price touches the lowest Donchian Channel.
ENTER
STOP ENTER
STOP ENTER
EXIT
MORE STRATEGY #1 TRADE EXAMPLES
+37.38 pts.
STOP ENTER 473.24
EXIT 435.86
+0.89 pts. +12.50 %
EXIT 7.75
ENTER 6.90 STOP
+1.69 pts. +2.35 pts.
EXIT 84.87
EXIT 85.85
+2.77 pts. EXIT 82.78
ENTER 84.16 STOP STOP
STOP
ENTER 80.01
ENTER 82.52
+0.66 pts. EXIT +1.06 pts.
EXIT 196.57
196.58
STOP
STOP
ENTER 195.51
ENTER 195.92
AGGRESSIVE vs. CONSERVATIVE
STRATEGY #1 AGGRESSIVE VERSION (Shallow Pullback)
+2.02 pts.
EXIT 49.48
STOP
ENTER 47.46
+1.94 pts.
STOP
EXIT 83.05
ENTER 84.99
STRATEGY #1 CONSERVATIVE VERSION (Deep Pullback)
STOPPED OUT
STOPPED OUT
STOPPED OUT
STOPPED OUT
STOPPED OUT
STOPPED OUT STOPPED OUT
STOPPED OUT STOPPED OUT
STOPPED OUT STOPPED OUT
STOPPED OUT STOPPED OUT
STOPPED OUT STOPPED OUT
STOPPED OUT STOPPED OUT
STOPPED OUT STOPPED OUT
STOPPED OUT STOPPED OUT
STOPPED OUT STOPPED OUT STOP
+20.96 pts.
EXIT 546.90
STOPPED OUT STOPPED OUT
ENTER 525.94 STOP
STRATEGY #1 MOVING STOP TO BREAKEVEN
Break Even Suggestion You have the option to move your stop to unchanged once price travels either: 1) Half the distance to the exit point, or 2) The 200% extension of the set-up bar
EXIT?
ENTER
STOP
EXIT?
50%
ENTER
STOP
EXIT?
ENTER
STOP
EXIT?
ENTER 100% STOP
EXIT?
200%
ENTER 100% STOP
EXIT?
200%
ENTER 100% STOP
STRATEGY #1 VARIATIONS
Donchian Channel Settings (Increments of 7)
•Low Volatility = Decreased Setting •High Volatility = Increased Setting •Standard Setting = 21-period
CONTINUATION TRADING WITH DONCHIAN CHANNELS
BUY BUY BUY BUY
BUY BUY BUY
BUY
BUY
SELL SELL SELL
SELL
SELL SELL
SELL
SELL
SELL SELL
SIGNALS WHERE THE SET-UP BAR IS AN INSIDE DAY
STRATEGY #1 REVIEW • • • • • • •
Strategy Is Based On Concepts #1 and #2 Designed to Trade Pullback Moves Intensity Level (1-3): 2 Main Indicator – Donchian Chanels Any Time Frame / Any Direction / Any Market Learn the FULL Strategy – Paper Trade First! The Specialist’s Edge - Consistency
HOMEWORK ASSIGNMENT
IDENTIFY RECENT STRATEGY #1 TRADE Time Frame – DAILY BAR 1. Buy or Sell? 2. Identify Price of Entry, Stop Placement, and Exit Price. 3. Profit or Loss?
MY GOAL IS TO TEACH YOU HOW TO TRADE WITH THE SPECIALIST’S EDGE
ELITE STOCK TRADING COLLEGE WEEK #3 STRATEGY #4
QUESTIONS
[email protected] [email protected] 1-310-844-7220
DISCLAIMER
Hypothetical or simulated performance results have certain inherent limitations unlike actual performance record: simulated results do no not represent actual trading. Also, since the trades have not actually been executed, the results may have underor overcompensated of the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No presentation is being made that any account will or is likely to achieve profits or losses similar to those predicted or shown.
