Oliver Velez - Core Trading for a Living

Pristine.com Presents

Cor e T r adi n g f or a L i vi n g With

Ol i ver L . V Oli Veel ez Vel

F oun ounde derr of Pr ne.c .com, om, and Auuth thor or of th the e be bes bo ok, ounder Prii stitine and Auth A best se sel l i ng book, boo k, T oo ooll s and Tactics Tacti cs f or th the e M as aste terr D ay T ade er Trr ad Cop

Cap

Table of Contents

Introduction The Major Time Shift The Major Analytical Shift Fundamental vs. Technical

Foundation Four Styles of Trading Core Trading Defined Core Trading vs. Investing Macro Core vs. Micro Core The Never -ending Battle Tools of the Core Trade

T h e K ey E ven ve n ts Eve 3 to 5 Bar Set -ups Tail Set-ups COG™ Set-ups

T h e Str ate ategi gie es Mighty MA Play Pristine Buy/Sell Zone ™ CBS™ & CSS™ Plays Putting It All Together

Introduction

Introduction

The Major Time Shift

Fact # 1

20 year year s ago, th th e typii cal i n vestor typ l oo ookk ed to h ol old da stoc tockk po possi ti tion on f or 4 ½yea earr s , on on average.

Fact # 2

T oda oday, y, the th e typii cal i n vestor typ l oo ookk s to hol h old da stoc tockk posi ti tio on f or 4 ½m on t h s .

Pristine Theories

Theory # 1 W e be bell i eve ve,, th th e i n ve vesstor tor’’ s av ave er age hold hol di ng pe per i od fo f or any stoc tockk wil wi l l dr dro op t o 4 ½wee eekk s …. i n si de of 2 ye year arss! !

Theory # 2 Long-term Investing , commo ommon n l y re r ef er r ed to as th the e “ bu buyy- an d- h ol old” d” ap appr proa oacch , is is becomi be comi n g le l ess ef f ecti ve by ye year ar ! !

The Dynamics of Change

What has led to this dramatic change? I) 25 Year Decline in Commission Rates II) Worldwide Collapse in Interest Rates III) Phenomenal Technological Advancements IV) New Order Handling Rules V) The Advent of the Internet VI) A More Sophisticated Public

Fundamental vs. Technical

Fact # 1

20 year s ago, fundamental analysis was consider ed the onl y pr oper way to make mar ket decisions

Fact # 2

“Today, the ‘purely’ fundamental analyst is vir tuall y extinct.” –M ark Douglas, author of The Di sciplin ed Trader and Trading I n The Zone

The Dynamics of the Analytical Shift

What has led to this dramatic shift? I) Money! II) Markets are not mathematically logical and/or rational III) The hopes and fears of people move stocks IV) Under extreme stress and glee, people react the same way. V) Charts are the foot prints of these actions and reactions VI) In other words: Charts Don’t Lie!

The Building Blocks

Foundation

Four Styles of Trading

Types of Trading F our Styles of Trading: Core ; ; ; ; Swing ; Guerilla ; Micro Which f all into….

Two Br oad Tr ading Categories: Wealth ; ; Income

Two Broad Trading Categories Wealth Trading Styles Core Trading

Income Trading Styles Guerilla Trading ™

- Weekly Charts

- 60 Min & 30 Min

- Weeks to Months

- Hours to Days

Swing Trading

Micro Trading

- Daily Charts

- 5 Min & 15-Min

- Days to Weeks

- Minutes to Hours

The Pristine Philosophy

Pristine Ti p: The Pristine Trading Philosophy calls for a trader to have 1) a Wealth Building trade and 2) an Income Producing trade on….

At Al l Times!

Core Trading Defined

What is Cor e Tr ading? 1) A style of market play that typically covers a holding period of several weeks to several months. 2) There are two forms of Core Trading: Macro; Micro 3) This style of trading has become the new form of investing. 4) The Core Trader uses weekly charts to make entries and exits. 5) Core Trading is best used on key stocks and indices. 6) Core Trading is the key to capturing substantially bigger gains than the swing and/or day trader is accustomed to. 7) Core Trading is style of trading that can be practiced by ALL!!

Core Trading vs. Investing Core Trader Sells!

Core Trader Sells!

Core Trader Shorts!

d20ma d40ma Investor Buys!

r20ma r40ma The Investor is a loser! Core Trader Buys!

Shorts!

Macro vs. Micro Core Trading Micro Core Trader Sells!

Macro Core Trader Sells! Key Point: The Macro Core Trader looks to ride the entire (macro) move, while ignoring the temporary weekly set backs.

Key Point: The Micro Core Trader only looks to ride one color, primarily. This is the “no pain” approach.

r20ma r40ma

Macro Core Trader Buys!

Micro Core Trader Sells!

r20ma r40ma

Micro Core Trader Buys!

Core Trading Chart (QQQ) S

CSS

3-5

Candlestick Bars

S 20ma B 3-5

BT

S 3-5

Pri stine Charti ng Power! ! Color Coded Volume

Volume Climax

40ma

20ss S

B CBS B

Core Trading Tools

Tools of the Core Trade Charting Tools: Weekly charts displayed in Japanese Candlesti ck f orm.

Technical Tools: Color coded volume; 20 & 40 period per iod ‘ simple’ moving aver ages.

Weekly Chart with Volume

Wide Bars Japanese Candlesticks

Small Bars Color coded Volume

Core Trading Tools The Only Tools You N eed! 1) Weekl y Chart 2) Colored Volu me

Japanese Candlesticks

3) 20sma 4) 40sma

B B

B

r40ma

Color coded Volume

B r20ma

B

The Weekly Battle

Determini ng Who Won The Battle

High

L ow

Close

Open

High

L ow

Bul ls Win

Open

Close

Bears Wi n Pristine Capital Holdings, Inc.

An Important Statistical Fact

Pristine Ti p: Bulls and Bears cannot consistently win more than 5 battles in a row. Each side typically surrenders to the other after 3 to 5 battles won. However…

If the Bulls or Bears win significantly more than 5 battles in a row, a catastr ophic loss will be the price paid for such an abnormal winning streak.

3 Key Pristine Events

The Key Events

3 to 5 Bar Rallies

Pictur es of Greed Pictures Gr eed Thi nk ““Sell Sell ” Thi nk “Sell ” Thi nk ““Sell Sell ”

3 Bars Up

PristineUp Capital Holdings, Inc.5 Bars Up 4 Bars

3 to 5 Bar Rallies

Pictures of Pain

Think ““B Buy” uy”

Thin Thinkk ““Buy” Buy”

3 Bars Down

Think ““B Buy” uy”

4 Bars Down

Pristine Capital Holdings, Inc.

5 Bars Down

Count Your Way to Profits

4 Green Bars

3 Green Bars

3 Green Bars

3 Red Bar s 5 Red Bar s

3 Red Bar s


5 Red Bar s

Count Your Way to Profits

5 Green Bars B ars

3 Red Bar s


4 Red Bar s 3 Red Bar s

Bull & Bear Tails

Bottoming & Topping Tail s Tails Topping Tail (TT)

Bottomin g Tail (BT) Bottoming Pristine Capital Holdings, Inc.

Topping Tail Play I Topping ail Toppin g T Tail

Toppin g Tail Topping T ail

1) 6 Up Bars in a row 2) Topping Tail (TT)

6 - -Up U p

6 - -Up U p

$160 Catastrophe! Catastr ophe!

The Party is Over!

r20ma r40ma


r20ma r40ma

Bottoming Tail I 1) 6 Down Bars in a row 2) Bottomin g Tail Bottoming

I t’ s Party Ti me!

6 - -Down Down

Bottoming Tail r40ma

110% Party!

6 - -Down Down

Bottoming Tail

r20ma r40ma


r20ma

Bull & Bear COG

Changing of the Guard (COG) Bear COG

Bull COG Pristine Capital Holdings, Inc.

Bear Changing of the Guard ™ Toppin g Tail Topping T ail Bear COG ™ ™

Toppin g Tail Topping T ail Bear COG ™ ™

1) 5 Up Bars in a row 5 - -Up U p 2) Bear COG ™ ™ 3) Topping Tail (TT)

5 - -Up U p

$120 Catastr ophe

The Party is Over!

r40ma


r40ma

Changing of the Guard ™ Plays Bear COG ™ ™

4 Up Bars

5 Down Bars

3 Up Bars 3 Up Bars 5 Down Bars

3 Down Bars Bull COG ™ ™

Tails Bull COG ™ ™


Bull COG ™ ™

4 Up Bars

Pristine Core Trading Strategies

The Strategies

Mighty 20ma Plays

The Powerful 20ma Play r20ma Play d40ma

r20ma


d40ma Play

20 MA Play I 1) Rising 20 MA (r20ma) + 2) Rising 40 MA (r40ma) + 3) r20ma > r40ma = Stock Will Rally Off r20ma

r20ma 3 D/Bars 3 D/Bars


r40ma

20 MA Play II 1) Rising 20 MA (r20ma) + 2) Rising 40 MA (r40ma) + 3) r20ma > r40ma = Stock Will Rally Off r20ma

r20ma r40ma


20 MA Play III

1) Declining 20 MA (d20ma) +

d20ma

2) Declining 40 MA (d40ma) +

d40ma 3) d20ma < d40ma = Stock Will Decline Off d20ma


20 MA Play IV

d20ma d40ma 1) Declining 20 MA (d20ma) + 2) Declining 40 MA (d40ma) + 3) d20ma < d40ma = Stock Will Decline Off d20ma


Pristine Buy & Sell Zones ™

Pristine Buy & Sell Zones Pristine ™ Pri stine Buy Zone ™ Play (PBZ)

Sell Zone

d40ma

d20ma r20ma r40ma

Pristine Sell Zone ™ ™ Play (PSZ)

Buy Zone


Pristine Buy Zone ™ Play I

r20ma


r40ma

Pristine Buy Zone ™ Play II

r20ma r40ma


Pristine Sell Zone ™ Play I

d20ma d40ma


Pristine Sell Zone ™ Play II

d20ma


d40ma

Climactic Buy & Sell Set-up

Climactic Buy & Sell Set - ups - u ps Climactic Sell r s a B p U e o r M r o 3

e c n a t s i D e d i W

S n a p B a c k t o 2 0 m a

3 o r M o r e D o w n B a r s

20ma

Cli mactic Buy


e c n a t s i D e d i W

40ma

a m 0 4 t o k c a B p a n S

Climactic Sell Set-up I 1) 6 Up Bars in a row

2TT

2TT

2) 2 Topping Tails (TT) 3) Wide Distance from 20ma

The Party is Over!

6 -Up

6 -Up

$75 Catastr ophe

r20ma r40ma


Climactic Sell Set-up II 1) 6 Up Bars in a row

3TT

3TT

2) 3 Topping Tails (TT) 3) Wide Distance from 20ma

6 -Up

4) Climactic Volume

6 -Up

$85 Catastr ophe

The Party is Over!

r20ma

r40ma

r20ma r40ma

Climactic Volu me


Climactic Sell Set-up III 1) 5 Up Bars in a row Tail/COG 2) Topping Tail (TT)

Tail/COG

5-Up

5-Up

3) Bearish COG 4) Wide Distance from 20ma

$70 Catastr ophe

The Party is Over!

r20ma

r20ma r40ma

r40ma


Climactic Buy Set-up I d20ma

d20ma


125% Party! 1) 9 Down Bars B ars in a row 9- Down 2) Climactic Volume 3) Far fr om 20ma Climactic Volu me

9- Down

Climactic Volu me Volume


Climactic Buy Set-up II 1) 6 Down B ars in a row Bars 2) Bull ish COG 3) Far fr om 20ma

d20ma d20ma

6 - Down COG

6 - Down

A 100% Party COG

I t’ s Party Time! Ti me!


Climactic Buy Set-up III 1) 4 Down B ars in a row 2) Climactic Volume 3) Bull ish COG 4) Far fr om 20ma

d20ma 4- Down

$12 Party 4- Down


COG COG

Climactic Volu me Volume

Climactic Volu me


Core Trading Summary Core Trading Combinations 3 to 5 Bar Buy/Sell Set - ups - u ps Can happen wi th:

1) Topping/Bottoming Tail s or

Powerful Cor Coree Trading Combinations

2) Bull/Bear COG Set - ups - u ps

These Combinations can happen: 1) At or Near the 20ma or

2) I n the Buy/Sell Zones or

3) F ar from the 20ma

Location

Oliver Velez - Core Trading for a Living

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