Five Basic Patterns

Five Basic Patterns with Trade a nagem en ra eg es Copyright © 2009 Linda Raschke and LBRGroup Inc.

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This This pres presen enta tati tion on is cop opyr yriigh ghte ted: d: © 1996 – 2009 LBRGrou LBRGroup p / Linda Raschk Raschke. e. All Rights Reserved.

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Cert Ce rtai ain n cha chart rt imag images es are are cop copyr yrig ight hted ed © CQG CQG

Copyright (c) LBRGroup LBRGroup 1996-2009. All Rights Reserved. Reserved.

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Corrective A-B-C trend) - Momentum Divergences in range


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STRUCTURE Structure dict dictates ates the con conttext for a trade setup or chart formation. Elements of structure consists of: . eways nes a so nown as va ue are rea as , “trading ranges”, or accumulation/distribution) . lack of momentum. . struc str uctture for ret retes estt fun functi ction ons. s. The hese se mos ostt visible visible cha ch art oints indica dicatte whe here re reviou revious s bu ers or sellers came in. LAS LA STL TLY Y: is the herre vol volum ume e or is it a no noiise environment! Copyright (c) LBRGroup LBRGroup 1996-2009. All Rights Reserved. Reserved.

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unc ons: Entry Metho Methodd : Lim Limiit orde orders, rs, marke arkett orde orders, rs, bu buy/sel y/selll sto s…or a combin ina ation of limit limit ord orde er with with sto entr also known as OCO (One Cancels the Other) Init nitial ial stop sto p pla pl aceme cement nt:: fixed stop amount such as dollar , absolut ab solutel ely y swi swing high or or low low or a few ticks beyo beyond nd.. (not goiing into time stops for this pres go presen enttati ation on). ). Exit Strategy: Strategy : Small targ target et (.5 – 1 ATR), larg large e targ arget, et, Trail railiing stop stop,, scal scale ou outt fun functi ction on.. La Large rge targe targett or trail trailiing

Big Win. We wi will go over over the patt patterns erns that lea lead d to Bi Big Win.


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Bund s….active Bunds…. active rhyt rhythmic hmic market market with volume. Cha Chart rt form formations ations are “ plea pleasing sing”” . Brea Breakout kout from fr om converging con verging trendlines trendli nes and and Power Power Buy (A-B-C (A-B-C))


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Can anad adiian Doll ollar: ar: illiqu quiid no noiise market


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Sidew ideway ays s liline ne - Lo Low wer high - Sim imple ple be bear ar flflag ag Th The e fifirst rst flflag ag after bre break ak fr from om sidew side way ays s liline ne – play for bigge biggerr target. target. All other sim simple ple flflag ags s – sm small all target target only. only.


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The power of the sideways line followed by new momentum lows. The first short op may have gotten stopped out but there was no lower high in place yet. A cert certain ain % of trades trades wi will alw always get get stopp stopped ed out out due to hum human err error, or, market noise, or lack of follow-through.


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Bea earr flag flags s late in the sw swiing ng:: sm small all target target ONLY LY..


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Corr orrect ectiive A-B C or “Pow “Power Sel elll” in a dow downtr ntrend endiing market arket.. Note momentum move after break from sideways line. Play for new lows.


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Correct orrectiive A B C or “Pow “Power er Sell Sell”. ”. Th The e first is is at the en end d of a sw swiing ng.. Th The e secon se cond d com comes es aft after er a fr fresh esh brea break k from a sidew sidewa a s line line..


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“Faiiled “Fa ed”” A-B-C A-B-C or tr tren end d reve reversal rsal point. point. Trai raill a stop.


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Momentum Divergences in a Trading Range


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Momentum divergences are best for entry into corrective , .


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Breako reakout ut from con converging verging trendli rendline nes s (we (wedg dge): e): Trail Stop


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Upside break breakou outt from si side dew ways line ne:: Get the tr trad ade e on on.. Trail stop.


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SP E mini 800 800 tick tick chart chart – “st “structure” ructure”


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SP E mini 800 800 tick tick chart chart – reso resolluti ution on!!


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Buy Anti vs. Buy Div……both play for fixed small target only. both must use tight absolute stop.


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U-t -turn urn follow follows s “Fai “Failure Test”. Test”. Overall structure structure is downtrend. downtrend. (note a b c up is correcti corr ective)… ve)…Trade Trade manag anagem ement ent – abso absollute stop at high, scale out.


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Daily EC: Failure test followed by U-turn. Aggressive traders enter on lower high, conservative con servative trad traders ers enter enter on sell sell stop. Scale out out to take profi profits. ts. Stop at at absol absolute hi high


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Trade Managem Management ent is is an AC ACTIVE TIVE process. Pull your stops stops down down when when the trade trade starts to work….take your bid to the market if the price is falling short.


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No perf perfect ect way way to trail trail a stop. Tighten to just above above the hi high abo above ve the previous swing high.


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Correctiv e A-B-C Corrective A-B-C: en entter aft after er you see you yourr stop po poiint, Play for big big win (m (more ore then 1 ATR TR)) or new hi highs ghs or low lows, s, if in in trend rendiing market. If in rang range, e, sca scalle ou outt for sm small all win. with limit order or market order, play for small win (.5 to 1 ATR) a e - ren reversa : n er on uy or se s op, play for big win or trail stop. Momentum Divergences in range: range: Enter with limit orde order r or market order after market turns, scale out. Breakout Brea kout from f rom converging con verging trendline trendlin es . Enter wi with bu buy y or , . Copyright (c) LBRGroup LBRGroup 1996-2009. All Rights Reserved. Reserved.

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Dam amon on Pa Pavl vlat atos os Futur FutureP ePat ath h Tradi Trading ng Summary of what w hat I learned over the last 30 30 yea years rs as a Tra Trader der and from fro m working work ing with wit h other Professional Trade Traders rs

• Common mi mistakes made b even th the best • How to manage risk • • Ma Maki king ng a plan plan or str strat ateg egy y and and exe execu cuti ting ng it •


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This is a basic Trading Page that consists of a trade matrix on the left and on the right stacked stacke d hori horizon zontal tallly starti starting from the top there is a quote quote box, box, open orders, executed executed , .


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Mult ultiiple trade trade matr matriix' x's. s. The low ower er right right onw show shows s open open OC OCO orders.

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OCO’S showing on the charts and on the Matrix simultaneously

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When to use bracket orders

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Trailing stops

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Five Basic Patterns

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