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Corrective A-B-C trend) - Momentum Divergences in range
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STRUCTURE Structure dictates the context for a trade setup or chart formation. Elements of structure consists of: . eways nes aso nown as vaue areas , “trading ranges”, or accumulation/distribution) . lack of momentum. . structure for retest functions. These most visible chart oints indicate where revious bu ers or sellers came in. LASTLY: is there volume or is it a noise environment! Copyright (c) LBRGroup 1996-2009. All Rights Reserved.
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unc ons: Entry Method : Limit orders, market orders, buy/sell sto s…or a combination of limit order with sto entr also known as OCO (One Cancels the Other) Initial stop placement: fixed stop amount such as dollar , absolutely swing high or low or a few ticks beyond. (not going into time stops for this presentation). Exit Strategy: Small target (.5 – 1 ATR), large target, Trailing stop, scale out function. Large target or trailing
Big Win. We will go over the patterns that lead to Big Win.
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Bunds….active rhythmic market with volume. Chart formations are “ pleasing” . Breakout from converging trendlines and Power Buy (A-B-C)
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Canadian Dollar: illiquid noise market
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Sideways line - Lower high - Simple bear flag The first flag after break from sideways line – play for bigger target. All other simple flags – small target 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 certain % of trades will always get stopped out due to human error, market noise, or lack of follow-through.
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Bear flags late in the swing: small target ONLY.
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Corrective A-B C or “Power Sell” in a downtrending market. Note momentum move after break from sideways line. Play for new lows.
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Corrective A B C or “Power Sell”. The first is at the end of a swing. The second comes after a fresh break from a sidewa s line.
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“Failed” A-B-C or trend reversal point. Trail 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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Breakout from converging trendlines (wedge): Trail Stop
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Upside breakout from sideways line: Get the trade on. Trail stop.
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SP E mini 800 tick chart – “structure”
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SP E mini 800 tick chart – resolution!
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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-turn follows “Failure Test”. Overall structure is downtrend. (note a b c up is corrective)…Trade management – absolute stop at high, scale out.
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Daily EC: Failure test followed by U-turn. Aggressive traders enter on lower high, conservative traders enter on sell stop. Scale out to take profits. Stop at absolute high
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Trade Management is an ACTIVE process. Pull your stops down when the trade starts to work….take your bid to the market if the price is falling short.
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No perfect way to trail a stop. Tighten to just above the high above the previous swing high.
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Corrective A-B-C: enter after you see your stop point, Play for big win (more then 1 ATR) or new highs or lows, if in trending market. If in range, scale out for small 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: Enter with limit order or market order after market turns, scale out. Breakout from converging trendlines . Enter with buy or , . Copyright (c) LBRGroup 1996-2009. All Rights Reserved.
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Damon Pavlatos FuturePath Trading Summary of what I learned over the last 30 years as a Trader and from working with other Professional Traders
• Common mistakes made b even the best • How to manage risk • • Making a plan or strategy and executing 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 horizontally starting from the top there is a quote box, open orders, executed , .
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Multiple trade matrix's. The lower right onw shows open 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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Copyright (c) LBRGroup 1996-2009. All Rights Reserved.
