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
Pristine Capital Holdings, Inc.
5 Red Bar s
Count Your Way to Profits
5 Green Bars B ars
3 Red Bar s
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
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 ™ ™
Pristine Capital Holdings, Inc.
Bull COG ™ ™
4 Up Bars
Pristine Core Trading Strategies
The Strategies
Mighty 20ma Plays
The Powerful 20ma Play r20ma Play d40ma
r20ma
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
20 MA Play III
1) Declining 20 MA (d20ma) +
d20ma
2) Declining 40 MA (d40ma) +
d40ma 3) d20ma < d40ma = Stock Will Decline Off d20ma
Pristine Capital Holdings, Inc.
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 Capital Holdings, Inc.
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 Capital Holdings, Inc.
Pristine Buy Zone ™ Play I
r20ma
Pristine Capital Holdings, Inc.
r40ma
Pristine Buy Zone ™ Play II
r20ma r40ma
Pristine Capital Holdings, Inc.
Pristine Sell Zone ™ Play I
d20ma d40ma
Pristine Capital Holdings, Inc.
Pristine Sell Zone ™ Play II
d20ma
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
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
Pristine Capital Holdings, Inc.
Climactic Buy Set-up I d20ma
d20ma
I t’ s Party Ti me!
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
Pristine Capital Holdings, Inc.
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!
Pristine Capital Holdings, Inc.
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
I t’ s Party Ti me!
COG COG
Climactic Volu me Volume
Climactic Volu me
Pristine Capital Holdings, Inc.
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