Valez Setup 2

CHAPTER 1“7-Day Master Trader Program” an introduction to trading for a living Page 1 Printed in the United States of America. ISBN 1-59280-253-2 Active trading is an activity that possesses a high level of risk and may not be suitable for everyone. From a Declaration of Principles jointly adopted by a Committee of the American Bar Association and a Committee of Publishers. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that neither the author nor the publisher is engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional person should be sought. Also, simulated performance results have certain inherent limitations; the results do not represent actual trading. Since many of the trades in this series have not been executed, the results may have under or over compensated for the impact, if any, of certain market factors, such as lack of liquidity. No representation is being made that the systems, methods or ideas shown in this course will produce the results that are described or illustrated. iFund Traders, LLC is advising anyone to trade or use any system illustrated in this course. These are educational examples of science of system testing and development that iFundtraders, LLC want to share with you. None of the information illustrated in these examples is to be construed as offers to buy or sell commodities, stocks, or any other financial instrument. None of the information presented purports to be a complete statement of all material facts related to trading. Reproduction or translation of any part of this work beyond that permitted by section 107 or 108 of the 1976 United States Copyright Act without the permission of the copyright owner is unlawful. Requests for permission or further information should be addressed to the Permissions Department at iFund Traders, LLC. All rights covered Published iFundtraders Copyright© 2007- 2011 iFundtraders Disclaimer Page 2 www.iFundtraders.com Page 3 www.iFundtraders.com Page 4 for any time frame is the most important for iFund Traders” – Oliver L. and is therefore neutral. Velez “Every single transaction is both a buy and a sell. The CHAPTER 2 Market’s Four Major Ticks Candles Light The Way The Page 5 .opening transaction or tick. The ‘Opening’ is Everything Page 6 . The further a stock drops below the opening price. The further a stock rises above the open. the stronger the bears.iFund Traders Tip: The opening trade of a time period determines the starting point. the stronger the bulls. the buyers and sellers.Bulls Win Low High Bears Win Every individual bar represents a battle that was fought by two groups. producing the color green. the wider the distance between the open and close. producing the color red. the bulls win. it is called an “elephant” bar. the bulls and bears. In other words. Low High The ELEPHANT BAR Page 7 . relative to the recent bars on the chart. When the close is well above the open. the bears win. How much each side wins is determined by how much green or red they produce. When the close is well below the open. the greater the win. When the bar is big. 1 2 3 4 5 6 7 8 9 10 11 12 Do you see an elephant bar(s)? It should be obvious. so if none of the bars stand out as obvious elephant bars. 13 14 Elephant Bars Page 8 . then stop looking for one. it is either there or it is not – they are big and can't hide. it is either there or it is not – they don’t hide. then stop looking for one.1 2 3 4 5 6 7 8 13 should be obvious. so if none of the bars stand out as obvious elephant bars. 14 9 Do you see an elephant bar(s)? It 10 11 12 Elephant Bars Page 9 . Velez “Every single transaction is both a buy and a sell. for any time frame is the most important for iFund Traders” – Oliver L.opening transaction or tick. The CHAPTER 3 Real Elephant Bar Examples Page 10 . and is therefore neutral. Elephant Bars Page 11 . Elephant Bars Page 12 . Elephant Bars Page 13 . Elephant Bar Page 14 . Elephant Bars Page 15 Elephant Bars Page 16 Elephant Bars Page 17 Elephant Bar Page 18 Elephant Bars Page 19 . Elephant Bars Page 20 . Elephant Bars Page 21 . Elephant Bars Page 22 . Elephant Bars Page 23 . location. or any market for that matter. Locations Page 24 . we lean that the golden rule to making money is. ” – Oliver L.location. This is also true for the stock market. CHAPTER 4 The Market’s 5 Hot Spots. Velez “In the real estate market. location. 4) Far below the 20ma: If a tradable event occurs “way” below the 20ma. it also is an actionable event and generally should be taken. it also is an actionable event and generally should be taken. or “where” something happens is in most cases more important than the event or “what” is happening There are 5 Key Locations: Locations Page 25 . it is a major occurrence and generally should be taken in an aggressive manner. the location. 2) A little below the 20ma: If a tradable event occurs a little below the 20ma but is not touching it.5) Far above the 20ma: If a tradable event occurs “way” above the 20ma. 1) At (or on) the 20ma: If a tradable event occurs touching the 20ma. Just like real estate. 3) A little above the 20ma: If a tradable event occurs a little above the 20ma but is not touching it. it is a an actionable event and generally should be taken. it is a major occurrence and generally should be taken in an aggressive manner. Igniting vs.” – Oliver L.“Everything is not always what it seems. What often looks bullish can actually be bearish. Velez CHAPTER 5 Learing how to indentify the start of a move and the end of a market move. and what actually looks bearish can be very bullish. Exhaustion Elephant Bars Page 26 . Note: The main key to identifying exhaustion bars is that they originate or begin far away from the 20ma. rather than change. Said another way. Igniting and Exhaustion There are two types of Elephant Bars: Igniting vs. they actually continue the current color dominated move. In other words. A stock can get far away from the 20ma. they ignite a brand new move or start a direction that was not in place before. Igniting Elephant Bars change the direction of the current trend. it gets even further away from it. The exhaustion bar not only starts its formation far away. but actually start near it. Exhaustion Page 27 . Exhaustion Elephant Bars continue or exasperate an already well established directional trend. the last hoorah.IGNITING IGNITING Elephant Bars (aka WRB’s wide range bars) that start a new move or trigger a new entry in the continuation of a trend tend to be igniting in nature and follow through is expected. and often lead to a pause and or change the momentum to the opposite direction EXHAUSTING EXHAUSTING Elephant Bars Igniting or Exhausting Page 28 . When these same bars appear after a move has already been underway they represent the final push. Igniting Elephants Page 29 . Igniting Elephants Page 30 . Igniting Elephants Page 31 . Igniting Elephants Page 32 . Igniting Elephant Page 33 . Igniting & Exhaustion Page 34 . Exhaustion Elephants Page 35 . Exhaustion Elephant Page 36 . Exhaustion Elephant Page 37 . Exhaustion Elephant Page 38 . Exhaustion Bar Page 39 . Exhaustion Elephant Page 40 . Igniting Elephant Page 41 . Bull Elephants Page 42 . Bull Elephant Page 43 . Bull Elephants Page 44 . Bull Elephants Page 45 . Bull Elephants Page 46 . Bear Exhaustion Page 47 . Bull Elephants Page 48 . Bull Elephants Page 49 . Bull Elephants Page 50 . Right Side Play Page 51 . Locations Page 52 . Igniting Elephant Page 53 . Igniting Bear Igniting Bear Page 54 . IGNITING BEAR Page 55 . Igniting Bull Elephant Page 56 . Bears in absolute control Low High Absolute control exists when a very solid colored bar is trading at its extreme. When a solid red bar is currently trading at its absolute low. but not at the open. iFund Traders Tip: Traders using a momentum style would look to enter the bar following a strong “win” bar. bulls are in absolute control. When a solid green bar is currently trading at its absolute high. The next bar has to confirm the strength of the original “win” bar by first producing a small amount of the same color that clears the high (green bar) or low (red bar) of the “win” bar Bulls in absolute control Low High Absolute Control Page 57 . More than the open is needed in order to commit to the trade. There can be various stages of control and it is not considered lost until 2/3 or more of the bar’s color has been erased. The ideal bar is one showing absolute control with a big solid bar and no wicks. We use the 2/3 retracement mark as the turning point. the law of follow-through is negated. the greater the degree of control is being displayed. Bulls in absolute control Low 2/3 High High Keeping control – the 2/3 rule Page 58 . iFund Traders Tip: If more than 2/3 of a bar’s color is suddenly erased.Bears in absolute control Low 2/3 The bigger and more solid the bar. Bars showing absolute control during formation may not always complete at the same level of control as they once demonstrated. When a relatively solid green bar has pulled back off the high. Bulls in full control Low 2/3 High Full Control Page 59 . When a relatively solid red has moved up off the low.Bears in full control Low 2/3 High Full control exists when a very solid colored bar is trading just a tad bit off its extreme. but the bar is still dominantly green. it’s the upper end of a green bar and the lower end of a red bar that truly determines the potency or lack thereof of the group currently producing the color. iFund Traders Tip: I repeat. but the bar is still dominantly red. bears are in full control. bulls are in full control. Bulls still in control Low 2/3 High Good Control Page 60 . These bars should not necessarily scare traders or make them doubt the power of the group producing the color…not at this point. When a red has moved up well off the low. When a green bar has pulled well off the high. but the bar is still mostly red. bulls are in good control. iFund Traders Tip: This is often what a bar will do after the trader has already committed to a play. This bar typically represents the squat before a dancer’s leap back to strength.Bears still in control Low 2/3 High Good control exists when a solid colored bar has moved well off the extreme. bears are in good control. but not enough to justify calling the bar wrecked or weak. but the bar is still mostly green. Bears’ weakening control Low 2/3 High Weak control exists when a solid colored bar has lost about ½ of the color it once had. bulls might be in trouble. the odds are good that the control is going to change. iFund Traders Tip: This scenario does not guarantee that a full lost of control will materialize. When a green bar has pulled down well off the high to eliminate about 50% of the green it once had. but if the market is behind the counter color move. Bulls’ weakening control Low 2/3 High Weak Control Page 61 . bears might be in trouble. When a red bar has moved up well off the low to eliminate about 50% of the red it once had. When a very solid red bar has pulled back so far off the low. leaving behind more tail than color. leaving behind more tail than color. When a very solid green bar has pulled back so far off the high. bulls have lost their power. leaving the tail as the most dominant part of the bar. Bulls lose control to Bears Low 2/3 High Lost Control Page 62 .Bears lose control to Bulls Low 2/3 High Lost control exists when a previously solid colored bar loses 2/3 or more of the color it once had. bears have lost their power. This should be obvious. it should not take more than a split second glance and does not require you to measure or calculate anything. Low High The 2/3 Retracement Page 63 .2/3 Low High 2/3 The idea is to be able to clearly see when a big solid bar has lost 2/3 or more of its color. the first sign in a slowing or change in momentum. the greater the win. When the close is above the open. producing the color green. the bulls win. and when those types of bars are completely erased. producing the color red. the bears win. When the close is below the open.Remember. each bar represents a battle between the bulls and bears ( buyers and sellers). the greater the win for the opposite group! Bears in permanent control Bulls in permanent control 100% 100% Totally Over!! Page 64 . How much each side wins is determined by how much green or red they produce. In other words. the wider the distance between the open and close. Bulls in control forever Remember. each bar represents a battle between the bulls and bears ( buyers and sellers). When the close is below the open. the bears win. the bulls win. How much each side wins is determined by how much green or red they produce. producing the color red. producing the color green. and when those types of bars are completely erased. it becomes an even greater the win for that group! Bears in control forever 100% 100% Control Forever!! Page 65 . the wider the distance between the open and close. When the close is above the open. the greater the win. and the other group produces it’s own color. In other words. The CHAPTER 6 “Tail Bars” Page 66 . Velez “Tails Bars are nothing more than Elephant Bars totally or partially reversed.represent one of the first signs that a market is shifting from one side to the other (buying to selling or selling back to buying” – Oliver L. Bottoming Tail Page 67 . Bottoming Tail Page 68 . Bottoming Tail Page 69 . Bottoming Tail Page 70 . Bottoming Tail Page 71 . Bottoming Tail Page 72 . Bottoming Tail Page 73 . Topping Tail Page 74 . 55% Retracements Page 75 . When the close is above the open. the bears win. producing the color red. the bulls win. In other words. the wider the distance between the open and close. producing the color green.Bears in Control Low 2/3 High Each bar represents a battle between the bulls and bears (buyers and sellers). the greater the win Bulls in Control Low 2/3 High Full Control Page 76 . When the close is below the open. How much each side wins is determined by how much green or red they produce. Bulls still in control Low 2/3 High Good Control Page 77 . but not enough to justify calling the prior bar wrecked or weak.Bears still in control Low 2/3 High Good control still exists when a solid colored bar has formed and the following bar move against it. This bar typically represents the squat before a dancer’s leap back to strength. iFund Traders Tip: This is often what a bar will do after the trader has already committed to a play. These bars should not necessarily scare traders or make them doubt the power of the group producing the color…not at this point. the bulls might be in trouble. When a red bar has a following green bar retrace up and eliminate about 50% of the prior red bar. Bulls weakening control Low 2/3 High Weak Control Page 78 . the bears might be in trouble. When a green bar has a following red bar retrace down and eliminate about 50% of the prior green bar. but if the market is behind the counter color move. the odds are good that the control is going to change.Bears weakening control Low 2/3 High Weak control exists when a solid colored bar has the following bar erase about half the color of the prior bar. iFund Traders Tip: This scenario does not guarantee that a full lost of control will materialize. the bulls have lost their power. When a very solid red bar has a following green bar retrace 2/3 or more of the prior red bar. When a very solid green bar has a following red bar retrace 2/3 or more of the prior green bar. Bears back in control 2/3 High Lost Control Page 79 .Bulls back in control Low 2/3 High Lost control exists when a previously solid colored bar has the following bar erase 2/3 or more of the prior bar’s color. the bears have lost their power. the bulls win. producing the color green. the wider the distance between the open and close. producing the color red. When the close is above the open. the greater the win. When the close is below the open. How much each side wins is determined by how much green or red they produce. the bears win. and when those types of bars are completely erased by the following bar. In other words. the greater the win for the opposite group! Bears in control forever 100% High Totally Over Forever! Page 80 .Bulls in control forever Low 100% Remember. each bar represents a battle between the bulls and bears ( buyers and sellers). The Bull and Bear 180 is the most potent of all.“The market has only a small handful of truly potent events.” – Oliver L. Velez CHAPTER 7 Learning the Basics of the Markets Most Potent Intro to the Bull 180 Event Page 81 . Bull 180 Event Page 82 . Bull 180 Event Page 83 . Bull 180 Event Page 84 . Bull 180 Event Page 85 . Bear 180 Event Page 86 . Bear 180 Event Page 87 . Bear 180 Event Page 88 . Bear 180 Event Page 89 . Velez “I’m not sure if Sir Isaac Newton every played the market.– Oliver L. but many of his discoveries and realizations lend themselves to proper market play.” CHAPTER 8 “Velez Market Law 1” Page 90 . the higher the odds of follow through. stocks and other tradable items tend to follow through or continue the most recently completed color-coded bar.” During MOVING market environments. expect another one to follow 80% 1) After a solid Green Bar. as long as most of the color has been maintained. 2) After a solid Red Bar. More information is needed in that case.4) A small amount of green or red does not give the iFund Traders enough to go on. Different ways to communicate the law: Sir Isaac Newton: “An object in motion tends to stay in motion. The Law of Momentum Velez Market Law #1 Page 91 . 80% of the time. meaning you’ll see continuance closer to 90% of the time. expect another one to follow 80%. 3) The bigger the green or red bar. They represent the market’s alphabet. Learn these bars and what they mean and you’ll be set to Trade for Life™. Velez “The Market’s 13 Bars” Page 92 .” – Oliver L. if you will.“There are only 13 bars the market can form. the most questionable is at the far right. The same goes for the bear wins. the least is at the right.7 2 8 3 Neutral Bull 4 9 The first set of bars is won by the bulls in varying degrees. The most bullish is at the left. with the last bar being an actual loss. The most bearish starts at the left. 6 2nd Most Bullish 2nd Most Bearish 1 Neutral Bear Page 93 10 5 The 10 Colored Candles Normal Bullish Normal Bearish Most Bullish Most Bearish Least Bullish Least Bearish . Bar 2 is won by the bears and Bar 3 is won by the bulls.11 All green was lost 12 Buyers dominate this entire area 13 Topping Tail (TT) Bottoming tails (BTs) and Topping Tails (TTs) offer iFund Traders some incredible trading opportunities. Draw Page 94 The 3 Non-Color Candles All red was lost . is completely a draw. the last group in control of the stock is considered the winner. Bottoming Tail (BT) Sellers dominate this entire area Tip: While technically no one wins. due to the open and close being even. Bar 1. which we will see shortly. The Most Important Bars of All Page 95 . Knowing how to read the footprints of money is your key to trading mastery” – Oliver L.“Money and its flow is the lifeblood of the market. Velez CHAPTER 10 Learning How to Identfy the Footprints of the Big Instituations. The 4 Most Potent Bars The Most Potent Bars Page 96 . com * 2576 Broadway. NY.Copyright © 2010 * iFundTraders. 10025 The Most Potent Bars Page 97 . NY. #158. #158. NY.Copyright © 2010 * iFundTraders.com * 2576 Broadway. NY. 10025 The Most Potent Bars Page 98 . Copyright © 2010 * iFundTraders. NY. 10025 The Most Potent Bars Page 99 . #158. NY.com * 2576 Broadway. com * 2576 Broadway. NY.Copyright © 2010 * iFundTraders. 10025 The Most Potent Bars Page 100 . NY. #158. NY.Copyright © 2010 * iFundTraders. NY.com * 2576 Broadway. 10025 The Most Potent Bars Page 101 . #158. What often looks bullish can actually be bearish.“Everything is not always what it seems. and what actually looks bearish can be very bullish. How To Trade The Most Potent Bars Page 102 .” – Oliver L. Velez CHAPTER 11 Learning How to Enter and Place Stops on the Most Potent Bars. the Velez Trained Trader only loses one bar Buy and Stop Method Page 103 . NY.Bull Elephant Copyright © 2010 Stop Buy Buy toward the end of the Bull Bar’s formation Step 1: * Buy Step 2: Place a hard stop 2 to 5 cents below the Bull Bar’s low. 10025 Colored Bottoming Tail Buy iFund Trading Tip: With this stop method. NY. #158.com * 2576 Broadway. Non-Colored Bottoming Tail Buy iFundTraders. NY.com * 2576 Broadway. 10025 Colored Topping Tail Sell Place a hard stop 2 to 5 cents above the Bear Bar’s high.Sell Copyright © 2010 Bear Elephant Stop Sell toward the end of the Bear Bar’s formation Step 1: * Sell Non-Colored Topping Tail Sell iFundTraders. the Velez Trained Trader only loses one bar Short Stop Method Page 104 . Step 2: iFund Trading Tip: With this stop method. #158. NY. 10025 Especially the bullish ones! ALL OF THEM! All Actionable Bars Far Above The 20-ma are Sellable Never Forget This! Page 105 . #158. NY.Copyright © 2010 * iFundTraders.com * 2576 Broadway. NY. They are used to implement the High-Octane.” “The following three time frames are used by iFund Traders to earn a living in the CHAPTER 12 The Three Trading Time Frames Page 106 . not wealth builders. ATM approach to making money daily that Oliver Velez has made so famous.markets. These time frames are income generators. the 5. It’s also useful if and when the entry and/or exit points dictated by the 5-minute chart are too far away or unclear. It’s a personal choice. 1-minute Chart – This super fast moving time frame becomes a major focus when the ultimate level of precision and accuracy is required.2-minute Chart – This fast moving chart is a god-send when the market is not producing clear signals on the 5-minute or more action is desired. which can be a bit too long. which is often required when the bars on the 2-minute chart are too wide and a flat market develops as is often the case during the midday doldrums period. the 20-period moving average (20ma). and the 200-period moving average (200ma) are used on all three. The patterns we trade at iFund Traders appear frequently enough in the 5minute window to keep us active. 2) 3) Note: The 8-period moving average (8ma). which can be a bit too noisy at times. exit or stop will usually provide the best alternative. It offers the ability to take an x-ray of the x-ray. 5-minute Chart – This time frame is the iFund Traders number one staple. while others are either sitting it out or getting knocked around in the bigger more unreliable time periods. 1) Three Trading Time Frames Page 107 . yet infrequently enough to prevent us from over trading. We call this “dropping down to the 2-minute chart” taking an x-ray. Keep in mind that the 20ma and 21ma are interchangeable. Dropping down to the 2-minute chart for a finer entry. If there were only one time frame with which to make a living. It perfectly sits between the 15-minute. 2 and 1-minute charts. This is “the” one. By dropping to the 1-minute. the iFund Traders can use flat periods to scalp extra income. it would be this one. or looking inside the stock. and the 2-minute. “the” time frame to master. iFund Traders would look to go long at or near the r20ma. See Circles. Chart Courtesy of iFund Traders Trading Tip: iFund Traders look to go long when the r20ma is above the 200ma. They look to go short with the d20ma is blow the 200ma The 5-Minute Chart Page 108 iFund Traders Tip: A rising stock over a rising 8 and rising 20 ma represents one of the most POTENT trends in existence. Rarely Should it be fought. The iFund Trader looks for any buy set up to enter The 2-minute Chart Page 109 iFund Traders Tip: This time frame offers nice opportunities to capture entire short-term trends using the 8ma to enter or trail. Circles show well-defined buy opportunities for the iFund Trained Trader. The 1-minute Chart Page 110 market and the stocks they trade. Knowing how to determine what direction is more likely than the other over the next day, hour or 15 minute period is one of the true keys to accuracy as a trader” – Oliver L. Velez “The following three time frames help iFund Traders establish a bias for the CHAPTER 13 The Three Analytical Time Frames Page 111 Certain price patterns that form on the daily chart have a high probability of moving in a predetermined direction the following morning.and 15-minute charts. 2) 3) Note: The 8.” areas of major significance which often lead to abrupt stoppages and sudden reversals during the day. 1) Three Analytical Time Frames Page 112 . Additionally. While iFund Traders will trade on it from time to time. its use as a gauge of the stock’s power and its overbought-ness or oversold-ness is unrivaled. In a sense. it is unrivaled when it comes to finding major “reflection points. The iFund Traders will use the 60-min chart simply to reference these points and to gauge the major trend of the underlying stock. 60. this time frame would be considered the “core” one. but like its smaller 15-minute brother. for longer term trades throughout the day. 20 and 200 MAs are typically used for the daily. many stocks with well defined daily chart patterns will produce a multi-day directional bias that may now be focused on for several days. Daily Chart – This time frame is key to determining which stocks have upside biases and which have downside biases for the following day. This proves very valuable to iFund Traders and often leads to quick profits in the first 30-minutes of trading. for the professional trader earning a living via the markets. 15-minute Chart – This time frame will be used primarily for trend analysis and support and resistance reference points. trades on the 15-minute chart do tend to be the cleanest and the truest. With that being said.60-minute Chart – This time is almost never used for trading. our traders scan the market after hours to compile a short list of stocks that should have an upside or downside bias over the next several days. iFund Traders Tip: Each day. based on the daily chart.The circles show when the iFund Traders would have a definite upside bias. 60-min and 15-min) to determine your “bias” gives you the necessary skill and confidence to take the signals on the smaller time frames when they are in sync with that bias. The Daily Chart Page 113 . Using bigger time frames (daily. 5-. the iFund Traders would have a definite short bias on smaller time frames (2-. charts).Tip: During declining periods on the 60-minute chart (60minute chart under a declining 21ma). The same applies in reverse. 15-min. The 60-minute Chart Page 114 . when the r20ma is above the 200ma.iFund Traders would look to go long in the area of the r20ma (circles). They look to go short with the d20ma is below the 200ma. iFund Traders Tip: Traders look to go long. The 15-minute Chart Page 115 . " The CHAPTER 14 The Three Trading Moving Averages Page 116 .” .moving averages form the basis for many of our biggest money making strategies. Velez “There are three moving averages iFund Traders monitor at all times.Oliver L. No chart is ever looked at without the aid of the 20ma. it is this moving average that the stock will often react off of. We also use this moving average as the basis for one of our most effective trailing stop methods. We round to 20. It is always in view and is given the utmost respect. In fact. acts like a magnet and tells the trader where significant areas of support and resistance are. 20-period Moving Average (20ma) – This simple moving average is the number one staple for iFund Traders. It’s almost magical how often stocks and the overall market obey this slow moving line. Many of iFund Traders’ most successful trades originate off the 200ma. knowing that moving averages are simply areas. iFund Traders have the 8ma on every chart they look at. not specific prices. If a stock is moving with a fury (up or down). which we will discuss shortly. 200-period Moving Average (200ma) – This simple but major moving average is the granddaddy of them all. 1) 2) 3) Three Major Moving Averages Page 117 .8-period Moving Average (8ma) – This simple moving average is superior at capturing and supporting the market’s most powerful moves. It reveals a stock’s directional bias. I don’t regard a chart as being valid unless it is accompanied by the 20ma. Keep in mind that the purest would use a 21-period MA. This is when the iFund Trader can intelligently look to take advantage of a counter trend move. a violent snap back to the 20ma is eminent. if the 8 & 20ma are declining in a smooth fashion. If and when this is the case. If the 20ma is flat (f20ma). Look for sells/shorts at or near a 8ma or 20ma. If and when stocks get too far away. your focus can be to liquidity trade with the “bid and offer” approach (buy below the 20ma.1) d) Use 20ma as a magnet – Stocks cannot remain extended too far above or below the 20ma for long. it will serve as strong support. a) Trade with the 8ma & 20ma. the 20ma will be flat and usually positioned right in the middle of the sideways trend. If the 8 and/or 20ma are declining. Look for buys at or near a r8ma or r20ma. Their power and reliability are unrivaled. Tip: The iFund Traders Trader can literally earn his entire living in the market with the 8ma & 20ma. We use them on every time frame or chart we look at. There will be more on this “rule-breaking” concept later on in the course c) Use 20ma as a median line – When a stock is consolidating in a sideways pattern. bidding for stock in a range below the 20ma and offering/shorting stock in a range above the 20ma is the game to play. Always be watchful of which side the 20ma eventually halts the stock on.Most of your trades should be in sync with the 20ma. If the 8 & 20ma are rising in a smooth fashion. Here are the most important things to know about the 8ma & 20ma and their proper use: The Powerful 8MA & 20MA Page 118 . your focus should almost always be long. sell above the 20ma). your focus should almost always be to short. it will serve as strong overhead resistance. Conversely. b) Use 8ma & 20ma as support & Resistance – If and when the 8 and/or 20ma are rising . thus NO chart is a chart unless it is accompanied by these all-important technical indicators. not against them . 8 & 20 Period Simple Moving Average – The 8ma & 20ma (or the 21ma) are so important to iFund Traders that no chart is ever studied or viewed without them. Chart Courtesy of iFund Traders Pro™ While iFund Traders don’t trade off the daily. Circles show when the iFund Traders would have a definite upside bias on the smaller time frames. they use it each night to compile a short list of stocks that should have upside or downside biases for the next day or week. The Daily Chart Page 119 . ‘One time’ never cuts it.” – Oliver L. or one time.always seems to require something more than one. or once. It CHAPTER 15 “Velez Market Law 2” Page 120 . In other words. Velez “The number 1 has never and never will be a popular number for the market. the market likes confirmation. It needs at least two bars to regard something as being real or significant. no matter how apparently significant. The Law of “2” Velez Market Law #2 Page 121 . 2) A one bar breakdown is only significant if it’s followed through by a second down bar. Follow-through by a second bar is crucial. otherwise the one bar event. 1) A one bar breakout is only significant if followed through by a second up bar. is not yet real. Different ways to communicate the law: The market never accomplishes anything with just one bar.3) One bar events with no follow through tend to eventually produce strong moves in the opposite direction. Chart Courtesy of iFund Traders Pro™ The power of the 20 MA Page 122 . Charts Courtesy of iFund Traders Trader Pro® The stock is held in check by the 20ma here for the first time. The power of the 20 MA Page 123 . iFund Traders would look for several more successful retests. Once the stock gets above the 20ma and a subsequent decline is held in check by the 20ma. the Bull Picture of Power (+POP) is in full effect and the iFund Trader can look to play several more 20ma Retest plays. Charts Courtesy of iFund Traders Trader Pro The power of the 20 MA Page 124 . Charts Courtesy of iFund Traders Trader Pro® The 20ma Halt! Page 125 . iFund Traders Tip: After the first 20ma Halt. The 20ma Halt Page 126 . the iFund Trader assumes there will be several more to exploit. The Power of the 20 MA Page 127 . that for all practical purposes. overhead 200ma. and reliability are so great.2) Trading Tip: iFund Traders know that flat 200ma plays call for bigger positions d) Use as a magnet – a) If a stock gets too far above or below its 20ma. 15-. In other words. that it truly is goliathlike. 5-. particularly if the 20ma is far away. So rarely do stocks fail to obey (get halted by) the 200ma that we’ve given it the highest nickname of all. it will almost always experience some form of retracement back down. 2-. 60-min and Daily charts). Here are a few things that you must keep in mind regarding this mighty moving average: The Mighty 200 MA Page 128 . a) Flatness is king: . it will almost always experience some form of rebound.While the 20ma is most powerful when it is rising and declining (trending). then c) a major reversal is usually very close at hand. It’s power. We use the 200ma on all time frames (1-. There will be more on this “rule-breaking” concept later. force. 200 Period Simple Moving Average (200ma) – The 200ma is so universally watched. and b) its 20ma gets too far above or below the 200ma. Goliath. b) Use as support – Whenever a stock declines to a flat 200ma. in all time frames. particularly if the 20ma is far away. the 200ma is most powerful when it is flat (trend-less). it’s this scenario that allows for intelligently going against the prevailing trend. it has become a self-fulfilling prophesy. c) Use as resistance – Whenever a stock rallies to a flat. This is when the iFund Traders Trader can look to take advantage of a counter trend move. Charts Courtesy of iFund Traders Trader Pro® The Flat Mighty 200ma Page 129 . 200ma Resistance Page 130 . 200ma Resistance Page 131 . 200ma Resistance Page 132 . Flat Mighty 200ma Page 133 . The Flat Mighty 200MA Page 134 . A iFund Trader Buy Set-up w/ a bottoming Tail The Flat Mighty 200MA Page 135 . iFund Traders Quote: “All markets have statistical limits. and possibly even rich!” . The trader who thoroughly understands when markets are statistically at or near the outer bounds of their norms will become a master.Oliver L. Velez CHAPTER 16 “Velez Market Law #3” Page 136 . Every now and again. the iFund Trader should look to take advantage of an upcoming series of green bars. creating a nice trading opportunity. 8 Bar Max Velez Market Law #3 Page 137 . After a sharp 3 to 5 bar decline. 1) After a 3 to 5 bar run (up or down) the market/stock tends to sharply reverse. this law can be said this way: “After 3 to 5 green bars in a row. the iFund Trader should look to take advantage of an upcoming series of red bars. Different ways to communicate the law: During NORMAL market environments. the bears usually quickly regain control. 5. These moves can move to the 5 to 8 bar zone at times.3) Lastly. stocks tend to stay trapped in a 3 to 8 bar max cycle 80% of the time. But 5 bars is truly the pivotal number. After 3 to 5 red bars in a row. stocks and other tradable items cannot move in the same direction more than 5 to 8 bars in a row. stocks can slip into the next 5 to 8 bar zone.” 2) Neither the bulls nor the bears can consistently win more than 5 battles (bars) in a row. however. the bulls usually quickly regain control. 20% of the time. The 3. After a sharp 3 to 5 bar rally. a stock’s moves can top and bottom outside of this zone. In each of the scenarios above, the iFund Trader would be looking for a tradable rebound to the upside, once the high of a prior bar has been taken out. How much of a rebound would depend on the answers to several key questions such as: a) is the 3-5 bar dip occurring in an up trend, down trend or sideways trend; b) are any of the most powerful reversal signs present; c) how far away is the nearest area of resistance; d) was there a volume surge that took place toward the end of the decline; e) where is the dip in relation to the 20ma; and f) is the current decline potentially bottoming at or around one of the key reversal times? The answers to all these questions are covered in the many trading concepts taught in upcoming chapters and through out our 5-day live trading labs The 3 to 5 Bar Buy Rule Page 138 In each of the scenarios above, the iFund Trader would be looking for a tradable rebound to the upside, once the high of a prior bar has been taken out. How much of a rebound would depend on the answers to several key questions such as: a) is the 3-5 bar dip occurring in an up trend, down trend or sideways trend; b) are any of the most powerful reversal signs present; c) how far away is the nearest area of resistance; d) was there a volume surge that took place toward the end of the decline; e) where is the dip in relation to the 20ma; and f) is the current decline potentially bottoming at or around one of the key reversal times? The answers to all these questions are covered in the many trading concepts taught in the future chapters and through out our 5-day live trading labs The 3 to 5 Bar Buy Rule Page 139 In each of the scenarios above, the iFund Trader would be looking for a tradable rebound to the upside, once the high of a prior bar has been taken out. How much of a rebound would depend on the answers to several key questions such as: a) is the 3-5 bar dip occurring in an up trend, down trend or sideways trend; b) are any of the most powerful reversal signs present; c) how far away is the nearest area of resistance; d) was there a volume surge that took place toward the end of the decline; e) where is the dip in relation to the 20ma; and f) is the current decline potentially bottoming at or around one of the key reversal times? The answers to all these questions are covered in the many trading concepts taught in up coming chapters and through out our 5-day live trading labs The 3 to 5 Bar Buy Rule Page 140 In each of the scenarios above, the iFund Trader would be looking for a tradable rebound to the upside, once the high of a prior bar has been taken out. How much of a rebound would depend on the answers to several key questions such as: a) is the 3-5 bar dip occurring in an up trend, down trend or sideways trend; b) are any of the most powerful reversal signs present; c) how far away is the nearest area of resistance; d) was there a volume surge that took place toward the end of the decline; e) where is the dip in relation to the 20ma; and f) is the current decline potentially bottoming at or around one of the key reversal times? The answers to all these questions are covered in the many trading concepts taught in up coming chapters and through out our 5-day live trading labs The 3 to 5 Bar Buy Rule Page 141 To find stocks in play throughout the day, iFund Trader would first look for sectors experiencing the picture of strength, then delve into those sectors to find the top stocks with the same picture. The Picture of Strength Page 142 c) how far away is the nearest area of support. and f) is the current rally potentially topping at or around one of the key reversal times? The answers to all these questions are covered in the many trading concepts taught in up coming chapters and through out our 5-day live trading labs The 3 to 5 Bar Sell Rule Page 143 . b) are any of the most powerful reversal signs present. down trend or sideways trend. the iFund Trader would be looking for a tradable rebound to the down side. How much of a rebound would depend on the answers to several key questions such as: a) is the 3-5 bar rally occurring in an up trend. e) where is the rally in relation to the 20ma.In each of the scenarios above. once the low of a prior bar has been taken out. d) was there a volume surge that took place toward the end of the rally. e) where is the rally in relation to the 20ma. How much of a rebound would depend on the answers to several key questions such as: a) is the 3-5 bar rally occurring in an up trend. b) are any of the most powerful reversal signs present. d) was there a volume surge that took place toward the end of the rally. the iFund Trader would be looking for a tradable rebound to the down side. once the low of a prior bar has been taken out. c) how far away is the nearest area of support.In each of the scenarios above. down trend or sideways trend. and f) is the current rally potentially topping at or around one of the key reversal times? The answers to all these questions are covered in the many trading concepts taught in up coming chapters and through out our 5-day live trading labs The 3 to 5 Bar Sell Rule Page 144 . In each of the scenarios above. e) where is the rally in relation to the 20ma. and f) is the current rally potentially topping at or around one of the key reversal times? The answers to all these questions are covered in the many trading concepts taught in up coming chapters and through out our 5-day live trading labs The 3 to 5 Bar Sell Rule Page 145 . once the low of a prior bar has been taken out. How much of a rebound would depend on the answers to several key questions such as: a) is the 3-5 bar rally occurring in an up trend. c) how far away is the nearest area of support. down trend or sideways trend. the iFund Trader would be looking for a tradable rebound to the downside. b) are any of the most powerful reversal signs present. d) was there a volume surge that took place toward the end of the rally. In each of the scenarios above. c) how far away is the nearest area of support. down trend or sideways trend. e) where is the rally in relation to the 20ma. How much of a rebound would depend on the answers to several key questions such as: a) is the 3-5 bar rally occurring in an up trend. b) are any of the most powerful reversal signs present. d) was there a volume surge that took place toward the end of the rally. once the low of a prior bar has been taken out. the iFund Trader would be looking for a tradable rebound to the downside. and f) is the current rally potentially topping at or around one of the key reversal times? The answers to all these questions are covered in the many trading concepts taught in up coming chapters and through out our 5-day live trading labs The 3 to 5 Bar Sell Rule Page 146 . The iFund Trader can often count his way to profits 3 to 5 Bar Sell Rule Page 147 . Quote: “Market failures tend to cause major problems for most ordinary traders. Velez CHAPTER 17 “Velez Market Law #4” Page 148 . we are always prepared to profit from the market’s failed attempt to do something highly expected.” . but they can serve as major money making opportunities for well trained iFund Traders! In other words.Oliver L. ” “If a stock fails to make a new low. after it has already made 3 or more lower The Failed New Low/High Law Velez Market Law #4 Page 149 . if a stock fails to make a new high. Different ways to communicate the law: lows. The trend has likely changed and the first low in the new trend has been identified.3) The first failed attempt to make a new high or low in a well established trend is the first sign that the back of the existing trend has been broken and the opposing side is ready to regain control. it will make a new low on the next move. Conversely. 2) The first failed attempt to make a new high in a well established uptrend is the first sign that the balance of power has shifted from the buyers back to the sellers. after it has already made a series of higher highs (3 or more). it will make a new high. The trend has likely changed and the first high in the new trend has been identified. 1) The first failed attempt to make a new low in a well established downtrend is the first sign that the balance of power has shifted from the sellers back to the buyers. ” CHAPTER 18 “iFund Traders” The Three Major Trailing Stop Methods Page 150 .Jesse Livermore “The idea is to get out fast when a trade goes against you.. the TRAILING STOP is moved up. During which.01 below the prior bar’s low at all times. as evidenced by Figure 2. always staying only one bar behind the bar currently trading. meaning that either the trader will hit his anticipated target or get out at his initial stop. the trader maintains a mental stop $0. the trader would launch into “TRAILING STOP” mode. it’s a boom or bust scenario.Once the iFund Trader has entered his long. iFund Traders Bar-by-Bar Stop Method iFund Traders Trailing Stop Method 1 Page 151 . and placed his initial stop. As each new bar begins. The same would apply in reverse. Once there is a two bar lift (this includes the entry bar if it ends higher than the buy price). Bar-by-Bar Trailing Stop Page 152 . The numbers show each one of the TRAILING STOP moves made by the iFund Trader. Bar-by-Bar Trailing Stop Page 153 .Charts Courtesy of iFund Traders Trader Pro® Tip: Remember. it’s the initial stop(s) that serves as your line in the sand. Before that. begin TRAILING STOP mode only AFTER you have two bars of profitability. it (like its bigger brother. with proper timing. the force of the trend. Essentially. anticipating a pullback before the secondary leg. Figure 1 8ma Buy (1) Figure 2 2) iFund Traders 8ma Momentum Stop Method – This is by far the most dynamic TRAILING STOP method we deploy.a Buy (2) Short (1) a 8ma Short (2) In the above Figure 1. but requires nerves of steel to put into practice. Everything would be handled in reverse for Figure 2.” But. What must be kept in mind is that when stocks are not in a trending mode. iFund Traders Trailing Stop Method 2 Page 154 . the iFund Trader would simply buy at point 1. Bar-by-bar noise is eliminated. this stop method will result in frequent “whip-saws. Note: We allow iFund Traders to use this stop method right from the beginning stages of their trading. the 8ma would become the iFund Traders TRAILING STOP. and sell into the initial rise. at that point. the iFund Trader could try and hold on to the stock as long as it remained above the r8ma.and 5-minute charts works extremely well. At buy point 2. the 20ma trailing stop method) is unrivaled when it comes to “milking” the best part of a stock’s move. The method applied to 1. It represents one of my personal favorites because of its superior ability to keep the trader in a trade during the sweetest (strongest) part of the move.2. allowing the trader to focus on what counts. iFund Traders Tip The 8ma Bull Run Page 155 . Tip: iFund Traders add to winning plays by buying at each iFund Trader Buy Tactic. The 8ma Bull Power Page 156 . iFund Traders Tip: 8ma Bull Run Page 157 . Charts Courtesy of iFund Traders Pro® 8 Taking the 8 Train Page 158 . Charts Courtesy of iFund Traders Pro® Circles show three iFund Trader Sell Tactics. iFund Traders Tip: The 8ma is an iFund Traders number one trailing stop guide. 8ma Bear Run Page 159 . Come back later to identify each one. Charts Courtesy of iFund Traders Pro® Note how effective the 8ma keeps the trader in the stock during the strongest part of the move. 8ma Trailing Stop Page 160 . Circles show well defined entries for the iFund Trained Trader. iFund Traders Tip: After the first successful retest of an iFund Traders moving average. always assume another will occur. The 8ma Retest Page 161 . The circle shows the successful retest of the 8ma. and 5-minute charts works extremely well. iFund Traders could try and hold on to the stock as long as it remained above the r20ma. Everything would be handled in reverse for Figure 2. In many ways. as it forces the trader to focus on the trend. it is unrivaled when it comes to “milking” a stock’s move for all it’s worth. However.a Buy (2) Short (1) a 20ma Short (2) In the above Figure 1. Figure 1 20ma Buy (1) Figure 2 3) iFund Traders 20ma TRAILING STOP Method – This is by far the most basic TRAILING STOP method we deploy. At buy point 2. But. and the easiest to put into practice. Note: We ONLY allow iFund Traders to use this method AFTER they have graduated to level 4. instead of the bar-by-bar noise. iFund Traders would simply buy at point 1. iFund Traders Trailing Stop Method 3 Page 162 . The method applied to 2. the 20ma would become the iFund Traders TRAILING STOP. anticipating a pullback before the secondary leg. its superior nature only works in trending stocks and markets and it loses all of its luster when stocks and markets are not trending. which can be quite confusing at times. it is the most superior method of all. with proper timing. and sell into the initial rise. Essentially. at that point. The 20ma Trailing Stop Page 163 . the iFund Trader confidently buys subsequent retests. The 20ma serves as a trailing stop for those who don't mind the bigger swings. Once the 20ma begins to halt the price declines.Circles show trading opportunities. while riding each open position for maximum gains using the 20ma as the trailing stop. The 20ma Trailing Stop Page 164 . The iFund Trader has multiple opportunities to enter a short in INTU and add to it.Note: The iFund Trader is still holding all open positions. .” CHAPTER 19 “iFund Traders” The Market’s Three Trends Page 165 .Unknown “You can beat a horse race. but you can’t beat the races. usually when it forms after an advance. The Market’s Three Trends Page 166 . This stage can be wide. Our definition is a bit more involved. iFund Traders short rallies toward the 20ma. 2) 2) The Down Trend – The down trend. 3) Sideways Trend iFund Traders buy/bid dips and short/offer rallies. short breakouts away from the 20ma and buy climactic declines too far from the 20ma. by far the most frustrating. Tip: In Sideways Trends. iFund Traders buy dips toward the 20ma. is usually defined by a series of relatively equal highs and lows. 1) Tip: In Up Trends. 3) The Sideways Trend – The sideways trend. is usually defined by a series of higher highs and higher lows. Our definition is a bit more involved.Uptrend Downtrend Tip: In Down Trends. by far the most popular of all. In addition to higher highs and lows. by far the most feared of all. is usually defined by a series of lower highs and lower lows. we want a down trend to posses a smooth declining 20ma below a 200ma. we want an up trend to posses a smooth rising 20ma above a 200ma. In addition to lower highs and lows. 1) The Up Trend – The up trend. buy breakouts away from the 20ma and short climactic runs too far from the 20ma. or it can tight and narrow. usually when it is just a pause or after a sharp decline. which is also above a rising 20ma. 1) The Regular Up Trend – This uptrend. defined as a rising stock above a rising 8ma. is the most powerful one in existence. Up trend 20ma Power Uptrend 20ma Tip: In Power up trends. it’s typically clearer sailing for the stock. buy breakouts away from the 20ma and short climactic runs too far from the 20ma. dips are no concern and can be used to accumulate larger positions. It does not get better than this! 2) 2) The Power Uptrend – This uptrend. This trend will be played more than an other. defined as a rising stock above a rising 20ma which is also above the 200ma. 3) Super Uptrend 20ma 8ma Tip: In Super up trends.Reg. buying anywhere and anytime during the trend works amazing well. 1) Tip: In Regular up trends. An overhead 200ma represents clouds in the sky. It’s emergence signifies pure unadulterated buying power that one can trust absolutely. The Market’s Three Up Trends Page 167 . is a step above the regular uptrend. defined as a rising stock above a smooth rising 20ma. is a iFund Traders bread and butter trend. iFund Traders buy dips toward the 20ma. 200ma 3) The Super Uptrend – The uptrend. somewhat. When the 200ma is below all the action. The Market’s Three Down Trends Page 168 . shorting anywhere and 8ma anytime during the trend works amazing well. It’s emergence signifies pure unadulterated selling power that one can trust absolutely. is a step above the regular downtrend. defined as a declining stock below a smooth declining 20ma. It does not get better than this for bears! 20ma Tip: In Super downtrends. 200ma 1) 20ma 1) The Regular Down Trend – This downtrend. is the most powerful one in existence. is a iFund Traders bread and butter short trend. defined as a declining stock below a declining 20ma which is also below the 200ma. 2) 2) The Power Downtrend – This downtrend. Power Downtrend 20ma Tip: In Power downtrends. the stock is typically freer to fall. A 200ma below the stock represents a floor of support. This trend will be played on the short side more than an other. When the 200ma is above all the action.Reg. 3) The Super Downtrend – The downtrend. rallies are no concern and can be used to build larger short positions. Downtrend Tip: In Regular downtrends. short breakdowns away from the 20ma and buy climactic runs too far below the 20ma. defined as a declining stock below a declining 8ma. iFund Traders short rallies toward the 20ma. which is also below a declining 20ma. Rather. Charts Courtesy of iFund Traders Pro® Buy Here iFund Traders Super Uptrend Page 169 . the iFund Trader looks for any excuse to fall in or enter.iFund Traders Tip: A rising stock above a rising 8ma and 20ma represents one of the most potent uptrend’s in existence. Rarely should it be fought. buying dips and breakouts on the 2-minute and 5-minute charts have better odds of working.Charts Courtesy of Realtick® When stocks are in strong up trends on the 15-minute chart. 15-Minute Up Trend Page 170 . 15-Minute Down Trend Page 171 . shorting rallies and breakdowns on the 2-minute and 5-minute charts have better odds of working.Chart Courtesy of Realtick® When stocks are in strong down trends on the 15-minute chart. If the iFund Trader Up Trend 1 – Rising Stock above the 2 – Rising 20ma (r20ma) 3 – r20ma above the 200 ma Tip: iFund Traders can buy dips and breakouts that occur (originate) at or near the r20ma (or 21ma) 5-Minute Up Trend Page 172 . Circles show iFund Traders Opportunities VBSs 5-Min Downtrend Page 173 . This dip back to the r20ma was a bit too sloppy. it occurred too close to the end of the day for the iFund Traders to take. Come back after the course to name these iFund Traders Trades 2-min Up Trend Page 174 . In addition. Come back sometime after the course to name these iFund Traders Set-ups (events). Chart Courtesy of Realtick® 2-min Downtrend Page 175 . but it communicates so much that it taught by iFund Traders. you’ll see it several more times. We’ve seen this chart several times. already. 5-Minute Sideways Trend Page 176 . 1-Minute Sideways Trend Page 177 . Power Trends Page 178 .” – Oliver L. When it arrives. its your chance to sit back and do nothing but enjoy the ride.“The Power Trend is what every trader craves for. Velez CHAPTER 12 The Market’s Biggest Reward. demonstrating the anxious and excited nature of the buyers. 3)There is very few contacts with the 20ma.Exhaustion Elephant Bars continue or exasperate an 1)Stocks (or any other item) in power trends rise or decline at 45 degree angles . almost non-dramatic way. 4)They frequently ignore single red bars – In other words.Power trends rise in a tight. 2)These power trends are formed by and large by small. Think Marathon runner versus the sprinter. Red bars are often immediately followed by green bars. which means its rising with the greatest amount of ease and efficiency.Keep in mind that angles much sharper than 45 degrees are very short lived and the speed and velocity of such trends are so high they can’t endure over extended periods of time. if any at all – Power trends tend to easily and ever-sogracefully glide above their 20mas. little bars: . Big bars expend tons of energy. power trends tend to frequently produce only one red bar only. Small bars make most of the stock’s 45 degree trend. Think of an Olympic sprinter. They may have a few contacts along the way but they are like jets they fly smoothly above the clouds. not through them. They expend too much energy too quickly to last. Power Trends are comprised of the following characteristics: They represent the much awaited for “reward” of all traders Power Tends or Super Trends: Power Trends Page 179 . We call this frequent ignoring of red bars (RBIs). Power Trend Page 180 . Power Trend Page 181 . Power Trend Page 182 . Power Trend Page 183 . Power Tend Page 184 . Jesse Livermore “Do not have an interest in too many stocks at one time.” CHAPTER 21 Left. Right & Bottom “The Three Modes of Trading” Page 185 . It is much easier to watch a few than many.. While the buys with this style do occur under the 20ma. Bottom to Right: Define Who You Are Page 186 .Note: While a trader can lean toward one style more than others. building a position in anticipation of a near-by turn to the upside. The left-side buyer looks to enter plays only after a stock has demonstrated its inability to decline below the 20ma again. Right Side Buyer: When a stock is right-siding. his buyer will only make his/her initial entry after a stock has demonstrated its ability to get above the 20ma and stay there. This approach is the most aggressive style of the three and is only for the most skilled at timing near-by bottoms. These 3 styles represent the three type of pro buyers Left Side. Bottom to Right Buyer: The trader practicing this style is a hybrid between the above two styles. This most conservative style of the three often has the trader buying rather heavily after the first successful retest of the 20ma. they only take place when an actionable event forms deep below the 20ma. mixing these styles is also an option. Right Side. The initial buys tend to be quite heavy at first and become lighter as the play evolves. My famous ATM trading method falls into this category. The left-side buyer looks to gradually enter small lots while a stock is still declining under its 20ma. it is trending upward above a rising 20ma. it is tending downward under a declining 20ma. Left Side Buyer: When a stock is left-siding. One does not have to have a rigid “either or" stance with them. Right Side Play Page 187 . “THE GIFT” Page 188 . 10025 Click to add subtitle The “GIFT” Buy . * 2576 Broadway. #158.Copyright © 2010 * iFundTraders. LLC. NY. NY. NY. NY. #158. LLC. 10025 Click to add subtitle The “GIFT” Buy . * 2576 Broadway.Copyright © 2010 * iFundTraders. NY. NY. LLC.Copyright © 2010 * iFundTraders. * 2576 Broadway. 10025 Click to add subtitle The “GIFT” Buy . #158. NY. 10025 Click to add subtitle The “GIFT” Buy . #158. NY. LLC.Copyright © 2010 * iFundTraders. * 2576 Broadway. Copyright © 2010 * iFundTraders. #158. NY. * 2576 Broadway. LLC. NY. 10025 Click to add subtitle The “GIFT” Buy . NY.Copyright © 2010 * iFundTraders. NY. #158. 10025 Click to add subtitle The “GIFT” Sell . * 2576 Broadway. LLC. NY. 10025 Click to add subtitle The “GIFT” Sell . * 2576 Broadway.Copyright © 2010 * iFundTraders. #158. LLC. NY. 10025 Click to add subtitle The “GIFT” Sell . NY. #158.Copyright © 2010 * iFundTraders. LLC. NY. * 2576 Broadway. NY. 10025 Click to add subtitle The “GIFT” Sell .Copyright © 2010 * iFundTraders. * 2576 Broadway. LLC. #158. NY. Daniel Mielcarski “Do you know what you are supposed to do.Dr.. and if so. do you actually do what you are supposed to do when you are supposed to do it?” IGNITING BARS THE MOMENTUM BUY AND MOMENTUM SELL Pg 127 . The Momentum Buy . NY. #158.Copyright © 2010 * iFundTraders. the TIF Rules (covered in the next section) must be followed Only a one bar lift is needed to begin using a Bar-By-Bar trailing stop . NY. the momentum buy is made once the high of the igniting bar is cleared and a stop is placed under the low of the igniting bar. In that instance it is better to wait for the resistance to be cleared and retested. In other words we do not want to buy right into the face of immediate or very near by resistance. The best igniting bars most closely resemble those with Absolute Control and also have a price void (empty space) above on the current time frame and the larger time frames. LLC. * 2576 Broadway. or cleared and another buy trigger forms to confirm the follow through of momentum. as support. Once you have indentified an igniting bar. 10025 If a momentum bar is to be entered before completion. NY. NY. * 2576 Broadway. #158. 10025 Igniting Bar The Momentum Buy .Copyright © 2010 * iFundTraders. LLC. 10025 Igniting Bar Entry The Momentum Buy .Copyright © 2010 * Stop iFundTraders. * 2576 Broadway. NY. NY. #158. LLC. NY. #158. NY.Copyright © 2010 * iFundTraders. 10025 Igniting Bar Trailing Stop Current bar still forming The Momentum Buy . LLC. * 2576 Broadway. NY. 10025 Igniting Bar Trailing Stop Current bar still forming The Momentum Buy .Copyright © 2010 * iFundTraders. LLC. #158. * 2576 Broadway. NY. In other words we do not want to sell right into the face of immediate or very near by support.Copyright © 2010 * iFundTraders. NY. or cleared and another sell trigger forms to confirm the follow through of momentum. the TIF Rules (covered in the next section) must be followed Only a one bar lift is needed to begin using a Bar-By-Bar trailing stop . 10025 If a momentum bar is to be entered before completion. The Momentum Sell . In that instance it is better to wait for the support to be cleared and retested. LLC. the momentum sell is made once the low of the igniting bar is cleared and a stop is placed above the high of the igniting bar. * 2576 Broadway. NY. Once you have indentified an igniting bar. The best igniting bars most closely resemble those with Absolute Control and also have a price void (empty space) below on the current time frame and the larger time frames. as resistance. #158. #158.Copyright © 2010 * iFundTraders. 10025 Igniting Bar The Momentum Sell . NY. LLC. NY. * 2576 Broadway. NY. NY. * 2576 Broadway.Copyright © 2010 Stop * iFundTraders. 10025 Entry Igniting Bar The Momentum Sell . #158. LLC. #158. NY. * 2576 Broadway. 10025 Current bar still forming Trailing Stop Igniting Bar The Momentum Sell . NY. LLC.Copyright © 2010 * iFundTraders. 10025 Current bar still forming Trailing Stop Igniting Bar The Momentum Sell . NY. * 2576 Broadway. #158.Copyright © 2010 * iFundTraders. LLC. NY. iFund Traders Services: Supporting Traders Page 209 . Stay In Touch Page 210 .