<s> $69.95 USA/$108.50 CAN
ith the recent explosion in thepopularity of trading, nearlyeveryone who trades wants atrading system—a methodology for buyingand selling. A trading system can be a usefultool—provided the trader has the know-howto use it correctly. Unfortunately, few tradersJo. In this indispensable book, John Hill, oneof today's most, highly regarded analysts, andhis partners, George Pruitt and Landy Hill,enable traders to develop original systemsthat they tan use to increase their tradingprofitability.Demonstrating that a system is only as reliableas the criteria on which it. is based and theinformation that is fed into it, the authors provide traders with the tools needed to developsystems based on sound logic, including complete explanations of.• The principles behind trading systems• How various systems operate foraccounts of all sizes, ranging fromamounts of $10,000 to $1.000.000• The tools and background necessary fordeveloping computerized trading systemsthat are backtested (i.e., tested on existing historical data) and will be profitablein the future• Short-term market timing techniques forany market. . .and much more. Stock, futures andoptions traders, and individual investors will(Continued on back flap)
(Continued from front f l a p )find that this complete, highly effective tutorialis truly the ultimate in successfully developingand utilizing trading systems that really work.JOHN R. HILL is the President and founderof futures Truth, a leading newsletter thatanalyzes and rates trading systems. He has beena frequent guest on CNBC and is a popularspeaker at numerous investment conferences.Mr. Hill holds a master's degree in chemicalengineering from Ohio State University.GEORGE PRUITT is the Director of Researchfor FuturesTnruth. In addition, he has writtenfor Futures magazine and has had researchpublished by the Wall Street Journal andBarron's. Mr. Pruitt holds a B.S. in computerscience from the University of North Carolinaat Ashenlle.LUNDY HILL began his career working onthe Door of the Chicago Mercantile Exchangeand the Chicago Board of Trade. He currentlyoperates Commodity Research Institute, afutures brokerage company. Previously, heorganized Stafford Trading Company, aregistered CTA. Mr. Hill holds a degree inelectrical and computer engineering fromClemson University.
CONTENTSxixv1
PrefaceAcknowledgmentsIntroduction: The Search for TruthChapter 1The Set-Ups or the Big Picture
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Trading versus InvestingThe Ultimate Timing Tool for All MarketsTechnology RevolutionStages of Market ActionHow to Make Money with This TheoryCase Study of Trading RulesTo Trade or Not to TradeConclusionNote
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Chapter 2Practical Applications of the Elliott Wave Theory
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Targets for Major MovementsCorrective Waves or PhasesCase Study in Crude OilHow to Trade A or ABC Corrections to a ThrustTrading PlanOther Works on CyclesSummaryChapter 3Bar Charts and Their Forecasting Ability
How to Use Short-Term Patterns for ProfitEntry TechniquesSystem Development Based on Closing PricesThree-Day Equilibrium ReversePattern GapHook Closingvii
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CONTENTS
Narrow Range BarsTrading the Narrow RangesTrading the Wide Range BarBuy ZonesStop PointTaking ProfitsAnticipationTime Breakout RuleGap Higher/Low Openings
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Chapter 4Channel and Trendline Trading
Trend Lines and Parallel MovementsTrading the 0-2 LineTrendline and Four-Close System (TL4C)Trend Channel System
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Chapter 5Swing Trading
SwingChartsAnticipationMove EndingPullback BuysAction and ReactionsPreliminary DemandTime and SpaceSell Tops after a Trend ChangeThree Bar RalliesHolding Gain and Rally from SupportSetups for Trend ChangeTrend ContinuationThree Drives to a BottomSupport/Resistance ZonesTime and Price ProjectionsTrendFirst Day in Rally
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Chapter 6Patterns101
Opening Range BreakoutsTrend Up ConfirmedSpring Reversal Pattern
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Upthrust Reversal PatternYum-Yum Continuation PatternL Formation and Reverse LDouble Tops and BottomsSmall Morning TailsClear Out PatternsOverlapping and Non-Overlapping BarsTwo-Day IntersectionChannel Trading SystemsThePullbackHigh of Low Bar for Buying/Low of High Bar for SellingThree Bars Up/DownDynamite TriangleNarrow Range/Wide RangeTwo-Day Flip(2DF)Tight Formation BreakoutThe Important of ExitsUse of Tools in Trading the S&PsChapter 7Drurnmond Geometry and the PLdot:An Introduction to the Fundamentals
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What is Drumnond Geometry?Conclusion
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Chapter 8Introduction to Mechanical Trading Systems
Why Use a Trading System?Throw Those Ads AwayShould I Buy a Trading System?Myths and Facts Concerning Trading SystemsConclusionChapter 9Where to Start
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HardwareSoftwareDataIndicatorsFive Approaches Used by the Best Trading SystemsAnatomy of a Trading SystemConclusion
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Chapter 10Historical Testing—A Blessing or a Curse
Simulated AnalysisCurve FittingPeriodic Reoptimization—Does It Work?Alternative to Optimization—Adaptive ParametersYou Design the Trading System, Not Your ComputerHow to Evaluate Trading System PerformanceHow to Evaluate Trading System Portfolio PerformanceConclusionChapter 11Money Management
Chapter 12Turnkey Systems and Portfolios
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Portfolio 1 $10,000 Initial CapitalPortfolio 2 $25,000 Initial CapitalPortfolio 3 $50,000 Initial CapitalPortfolio 4 $100,000 Initial CapitalPortfolio 5 $300,000 Initial CapitalConclusion
BibliographyAppendix: Easy Language Source Code
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Statistics—A Necessary ToolRisk of RuinCapital Allocation ModelCompounding ReturnsPlacement of Protective Stopa and Profit TargetsConclusion
Chapter 13Top Ten Systems of All Time
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PREFACE
All speculative markets are governed by the law of supply and demand.Economics have proven that a fair market will determine the equilibrium point between the supply and demand of goods or services. Thisequilibrium point is the price where buyers and sellers agree on a valueof the product being traded. The price of a stock or future is constantlychanging. This price movement, also known as market action, is oftenrepresented by a simple bar chart that provides five different statisticsfor the market that it represents: open, high, low, close price, and therange of market movement fur that day.The bar chart represents the war that is fought between buyers andsellers (bulls and bears). If the market closes up from the open, thehulls have won. If just the opposite happens, then the bears are the victors. The range of the bar chart represents the battles that were foughtduring the day. If the price of a stock advances by one point, that stockwas worth an extra point in price. A collection of the latest bar charts ofa certain market gives a longer term view of the supply and demand forthat underlying market. Market technicians believe that future pricesof a slock or future can be determined by following the map of supplyand demand that is portrayed by the bar chart. If one can master theart of proper chart interpretation and uncover the law of supply and demand, it can lead to profitable trading.The first part of this book is dedicated to the art of decipheringthe bar chart. The authors present several approaches to reading thecharts that are based on years of watching the markets. We learn bestwhen we concentrate on one idea at a time. Take any chart and markspecific entries under each idea presented. The ideas presented willnot work in isolation, but will contribute to an overall trading plan.There are only three parts to a trading plan: entry, exit, and stop losswhen the entry is wrong. Each one of these three parts has a basket oftechniques. By learning these techniques, you will develop your ownkey indicators and eventually you'll have the ability to navigate anychart and recognize a potential edge that suits your trading style. Youcan develop an edge in the markets, but you will never master themonster.The second part of this book is dedicated to the multimillioni dollarindustry of mechanical trading systems. The advent of the computerxi
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PREFACE
and inexpensive data has given everyone the ability to teat tradingideas. Since most of the trading public are inexperienced traders, theyhave searched out the gurus and experts in trading systems. Manygurus and experts promise wealth to anybody wanting to trade stocksor futures. Unfortunately, many people followed their advice, purchased their trading systems, and failed miserably at trading. Thelarge gap between what was promised and what was actually achievedhas given this industry a bad name. Futures Truth Company has beentesting and evaluating trading systems since 1986. This company wasorganized to provide hard cold facts on the many trading systems thatare available to the public. Futures Truth began as a watchdog company, but over the years it has become a medium for good and honesttrading ideas. A mechanical approach to the markets can be successfuland this is backed up by the fact that approximately 80% of the $30billion in the managed futures industry is traded by exact systematicmethods.Well over 80% of traders and speculators lose money. Computershave incorrectly been used to show hypothetical performance statistics.A trading system cannot be dreamed up by a computer; it must be basedon a reasonable chart interpretation of supply and demand. The computer, with the benefit of hindsight, can be used to massage data toshow any desired return. This is known as curve fitting. Such tradingsystems have no relationship to the real world, but do make impressivepromotional pieces. That is why it is extremely important for a trader tounderstand the forces of supply and demand that operate in the markets. The purpose of this book is to show you how to make money in themarkets by providing:1. A framework for chart interpretation based on solid supply anddemand characteristics of the charts .. . and how to use thisknowledge for profit.2. The education and tools necessary for developing trading systemsthat will work not only in hindsight but in the future.3. Trading systems and money management schemes that can get atrader on the right track.The ideas and trading tools presented are bound to initiate controversy, even provoke disagreement. This seems appropriate since no onetrading tool is right for everyone. Take what is useful and discard therest. Read and study the ideas with healthy skepticism. Test the ideasand patterns against your own experience. Our interest is not that youtrust and/or believe the ideas and trading plans presented herein butthat you trust your own approach to trading the markets.
PREFACE
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DISCLAIMERIt should not be assumed that the methods, techniques, or indicatorspresented in this book will be profitable or that they will not result inlosses. Past results are not necessarily indicative of future results. Examples in this book are for educational purposes only. This is not a solicitation of any order to buy or sell. The National Futures Associationrequires us to state that "Hypothetical or simulated performance results have certain inherent limitations. Unlike an actual performancerecord, simulated results do not represent actual trading, also, since thetrades have not actually been executed, Che results may have under- orovercompensated for the impact, if any, of certain market factors, suchas lack of liquidity, simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. Norepresentation is being made that any account will or is likely to achieveprofits or losses similar to those shown."JOHN HILLGEORGE pRUItTLUNDY Hill.
INTRODUCTION:THE SEARCH FOR TRUTH
A young engineer with a wife, three kids, a big house mortgage, and$1,000 began his search for market, truths in the late 1950s. At thattime he was buying a few shares of Westinghouse and other stockswhen one day someone mentioned 95% leverage and the futures market.Engineers generally believe they are smarter than most people becausethey took the toughest courses in college. This belief is far from truewhen it comes to successful investing, as this engineer found out thehard way. He took his $1,000 and ran it up to $18,000 within a 3-monthlime span by trading in and out. of the sugar market. It should havebeen 5200,000 according to his paper studies if it had been traded in amore logical manner. HP then began his search for the next great market and someone mentioned soybeans and the impending drought in theMidwest. All $18,000 went into soybeans and he began calling theweather bureau every hour to get the latest forecast. Each time the market would move up he would buy more beans to the full extent of themargin available. Within a very short time the equity was up to$80,000 and he was long 200 contracts. On Friday, the weather reportswere still predicting the big drought and he was proudly telling his wifethat there was very little difference between $80.000 and 0 but thisthing could turn into a million bucks as he smoked a big cigar anddrank a glass of champagne. (Young corporate executives at that timecould not think or hold effective meetings without a big cigar.) On Saturday night the Midwest had a weather phenomena that had not occurred in the last 100 years. A huge weather front from out of nowherecame through. By Monday morning instead of drought, the country wasgoing to produce a record crop of beans. He ended up with $5,000 andwas extremely lucky he did not lose his house and earnings for the next10 years. Three things were apparent: There was a big element of stupidity, he had to get some ''smarts." and if money could be made onetime, it could be made again.This started a search for knowledge. Weekends were spent in theLibrary of Congress in Washington and the New York Public Library1
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THE ULTIMATE TRADING GUIDE
looking for any and all publications on technical analysis. He wouldknock on the door of anyone who was a recognized authority. Many doorswere closed, but a few were open. The bull markets and silver in theearly 1970s enabled him to escape the corporate world. An avocation became a profession. He wrote the Paine Webber market letter on futuresfor a couple of years and wrote a couple of books on technical trading.Futures Truth was started in the mid-1980s. The author was tiredof buying worthless trading methodologies, spending many thousands ofdollars in this search for knowledge. One individual copied a section ofthe author's earlier publication and sold it for $100. it was a good technical tool but not a system unto itself. Futures Truth Company was organized for the express purpose of showing the actual performance ofsystems after they were released for sale to the public. The FuturesTruth publication is now sold around the world. It tracks performance ofabout 130 different methodologies. The performance of Jrainbow merchants"—venders who sell products that have far more hype than value—is no longer shown. Private opinions are still available. Sadly enough,numerous phone calls are received from people who have purchased systems and traded them without full understanding. The systems generally cost much more than the initial outlay. You can easily lose up to$10,000 on a purchased system before you decide it is not for you. Futures Truth has been threatened with lawsuits many times. FuturesTruth could always count on the big lawyers from New York and Chicagocalling when particular vendors ran full-page ads in trade publicationsextolling the beautiful profits to he made by trading their methodologies. Futures Truth showed the hard cold facts regarding these systems.Futures Truth was sued once when we showed that a vendor's systemswould have lost several million dollars if you had traded them after theywere released for sale. (The Judge dismissed the suit.) Futures Truthhas cramped the style of many rainbow merchants, but you never reallyput them out of business. After some time, the honest and reputable vendors come to Futures Truth and asked the publication to track their systems. The general public wants rainbows: they generally will not buy asystem that shows realistic profits and draw downs. Honest vendors simply cannot compete on a short-term basis, however, long term they arethe only survivors. Look at any publication that is five years old and seehow many rainbow merchants are no longer around. This has been an interesting area. The methodology has to be revealed to Futures Truth forprogramming into their Excalibur Testing Software to track performance. Over the years, we have seen just about every imaginable approach to trading the markets. There is simply no Holy Grail or magicformula that will make you rich. If anything, the Holy Grail is the realization that it simply does cot exist. There definitely are methodologiesthat will give you an edge in the markets and that is what this book is
INTRODUCTION
3
all about: How to recognize that edge and then how to exploit it to makemoney in the markets.The advent of massive computer power in the early 1980s unleasheda powerful force for trading stocks and futures. Trading ideas, cover ingmany years of data, can now be tested in a matter of minutes. Unfortunately, this has lead to statistical flukes in that systems may be manipulated to curve fit the systems to yield unbelievable returns. This issimply not the real world. Late night television has infomercials thatpromise great riches if you only follow the statistical curve-fitted system, This book will examine the fallacies of this approach and presentan outline and a basket of trading ideas that should give you a statistical advantage in trading the markets.Technical analysis is simply reviewing historical data in an effortto understand the forces of supply and demand. This effort can give youa slight edge in the markets that may lead to consistent an profitabletrading results. Technical analysis is a viable and effective force intrading the markets.This is a story of the very best trading system of all time. The authorowns a farm in North Carolina. One day while trading, he noticed thatwhen his cows moved to the north pasture, the price of wheat moved up.This did not attract too much attention on the first day, but this phenomenon seemed to occur on every occasion when the cows went to thenorth pasture. The excitement was hard to contain. The ultimate trading system had been found. A PhD agronomist was hired to study thisstrange situation and seek out the answers to this recurring event. Thiswent on for several months. Finally, this high-priced employee wasfired. Two high school kids were employed to drive the cows to the northpasture any time the author was long wheat.Wild isn't it, but no more so than the pundits who claim that the position of Saturn in the universe directs the price of silver or that theseasonal pattern of British Pounds is to buy British Pounds on February 15 and sell on March 3 and you will be 80% correct.A bar chart of price action reveals underlying supply/demand factors in the market. Some of you may be familiar with the Donchianbreakout theory: Buy a four-week breakout to new highs in the marketand sell a four-week breakout to new lows. This basic theory has consistently made money in the markets since it was first introduced severaldecades ago. The computer now allows testing of these various theorieswith great rapidity.Timing is the essential ingredient for success in trading. Enormousfinancial rewards are available if the problem of timing is solved. Thisbook is primarily concerned with the problem of timing. The book is100% technical. Fundamentals are not covered. Proper chart interpretation will reveal all the fundamentals that you need to know. A chart
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THE ULTIMATE TRADING GUIDE
represents all the bulls and bears in a given market. When you read afundamentalist's summary of a given situation, you are always influenced by how the author slants the article. A chart will contain not onlyhis viewpoint (providing he has money in the market), but all the otherfinancial interests in the market.By studying and applying the technical approach, you can cover allthe active commodity markets or many stocks. This is not possible if youare a fundamentalist. There are simply too many variables, Home ofwhich will be in conflict.Futures Truth Company has been testing and evaluating commodity and stock trading systems for over fifteen years. A systematic mechanical system can produce profits in trading over the long term. Alarge number of traders have the same belief as evidenced by the $30billion being traded in managed futures using a systematic approach.Unfortunately 90% of traders lose money year after year in trading systems. It has been our task at Future Truth Company to show the hard,cold facts concerning trading systems. Some of the true reasons behindthis devastating statistic will become apparent.TRUTH 1: THE NAME OF THEGAME IS MONEYThe first and foremost thing to remember is that the name of the gameis money—or at least the acquisition thereof, This is not only the name,hut the object of the game. If you have any other purpose in mind, thenthe game and this book are not for you.As in all good games there are two teams. There is the "we" team;naturally enough, that's our team. The "they" team can be a large syndicate (although this is seldom true now) or, more frequently, can be agroup of unrelated professional traders acting in concert.The object of the game is the acquisition of the available moneythat is used to fuel the game. The gambits, feints, and intricate playsused are endless and would cause Knute Rockne to turn green withenvy.Technique number one is the lie—or, to be charitable, the loose truth.Breathes there a man, woman, or child in the continental United Stateswho is not familiar with the television picture of sad Farmer Brown holding a black ear of corn in his calloused hands? True, there was the cornblight of 1971 which saw corn rise from $1.40 per bushel to $1.67 perbushel for a 27 rise.It looked for a while as though we would need ration cards to getcorn, but surprise! The production was a full third over anything seen
INTRODUCTION
5
before in history and corn went down like the Titanic to the tune of 47per bushel.This is a principle as old as the hills, Brunswick and AMF, Inc. inthe late 1950s and early 1960s rose from obscurity to the $60 to £70area and then fell back to 6 for Brunswick and to 14 for AMF. For a period, it appeared that there would be a bowling alley for every thirdfamily in the world, including new nations.Computers, too, Levin-Townsend at 1 1/2 in 1965. Now the tom-tornsare heard and it's 1968. The stock, LTX, is at 68 1/2 There's a good storygoing in computer technology, but two years later in 1970, LTX's fortunes are at a low ebb. The stock later dropped to $3.00 per share—something to do with accnunting procedures and dull pencils.Of more recent vintage, take the example of current companies thathave ".com" as part of their names. One such company is The Globe.com,Inc. Their stock was initially offered at around $25 in November, 1998.It immediately went to about $48.5 per ahare in a matter of days. Only,one year later the price has dropped to around $7 per share.The point is that in all four cases there was a good story—lie—going:No corn. Everybody's bowling. Computer technology is the wave of the future. Buy anything with ".com." Maybe so, but the true facts were on thebar chart. The lesson to be learned here is to ignore all news, tips, andgarbage that are constantly being put out by the "they" team in an effortto deceive us. The only thing that counts is the chart. That is fact. That isthe only truth.
TRUTH 2: HE WHO KNOWS NOTWHAT HE RISKS, RISKS ALLA second basic truth in trading is risk threshold. Broadly defined thismeans the amount of proof required before the individual investor willmove—that is, act on the basis of his convictions. The author knows several very capable market, technicians who couldn't reach a decision evenif a gun were pointed at them. One, in particular, will cite a number ofastute observations relative to a given situation and then when pressedfor a hard buy-sell decision will cop out; by saying, "I don't know. Let'swatch the pattern unfold." By the time the unfolding has taken place,the opportunity is lost.What this means in practical terms is that by the time our marketoperator has gathered enough proof to make a decision to buy or sell,the move is probably over, The lesson here is that when you see thatsomething should be done—do it! Don't wait! Don't even look back!
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THE ULTIMATE TRADING GUIDE
TRUTH 3: PERSONAL PSYCHOLOGICAL MAKEUPDETERMINES HOW YOU GO ABOUT HONEYMANAGEMENT AND RISK CONTROLRemember that risk is absolutely the only thing you can control. Sometraders risk 1% to 5% of total capital on a single trade whereas others willride a given situation into the ground. If I may quote Larry Williams;"Rich people don't take big risks." You must do some clear hard-nosedthinking in this area before you begin trading. The idea that big lossesonly happen to the other fellow is simply not true if your guard is down.This is an area where positive thinking can and often is your downfall.The market simply does not care how positive you feel about a given stockor future. Stifle that ego and learn to love small losses. If you don't havesmall losses, it is positively guaranteed that you will have huge losses.A person may have all of the finest technical tools available at hisdisposal and yet be unable to make money at this business because ofhis personal psychological makeup. If you are to be successful in thisbusiness, you must learn who you are—how you make decisions. Personal financial decisions can be highly emotional.Take the case of a man shopping for a ear. One person will decide onthe spur of the moment to buy—another person will spend monthsstudying designs, different makes, and so on. before deciding; and thenhe generally has to be pushed into making a decision. The same is trueof traders. You have the person who shoots from the hip—buys on thefirst whim. Then 15 minutes later, he changes his mind. The other extreme is the person who studies a given situation and waits until everything falls into place, including the move. He will enter the marketafter it has made its move, and it is too late. One author calls this riskaversion. Failure to transform into action the results of good speculative thinking is as fatal to success as a habit of hastily making decisions on purely emotional impulse.Successful trading is dependent on developing a sound trading strategy and the ability to stick with that strategy. Always, the speculatormust be on guard to maintain mastery over himself.Another question you should ask yourself is: Why am I tradingstocks or commodities? Trading is certainly different from gamblingand serves a very vital function in our economy. However, the playersare not necessarily different. If you have not put forth time and study intrading, you have less chance than throwing dice. There the odds arefairly predictable. What is suggested is that you read books on gamblingand the instinct of gamblers, to be sure you are not addicted to tryingto "make the fast buck." Compulsive gamblers want to lose to punishthemselves, so some psychologists say.
INTRODUCTION
7
You must find out where you fit in and what your psychologicalmakeup is if you want to be successful in this business. When you knowyour internal strengths and weaknesses, you can build on the strengthsand work to overcome the weaknesses.To sum up the psychological aspects of trading, know who you areand why you are trading. This combined with the technical knowledgein this hook should put you on the road to success.Conrad Leslie is one of the most respected grain statisticians in thecountry. At a conference, I gave him a copy of a small book I publishedin 1977. Several months later I visited with Conrad and asked him if heliked my book. Conrad remarked that it was the best book ever writtenabout markets and I should not be selling it. He specifically mentionedthat one of the ideas in the book had made him a considerable amount ofmoney. I asked what page in the book the idea was on. Conrad said thatit was a secret, but if I searched hard enough I would find it. If anyonereading this book has Conrad's Great Fortune, please remember yourauthors and tell us what page it is on.Good Trading and remember: A speculator who dies rich dies beforehis time.
1THE SET-UPS OR THEBIG PICTURE
Trading is easy. Only buy stocks that are going up. If they don'tgo up. then don't buy them.—Will RogersThis chapter covers the set-Ups for profitable trading—looking at the bigpicture to determine where the market is in its overall development.After this, technical tools are used to pick exact entry techniques, stoploss protection in the event you are wrong, and likely targets for themove. Just as is true for real estate, the most important factor in trading is location, location, location. In addition, add timing, timing, andtiming. The net-up gives you an overall picture on where the market isin its stage of development—a hey factor when looking at short-term reversal and continuation patterns. Ideally, you enter the market in thezone that has the greatest probability of being a successful trade. Expressed another way. Go long in the boy or support zones and short ortake profits in the sell or resistance zones. Ideas such as accumulation,distribution, buy zones, and sell zones will be explained in this chapter.TRADING VERSUS INVESTINGThe first step in investing is to study the basic market fundamentals.Economic factors may take a number of years to be reflected in themarket so a longer term view is important. However, trading involves astudy of the technical factors that govern short-term market movementsas well an the psychological makeup of the buyers and sellers in themarket. Trading involves more risk than long-term investing, but it alsooffers oppurtunity for greater profits.8
THE SET-UPS OR THE BIG PICTURE
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THE ULTIMATE TIMING TOOL FOR ALL MARKETSShort-term trades that have gone sour or ones that I failed to get out ofbecome my long-term investments. You may have heard the expression:"You know it has 10 go back up." Lei me assure you that the market doesnot have to do anything. If I had to tell you the exact time and price thatthe market w i l l turn hack up, it would he when I abandon the trade andnot one minute before. Learn this market principle well because it willsave you many dollars. This principle has, in fact, made me many dollars. 1 have had investors call me hoping for some assurance that theparticular market they are in will turn hack up. My response is alwaysthe same, "Let me know when you liquidate because that is the time Iwill boy." If a trade is not acting right, get out, Don't stay with a position. Your capital will remain intact for another trade. Lear