, 65, 82
learning, 71
support, 142swing trading method, 96timing, trigger action. See
Commitment of Traders Report
trend, 91trigger, 141–143usage, 85, 91. See also Active
markets; Short-term swingtradingquiz, 96–97review, 96STF inclusion. See British Pound
futures; Google stock; Microsoftstock; Swiss Franc futures
summary, 94–96Moving average (MA), 85
display, 143MA-based systems, 85–86shortness, 144
Moving average of the high (MAH),
up movement, abnormal condition,
91
54–55
Moving average of the low (MAL),
Money loss, odds (increase), 190–192Money management stop (MMS), 42Monthly bullish MOM pattern. See
Motorola stock
Motorola stock, monthly bullish MOM
pattern, 57
91–92
Multiple positions, trading, 102
NNews, overdosing, 179Nonproductive behaviors, unlearning,
Moving average channel (MAC)
189
application, 91–92
AD/MA usage, 94ﬁve consecutive bar pattern,
usage, 92–94
basics, 88–89buy signal, 92, 141. See also Two-bar
MAC buy/sell signals
high, 119method, 85–86
requirement, 96
pattern, example. See Five-bar MAC
patternpractice, 88–89quiz, 89–90review, 89sell signal, 93. See also Two-bar MAC
buy/sell signals
simplicity, deceptiveness, 86–88
OObjectives, clarity, 183One-contract trading, 43–44One-day gaps, 109
results, comparison, 110
Open/close pattern. See Eight-baropen/close patternOpen orders, tracking, 162Options, trading, 187–188Order log, example, 161fOrders, usage, 174Organization
absence, 174goal, 181impact. See Disorganizationimportance, 175, 181Organizational skills, 2
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Out of the money options, purchase,
Power momentum formula trigger
174
Overthinking
avoidance, 187–188impact, 178–179. See also Trading
(PMFT), 61
practice, 65quiz, 66–68review, 65
PPA. See Penetration amountParabolic stop (PS), 42Patterns. See Eight-bar open/closepattern; Price patterns
Preholiday seasonals patterns, 22Price
decline, 63fdown movement, abnormalcondition, 54–55
normal/abnormal relationships. See
appearance. See Gap-down pattern;
Momentum
Gap-up patternPenetration amount (PA), 102Percentage historical accuracy,
22
Performance statistics, 10PMF. See Power momentum formulaPMFT. See Power momentum formula
trigger
Position
entry, 79, 128timing, 61
exit, 119, 128, 142sizes, procedure, 77spreading, 174
Positive growth trend, 28Power momentum formula (PMF)follow-through, relationship, 69,
77
practice, 71–72, 82quiz, 72–75, 82–84review, 72, 82introduction, 51–52practice, 57review, 57stop-loss, 80–81success, 64trade
examples, 80S-T-F inclusion, 70f, 81f
trading, 51
Power momentum formula (PMF)
method, 55
objectivity, 78review, 78rule basis, 64
relationship, abnormal condition.See Bearish MOM/pricerelationship
trends, 53f
commercials, relationship, 137frelationship. See Large speculator
COT
up movement, 52
Price bars
examination, 61–62, 63inclusion, 56trigger, 78
Price/MOM, normal relationship, 53fPrice patterns, 99, 109, 117
examples, 120–121quiz, 105–108, 113–116, 122–124review, 105, 113, 121systems, 170
Probability repetitive pattern, 3Professional trader, thinking/acting
process, 181–183
Proﬁt/loss ratio (P/L), 24, 27Proﬁts, maximization, 5Proﬁt target. See First proﬁt target;
Full proﬁt target
calculation, 69–72range, 111
PS. See Parabolic stopPT1. See First proﬁt target
RRate of change (ROC), 51Rationalization, avoidance, 180Ratio relationships, seasonal patterns,
22
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Ratios, setup example, 3Reversal down. See Daily reversal down
example, 11fpattern, trigger inclusion (results),
15t
sell strategy, results, 12f
Reversal pattern, trigger (inclusion),
13f
Reversal up. See Daily reversal up
buy strategy, example, 11fexample, 10ftrigger inclusion, results, 16t
Reverse trade per day, 154Reversing signal, 93Rewards, usage, 189Risk. See Trade
degree, acceptance, 185limitation, 5, 102Risk management, 5
methods, 2stop-loss, usage, 41–42ROC. See Rate of changeRound lots, usage, 78Rule-based method, 64–65
SScared money, usage, 174SCO. See Stop-close-onlySeasonality
introduction, 21quiz, 29–30review, 28–29
Seasonal patterns, 22. See also Cashmarkets; Commodities; Ratiorelationships; Spreadrelationships
Seasonals
discovery. See Key date seasonalssetups
equivalence, 22–23example, 3
Seasonal setupsselection, 32usage, 23
Seasonal systems, 170Seasonal tradeentry, 46exit, 46follow-up, 42–43setup. See Standard and Poor’s
futuresstop-loss, 42–43timing trigger, inclusion. See July
hog futures
Seasonaltrader.com, log-in procedure,
28
Seasonal trigger. See Standard and
Poor’s trade
example, 33introduction, 31learning, 28–29quiz, 37–39review, 31–36stochastic K14/5, usage, 35f
Self-discipline, absence, 181Sell, MAC trigger, 86Sell reversal, 13–15Sell setup (SSU). See Gold futures
existence, 62
Sell strategy, example. See Reversal
down
Sell trigger, 61–63, 118, 119. See also
Gold futures
example. See Thirty-minute breakoutoccurrence, 32, 63point, clarity, 62f
September Canadian dollar futures,
seasonal trade (usage), 27t
September heating oil futures,
seasonal trade (usage), 25t
September soybean futures, seasonal
trade (usage), 26t
trade, usage. See July hog futures;
Setups. See Cuban Missile Crisis; Date
September Canadian dollarfutures; September heating oilfutures; September soybeanfutures
types, 22
seasonal setup; Gapsetups/triggers; High-oddsseasonal setups; Two-daygap-down setup/trigger;Two-day gap-up setup/trigger
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Setups (Continued)
Sixty-minute MOM sell setup/trigger.
application rules. See Bearish MOMsetups; Bullish MOM setups
assumption, 43combination, requirement, 5conﬁrmation/validation, 5determination, 3–4equivalence. See Seasonalsexamples, 3, 9–12indication, 9introduction, 9motion, 3pattern. See Thirty-minute
breakout
quiz, 18–19review, 18rules, 3selection. See Seasonal setupstrigger, usage, 5usage. See Eight-bar open/close
pattern
Setup trigger follow-through (S-T-F)
application, 25–28approach, 17–18
usage, 86
example. See Thirty-minute breakoutinclusion. See British Pound futures;Google; Microsoft stock; Powermomentum formula; SwissFranc futures
method, 41structure
importance, 99usage, 175Short position
entry, 71f, 111stop-loss, 81
See Gold futures
Slippage fee, 12Small speculators, 133
group, 134
Small trader, correlation, 134Small trader COT, 134fSocial structures, disruption, 183Spread, trades, 187–188Spread relationships, seasonal
patterns, 22SSU. See Sell setupStandard and Poor’s (S&P)
chart, 127contract, starting capital, 151futures
quiz, 58–60seasonal trade setup, 46ttrade, seasonal trigger, 45f
Standard and Poor’s (S&P) trading,
advanced 30-minute breakout,151
concept, 151–152quiz, 155–158review, 154–155setup, 151–152trades, examples, 154
Starting capital, insufﬁciency, 174Statistical performance history, 17S-T-F. See Setup trigger follow-throughStochastic indicator (SI), 31reading, closeness, 32timing chart, 33usage, 47
Stochastic K14/5, 31–33
usage. See Seasonal trigger
Stocks
Short-term methods, 99–100Short-term swing trading, MAC usage,
PMF trading, 79weekly seasonal patterns, 22
92f, 93f
Short-term trend changes,determination, 129
Short trades report, 15tSI. See Stochastic indicatorSignals entry/exit. See Gap signals
entry/exitSimple MA, plotting, 143
Stop, trailing (ability), 126Stop-close-only (SCO) order, 47Stop-losses, 33. See also Seasonal trade
basis, 42close, usage, 4danger zone, relationship, 80–82methods, 15–16movement, 43
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placement, 43trailing
procedure, 77, 85timing, 69, 77, 85
types, 42usage, 41–42, 102. See also Risk
management; Trade; Trailingstop-lossesStress, relief, 183Structure
deﬁnition, 3steps, 3usage. See Trading
Swing trading, 91systems, 170
Swiss Franc futures (daily chart), MACusage (STF inclusion), 87f
Systems. See Divergence; Markets;
Price patterns; Swing tradingsystems; Trend-followingsystemsabsence, 174spreadsheet, 169ftypes. See Trading
TT-bond markets, usage, 168Thirty-minute breakout (30MBO), 151.See also E-mini trading;Standard and Poor’s trading
buy trigger, example, 153ffollow-through, usage, 152–154method, 151sell trigger, example, 153fsetup pattern, 152fSTF, example, 154ftrades, example, 154trigger to exit, example, 155fThirty-minute intraday corn chart,
bearish MOM divergencepattern (development), 63f
Thirty-minute price bar, 152
high/low, 152fThorndike, E.L., 189Thought, importance. See Deep
thought
Three-contract trading, 44–45
205
Timeframe
diversiﬁcation, 165, 167markets, 167–168
Timing
signal, 31triggers. See Commitment of
Traders Report
usage. See
Accumulation-DistributionMoving Average
T-note markets, usage, 168Top
occurrence, 100precession, 52–53selection, 191
Trade
appearance, 187blank line, usage, 160commitment, 188exit, 61feeling, 187follow-through, 71f, 81flog, example, 163flog, keeping, 159–162number, assignation, 160planning, 182–183range, achievement, 153risk, 187segregation, 175stop-loss, 92usage, 32stoppage, 113structure, necessity, 2trigger, 71f, 81f, 152
absence, 33
types. See Losing trades
Traders
acting process. See Professional
trader
considerations, 185–193enemies, 177–181loss, reasons, 173–174news, love-hate relationship, 179risk, 192thinking
dilemma, 183–184process. See Professional trader
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Trade structure
introduction, 1–2quiz, 6–7review, 5
Trading. See One-contract trading;
Three-contract trading;Two-contract trading
advanced 30-minute breakout. SeeE-mini trading; Standard andPoor’s trading
approach, development, 182comments, 185–186considerations, 185–193discipline, 177goal, 1–2imperfection, impact, 188implementation, importance,
192–193
MAC usage. See Short-term swing
trading
methodologies, diversiﬁcation,
165
overthinking, impact, 187–188plan, absence, 174problem. See Edsel tradingpsychology, 177purpose, 1–2record, example, 161fstructure, usage, 3suggestions (obtaining), Internetchat rooms (usage), 174
tools
conclusion, 173teaching, 2
Trading portfolioquiz, 165–166review, 165structuring process, 159
Trading systems. See Swing trading
systemsabsence, 127purchase, 191sophistication, 182types, 168–171
Trailing proﬁt target, 61Trailing stop-losses, usage, 42
INDEX
Trailing stop (TS), 42Trend-following systems, 168, 170Trend-following tool, 135Trends
change indicator, 91–92indicator, 91–92
Triggers, 3. See also Cuban MissileCrisis; Gap setups/triggers;Moving average channel;Two-day gap-downsetup/trigger; Two-day gap-upsetup/trigger
absence. See Tradeaction. See Commitment of Traders
Reportaddition, 12–15application/approach. See Setuptrigger follow-through
assumption, 43combination, requirement, 5example. See Eight-bar open/close
patternillustration, 35fimpact. See Commitment of Traders
Report
inclusion. See Buy reversal;
Canadian dollar seasonal trade;Reversal pattern
results. See Reversal down;
Reversal up
introduction, 9necessity, 57occurrence, 78, 152. See also Buy
trigger; Sell trigger
quiz, 18–19review, 18structure, 173usage. See Accumulation-
Distribution Moving Average;Eight-bar open/close pattern;Setups
Trigger to exit, example. See
Thirty-minute breakout
TS. See Trailing stopTwo-bar MAC buy/sell signals, 94Two-contract trading, 44
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Two-day breakaway gap pattern,
Uptrend
109–110example, 113follow-through, 111–113setup/trigger, 111Two-day gap-downpattern, 110fsetup/trigger, 111
Two-day gap-down setup/trigger, 111f,
112fTwo-day gaps, 109occurrence, 110setup/trigger, 111
Two-day gap-uppattern, 110fsetup/trigger, 111
Two-day gap-up setup/trigger, 111f,
112f
UUgly duckling trading approach,
177–178Unavoidable loss, 78
MAH, impact, 91narrowing/widening channel, 87
VVolatility breakout methods, 168Volatility breakout systems, 170
WWeekly bullish MOM setup, usage. See
Corn futures
Weekly charts, 55Weekly continuation chart, usage, 143What-if scenarios, 179Williams, Larry, 103Williams accumulation-
distribution/moving averageindicator, 96
Williams AD, usage, 143Winners, exit, 191Winning behaviors, 174–175Worst case scenario, expectation,
180
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