Strategies for Trading

Forex
 Our Favourite
Scalping Strategies
In This Report
An Award-Winning Strategy for Scalping Big Money Moves

Rob Hoffman, BecomeABetterTrader.com

Mastering the Perfect Pullback

Corey Rosenbloom, AfraidToTrade.com

The Hip Hop Wave Strategy for Low-Risk, High Reward Setups

George Mahshigian, Trade2Live.com

Timing Your Entries and Exits with Bollinger Bands

Michael C. Thomsett, ThomsettPublishing.weebly.com

Risk Disclaimer

There is a very high degree of risk involved in trading. Past results are not indicative of future
returns. SirIsaacPublishing.com and all individuals affiliated with this site assume no
responsibilities for your trading and investment results. The indicators, strategies, columns,
articles and all other features are for educational purposes only and should not be construed
as investment advice. Information for futures trading observations are obtained from sources
believed to be reliable, but we do not warrant its completeness or accuracy, or warrant any
results from the use of the information.

Your use of the trading observations is entirely at your own risk and it is your sole
responsibility to evaluate the accuracy, completeness and usefulness of the information. By
downloading this book your information may be shared with our educational partners. You
must assess the risk of any trade with your broker and make your own independent decisions
regarding any securities mentioned herein. Affiliates of SirIsaacPublishing.com may have a
position or effect transactions in the securities described herein (or options thereon) and/or
otherwise employ trading strategies that may be consistent or inconsistent with the provided
strategies.

Privacy Policy
 Copyright © 2016 by Sir Isaac Publishing. 37 N Orange Ave STE 500 Orlando, FL
32801 http://SirIsaacPublishing.com All rights reserved. Printed in the United States of
America. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or
otherwise, without the prior written permission of Sir Isaac Publishing

An Award-Winning Strategy for Identifying

and Scalping Big Money Moves

Rob Hoffman, BecomeABetterTrader.com

 The Hoffman Inventory Retracement Bar (IRB) Trade
Developed and used to win trading competitions around the world, the Hoffman Inventory
Retracement Bar (IRB) Trade has become one of the most popular ways to identify where
short-term countertrend institutional inventory has subsided and when it’s time to re-enter
into a trade’s original trend direction. What you will learn here is how to identify when the
conditions arise to make the trade, the entry points, and exit strategy.

What is the Hoffman Inventory Retracement Trade (IRB)?

The IRB Trade is a strategy that is used to identify specific types of institutional trading
activity that is counter to the prevailing trend at hand, and then identify entries when the
short-term countertrend inventory activity has come to an end and the market is likely ready
to resume’s its original trend.

While it is common folklore in the investment industry that institutions, like wolves, travel in
packs, the reality is that institutions are not all sitting around at a table conspiring as a group
about how to part retail traders with their money. The institutional investment business is
extremely competitive and these firms are very much out for themselves and have their own
objectives and performance metrics to achieve to appear most attractive to prospective
investors at any given time.

Therefore, this strategy is designed to identify when one or a handful of institutions are
moving inventory in and out of the market and are straying away from the markets current
path causing a short-term retracement against the trend. We are subsequently looking for the
market in question to resume its preexisting trend when those short-term countertrend
institutional activities and inventories have dried up.

The Rules For The Inventory Retracement Bar (IRB) Identification

IRB Characteristics

In an uptrend – Look for candlestick bars that open and close 45% or more off their high.

Figure 1 shows four individual and unique examples of the IRBs in an uptrend for
illustrative purposes
In a downtrend - Look for candlestick bars that open and close 45% or more off their low.

Figure 2 shows four individual examples in a downtrend for illustrative purposes.

 Trend Identification

In the absence of the advanced trend identification systems Rob Hoffman uses, a simple
approach to trend identification is looking at the 20 EMA (Exponential Moving Average) and
asking yourself if it appears to be in approximately a 45 degree angle based on the timeframe
you’re looking to trade over the 20 bars of data (i.e. 5 min., 60min, Daily, Weekly, etc.). The
next higher timeframe above the one you’re looking to trade should also be flowing in the
same direction. For instance, if you’re trading off of a 5 minute chart and it’s in an uptrend,
you would like to see that your 10 or 15 minute chart also in an uptrend. It should be flowing
in the same direction. If it’s sideways, or worse yet, trending in the opposite direction, your
trade is much more likely to fail.

The Entry Strategy

Once an IRB and proper trend is identified, the next step is to allow the market to move along
and wait for the price action to break one tick/cent/pip below the low of the IRB in a
downtrend. In an uptrend you’re looking for the market to break one tick/cent/pip above the
high of the IRB. While it is not an absolute, it is preferred that the price breaks beyond the
 IRB within the next 20 bars based on the time period you’re trading. For example, if you’re
trading off of a 2 minute chart, you would ideally like to see the break in the next 40 minutes.
In general, the sooner (i.e. the next five bars as an example) it is better for trend resumption.

The Trailing Stop Exit Strategy

While many traders are specific dollar target traders, the preferred method is more of a
support and resistance target based methodology backed up by a trailing stop to ensure you
are not giving back those profits during any snapbacks against your position.

Typically, Rob Hoffman prefers a trailing profit stop moved up to 50% trailing of profit
achieved when you’ve made it 50% of the way to the intended overall profit target. Then
move the trailing stop to 80% of profit earned as you approach 80% of the way to your
intended target. Then move the stop to 90%+ of profit achieved as the major support or
resistance target level is hit. At this point, if no further progression is made in price, then trail
right to the current bid/offer with the intent to exit. If one more spike of energy comes in to
trap unsuspecting retail traders with a false breakout, we manually trail immediately behind
price during the spike until it pauses, then we’re taken out with profit. Either way a win-win
trading opportunity. Common major levels include key Fibonacci levels, previous day’s highs
and lows, daily, weekly and monthly pivot points, etc. For maximum comfort with the
strategy, it is preferred that you use this with your own favorite support and resistance levels.

Figure 3 Live Trade Example: Below the middle chart highlights in yellow the intended
target, a pivot point. As we approach 50% of the way to the target, we trail the stop to
50% of profit earned.
 Figure 4 Live Trade Example: As we approach 80% of the way to the target, we trail
the stop to 80% of profit earned.

Figure 5 Live Trade Example: As we approach intended target we trail the stop to 90%
of profit earned. This gives the trade an opportunity to have one more false breakout
move above the target that allows us to pull out a little more profit.

Figure 6 Live Trade Example: If trade holds target and fails to break through we move
stop to current bid/offer and wait to be taken out of the trade. If one more spike of
energy comes in to trap unsuspecting retail traders with a false breakout, we manually
trail immediately behind price during the spike until it pauses, then we’re taken out
with profit. Either way a win-win trading opportunity.
 Figure 7 Live Trade Example: The bid was hit and the maximum profit achieved!

Stop Management

Based on the premise of this trading strategy, the expectation upon the entry is that the
market will continue into the original direction it was heading after its brief institutionally
driven pullback against the trend. Very frequently, after breaking through IRBs, the market
will actually rapidly accelerate with fast action and wide ranges as everyone starts to realize
that the brief pullback was merely a pause by one or a few institutions against the intended
direction as the market moves to catch up with its original intent.

With that said, once a trade is entered, the price should not retrace back beyond the opposite
side of the IRB. For instance, if the trade is entered one tick/cent/pip below the low of the
IRB in a downtrend, it should not stop and reverse to one tick/cent/pip above the high of that
IRB. If it does, that market may be forming more of a reversal pattern and thus the need to
exit the position and move on to the next opportunity or use one of Rob Hoffman’s
phenomenal market reversal strategies to capture the move.

When not to use the strategy

 This strategy was primarily designed to identify and take advantage of trend continuations
after counter trend institutional inventory exhaustion. Therefore, this trade is not to be used
in a sideways market conditions as continuation failure will frequently occur.

Why This Strategy Works

In general, the market tends to trade directionally with as few retail traders on board the
correct direction as possible.

This strategy is so effective due to its ability to find high probability areas where three things
are happening to retail traders in an uptrend:

1. Buyers are being distracted from taking long side trades when they see the pullbacks off
the highs, scaring them into believing the move is over.

2. During pullbacks, sellers are being given false hope that any shorts taken earlier in the
uptrend may finally start to work.

3. Buyers who bought the high during rapid wide range ascents hoping it will go higher get
stopped out on the pullback.

After all of these events above, once a new IRB to the upside appears and is pierced, the
market is much more likely to move without all of those traders above on the right side of the
market.

In a downtrend these three things are happening to retail traders:

1. Sellers are being distracted from taking short side trades when they see the pullbacks off
the lows, scaring them into believing the move is over.

2. During pullbacks, buyers are being given false hope that any buy side trades taken earlier
in the downtrend may finally start to work.

3. Sellers who sold the low during rapid wide range descent hoping it will go lower get
stopped out on the pullback.

After all of these events above, once a new IRB to the downside appears and is pierced, the
market is much more likely to move without all of those traders above on the right side of the
market.

Used During International Trading Competitions

Figure 8 shows one of the seven trades taken using this strategy during the
International Trading Competition held in Paris, France. The black vertical arrow
highlights the IRB and the black horizontal arrow shows the intended area of entry for
trades using this strategy.
 Rob’s Strategy Checklist

1. Strategy Name: Hoffman Inventory Retracement Bar Trade (aka. Hoffman IRB)

2. Strategy Type: Trend Continuation

3. Time Frame: Intraday as well as daily and weekly signals

4. Setup: IRBs are created where the open and close of the bar are 45% or more off the low
in a downtrend and 45% or more off the high in an uptrend

5. Entry: One tick/cent/pip below the low of the IRB in a downtrend and one tick/cent/pip
above the high of the IRB in a uptrend

6. Stop-Loss: One tick/cent/pip above the high of the IRB in a downtrend and one
tick/cent/pip below the low of the IRB in a uptrend

7. Trailing Stop Exit Strategy: 50% of profit achieved until you approach a major support
or resistance level, 80% trailing when 80% to target, then move the stop to 90%+ of
profit achieved as the major support or resistance level is hit.

8. Risk And Money Management: <1% per trade

9. Average Number Of Signals: Every instrument and time duration will be different based
on its frequency of trending. However for active traders as an example, in general, it is
possible to see as many as 25+ IRB on a 2 minute chart over a 24 hour period.

Key Points To Remember

No more weight is given to any IRB based on whether its close is above or below the open
(i.e. green or red candle).

In addition, think about the concept of over extension. If the IRB has an extraordinary range
as compared to the Average True Range of the last 10+ bars before it then the break back
through the IRB is far more likely to fail. This will more likely result in an entry that has a
higher likelihood of reversion to the mean as much of the energy and profit opportunity has
potentially dissipated leaving the trader with a much smaller profit or perhaps a stop loss.

Trail your entries to reduce the risks of reversion to the mean while still giving a trade a
chance to push into your intended direction.

Use proven trend qualification tool like Rob Hoffman’s. In the absence of a well-tested tool
of your own, trade in the direction of an approximately 45 degree angled 20 EMA.

This strategy has very diverse applications across many markets and asset classes. For
instance, in addition to trading conventional equities, futures, options and FOREX
instruments, traders can consider using this strategy to analyze underlying equities and then
trade high delta, in the money options plays as an example for active options day traders. So
very diverse indeed.
 Conclusion

What we have shown you here is a simple, award winning strategy that you can take away
and explore here today. Rob Hoffman has used this tool to help him secure wins in many of
his 19 domestic and international trading competition wins. It is an excellent tool used for
identifying where retail traders are misjudging the markets movement. It shows where one or
more institutions is temporarily breaking away from the trend due to short-term inventory
acquisition or liquidation. Once that inventory need is exhausted the overall market is free to
resume the existing trend offering new opportunities for retail traders to trade back in the
direction with the overall trend.

THE SPECIAL OFFER

VIDEO: Watch Rob Hoffman's Award Winning Strategy
in Action!

ABOUT ROB HOFFMAN

Rob Hoffman is the president and CEO of Become A Better Trader, Inc. and
BecomeABetterTrader.com.

Expertise: STRATEGIES

Rob Hoffman is 19-time domestic and international trading champion trader who has won
more live, real-money only, domestic and international trading competitions than any other
trader in the entire world.

Rob is also an internationally recognized professional trader, frequent speaker for top
brokerage firms and financial exchanges, skilled educator and passionate mentor to
proprietary traders, portfolio managers, and hedge fund managers from around the world.

Contact Rob at rob@becomeabettertrader.com or his team at

support@becomeabettertrader.com. His office number is 847-235-6131.
 Learn How to Scalp the Markets
with Trading Strategies that are
best suited for your
unique trading personality.

Practice the strategies with help from coaches and fellow

traders.
Once you've got it down, we will pay you to trade with our
money.

Click Here to find out how.

Back to Table of Contents
 Mastering the Perfect Pullback

Corey Rosenbloom, AfraidToTrade.com

Are you lured by the siren song of searching for a trend reversal and fighting the price
action? How has that worked out for you? It's understandable that many traders want to
gratify their ego by pinpointing the exact spot that a market trend reverses, but unfortunately
many trading accounts have been harmed in the process.

Join me for a brief journey to "go with the flow" and trade with price action as it moves
forward in a trend and not against it. We'll focus specifically on identifying a trend in motion
and the perfecting a classic trade set-up that will reduce frustration and - hopefully - build up
your trading account consistently over time.
 Trends - the Foundation of Trading

Technical Analysis and chart-based trading is built on the idea that trends, once established,
have greater odds of continuing than of reversing. It's a simple principle but so many traders
get trapped in the allure of calling a market top or bottom - a trend reversal - and miss the
easier profits that can be made by trading with the trend and not against it.

In Technical Analysis Explained, Martin Pring defines the entirety of technical analysis with
this quote:

"Technical Analysis is the art of identifying a Trend Reversal at the earliest stage possible
and then trading in the direction of that trend until the weight of the evidence proves the
trend has reversed."

In this article, we'll focus on the portion of the definition that addresses "trading in the
direction of that trend" and specifically create a trade set-up you can recognize in any market
or timeframe. You can use this as a building block to more complex strategies in your
trading toolbox, or as a standalone set-up.

Two Quick Ways to Identify a Trend in Motion

If our first goal is to "identify a trend reversal at the earliest stage possible," how exactly do
we do that? Let's build an official way to define a trend in motion.

1. Pure Price Method

The most basic method for identifying an official trend is to compare price highs and price
lows as they develop over time. On a price chart, simply draw a line over each swing high in
price and also on each swing low. It can be helpful to draw small green lines over price highs
and small red lines over price lows so you can compare them easier.

An uptrend is defined as a price movement having BOTH a higher high and a higher low

A downtrend is a price movement over time having BOTH a lower low and a lower high

A sideways trend occurs when the swing highs and lows closely overlap prior highs and
lows

Many new traders simply "eye-ball" a trend and have no formal way of defining it, which
increases confusion and uncertainty.

Let's see this example of the Pure Price Method on a chart of a strongly uptrending stock:
 Figure 1: CME Group (CME) Identified Simply by Labeling Higher Highs (Green) and
Higher Lows (Red)

A Trend Reversal - by this definition - would occur when an uptrend moves to develop
BOTH a lower low and a lower high; by the same logic, a downtrend would reverse ONLY
when price then made a higher high and higher low.

2. Moving Average Crossovers

In addition to drawing highs and lows to define a trend, we can use two moving averages to
define a trend in motion. We'll need a short-term and intermediate term moving average to
overlay on our price chart.

There's no secret formula to which moving average is the perfect tool to use, though in my
experience I've consistently used the 20 period Exponential Average (which I often color
green) and the 50 period Exponential Average (which I color blue).

An uptrend is identified when the 20 period (short-term) moving average is rising steadily
above the rising 50 period (intermediate-term) Exponential Moving Average.

A downtrend is identified when the 20 period Exponential Average (EMA) is falling steadily
beneath the falling 50 period EMA.

A flat or sideways trend occurs when the moving averages repeatedly cross each other as
they take a sideways or horizontal slope.

Trend Reversals occur when the moving averages cross each other, especially after a lengthy
uptrend or downtrend.

Here is CME again with the 20 and 50 day Exponential Moving Average Indicators:
Figure 2: CME with 20 and 50 day EMAs Applied. Uptrends display rising moving average
and crossovers reveal likely Trend Reversals
 While there are many formal chart-based methods for classifying trends, often these simple
methods are easier to identify and can outperform complex methods with many
variables. New traders especially should begin with simpler methods, build success with
them, and then only if necessary move toward more complex methods of trend identification.

Now that We've Identified the Trend... What Do We Do with It?

A main goal of new traders is to identify a trend in motion and then trade in the direction of
that trend as long as it lasts. How exactly do we do that?

Just like there are multiple ways to identify a trend in motion, there are even more methods to
align your trades in the direction of the trend and profit from the trend continuing into the
near-term future.

For this article, let's focus on pullback or retracement trades and maximize our efficiency
with this simple yet very powerful and consistent foundational set-up.

There are three foundational trade set-ups:

- Retracement Trades trigger on a pullback in an established uptrend.

- Reversal Trades trigger on a breakout or reversal spot from a mature trend that is ending
(as a new trend begins)

- Breakout Trades trigger on the breakout beyond a new high or new low, or a clear
support/resistance level (or from a price pattern). Breakout trades may trigger in the
direction of a prevailing trend, or also against it.

For this article, we will only focus on the Retracement Trade identification and strategy.

The first step is to identify a trend in motion and thus the second step is to trade in the
direction of that trend as it progresses.

Retracement trades attempt to identify a short-term turning point when a counter-trend

retracement (price moving against the trend) ends and a new swing in the direction of the
trend begins. Price tends to move in "waves" or swings that are either with the current trend
direction (also called "impulses") or against it ("counter-trend reactions" or
"retracements"). The goal is to enter as close as possible at the end of a short-term
retracement and join the direction of the trend when price resumes moving in the direction of
the established trend.

As you can imagine, there are hundreds of ways of accomplishing this goal, and there are just
about as many methods and indicators to pinpoint the end of a retracement and beginning of a
new trend swing. Once again, new traders should start with simple methods and build
complexity ONLY if it is necessary (never start with the complex).

Three Simple Tools to Pinpoint the End of a Retracement

1. Hand-Drawn Price Trendline

 Let's start with the simplest tool, the hand-drawn (on your computer screen or on a printed
chart) trendline. The goal when drawing trendlines is to connect as many price swing highs
or lows as possible. By definition, a trendline requires at least two points and the preference
would be to connect three or more swing highs or lows. Extend trendlines into the future and
when price "pulls back" to a trendline, it can be a low-risk spot to enter the market.

2. Moving Averages

They're back! We can use moving averages both to identify a trend in motion and also to
enter a position into the trend once price "pulls back" or retraces to either our short-term or
intermediate term moving average. Look closely at the chart of CME above to pinpoint each
time price touched - or tested - the rising 20 or 50 day EMA and then rallied up off this
"moving trendline." January 2015 reminds us that no method is perfect in trading a
retracement, but each indicator gives us guidance and clues as to when a retracement may end
and price will then swing back in the direction of the trend.

Here's Apple (AAPL) to demonstrate both the Trendline and Moving Average Tactics:

Figure 3: Apple (AAPL) with Hand-Drawn Trendline (Black) which was touched four times
and successful Pullbacks (labeled "P") to the rising 20 (green) or 50 (blue) moving average.

From April 2014, Apple shares burst into a strong uptrend on the Daily Chart and the series
 of higher highs and higher lows continued into 2015 without any sign of reversal. After
April, price "pulled back" or retraced toward the rising 20 or 50 EMA.

Late 2014 saw a strong resumption of the trend but also a strong retracement against it that
ended in January 2015. Instead of "stopping" or reversing up off the moving averages as was
the case in 2014, price reversed off the previously drawn black trendline to resume the strong
uptrend in motion. At no point did the uptrend reverse, and those who tried to play a reversal
- or call a top in Apple - likely lost money unnecessarily.

3. Flag Patterns

Sometimes the price trend is so strong that we never see a touch of a trendline or moving
average. In these cases, especially on lower timeframes, our only method for entering a
strong trend is to do so not at a support (uptrend) or resistance (downtrend) level like a
moving average or trendline, but on the breakthrough of a smaller, mini-trendline that we
often call a "flag" pattern. These would be your classic Bull and Bear Flag price patterns.

Here's the same chart of Apple, only with the "Flags" highlighted:
 Figure 4: Apple (AAPL) with Bull Flag Retracement Patterns Highlighted. Instead of
aiming to buy at a support level (like a trendline or moving average), the goal becomes to
buy shares on a price breakout above the smaller 'flag trendline.

Here's a zoomed-in perspective of the first two flag patterns in mid-2014:

 Figure 5: Apple (AAPL) with zoomed-in perspective of two pro-trend "Flag" retracement
price patterns

Now we have three simple strategies to identify when a counter-trend retracement is likely to
end as price pivots to resume moving in the direction of the trend (where we seek to make
profit).

Let's create a specific strategy for entering and managing these Pro-Trend Pullback
(retracement) Strategies.

How to Trade a Retracement Play

It's one thing to recognize a retracement as it develops in real-time but we don't make money
watching patterns develop. We need specific parameters for entry, targets, stop-loss
placement, and management once we recognize a set-up in motion. Fortunately, retracement
trades naturally develop these parameters and all we must do is enter, manage, and exit the
short-term trade as the trend resumes... or else surprises us with a failure outcome (at which
point we would take a small stop-loss).

The simple, specific steps to trade a retracement play:

1. IDENTIFY a Mature Uptrend in Motion (using the Price and/or Moving Average
Method)

2. MAINTAIN the stock in your watch list UNTIL price retraces lower in an uptrend to a
support level (trendline or moving average) in an uptrend or higher to a resistance
level (trendline or moving average) in a downtrend

3. BUY as price touches the moving average or trendline in a prevailing uptrend; SHORT-
SELL as price touches the moving average or trendline in a prevailing downtrend

4. PLACE YOUR STOP beyond the trendline or moving average (usually 1% to 2% away
from the level on a Daily Chart by this varies depending on your timeframe and the
volatility of the stock). Ideally, TRAIL THE STOP under the rising 50 EMA (uptrend)
or above the falling 50 EMA (downtrend)

5. TARGET a minimum of a touch of the prior swing high in an uptrend and the touch of
the prior swing low in a downtrend (you can choose to exit your full position or exit
half the position at the achievement of the minimum goal)

6. HOLD the remaining position until price breaks under a smaller hand-drawn price
trendline in an uptrend or over a smaller hand-drawn trendline in a downtrend

Make a check-list from these simple rules and use them as guidance for entering and exiting
positions.

The chart below reveals four small (yet profitable) pro-trend retracements trades in Monster
Beverage (MNST) and each trade developed and played out:
 Figure 6: MonsterBeverage (MNST) with Four Retracement Trades (Trendlines, Moving
Averages, and Flags Highlighted) as the Uptrend Continues on the Daily Chart

Here's a final glance at two simple Retracement Trades in Apple (AAPL):

Figure 7: Apple (AAPL) - two detailed (yet small) pro-trend retracement trades in a strong
uptrend. The Yellow Highlight indicates BUYING when price TOUCHES the rising moving
average while the Green Highlight indicates BUYING the "flag" or trendline breakout as
price moves up off support. The Target is the prior price swing high and the stop is located
 beneath the moving averages (not exactly under the averages, as was the case at the end of
June)

Summing it All Up:

No trading strategy guarantees perfect outcomes. The goal is always to take high probability
set-ups and craft trades that aim for a higher profit relative to the risk of loss as defined by
your stop-loss. Retracements take advantage of the higher probabilities of a trend in motion
continuing to extend higher (or lower in the case of a downtrend) and provide a clear, low-
risk entry where the stop-loss is small relative to the larger target.

If price fails to hold support (or resistance when short-selling into a downtrend), take your
stop-loss and prepare for the next opportunity. Just don't keep your stop-loss positioned
exactly at the reversal point - always locate it just beyond the trendline or moving average.

With experience, you'll be able to recognize trends, pullbacks, and opportunities more
effectively and can add additional parameters that can increase your probability of success or
maximize the profit (play for larger targets) relative to the risk.

Taking it One Step Further...

For ambitions traders, the following strategies can help you further master your pullback
trades:

- Adding Fibonacci Retracements to pinpoint "hidden" turning points (and to manage stops)

- Incorporating Reversal Candles that develop at trendlines or moving averages

- Stepping inside the price action to a lower timeframe to pinpoint more accurate entries

- Using Oscillators to quantify entries (especially when an oversold buy signal occurs at
support or an overbought sell signal occurs at resistance)

- Incorporating Volume or Market Internals into the chart

Don't start with the complex; instead, build from your successful trades using the simpler
methods described here. You can't improve upon something when you don't have a solid
foundation. The basic strategies here serve as building blocks you can use as a stand-alone
strategy or as a core method to add your own personal improvements as you gain experience
as a trader.

THE SPECIAL OFFER

Download four in-depth lessons on how to apply this simple, effective retracement strategy to
your successful trading activities.

- Lesson 1: Specifically, How do Trends Develop and How Do We Identify Them?

- Lesson 2: What Indicators are Best for Trend Trading Tactics?

- Lesson 3: How to Take Advantage of Trends through the Perfect Pullback Strategy (Set-up,
Entry, and Targets)

- Lesson 4: When to STOP Trading With the Trend When it is Showing Signs of Reversal
(and What are Those Signs?)

Get the special “Trend Trader Tactics” for only $27.00, simply CLICK HERE

Get the Special "Trend Trader Tactics" Bundle for

Just $27!

About Corey Rosenbloom

Corey Rosenbloom’s interest in the stock market began as a junior in High School where his
team won an investment challenge competition which drew him into investing actual money
in the market using basic fundamental analysis. Later, the Bear Market of the early 2000s
would challenge these assumptions and force him into deeper study of market concepts –
“There had to be a better way than Buy and Hold strategies”.

He was soon introduced to the concepts of price charting, or more formally known as
“Technical Analysis” and the pattern recognition, along with indicator combinations, drew
his attention sharply in that direction. As the market began its recovery, he was participating
as a momentum intraday trader, which soon gave way to broader swing-trading strategies. He
describes one of many “light-bulb” moments when he was introduced to Sector Rotation
Concepts which seemed to make the price charts fit into a logical progression of expectations.
From there, he deployed options trading strategies which gave way to ETF trading, which
itself finally gave way to active futures market trading tactics.

Mr. Rosenbloom holds a bachelor’s degree in both Psychology (cognitive research focus) and
Political Science and later received a Master’s Degree in Public Affairs with a Business
concentration. He has completed Levels I, II, and III of the Market Technician’s
Association’s Chartered Market Technician (CMT) program and is awaiting the official
charter in early 2009. He currently serves as an independent consultant, analyst, author, and
educator. He manages both personal and family accounts using the concepts discussed here,
employing both long-term and active intraday trading strategies.

Back to Table of Contents

 Bonus eBook!
Learn How to Become a Better Trader - and Get
Paid to Trade.
This new eBook will walk you step-by-step through the process of
learning how to trade like the pros and get paid to trade with
our money, not yours!

Click Here to Get Your Copy.

Back to Table of Contents

The Hip Hop Wave Method for

Identifying Low-Risk, High Reward Trades

George Mahshigian, Trade2Live.com

The Hip Hop Wave methodology is a chart set up that’s been very valuable for me over the
years, for the very simple reason of it has an incredible REWARD to RISK ratio –
anywhere from 5/1 to 10/1.

The wave sets up mostly when there is a good volatility. With a bit of practice, it will be
second nature for you to spot these set up instantly.

Watch the video and look at the examples I have provide, you won’t believe how powerful it
is.

THE MOVIE (15 minutes)

Get 5 Free Trading Days of Access to my Trade

Signals Room!
 About George Mahshigian
George Mahshigian started his trading career as a Floor Broker in Chicago in early 1980’s
before moving to California and becoming a successful Stock/Commodities Broker.

After gaining experience and building a reputation, he went on to start a futures trading
brokerage (an Introducing Broker) all while working on developing his own proprietary
trading methods.

He sold his brokerage firm in 2011 to dedicate his efforts on pairing his knowledge of the
markets with proprietary technologies to allow for an easier, more profitable trading
experience for traders of any level.

He currently markets his proprietary E-Mini S&P day-trading system. You can learn more
about his strategies and systems at www.ScalpingEmini.com

Back to Table of Contents

Timing Your Entries and Exits with Bollinger Bands

Michael C. Thomsett, ThomsettPublishing.weebly.com

 Most options traders rely on some form of technical analysis, often combining two or more
different price indicators. By improving the reliability of timing, such trades are more likely
to experience exceptional profits. One that is valuable for timing of entry and exit is Bollinger
Bands (BB)

You probably associate BB with the familiar three bands. The middle band is a simple
average of the most recent 20 periods. The upper and lower bands are each two standard
deviations removed from the middle band. Beyond the pattern so familiar to most traders, BB
can be used in many ways to improve timing while reducing risks.

Because the upper and lower bands are set up as two standard deviations from the middle
band, the overall pattern creates a highly reliable “probability matrix” for identifying likely
future price behavior. As a visual representation of ever-changing historical volatility, this
matrix tells you where price is likely to trade in coming days and weeks. That by itself is
exceptional. But there is more.

So many secondary indicators are derived from BB that this serves as a “must have” signal on
every price chart. Three specific visual indicators are emphasized in the following: trading
range tracking, the squeeze, and the dynamic channel.

Tracking the trading range

The first of these three is one of the most valuable BB uses. Traditionally, chart readers
attempt to identify resistance and support (the trading range) via a series of straight lines.
This is inflexible and often too awkward to provide meaningful trade timing signals.
However, when BB is used to spot dynamic resistance and support, you can more easily spot
the duration, strength, and conclusion of a trend. Since price is most likely to remain within
the range of the upper and lower bands, this vastly improves timing. When price does move
outside of this range, it signals a likely retracement back into the BB range.

The chart for Tesla Motors (TSLA) demonstrates how this works. Two tracking periods are
identified on the chart, the first bearish and the second bullish.

At first, toward the end of the trend, price moves below the lower band. This signals a likely
turn back into range, which not only happens within a few sessions, but leads to a bullish
swing trade as well.

On the second one, tracking resistance, price is very close to the upper band. As of the
conclusion of the chart, the trend was continuing, but its proximity to the band and recent
moves above signal high potential for a brief retracement to the downside. For trading
options, being able to identify the start of a trend is important; however, identifying its likely
end is equally important to execute a closing trade.

The Bollinger Squeeze

The second of three signals is called the Bollinger Squeeze. This is a pattern in which each
session’s daily range becomes very narrow, trending in one direction. This signals a likely
move in that same direction, and the closer the squeeze to the outer band, the stronger the
indication.

The TSLA chart below reveals the appearance of the squeeze.

 Timing of options trades relies on clear signals that point to reversal or continuation. This
task is especially challenging when the price is range-round. A consolidation trend eventually
ends, but how do you identify the signals?

In fact, spotting breakout from consolidation is at times easier than spotting reversal from a
bullish or bearish trend.

In mid-August, the price narrowed and moved lower, quite close to the BB lower band. This
narrowing daily breadth was a strong signal warning traders that price was likely to enter into
a strong bearish move. As predicted, price did just that, declining from $225 to $195 in only
three weeks.

In this instance, BB did not specifically warn of the coming downtrend, because the price
remained within the bandwidth. However, the narrowing daily breadth revealed in the
Bollinger squeeze predicted the decline, and the direction of the squeeze also revealed the
likelihood that price would be declining.

The chart reveals the potential for profitable options trades based on recognizing this pattern.
Even when other indicators are not present, the squeeze is a subtle but reliable early warning
system.

The Dynamic Channel

The third, and perhaps most interesting signal, is the dynamic channel. This combines BB
with the t-line and sets up a very clear, dynamic trading range, or channel that ids easy to spot
– and equally easy to identify when it ends. For options trading, this is truly a powerful
timing device.

The t-line is an 8-day exponential moving average. The “rule” for using this is very simple.
When price crosses above the t-line and closes there for two or more sessions, it is a bullish
signal. When it crosses below and closes there for two or more sessions, it signals a bearish
reversal.

When a sustained dynamic trend is underway, the t-line doubles as support (in a bullish trend)
or as resistance (in a bearish trend). The channel is established between the t-line and the
outer Bollinger band. In a bullish trend, the upper band serves as moving resistance; and in a
bearish trend, the lower Bollinger Band serves as support.
 Is America's 2nd Largest
Private Employer in Trouble?
Approximately 440,000 Americans work for this single company.

But recently, a pattern appeared on their stock - an "X" pattern that has shown up on every
major bankruptcy of the last 15 years.

If you own a share in this company,

it's vital you hear this story.
In both directions, the channel creates between the t-line and the outer band is a powerful
visual summary of the dynamic trend.

Besides setting up the dynamic trend, the combination of BB and t-line also signal when the
trend is coming to an end. The next version of the TSLA chart reveals this.

Two trending channels are highlighted. First is a bearish one in the first half of November.
Second is a bullish trend in most of December.

Notice how the t-line (in blue) tracks resistance in the bearish trend, and flips over to support
in the bullish trend. In both cases, the outer band sets up the other side of the channel.

Once price crosses over the t-line, it signals the end of the dynamic trend. The bearish
channel ended when the price crossed above, also setting up the beginning of the new bullish
trend. At the end of the chart, this trend continued but with proximity to the upper band, a
retracement or reversal was likely in the near future. However, as long as price remained
above the t-line, the trend should be expected to continue.
 The strength of the t-line is that it sets up the trend, which is expected to remain in effect as
long as it does not cross the t-line and close on the opposite side. Combined with BB
analysis, the t-line adds great confidence to the overall timing of trade entry and exit.

On this version of the TSLA chart, the overlay of a 3-standard deviation Bollinger Bands
makes the point. The highlighted areas mark likely turning points, either for reversal or
retracement. This occurs whenever the price moves into the zone between the 2- and 3-
standard deviations outer bands.

Even with high volatility, the price rarely (if ever) trades outside of the three standard
deviation range. So once price moves into the range between the two sets of bands, a move in
the opposite direction is highly probable.
 This type of analysis involves rather straightforward signals, but provides a wealth of
information. Timing of both entry and exit are made more reliable with the use of the
“probability matrix” of Bollinger Bands.

Options trading, even more than stock trading, depend on the reliability of signals. With this
in mind, some traders rely on a combination of complex signals, but often do not experience a
corresponding improvement in timing. The Bollinger signals, however, are simple but
provide reliable timing mechanisms to improve the timing of options entry and exit.

As part of a swing trading strategy, BB fits nicely for all forms of options applications: long
calls at the bottom and long puts at the top of the swing; short options at either side;
combinations and hedges such as the covered straddle, short strangle, or collar; weighted
positions including strips and straps; credit spreads; and numerous other approaches. All of
these positions involve varying degrees of market risk, but BB helps identify not only the
beginning and end of a trend, but also the risks associated with trades based expanding or
contracting volatility.

About Michael Thomsett

Michael C. Thomsett is the most widely published author in the options industry, with 12
published books on the topic, as well as numerous other books concerning technical analysis,
candlestick charting and more. His Getting Started in Options has sold over 300,000 copies
and currently is in its ninth edition.

He blogs regularly at TheStreet.com, Options Money Maker, the Top Advisor's Corner at
Stockcharts.com, and Seeking Alpha.

Thomsett also publishes extensively on the topic of candlestick charting and technical
analysis. He also is a frequent public speaker at seminars and conventions for investment
audiences and teaches at the New York Institution of Finance and with Moody’s Analytics.
Back to Table of Contents