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MASTERCLASSEntry to Exit
START
1
Laser-Focused System to Unlock Profits from any Market
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MASTERCLASS - Macro Overview
2
1. 3-Principle Method2. Some Recent Trades3. My Rules for Success
1. Chart Setup2. Trading Vehicles3. Trading Time Frames
1. Finding the Trade2. Entering the Trade3. Exiting the Trade
PART 2:PART 1: Part 3:
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PART 1: Micro Overview
3-Principle Method (Detailed in Part: 3)
The Power of this method
Pivotal Concepts for Trading Success
Recently Executed Trade Examples
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Entries and Exits - The 3 Principles
4
1. Regression Channels 2. Measured Moves 3. Fibonacci Extensions
ManagementEntry Exit
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Principle 1:
Regression Channels
ManagementEntry Exit
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Principle 1: Regression Channels - Middle Line
6
50%of price action below
Entering during outlier price action.
Creates the Middle Line: Very Powerful Trendline
50% of Price Action Above
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Regression: Middle Line
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Regression Channels: 1st Standard Deviation (STD.)
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1st Standard Deviation
Statistically: 68.2% of price action will be contained within here
1st Standard Deviation
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Regression Channels: 1st Standard Deviation (STD.)
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Regression Channels: 2nd Standard Deviation
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2nd Standard Deviation
Statistically: 95.4% of price action will be contained within here
2nd Standard Deviation
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Regression Channels: 1st & 2nd Standard Deviation
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Regression Channels: Overbought/Oversold
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OVERBOUGHT
OVERSOLD
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Regression Channels: Overbought/Oversold
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Regression Channels: 2nd STD. OB/OS
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Principle 1: ConclusionRegression Channels are
statistically the best way to enter overbought and
oversold markets.ManagementEntry Exit
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Principle 2:
Measured Moves
ManagementEntry Exit
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Measured Moves: Trade with the Trend
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A
B
C
D A
B
C
D
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Measured Moves - Uptrend
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BULLISH MEASURED MOVE | Higher Highs and Higher LOWS.
A
B
C
D
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Measured Moves - Downtrend
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BEARISH MEASURED MOVE | Lower Lows and Lower Highs.
A
B
C
D
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Measured Move within our Regression Channel
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Measured moves within our Regression Channel.
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Measured Move within our Regression Channel 2
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Measured moves within our Regression Channel.
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Principle 2: ConclusionMeasured Moves are the
best way to quantify a trend once you’re in a trade.
ManagementEntry Exit
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Principle 3:
Fibonacci Extensions
ManagementEntry Exit
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Fibonacci Extensions
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PRICE: Fibonacci Plotting Point: Fibonacci Extensions:
A
B
C
1.61 EXTENSION (target)
1.27 EXTENSION (target)
2.61 EXTENSION (target)
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Fibonacci Extensions - Chart
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Fibonacci Extensions - Chart 2
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Fibonacci Extensions - Chart 2
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Principle 3: ConclusionFibonacci Extensions allow me to PRE-SET price targets for my exit.
ManagementEntry Exit
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Entry and Exit - if/then walkthrough
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Price Moves to +/- 1 or 2 STD. on the Regression Channel
Price makes a MEASURED MOVE ENTRY
Simply Kill the trade trust me there are thousands of these setups A DAY.
buying/selling pressure is just to great
(somewhat common) EXIT
PROFITS ARE RUNNING
Fibonacci Price (128% - 162%) Targets are pre-set and ready to book PROFITS. EXIT
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THE EDGEDefined
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Entering trades when the price is either overbought/oversold. Regression channel statistically shows when price is ready to revert back to the mean. 95% of all prices are contained within the channel.
EDGE 1
Occasionally there are outliers so I wait for the price to change trend using the Measured Moves Principle
EDGE 2
After a measured Move 68% of the time price reaches the 127.2% Fibonacci extension.
EDGE 3
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Proper Trade Size
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Average loss of trade 25% >> $500/25%= $2000
With 20 Equities in the portfolio >> Max 20 Trades
20 trades * $2000 = $40,000 (cap. Allocation)
Risk only 1% per Trade >> $50,000*.01 = $5001.
3.
4.
2.
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Expected Returns per Trade:
[( .782*$555 ) – ( .218*$497 )]
$434 - $108
326
Calculating Expected Return
33
Let’s Assume:
Trading Account Size: $10,000
Trade Size: $1,000 (4 TLT Credit Spread contracts)
Trades Per Year: 78 for 21 months >> 45 per year
Expected Returns per Trade:
Profitable percent times rewardTrade
(minus -)Losing percent times risk
Trade
This is executing this system on 1 asset class...
Expected Returns per Year
$326 * 45 =
$14,670
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Concepts of Master Traders
Stand on the shoulders of giants
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Trader’s analytical tools are the known variables that put the odds of success (the edge) for any given trade in the trader’s favor.
Concepts From Master TradersSuccessful traders have virtually eliminated the effect of fear and recklessness from their trading.
If you can learn to create a state of mind that is not affected by market’s behavior, the struggle will cease to exist. When the internal struggle ends, everything becomes easy. At that point, you can take full advantage of all your skills, analytical or otherwise, to eventually realize your potential as a trader.
The Principles eliminate fear and greed
Principles will disconnect you from market behavior
The 3 Principles our my edge
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The number-one trading rule was the rule of limiting their losses when they had them.
Concepts From Master TradersThe number one skill required that was common to all these traders was a strong work ethic. (10,000 hrs.-“Outliers”)
Do not enter into an invested position without an exit plan.
I have spent 35+ years trading and honing these simple yet powerful Principles – you don’t need anything more – keep it simple
Principle 3. Go it!
When a Measured Move goes against the trade I am out
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Methodology - “Simpler the Better”
Concepts From Master Traders
There is no need to be invested in the market at all times. Be patient and free to stand aside until matters clarify.
Trading with an edge is what separates the professionals from the amateurs.
Wait for price action to extend to outlier levels. Regression channels overbought/oversold.
Financially Strong and small market basket, and the Principles
That’s why I trade with a principled method.
Edge: Portfolio selection, entry signals and exit signals.
LOVE IT!
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Real-Time Trade
SPX Weeklys
38
Enter Tuesday 4/12/16 with APR(4) 2045/2040 Bull Put @ $2.50 credit –Exit @ $0.40 debit – 85% return
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Real-Time Trade
Stocks
39
Enter GOOGL stock Thursday 6/14/18 @ $1158Exit 7/25/18 @ $1278– 10.3% return
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Real-Time Trade
E.T.F.
40
Enter SPY - Tuesday 8/7/18 @ 272.5Exit Thursday @ $269.2– (1.2%) loss
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Real-Time Trade
FOREX
41
Pairs: USD/JPY, EUR/USD, AUD/USD, GBP/USD
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