If you would like to understand the true profit
potential of the system please read this page. You won't be
disappointed.
I would like to make a comparison between traditional charting
and my techniques. Let us look at some slightly older but highly volatile
situations. The Nasdaq 100
index, when this index was really flying. Two key levels had been established on the
weekly chart. The intermediate peak at 2070.6 and the lows around 1656, a 25% range
measured from the low. I would expect that technical analysts would consider these
levels as being of significance, even if they did not class them as major levels. Well
we had the same levels with one major difference. We had forecast
the important levels between 8 and 12 weeks before the market traded at the
prices. Our numbers were 2066 (actual high 2071) and 1656 (actual lows 1657
and 1655).As I have mentioned before. Markets are not random, they are predictable.
Spotting highly profitable targets, days and weeks before the event, is normal. Spotting
them months before is less common but not that
unusual.
So what else did we
predict well in advance? Here just a few examples of the major ones that I can
remember (there are thousands of examples
from day trading). In 2000 we picked the High
and Low of the S&P 500 plus the High of the FTSE. The major lows of most of the stockmarkets and then the tops
of the bounce. The lows in Sterling in October 2000 (along with the Euro), and we
really nailed the high of Sterling in February 2004, when it had rallied 5000 points
from the lows. We also had this marked out as a swift initial collapse from around
1.9100 rather than a drift lower. It fell over 1200 points in 18 trading days.
Spotting potential market crashes is not only
fun but highly profitable. These do not occur by
chance.
The Dollar/Yen top in 1998 was forecast as a
major multi year top and we had a major risk level anywhere above 146.50 The high was
147.62 and it hasn't been seen since with the market having fallen around 30%. That
is almost 10 years below this predicted turning point. Economists were virtually
unanimous in seeing a rate of 165 to 175 within 3 months of the 1998 high at 147.62,
instead it went to 101.30 and it went there fast.
Even the September 11th terrorist attack
didn't create any major problems for our forecasting techniques. We had targets well
below where the stockmarkets were trading before the attack and even the
Nasdaq 100 only closed below our downside target for just two days before starting a
major rally. Then we were ready for the major rally with accurate upside targets already in
place.
Oh, and the July 2008 S&P e-mini low we
had within 1 tick. That is a downside of risk of just $12.50 per contract before a
major rally. You could have also traded the July lows in the Dow which had
a different pattern.
Day trading using
time.
This is taken from a type
of trade that I use over and over again. The methods show me levels in a falling
market that are much safer to buy at and also how long it is safe to hold the position
for. Imagine that the market is falling and falling fast. For
example, the Dow is trading around 11750. Every bid seems to be getting hit hard and
the system says either buy at 11733 and you can hold it for 8 minutes from now or
buying now is too risky. Now 8 minutes might sound like no time at all but in a fast
moving market it is a lifetime. Often I could buy the 11733 level, see a minor move
against me (which is always covered with a stop) and sell within 2 or 3 minutes for
20 or 30 points profit. If the market comes down lower I can now see whether the
level is safe to buy at again or the next level I should wait for and repeat the
profit taking operation (perhaps this time with more time to hold the position for a
larger profit). One client told me that in a strongly rising market he had decided to
sell the market 11 times during the day and had made money on 10 of the trades. The
11th had been a minor loss. The trend may be your friend but if you know where the
trend makes short term reversals and why it reverses, you can make significant
profits with minimal risk. Remember these are actual key price levels you are seeing
not an indicator saying that the market is oversold below 30 (and even more oversold
at 20 while you lose more money).
The Euro in 2006 - forecasting a sharp
reversal.
At the end of 2006, the Euro rallied sharply against the Dollar and
closed almost on its weekly highs after a rise of 260 points that week. This was the
second week of strong gains. This move was touted by many economists as being the start
of a major rally which would be extensive and immediate. Notice the word immediate. The
macro view was correct but the timing was awful. Our methods showed that there was a
real danger that the market could fall nearly 300 points from the highs and the danger
of a fall was focussed upon the market touching a rate of 1.3350. That week's high was
1.3349. The next week saw an insignificant rally (less than 20 points) and a sharp fall.
Within two weeks of touching 1.3350 (high 1.3369) we fell 300 points to 1.3053. In fact
just to show you that the lower level we had forecast was really significant, the market
then bounced 190 points. The level that the market pulled back to and bounced from was
known by us before any of the initial downside reversal had even taken place. It was
marked on our charts even as the market traded at its
highs.
Intra-day highs and lows are forecast correctly every
day. What do I mean by correctly? A significant change in trend takes
place with an insignificant price move against your position. In other words very low
risk trades. Are we ever wrong? Of course we are, but making money is about
recognising any mistakes quickly. As we know the levels in advance we can proactively
monitor the activity, as it hits the critical levels, and not be reactive to a
loss. The long term result is then higher profits.
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