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While doors are closing for many people with regards to employment as a result of financial crisis, you've still got an easy method of making ends meet and creating more income when you participate in seminars. In courses both online and offline, you'll find that there are many different ways for you to make money and there certainly are a handful that allows you to work at home. One of these systems is called day trading and it's when you enter the trading market buying and selling stocks. Whenever you obtain know-how about how it works by means of getting yourself with an education and learning on trading, you'll earn profits from the difference you obtain involving the selling price as well as the buying expense of financial instruments. Following training about how to day trading, you'll learn that the distinct difference from online trading in general is that you trade intraday. With regard to an active day trader, positions close towards the end of the trading session and you're off to fight another day tomorrow. Way back, tools such as direct access and high frequency were purely available to financial companies. Yet these days, you can also access these tools yourself and you are able to come close to obtaining probably the most successful careers in trading. Attending training seminars as well as courses will likely give you additional information regarding the strategies that make trading happen. Making use of your direct access as well as high frequency tools, you'll have the ability to analyze the trends on the market more readily and precisely. These types of tools and education seminars will certainly offer you specific data so you're able to measure holding period on positions in just a few seconds. Yet again, you'll be going after all this trading intraday. Remember that every second is important. You have to be active with your work when you need to succeed in this particular trading. No matter what you understand in classes, you need to make use of it inside the fast-paced realm of online day trading. In case you trade in stocks, you'll be easily left behind and encounter loses if you don't get yourself an education about trading. Therefore if signing up for a formal class is just not a choice for you, it is easy to choose seminars and courses. They won't take most of your time and usually in just couple of days, you'll have the hang of it and off you go towards a brilliant livelihood. There's a whole lot of money you may make with finance institutions such as commodities, options or stocks. Familiarize yourself with buying and selling these in day trading and bring your self a steady flow of cash.
Last Monday, February 25th, the broader markets gapped higher and then declined all day to close near the session lows. It was a wide range bearish day that suggested more selling was to come and it did - for a couple of hours. I too thought there would more selling than what did occur, but here's why I knew it wouldn't be a major decline as so many thought it would be. At the end of the day on the 25th, there wasn't much reason to think there wouldn't more selling to test lower price support. That night I posted at the Pristine Facebook Group "Today's reversal suggests more selling is coming. However, major declines historically do not happen with the typical wrong-sided option traders already betting heavily on a drop. I cannot get too bearish based on that." The above current chart was updated until the 25th and was also posted to show my reason why I did not expect a major decline. Historically, major corrections do not happen with option trader sentiment being bearish already and they positioned for the drop. That being said, I didn't think the drop was over that day either. Most options traders have a short-term bias, which tends to cause erratic moves in the ration day today. For that reason, we smooth the day-to-day fluctuations with a moving average (blue line) for a bias at extremes. We can also look at the sentiment of intermediate to long-term investors as a guide. The American Association of Individual Investors (AAII) surveys their membership each week if bullish, bearish or neutral. Let's look. Other than short periods in 2010 and 2012, these investors have been bearish on the markets. Those times of bullish extreme a market pullbacks happened that turned them bearish again. Not enough of these investors have turned bullish now, which would signal a correction. So this ratio is also saying to stay still bullish. When AAII Bull Ratio turns bearish and the typical wrong-sided option traders are buying too many calls (bullish bets), it will be time to look for a larger correction. Markets moving to new all-time market highs are likely to start that shift in sentiment. The brown line above is of the S&P 500 ETF symbol SPY. Prices are close to the all-time high from 2077 and that does suggest corrective price action. Isn't that what we have been seeing? Yes, so far that corrective action has been sideways on the daily time frame, rather than down. On the above weekly line chart of SPY, the dark green line is marketing Minor Support (mS)and the light green line is Major Support (MS). A pullback to the dark green line or midway between both lines (if prices do pullback) would be a normal bull market retracement. Below the light green line and MS and the weekly uptrend would be broken. The blue line is one of our guides of when a larger correction of more than 20% is not far off. The line is the difference between long-term interest rates and short-term interest rates. Historically, when it moves under zero (an inverted yield curve) a recession and larger bear market is not far off. As you can see, it's nowhere near that level and still bullish. It may be hard to accept a bullish bias when the markets have moved as far as they have over the last few years, but that is why we use market internals as a guide. Not our emotional beliefs. Until sentiment becomes bearish, history tell us that the markets are not likely to experience a major decline. That doesn't mean bull market corrections will not happen. I hope we get one that will setup a new buy. However, the odds that the majority of the option traders will ever or are catching the top now are low. Greg Capra President & CEO Pristine Capital Holdings, Inc
Bringing Common Sense to Trading In this week's Chart of the Week, I'm going to share with you one of the concepts taught in Pristine seminars. After reading this I believe that you will have what is referred to as a Ha-Ha or Light- Bulb moment. The basis of this concept isn't a new revolutionary type of technical analysis, but it is a powerful common sense approach to understand the interaction between buyers and sellers. Find someone else teaching the same - and you'll have found a forma Pristine student. Frankly, there isn't anything new or revolutionary when it comes to technical analysis. However, there are different ways of interpreting the same raw data that we all use. Most do this with a hodge-podge of indicators. Some even make a business out of selling you their proprietary indicators or indicator based system that will tell you what to do and when to do it. Knowing what to do and when to do it sounds great and why so many buy into these marketing indicator schemes. Maybe you remember or bought the once popular red light - green light trading system that many paid thousands for in the mid-2000 period. If you're interesting in a long-term approach to technical investing or trading, the history of the red light - green light indicator approach (gone) and others like it isn't it. The use of indicators or indicator systems attracts virtually everyone that becomes interested in trading the markets. I was no different when I started and tried many indicators and wrote a few of my own. The idea of removing the guess work and the uncertainty is attractive. It is also a powerful way of motivating those interested to buy into their marketing. Been there? Here's the concept I want to share with you....... There are buyers at prior price support (a demand area) and sellers at prior price resistance (a supply area). If you're thinking; I knew that already, that's it? You don't realize what a power concept this is. Let me explain. Virtually all price indicators/oscillators (there are hundreds) attempt to define when prices have moved too far and will reverse, right? Sure, but it doesn't work except in hindsight. These indicators have absolutely nothing to do with prices reversing. If you doubt it, think about why does what becomes overbought or oversold either stays that way or becomes more so without returning to the other extreme so often? It's not that you're using the wrong indicator or settings either. That's thing will keep you in search of the Holy Grail and the next indicator. Next there are technical tools like Fibonacci Retracements, Gann Lines, Moving Averages, Elliot Waves, Andrews Pitchforks, Bollinger Bands, Regression lines, Median Lines, Trendlines and they go on and on. All of them are supposed to locate the area where prices will find support or resistance. All of this hocus-pocus analysis is insane! So, what's the answer? An in-depth understanding of price support and resistance pivot points or consolidations as reference points are where you need to focus. This is where buyers and sellers interacted in the past and will likely do so again. Once you have a reference point, wait for a price pattern signaling slowing momentum and reversal. At Pristine, we define a Support Pivot as a bar or candle having at least two higher low bars to its right and left. A Resistance Pivot is a bar or candle having at least two lower high bars to its right and left; simple. The trend of prices, the arrangement of the candles, changing ranges and volume are some of the other concepts to consider that increase the odds of follow through, but that's for another lesson. As far as where prices are likely to stall, it's the basics you need to follow. There are buyers at prior price support (demand) and sellers at prior price resistance (supply). Let's look at a couple of chart examples. As Google (GOOG) moved lower on the left side of the chart, it formed a Resistance Pivot. As you can see, sellers came in at the same location. You didn't need an indicator to guide you where sellers would be, did you? You only needed to look at the chart for a pivot high. Once the trend was violated, look for buyers (demand) to overcome sellers (supply) at a Support Pivot. As prices move higher in an uptrend, the concept of what was resistance becomes support applies. However, in the strongest trends prices will not pull back to what was resistance. I'm sure you've seen that in the past. At these times, don't chase. Wait for a Support Pivot to form. Once it does, you have a new or created reference point of support where buyers will step in again. Reversal candles are you confirmation at those points. In the chart of Facebook (FB), prices moved up from a low pivot point and there was no clear resistance area to the left. However, once a Resistance pivot formed there was a clear point where sellers (supply) overcame buyers (demand) and that would likely happen again. Once FB broke lower many will look for a retracement to sell, which is fine. However, when supply is overwhelming demand - prices cannot retrace that much. Don't chase out of fear of missing the move, even though that may happen. Wait for a Resistance Pivot to form. Once it does, use that reference point and your Candle Analysis to tell when to act. In the chart of the New Zealand Dollar versus the U.S. Dollar (NZD/USD.FXB) a climactic move lower occurred. This created a Pristine Price Void above and once a pivot low formed we had a reference point where buyers (demand) would show up again. However, we cannot know for sure if that low will hold, and we don't want buy in such a strong downtrend without confirmation. Rather, we want to wait to see if a reversal will form in the same area. If it does, we have that confirmation on the retest and a strong buy signal. I hope this Chart of the Week has provided you with the Light bulb moment I promised All the best, Greg Capra Greg Capra President & CEO Pristine Capital Holdings, Inc.
Market timing can be made complex or simple. I have studied many methods and definitely found the simple approach the way to go. Those studies were a quest for finding that method and what works for timing and what doesn't? What you'll find surprising is that the typical tools used by the majority do not work. I know you're interested in what does and I'll show you. Before we review what to use, let's review some of the methods often talked about to determine market turns. Almost all of them will give a signal after a turn of some form has already happened. For example, the break of an uptrend trend line will signal a violation of the uptrend since prices have already moved lower. However, haven't you see uptrend lines broken that were followed by an almost immediate reversal back up in the direction of the trend? I have many times and found them inaccurate. Let's think about the use of a trend line. An uptrend line is drawn by "connecting the dots" and is supposed to show you a support line that is projected into the future. If that line is violated, it signals the end of that uptrend. Why should that be the case though? Can you really locate significant reference points of support by drawing lines on a chart? How do you know you are connecting the right dots? And since there are different points that the line can be connected to, should you draw from all of them? And, what if those lines intersect, does that make for a more significant support point? And then, what if you change the time frame from a daily one to a weekly one? Doing that has now changed the "dots" to connect to. Are the lines in the weekly time frame more significant than those in the daily time frame? Getting complicated and confusing isn't it? What about moving averages as a market timing guide? Okay, which one should be used? Is a break of the 50-day moving average a trend violation? How about the 100-day? Surely the break of the 200-day moving average would be bearish. However, by the time prices made it below the 200-day moving average the trend would have been violated long ago. There are also moving average crossovers. Again, which moving averages should be used? The 5-MA crossing the 20-MA is a popular combination. Then there is the "Golden Cross" of the 50-MA crossing the 200-MA. Golden cross sounds impressive. Then of course, there is the question of what type of moving average to use. Simple, exponential, weighted and there are others, even optimized. The combinations are endless. If you have asked yourself these questions in an attempt to figure out a method of timing the market's turns you're not alone. I suggest that you forget these types analysis and others revolved around price indicators. They are useless for market timing. If you're thinking we need the more esoteric types of analysis like Gann lines, Gann Square of Nine, Elliot Waves, Any Waves, Fibonacci Lines, Cycles or planetary alignments you can be relieved. We want no part of that hocus pocus type of analysis. What you need to use for market timing are market internal gauges based on market breadth and traders' sentiment. Data to measure breadth consists of stocks making new highs and lows, advancing and declining stocks, the volume in advancing and declining stocks. These can even be combined with formulas that use that data. These are excellent ways of determining the odds of a market turn, since they give us a clear measurement of when they reached an historical extreme. In other words, they tell us when the broader markets have moved too far in one direction or the other based on what has actually happened compared to the past years. They also warn us before the turn. We don't have to use all of these breadth gauges and are going to keep this simple. You may think prices have moved too far, but how many times have prices continued to move much further than you thought they could. Or you thought that prices would move further only to see them reverse. Breadth gauges provide an objective measurement based on the history of the broader market's internal movement, not the recent price movement of one index. Sentiment gauges tell us how traders, investors and institutions "feel" about the markets. Are they too bullish, too bearish or too complacent? Sentiment surveys, Put/Call Ratios and Volatility Indexes are excellent tools for measuring the current sentiment against the historical extremes. This letter cannot cover all the breadth and sentiment gauges available, but what I will show you are a few things that can be found at free websites or in your charting program. They are also easy to use and understand. The Volatility Index (VIX) is a measurement of anticipated future volatility in the market. Extreme highs are associated with market lows and extreme lows are associated with market highs. In other words, the Volatility index moves inverse to the market. A move to support in the VIX is short-term bearish and a move to resistance is short-term bullish. I say short-term because a significant turning point would require other information that the VIX cannot provide. Pristine Tip: short-term market timing requires a combination of breadth and sentiment gauges. Currently, the VIX is at a low point where it has turned up from over the last few years. This is not near an all-time low, so the VIX could move lower or sideways. Over the last few trading sessions, the VIX has been holding this area and the daily ranges have been narrow. This type of price action in the VIX has historically preceded a short-term move up. Set an alert at 14.00. A move above would be a short-term bearish confirmation. In the above chart, is the S&P 500 ETF symbol SPY, the McClellan Oscillator and the Equity Put/Call Ratio with a 5-period moving average of that ratio. The McClellan Oscillator is simply the difference between to moving averages of the daily fluctuations of advancing stocks minus declining stocks. Historically, when the oscillator moves to between plus or minus 100 and 200 a short-term reversal is likely. However just like the VIX, we won't rely on the McClellan Oscillator alone for a signal. At times, extremes are actually confirmation of a move to trade with, not against it. The Equity Put/Call Ratio tells us how many puts are being bought (bearish bets) verses calls (bullish bets). The ratio moves up when more puts are being bought than calls and down when more calls are being bought than puts. The day-to-day movement can be very erratic and may not mean much. However, when the ratio moves to an extreme, we want to take note of it. When the 5-period moving average of the ratio is at an extreme as well, it is a much stronger indication of a short-term turn. Again, we will not rely solely on the Put/Call Ratio. What we are very interested in is when there is an extreme in put buying (bearish sentiment) at the same time there is an extreme in stock selling (bearish breadth). This would signal a market low (green area). We are also interested to know when there is an excessive amount of call buying (bullish sentiment) with an excessive about of stock buying (bullish breadth). This would signal a market high (red area). Currently, The McClellan Oscillator is into a short-term bearish extreme and the Put/Call Ratio moved to a bearish extreme last week; however, the 5-MA of the Put/Call Ratio has not reached an extreme yet. This is telling us that risk for longs is rising short-term based on the gauges covered, but without the 5-MA at an extreme of call buying there is still the potential for higher prices. Any market move to higher prices should get option traders "all-in" and the odds of a pullback in the market would increase based on our gauges. There you have a simple method for market timing. Is it 100%? Of course not, but it is good, simple and easy to understand. I know it will serve you well over the years as it has for me. Greg Capra President & CEO Pristine Capital Holdings, Inc.
Good Morning All; For these next four letters, I am going to give you a series of exact steps that will help you tremendously if you have the technical knowledge, but cannot seem to turn the corner on making good profits. There are going to be four things that you can do that I feel will 'dramatically change your trading career'. The results will be immediate, every week. It should be stated again, that if you do not have the technical expertise, you are not at the level that these comments will help. If you don't know how to look at a chart, no amount of refining will help you. Where do you get this expertise? There is no better place that Pristine's Trading the Pristine Method Seminars. After a long time of working with many traders, one discovers that there are certain truths that cannot be denied. There are four things that are done so consistently wrong by new, and even fairly experienced traders, that each of these mistakes results in bad trades 90% of the time for most traders. If traders would simply follow these four rules, they would eliminate most of their losing trades. The fourth rule does not really fall into this "90%" category, but is perhaps the most important. Four Things That Will Change Your Trading Career: Part One of Four Here is the first rule, and the subject of this lesson. New traders are often so bad at managing trades, that their results would be incredibly improved by not managing at all. If you do not manage, it means you let your trade play out until it hits the target(s), or stops out. Nothing else. This is called 'all or nothing' trading. There are various ways to manage trades. Management should be a detailed part of your trading plan. Many do not even consider 'all or nothing', an option. Many management systems can work beautifully. So what is the problem that makes it the case that traders are better off doing 'nothing'? The problem is that traders do not FOLLOW them. Due to the emotions of trading, traders find excuses to override them. Most new trader's goals are to lock in small profits to avoid losses at all costs, and they change their management in the middle of the trade. Do you do this? There is a 90% chance you do. Here is how to find out. Go BACK in your records (do not do this going forward, it will not work) and take your last 20 trades and write down your entry, stop, target, and actual exit. Now go back to the chart, and see what would have happened if you did not manage the trade. Simply see if you hit the stop or the target first. Make a new column on your sheet and write this down. Then figure the profit for the 'new' column called 'all or nothing'. If the trade stopped, you lose your risk amount, whatever it is. If you hit a target, you may have a gain that is multiple times your loss (if you didn't have a target, figure what would have happened just holding to the end of the day). Compare which way you would have made more money, and be sitting down when you do this. Feel free to email your results to email@example.com. By the way, if you feel like you really are 'getting' the concepts of trading, and you find you have good chart reading abilities and you have more winners that losers, but your account is not growing, you are going to be in this category. This works, because many good plays get to very nice targets. However, if the trader is not in the trade, they never make the big money. Many traders get in the habit of taking normal losses (they have learned to follow stops) but they take small gains. It is hard to make money like this. Below is the five minute chart of ZQK, with an inset of the daily chart. On this day, ZQK gapped up on the daily chart, out of a daily Pristine Buy Setup that had pulled back to the daily rising 20 period moving average. The gap almost cleared the 'half-red' prior bar. This is a bullish gap, so buying an early morning pullback would make an excellent entry. On the chart above, a five minute Pristine Buy Setup triggered at '1', and was an excellent entry for this play. Many traders have learned how to do plays like this. What separates the pros from the novices if who really takes home serious money from this play. Since this play was a bullish gap on a bullish daily chart, we know there is potential to move up a significant amount, even on an intraday basis. So we pull out the hourly chart and look for a 'target area'. This hourly chart is inset in the chart below, and the 'star' marks the target. This is the first base we encounter in the general area of a solid day's move. It is at 2.80 - 2.85. So we are in the play, and have a target area selected. The only variable is management. Please notice something. If you used the 20 period moving average as your management trail stop, you would have been in this trade to the target of 2.85. Notice if you used pivots, (if you don't know what these are, the purple arrows have marked off five or two minute pivots of some kind) you would have achieved the target of 2.85. However, 90% of the traders using these methods don't hit their targets. All of those purple areas (which coincidentally were a form of a pivot) are areas that traders use as an excuse to exit the trade. Most traders would have exited at the first arrow, for a loss. If you were to play this all or nothing, you would just set one order as a stop loss around 2.51, and then set another order to sell at 2.85 then walk away for the day, or at least take this off your screen and leave it alone. The bottom line is very simple. Use an all or nothing method of management UNTIL you prove that you can beat all or nothing with your own management ability. Do not underestimate the power of this lesson, for many traders it is the most important of the four. Closing Comments Understand, that I am NOT saying that all or nothing is the best method of managing trades, but I am saying it is better than what 90% of those reading this article do. Also, you will NOT benefit if you are trading so bad that you stop out of all of your trades. Again, this is not a replacement for knowing technical analysis. Do NOT assume you got the point of this exercise just buy reading it. Do the exercise. You will not believe your results. Email me you comments if you actually do this. Next week we will look at the second thing that will change your trading. Paul Lange Vice President of Services Pristine Capital Holdings, Inc.