Info

No gap openings are allowed.

A breakout of any individual high.

Arrows point to the breakout point on the actual breakout day. There are many of them on the chart and I chose only a few.

Proceeding from left to right, the first arrow points to a breakout that offered little room for profit to the daytrader. The second arrow offered an excellent daytrade provided a profit protecting strategy of some sort was used. The last arrow shows a trade that offered excellent profits to the daytrader.

Chapter 6 MINOR ENTRY SIGNAL

The minor entry signal is as follows.

We look for a first or second breakout of the first trading congestion to form after the opening as seen on the intraday chart. This may include a congestion carryover from the previous day.

Entry is only by virtue of prices trading through the breakout point. To prevent being filled on a gap, we enter after the open.

Here are examples:

Here are examples:

trades. We would attempt the first and second times that prices actually trade through. It was the second time through that resulted in the good trade.

Trade a breakout of the first congestion after the open.

Trade a breakout of the first congestion after the open.

Each boxed area shows the first congestion after the open on each day shown. Trade breakouts of those congestions.

Trade a breakout of the first congestion to forn after the open.

Open 2 Openl

Open 4

In the above chart we are trading the first breakout of congestion.

Chapter 7 THE TRADER S TRICK

The purpose of the Trader's Trick entry (TTE) is to get us into a trade prior to entry by other traders.

Let's be realistic. Trading is a business in which the more knowledgeable have the advantage over the less knowledgeable. It's a shame that most traders end up spending countless hours and dollars searching for and acquiring the wrong kind of knowledge. Unfortunately, there is a ton of misinformation out there and it is heavily promoted. What we are trying to avoid here is the damage that can be done by a false breakout.

Typically, there will be many orders bunched just beyond the point of a Ross Hook. This is also true of the number two point of a 1-2-3 formation. The insiders are very much aware of the bunching of orders at those points, and if they can make it happen, they will move prices to where they see the orders bunched together, and then a little past that point in order to liquidate as much of their own position as possible. This action by the insiders is called "stop running."

Unless the pressure from the outsiders (us) is sufficient to carry the market to a new level, the breakout will prove to be false.

The Trader's Trick is designed to beat the insiders at their own game, or at the very least to create a level playing field on which we can trade. WHEN TRADING HOOKS, WE WANT TO GET IN AHEAD OF THE ACTUAL BREAKOUT OF THE POINT OF THE HOOK. IF THE BREAKOUT IS NOT FALSE, THE RESULT WILL BE SIGNIFICANT PROFITS. IF THE BREAKOUT IS FALSE, WE WILL HAVE AT LEAST COVERED OUR COSTS AND TAKEN SOME PROFIT FOR OUR EFFORT.

Insiders will often engineer moves aimed at precisely those points where they realize orders are bunched. It is exactly that kind of engineering that makes the Trader's Trick possible.

The best way to explain the engineering by the insiders is to give an example. Ask the following question: If we were large operators down on the floor, and we wanted to make the market move sufficiently for us to take a fat profit out of the market and know that we could liquidate easily at a higher level than where the market now is because of the orders bunched there, how would we engineer such a move?

We know that orders are bunched within a few ticks of the high point.

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