STS - The Teaching Manual

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Jun. 14, 2012STS THE TEACHING MANUAL

DISCLAIMER:Online trading involves substantial risk of loss and is not suitable for everyone. The valuation of the contracts does fluctuate, and, as a result, you may lose more than youroriginal investment. The impact of seasonal and geopolitical events is already factored intomarket prices. The highly leveraged nature of online trading means that small marketmovements will have a great impact on your trading account and this can work against you,leading to large losses or can work for you, leading to large gains. If the market moves againstyou, you may sustain a total loss greater than the amount you deposited into your account.

You are responsible for all the risks and financial resources you use and for the tradingsystems you are using.You should not engage in live trading unless you fully understand thenature of the transactions you are entering into and the extent of your exposure to loss. If youdo not fully understand these risks you must seek independent advice from your financialadvisor. All trading strategies are used at your own risk. This mentoring should not be reliedupon as advice or construed as providing recommendations of any kind. It is yourresponsibility to confirm and decide which trades to make. Trade only with risk capital; thatis, trade with money that, if lost, will not adversely impact your lifestyle and your ability tomeet your financial obligations.

Past results are no indication of future performance.

In no event should the content of this correspondence and coaching be construed as anexpress or implied promise, guarantee or implication from Children of the Journey that youwill profit or that losses can or will be limited in any manner whatsoever. Children of theJourney is not responsible for any losses incurred as a result of using any of our tradingstrategies and mentoring. The Trading software should never be left unattended due to thepossibility of events out of your control, such as computer or data failure, power outages,position mismatches, and/or network problems. Loss-limiting strategies such as stop lossorders may not be effective because market conditions or technological issues may make itimpossible to execute such orders. Likewise, strategies using combinations of trading positionssuch as spread or straddle trades may be just as risky as simple long and short positions.Information provided in this correspondence and coaching is intended solely for informationalpurposes and is obtained from sources believed to be reliable. Information is in no wayguaranteed. No guarantee of any kind is implied or possible where projections of futureconditions are attempted.

1 of 26 STS The Teaching ManualAll Rights Reserved;

The Children of the Journey Sangha of the East Coast. Copyright, 2011-2012


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Revision Log:

20120614.1700 A.Penaloza created initial document.

Related Documents:

Web: http://childrenofthejourneysangha.blogspot.com/


http://childrenofthejourneysangha.blogspot.com/http://childrenofthejourneysangha.blogspot.com/


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Contents

Mission Statement ............................................................................................................................................................ 5

Mastery ...................................................................................................................................................................... 5

PLAIN LANGUAGE DISCLAIMER: ........................................................................................................................................... 6

The Sangha Principles ..................................................................................................................................................... 6

Purpose: ........................................................................................................................................................................7

Methods: ....................................................................................................................................................................... 7

SAFETY: ......................................................................................................................................................................7

SURETY: ..................................................................................................................................................................... 7

PROFITABILITY: ............................................................................................................................................................. 8

Trading Strategies: ........................................................................................................................................................... 8

Our Set it and Forget it (pronounced SyFy) Strategy... .............................................................................................................. 8

Teachings:

.................................................................................................................................................................................10

Knowing the market rhythm: ........................................................................................................................................... 10

The PRIME-JERK-DELTA lines: ........................................................................................................................................... 23

The Three Market Cycles: ............................................................................................................................................... 24

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Purpose

This is the collective Wisdom our Spiritual Community of Traders had been gratefully made privy to by the Universal Intelligence ofLove.

This manual is a compendium of knowledge we as individuals and as a community continue to learn with appreciation and gratitude.

Mission Statement

We believe in the Divine and the Universe. We are eternally Grateful and ever Thankful for the Gift given.

We are continually given the most amazing insights about this Gift; which allowed us to create a business that takes little of our timeto run during the day. This Gift enables us to spend quality time helping others as the Divine wishes. This is the reason we teach this

Gift to others. We depend on the Divine and the Love of the Universe to lead others to us.

Mastery

It is what "is", you are seeing what you see.It is ALL in the technique and your efficiencies.

You cant predict the future trends of the market,you are but a mere follower, so act like it!

You must only develop the ability to see what is before your eyes.The Universe is asking for little more in this endeavor.

Practice being efficient!Points per trade, get it up.

Like Dirk Nowitzki in the NBA at 2.5 points per hoop.(The best average near him is 1.3).

Not like Monica Lewinsky, who swallowed many a shot, but didnt get credit for one.




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Using the least time and effort, a skilled performance = EFFICIENT!We will become Madly skilled in this area. Kurt Duerod

PLAIN LANGUAGE DISCLAIMER:

1. The Sangha will never ask you for money.2. The info IS PROVIDED FREELY with "no strings attached".3. The Sangha will provided answers and guidance pertinent only to The Sangha Trading System.4. The Sangha WILL NOT provide proof of effectiveness nor ANY guarantee of FITNESS of use. Prove it to yourself!5. You are FREE to profit from The Sangha Trading System in any way you choose, with only ONE RESTRICTION Give credit to The

Children of the Journey Sangha as the original creator.

The Sangha Principles

1. Those that have the passion and perseverance, on their own volition, will prove the merits of "The Gift" to themselves and acquirethe necessary skills by their own effort.

2. As "The Gift" was freely given to the Sangha, we FREELY give the gift from our heart to those who ask us. The Sangha will freelyanswer questions and provide the foundational knowledge to those who seek.

3. The Gift of "The Sangha Trading System" is Open Source and will adhere to the "7 Guiding Principles" of Open Source.




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The STS Teaching Manual

Purpose:

This document is the Sangha Trading System Team's latest understanding on how to use the PRIME-JERK-DELTA-COMBO STS toolsprofitably using the "Set it and Forget it" strategy. We include all the Tactics and Strategy, we currently know of, for Safe and Sureprofitability.

Methods:

SAFETY:

To protect our trading account, we employ the following tactics...

1. Use a trailing Stop and let the trailing Stop work for you.2. Make our profit early and stop trading early. We trade for a maximum of 1 hour.

3. Use the PRIME-JERK-DELTA-COMBO STS tools to identify Sustained Trends and only enter on the "Perfect Picture" for SustainedTrend begin.

WARNING: Doing business with the Market is "inherently" DANGEROUS! Market price action may sharply go up or down,PREVENTING your trailing Stop from activating in a timely manner. Please realize you will LOSE money when this happens andthis is a "normal" behavior of the market.

As a new STS practitioner, you are encouraged to use one contract at a time, to minimize this possible loss.

SURETY:

1. Use the COMBO, PRIME and DELTA to know when a Sustained Trend has started.

2. Use the COMBO-JERK crossing to time your ENTRIES and EXITS.

3. Use the JERK and DELTA to know where the market is.




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PROFITABILITY:

1. Make your profit early and stop trading early.

2. Take position ONLY at the beginning of a Sustained Trend.

3. BEWARE and stay away when the market is pivoting and going sideways (the JERK is in the Quarter NARROWS - DANGER ZONE).

4. BEWARE of entering positions when the JERK is NOT following the price action (JERK and price action DIVERGENCE).

Trading Strategies:

We "DANCE" with the market, we do NOT predict where it is going.

Our STS tools allow us to know the two types of market rhythm...

1. Sustained Trends - market doing the FOXTROT (DELTA going through Trap, Pull, Support phases or the COMBO remaining aboveor below the zero)

2. Sideways and Pivoting - market doing the JITTERBUG (DELTA and PRIME together and/or moving alike and JERK is in the QuarterNARROWS)

Our Basic Strategy is...1. For Discipline, we only enter/exit at COMBO-JERK crossings.

2. We only take a position when the market is doing the FOXTROT.

3. We STAY AWAY while the market is doing the JITTERBUG.

Our Set it and Forget it (pronounced SyFy) Strategy...

1. Set Trailing Stop to 2 points.




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2. Enter a position when DELTA and COMBO are both crossing the JERK or when you have the "Sustained Trend Perfect Picture", thenleave the mouse alone (complete detachment).

The Key is knowing when a Sustained Trend begins and just trading ONLY the Sustained trends!

Benefits of SiFi:

This is the Buddhist way to trade because of the detachment to outcome. You do not feed your FEAR or your GREED. You underscorethe importance of serenity and simplicity in your trading, while minimizing your number of trades.

You let the Market "WORK" for you.

Caveats to SiFI:

You MUST be able to identify the DANGER ZONES (pivoting-sideways) and avoid taking positions until the price break-out.


http://childrenofthejourneysangha.blogspot.com/p/sts-dancing-manual.htmlhttp://childrenofthejourneysangha.blogspot.com/p/sts-dancing-manual.html


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Teachings:

Knowing the market rhythm:

The DELTA is an extremely IMPORTANT tool for telling us when "Dancing with the Market"goes from FOXTROT - Sustained Trends to...JITTERBUG - Sideways-Pivoting (Avoid DANGER ZONES).

The DELTA tells us very plainly what the market rhythm is!

We encourage you to take SURE PROFITS when a FOXTROT has begun and REFRAIN from the Dance when the market is doing theJITTERBUG, to preserve those profits.

Here is a picture of what we mean...




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The importance of knowing the DELTA phases:

The PRIME gives us the Short Term Cycle, the JERK gives us the Long Term Cycle, the DELTA gives us the Extreme Trend Cycle of themarket.

Since all our STS tools represent a cycle, a cycle must always complete its journey. When the PRIME goes above the Zero, it willeventually go below the Zero. This is the same for ALL the STS Tools.

The DELTA goes through 4 phases of its Extreme Trend Cycle.

The TRAP; is when the DELTA will go to the other side of the NARROWS, opposite the price action, causing the existing trend tocontinue, then quickly revisit Zero to start the PULL for the opposite trend.

The PULL; begins when the DELTA is at Zero and moves to the NARROWS in the same direction as the price action, then the DELTA will


http://dl.dropbox.com/u/74471053/Pictures/STS%20-%20DELTA%20Importance.jpg


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cross the JERK to go back to the Zero to the opposite side of the price action, beyond the MID-NARROWS, to start the SUPPORT.

The SUPPORT; begins when the DELTA is again at Zero and now moves through the price action to get to the opposite side. The DELTAwill remain on the opposite side above the Zero during this most profitable portion of the sustained trend. When the DELTA once again

goes back to Zero, beyond the opposite the MID-NARROWS, the TRAP phase begins.

The SUPPORT-APPROACH-DANGER ZONE; begins when the DELTA is once again at Zero going through the price action in the samedirection and back through the price action in the opposite direction similar to the PULL phase. The trend will still continue as theJERK is in the Quarter NARROWS (DANGER ZONE), or as the DELTA spends more time OUTSIDE the opposite NARROWS. When the DELTAgoes through the Zero and quickly goes to the opposite NARROWS, opposite the price action, the TRAP phase begins again.

Please see the picture below for clarification:




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Here is a video to also explain.

IMPORTANT: Please understand that the DELTA does NOT always go through all the Phases discussed above, before you start anotherPULL for the opposite trend.


http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Videos/STS%20-%20DELTA%20Extreme%20Trend%20Cycle.mp4http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Pictures/STS%20-%20DELTA%20-%20Extreme%20Trend%20Cycle.jpghttp://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Videos/STS%20-%20DELTA%20Extreme%20Trend%20Cycle.mp4


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You may go PULL UP to PULL DOWN or SUPPORT DOWN to PULL UP or SUPPORT UP to PULL DOWN.

You MUST watch the COMBO crossings of the JERK, the angle of the JERK and for the "V's" of the COMBO/PRIME/DELTA that indicate2nd Call to get into a position.

Please see picture below:

Avoiding the DANGER ZONES:


http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Pictures/STS%20-%20DELTA%20-%20NOT%20always%20do%20sequence%20of%20phases.jpg


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A sure way of losing your money is taking a position while in a DANGER ZONE.

If you are already in a position, by all means remain in it, while in the DANGER ZONE, because DANGER ZONES are most likely trendcontinuations.

DANGER ZONES happen when the JERK is in the Quarter NARROWS.

A DANGER ZONE looks like this...

Here is a picture of UP DANGER ZONES...


http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Pictures/STS%20-%20Side%202%20-%20DANGER%20Zones.jpg


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Here is a picture of DOWN DANGER ZONES...


http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Pictures/STS%20-%20UP%20Danger%20Zone.jpg


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Here is How a DANGER ZONE transitions to a DELTA TRAP UP, then a DELTA PULL DOWN...


http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Pictures/STS%20-%20DOWN%20Danger%20Zone.jpg


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Please diligently do studies of Historical charts to teach your subconscious when Sustained Trends begin!Taking positions at the start of Sustained Trends is the only work you need to do in trading the market.

Here is a picture of a typical Sustained UP Trend...

Here is a picture of a typical Sustained DOWN Trend...


http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Pictures/STS%20-%20Sus%20UP%201.jpg


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http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Pictures/STS%20-%20Sus%20DOWN%201.jpg


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The COMBO line:

The COMBO line is...

COMBO_A = PRIME + JERK with an offset of 5 (current PRIME + JERK 5 bars back).

How the COMBO line helps...

Using the COMBO lines bring certainty and confidence into knowing how the market is "Dancing".

The COMBO line A the role of knowing when to enter a position and when to enter on a sustained trend.When the COMBO line crosses the JERK or creates a "V" or inverted "V" on or by the JERK, see if it is a good place to take a position.

COMBO Characteristics:1. Gives us timing for Entries/Exits, when COMBO crosses the JERK.

2. Shows when in a Sustained Trend; COMBO above Zero - UP trend, below Zero - DOWN trend.




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Here is a Picture to explain further...

Please see this video of the PRIME-JERK-DELTA-COMBO.


http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Videos/STS%20-%20PJDC%20tools.mp4http://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Pictures/STS%20-%20The%20COMBO.jpghttp://dl.dropbox.com/u/51589573/The%20Sangha%20Trading%20System/Videos/STS%20-%20PJDC%20tools.mp4


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The PRIME-JERK-DELTA lines:

The Universe let us know, with utmost certainty, that The PRIME, Jerk and The DELTA are the ONLY 3 lines needed to "Dance" with themarket Safely and profitably!

The picture below shows you why...


http://dl.dropbox.com/u/74471053/Pictures/STS%20-%20Roles%20of%20PJD.jpg


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The Three Market Cycles:

ALL the STS tools are lines that represent the inherent cycles in the market.So far, we know of Three Market Cycles exhibited by the JERK-PRIME behaviors.

Short-term cycle (Pivoting Market) - PRIME - Useful when the PRIME just goes from Upper NARROWS to Lower NARROWS or when JERKis in Mid-NARROWS, then use the PRIME to take positions on the STRONG side of the market.

Long-term cycle (Trending Market) - JERK- Useful when the market is in a trend. Exit the trend when the JERK crosses through theZero and re-enter a sustained trend when JERK crosses back again.

Extreme Trend cycle (Sustained Trending Market) - DELTA/COMBO (DELTA is PRIME - JERK; COMBO is PRIME + JERK) - Useful whenyou want to maximize your profitability.

ALL these lines cycle up and down through the zero as the market "Dances along".

Let us take the PRIME as an example...As the PRIME cycles up and down through the Zero, PRIME creates an UP Window - when BELOW the Zero and a DOWN Window - whenABOVE the Zero.

You do not want to take a SHORT when an UP window is being made!

You do not want to take a LONG when a DOWN window is being made!




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Here is a picture to make the concept clear...

Use this inherent NATURE of market cycles to your trading advantage.

End of Teachings...


http://dl.dropbox.com/u/74471053/Pictures/STS%20-%20PRIME%20Windows%20Concept.jpg


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Results:This paragraph will be updated with how well our trading strategy does for our profitability.

Conclusion:There is no Holy Grail of technical indicators. The best an STS practitioner can do is to "Dance" with the market and know when themarket is doing the FOXTROT (sure profitability) or the JITTERBUG (destroyer of trading account).

Stay away when the market does the JITTERBUG!

The STS Tools given to us by the Universe is a MIRACLE!

When we are NOT Profitable... it is because of our LACK of Trust in the tools and our LACK of Discipline.

