Trade Chart Patterns Like The Pros - Traders Laboratory

Trade Chart Patterns Like The Pros

Trade Chart Trade Chart Patterns Patterns

Like The ProsLike The ProsTraders LaboratoryTraders Laboratory

Suri DuddellaSuri DuddellaOctober 24, 2008October 24, 2008


DisclaimerDisclaimer

suriNotes.comsuriNotes.com is neither an investment advisory service nor an is neither an investment advisory service nor an financial analysis service. I am not an investment advisor and financial analysis service. I am not an investment advisor and do do not purport to tell people, or suggest to people, what they shounot purport to tell people, or suggest to people, what they should buy ld buy or sell for themselves. Trading and investing can be a very or sell for themselves. Trading and investing can be a very dangerous venture for there may be a very high degree of risk dangerous venture for there may be a very high degree of risk involved. Past results are not indicative of future returns. Tinvolved. Past results are not indicative of future returns. The he information provided here is for educational purposes only, and information provided here is for educational purposes only, and does does not come with a warranty of any kind, should you choose to internot come with a warranty of any kind, should you choose to interpret pret is as investment advice. In no way is is as investment advice. In no way is suriNotes.comsuriNotes.com is a sponsor of is a sponsor of any of the securities listed here. It is entirely possible thatany of the securities listed here. It is entirely possible that I may at I may at times buy, sell, or hold any of the securities covered on this stimes buy, sell, or hold any of the securities covered on this site. ite.

Neither Neither suriNotes.comsuriNotes.com nor anyone affiliated with nor anyone affiliated with suriNotes.comsuriNotes.com, , is is responsible for any investment decision made.responsible for any investment decision made.


Copyright @ 2008 Copyright @ 2008 -- Suri DuddellaSuri Duddella

All the material presented here and this All the material presented here and this presentation is presentation is COPYRIGHTCOPYRIGHT protected and protected and users are not allowed to distribute or copy users are not allowed to distribute or copy without written permission from Suri Duddellawithout written permission from Suri Duddella


AgendaAgenda……

Introduction Introduction Trading Methodology, ResearchTrading Methodology, Research–– Trading Plan, Instruments, Trading HoursTrading Plan, Instruments, Trading Hours……Overview of Entries and ExitsOverview of Entries and ExitsTop 10 Favorite PatternsTop 10 Favorite PatternsABC Setup, Trader VicABC Setup, Trader Vic’’s 2B Top/Bottoms 2B Top/BottomBook OverviewBook Overview


IntroductionIntroduction

Education Education Corporate America ExperienceCorporate America ExperienceEntrepreneurial Experience Entrepreneurial Experience 13+ Years Full13+ Years Full--time Tradingtime TradingQuant/Math/Analytical/Programming SkillsQuant/Math/Analytical/Programming Skills


Presentations, Articles, BookPresentations, Articles, Book……Member of Member of American Association of Professional Technical American Association of Professional Technical AnalystsAnalysts (AAPTA)(AAPTA)Interviewed in Stocks & Commodities (Sep. Interviewed in Stocks & Commodities (Sep. ‘‘08)08)

–– http://http://www.traders.com/Reprints/ArticleList.htmlwww.traders.com/Reprints/ArticleList.htmlPresentations Presentations

–– TradersExpoTradersExpo, Trading Groups, Trading GroupsArticles Articles

–– Stocks & Commodities (June/Aug. 2007, June 2008), Stocks & Commodities (June/Aug. 2007, June 2008), –– The TraderThe Trader’’s Journal (Sep./Nov./Dec. 2007)s Journal (Sep./Nov./Dec. 2007)

ActiveTraderActiveTrader, , TradersworldTradersworld, , ChartPointChartPoint……Featured Featured

BarronsBarrons, WBJ, S&C , WBJ, S&C ……Book Book

““Bulls, Bears and BrainsBulls, Bears and Brains”” –– Joshua Joshua SolanSolan, Adam , Adam LeitzLeitz (John Wiley)(John Wiley)““The Mathematician Meets the MarketsThe Mathematician Meets the Markets””


Trading MethodologyTrading Methodology


Trading InstrumentsTrading Instruments

EE--Mini Futures (ES, NQ, YM, ZG)Mini Futures (ES, NQ, YM, ZG)–– ShortShort--Term (1m Term (1m –– 30m)30m)–– Futures: 610 Tick, 5m, DailyFutures: 610 Tick, 5m, Daily

100+ Stocks 100+ Stocks –– Swing TradingSwing Trading–– OvernightOvernight to 3to 3--DaysDays–– Stocks: 5m, 60m, DailyStocks: 5m, 60m, Daily


Trading MethodologyTrading MethodologyDiscretionary Trading, Strategy Discretionary Trading, Strategy FollowupsFollowups....ShortShort--Term Trading (Technical)Term Trading (Technical)–– Bar Charts, Renko and Range BarsBar Charts, Renko and Range Bars–– Price Pattern Based TradingPrice Pattern Based Trading

No Oscillators or Momentum Indicators No Oscillators or Momentum Indicators Do not follow Do not follow ““Market GurusMarket Gurus””All Trading Ideas All Trading Ideas ---- Self Built/TestedSelf Built/TestedGoal Oriented TradingGoal Oriented Trading


Trading Plan and ResearchTrading Plan and Research

1 to 3 hours on Market Analysis (Stocks)1 to 3 hours on Market Analysis (Stocks)6 to 8 Hours of Trading6 to 8 Hours of TradingPattern RecognitionPattern RecognitionBuildBuild Trading PlanTrading PlanUpdate website (Update website (www.suriNotes.comwww.suriNotes.com))Update Journals Every DayUpdate Journals Every DayTradeStation TradeStation

http://www.surinotes.com/


Trading DayTrading DayEE--MinisMinis

9.00 am 9.00 am –– 11.30 am11.30 am–– Trade eTrade e--MinisMinis11.30 am 11.30 am –– 1.00 pm1.00 pm

–– NO eNO e--Mini TradingMini Trading1.00 pm 1.00 pm –– 3.00 pm3.00 pm

–– Trade eTrade e--MinisMinis

No Emini Trading and No Emini Trading and Absolutely Absolutely NONO Shorts after Shorts after 3pm3pm

StocksStocks

8.00 am 8.00 am –– 10.30 am10.30 am–– Sell/Close StocksSell/Close Stocks–– NoNo--New PositionsNew Positions

10.30 am 10.30 am –– 3.00 pm 3.00 pm –– Trade Trade ETFsETFs–– Pro/Pro/UtlraShortUtlraShort sharesshares

3 pm 3 pm –– 5 pm5 pm–– New Positions (Stocks)New Positions (Stocks)–– Buy/ShortBuy/Short


Overview of Entries/ExitsOverview of Entries/Exits


TradeTrade……

Framework Framework –– Time Frame, Trade Time ZonesTime Frame, Trade Time Zones……

Reason To Trade Reason To Trade –– Setup, Pattern, Indicator, SystemSetup, Pattern, Indicator, System……

Execution Execution –– Trigger based Entries, Target based ExitsTrigger based Entries, Target based Exits

Management Management –– Size, Stops, TargetsSize, Stops, Targets


Overview of Entries and ExitsOverview of Entries and Exits

Entries and Exits both are importantEntries and Exits both are important““A Planned Entry leads to A Planned ExitA Planned Entry leads to A Planned Exit””Success in Trading Success in Trading –– AnalysisAnalysis–– Excellent Platform/Execution SkillsExcellent Platform/Execution Skills–– DisciplineDiscipline–– Money ManagementMoney Management

MM most successful in LongMM most successful in Long--RunRunShortShort--term Traders term Traders ---- TechnicalsTechnicals


A Planned A Planned EntryEntry Leads to Leads to A Planned A Planned ExitExit


EntriesEntries

Entry above/belowEntry above/below–– Previous Bar, 2Previous Bar, 2--Bar High or Lows Bar High or Lows –– Swing High or Swing LowSwing High or Swing Low–– Breakout/Breakdown (Trendline, Supp./Breakout/Breakdown (Trendline, Supp./ResRes., MAs)., MAs)–– A WideA Wide--Range BarRange Bar

NN--Bar Range Breakout TechniqueBar Range Breakout Technique–– Toby Toby CrabelCrabel’’ss TechniqueTechnique


Entry: 2Entry: 2--Bar High/LowBar High/Low


Entry: Swing High/Swing LowEntry: Swing High/Swing Low


Entry: Breakout/Breakdown BarEntry: Breakout/Breakdown Bar’’s High/Lows High/Low


Entry: WideEntry: Wide--Range Bar High/LowRange Bar High/Low


NN--Bar Range Breakout TechniqueBar Range Breakout Technique


ExitsExits““Must be PlannedMust be Planned””Key Support and Resistance LevelsKey Support and Resistance LevelsFibonacci LevelsFibonacci LevelsATR ExitsATR ExitsBar Size ExitsBar Size ExitsDollar based ExitsDollar based Exits


Exit: Key Supp./Resistance LevelsExit: Key Supp./Resistance Levels

Moving AveragesMoving Averages–– 21 and 89 XMA, 200 SMA21 and 89 XMA, 200 SMASwing Highs/LowsSwing Highs/LowsTrend LinesTrend LinesPrevious Day High/LowsPrevious Day High/LowsFirst Hour Highs/LowsFirst Hour Highs/Lows


Exit: Fibonacci LevelsExit: Fibonacci Levels

Use High and Low valuesUse High and Low valuesFib. Levels (0.382, 0.618, 1.0, 1.168)Fib. Levels (0.382, 0.618, 1.0, 1.168)Secondary Fib. Levels (0.786, 1.27, 1.38)Secondary Fib. Levels (0.786, 1.27, 1.38)


Exit: Bar Size ExitsExit: Bar Size Exits


suriToolssuriTools VideoVideo

VideoVideo……http://http://www.youtube.com/watch?vwww.youtube.com/watch?v=8wuW_a0DIrI=8wuW_a0DIrI


Top 10 Favorite PatternsTop 10 Favorite Patterns


Pattern Trading Pattern Trading ……..

There are There are NONO Perfect PatternsPerfect PatternsAll Patterns Fail All Patterns Fail –– Key is to know when to Key is to know when to ‘‘TradeTrade’’ them and when to them and when to ‘‘AvoidAvoid’’ themthemThere is no single pattern which is a There is no single pattern which is a HolygrailHolygrailPatterns must be clearly visiblePatterns must be clearly visible…… Do not Do not FORCEFORCE a patterna pattern


Top 10 PatternsTop 10 Patterns1.1. Trader VicTrader Vic’’s 2B Patterns 2B Pattern2.2. ABC Patterns (Auto)ABC Patterns (Auto)3.3. Double Bottoms/TopsDouble Bottoms/Tops4.4. Opening Range PivotsOpening Range Pivots5.5. Fib. Zone PivotsFib. Zone Pivots6.6. Market FractalsMarket Fractals7.7. X5 Patterns X5 Patterns –– Gartley, Butterfly, Crab, BatGartley, Butterfly, Crab, Bat8.8. DragonDragon9.9. Flags/Pennants/WedgesFlags/Pennants/Wedges10.10. GapsGaps


Top 2 Patterns PresentationTop 2 Patterns Presentation


Trader VicTrader Vic’’s s

2B2B


Trader VicTrader Vic’’s 2B Patternss 2B Patterns

Victor Victor SperandeoSperandeo ““Trader VicTrader Vic””““Principles of Professional SpeculationPrinciples of Professional Speculation””Irregular Irregular ““Double TopDouble Top”” or or ““Double BottomDouble Bottom””


Trader VicTrader Vic’’s 2B Top (Sell)s 2B Top (Sell)2B Sell (Rules)

Must make a New High

Decent Retracement

Close above New High

No Follow Through

Close below Breakout Low

Short: below the Low

Target Major Swing Low

Stop: Above Breakout High


2B Top 2B Top (Sell)(Sell)


2B Top 2B Top (sell)(sell)



Trader VicTrader Vic’’s 2B Bottom (Buy)s 2B Bottom (Buy)2B Buy Rules

A New Low

Decent Retracement

Another Low below New Low

No follow Through

Close above Breakdown High

Long above Breakdown High

Stop below the Low

Target a Major Swing High


2B Long 2B Long (Example)(Example)


2B Buy (June 18)2B Buy (June 18)


2B Patterns2B Patterns


2B Top/Bottom 2B Top/Bottom Scans in Scans in RadarScreenRadarScreen


2B Scan Demo2B Scan Demo……

VideoVideo……


ABC PatternsABC Patterns


ABC PatternsABC Patterns

H.M. H.M. GartleyGartley’’ss BookBook……33--Pivot, 1Pivot, 1--22--3 Waves3 Waves……Lightening Bolt Lightening Bolt Trend, Retracement, TrendTrend, Retracement, TrendAB = CD Pattern formationAB = CD Pattern formationTrade in the Trade in the DirectionDirection of the Trendof the Trend

A

B

C

D


AB = CD StructuresAB = CD Structures


ABC BullishABC BullishABC Bullish Pattern

2 to 3 bar Pivot Strength

Must have at least 62% Retracement

Entry: After ABC pattern, Long Above the High of Previous Bar

STOP: Below ‘C’

Target: Between 100% of AB and 127% of BC


ABC ABC BullishBullish


ABC ABC Bearish Bearish


ABC BearishABC Bearish



ABC Scans in ABC Scans in RadarScreenRadarScreen


ABC ABC RadarScreenRadarScreen ScansScans


Trade Chart Patterns Like Trade Chart Patterns Like The ProsThe Pros

Book PresentationBook Presentation


BookBook300 Pages8.5” x 11” Book

65 Patterns225+ Chart IllustrationsPrecise Entries/ExitsTargets/Stops

$50


Book Introduction VideoBook Introduction Video

–– VideoVideo……–– http://http://www.youtube.com/watch?vwww.youtube.com/watch?v=BNRuxUX1sNM=BNRuxUX1sNM


Book OverviewBook Overview4 years in making/data, 24 months of writing4 years in making/data, 24 months of writingWritten for Written for ““TradersTraders”” with with ““Trading PerspectiveTrading Perspective””More practical than theoreticalMore practical than theoreticalEmphasizes Emphasizes ““howhow--toto”” of pattern recognition of pattern recognition Each pattern with brief synopsis, 2Each pattern with brief synopsis, 2--4 examples4 examplesPrecise entry and exit techniquesPrecise entry and exit techniquesEach example with stops/targetsEach example with stops/targetsNo Oscillators, Indicators or StatisticsNo Oscillators, Indicators or Statistics


Book: 13 Chapters CoversBook: 13 Chapters Covers……Chart Types (Basic types, 3LPBChart Types (Basic types, 3LPB……))Bar Groups (Market structures, NR7IDBar Groups (Market structures, NR7ID……))Pivots (Floor, Fib. Zone, Open RangePivots (Floor, Fib. Zone, Open Range……))Geometric (Triangles, RectanglesGeometric (Triangles, Rectangles……))Harmonic (ABC, Gartley, ButterflyHarmonic (ABC, Gartley, Butterfly……))Price Action (Head & Shoulders, C & HPrice Action (Head & Shoulders, C & H……))Top and Bottoms (V, Double, TripleTop and Bottoms (V, Double, Triple……))Exotic Patterns (Dragon, Sea HorseExotic Patterns (Dragon, Sea Horse……))Channels (Channels (DonchianDonchian, Pitchfork, LRC, Pitchfork, LRC……))


How to Use this BookHow to Use this Book……Have an Open MindHave an Open Mind…… Be a StudentBe a StudentPick 3Pick 3--5 patterns of your interest of similar 5 patterns of your interest of similar groupsgroups……Study them thoroughly (Historically, RealStudy them thoroughly (Historically, Real--Time) Time) with your Instruments, Timewith your Instruments, Time--Frames, Indicators Frames, Indicators ““MasterMaster”” your Setups and your Setups and ““MasterMaster”” your Tradesyour TradesBuild Confidence of Why/How/When to tradeBuild Confidence of Why/How/When to tradeLet your Trading demand more patterns to Let your Trading demand more patterns to MasterMaster


Book Discount URLBook Discount URL$49.95 $49.95 –– A $10 Discount to TL MembersA $10 Discount to TL Members

Normally Sells for $59.95Normally Sells for $59.95

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Trade Chart Patterns Like The Pros - Traders Laboratory