“4 Keys to Trend Trading Tech Analysis”
There is no Holy Grail of Trading—Only Tools & Rules
DisclaimerU.S. GOVERNMENT REQUIRED DISCLAIMER – COMMODITY FUTURES TRADING COMMISSION FUTURES AND OPTIONS TRADING HAS LARGE POTENTIAL REWARDS, BUT ALSO LARGE POTENTIAL RISK. YOU MUST BE AWARE OF THE RISKS AND BE WILLING TO ACCEPT THEM IN ORDER TO INVEST IN THE FUTURES AND OPTIONS MARKETS.
DON’T TRADE WITH MONEY YOU CAN’T AFFORD TO LOSE. THIS IS NEITHER A SOLICITATION NOR AN OFFER TO BUY/SELL FUTURES OR OPTIONS. NO REPRESENTATION I S BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED IN THIS TRAINING. THE PAST PERFORMANCE OF ANY TRADING SYSTEM OR METHODOLOGY IS NOT NECESSARILY INDICATIVE OF FUTURE RESULTS.
CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAINLIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOTREPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN E XECUTED, THERESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAINMARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS INGENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OFHINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELYTO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.
ALL MATERIALS PRESENTED ARE FOR TRAINING PURPOSES ONLY . TRADERS SHOULD PAPER TRADE ANY NEW METHOD PRIOR TO RISK OF PERSONAL CAPITAL.
Keys to Trend Trading Technical Analysis
Copyright 2007-2017 ATTS
Institutions don’t care about small traders—They just want to take our money!
4 Key Tools for TATools Of The Trade
• The goal of every short-term trader is to determine the direction of a given asset's momentum and to attempt to profit from it.
• There have been hundreds of technical indicators and oscillators developed for this specific purpose. There are Pros & Cons for each indicator & oscillator.
• 4 Key Tools:– Trend Line Analysis– Chart Patterns– Support – Resistance
Recognize and Take Action
Read more: Top 7 Technical Analysis Tools http://www.investopedia.com/slide-show/tools-of-the-trade/#ixzz4keHU1XCa
Copyright 2007-2017 ATTS
Trend Line Analysis
• Long Term
• Intermediate
• Short Term
Longer Trends are strongest!
Where is price action with respect to the Long Term Trend?
Where do I want to take action to get in!
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There is no Holy Grail of Trading—Only Tools & Rules
Copyright 2007-2017 ATTS
NVDA – 1 Hour Intraday
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NVDA – Daily
June 2017
July 2016
Copyright 2007-2017 ATTS
NVDA – WeeklyAcceleration
Chart Patterns
• Many Patterns for charts and price action
• Choose proven winners that match your eye, or
• Combine with Oscillators/Indicators
• Pattern Recognition is great, BUT…
1. Trend Line, Moving Average Trend, Oscillator Divergence, Support & Resistance can be more predictive -- Ok to recognize the pattern but understand what it’s telling us
2. Traders can get overly focused on what a pattern is called and what’s it’s suppose to do they are distracted and unsure when the real move starts!
Copyright 2007-2017 ATTS
Support :
- Take the time to identify Support zones!
- It takes negative energy to break Support.
- Trader’s see support as a zone where institutions step in to support their position!
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Copyright 2007-2017 ATTS
Buyers come in to support the current up move
Sellers come in at resistance to stop the
up move
Program yourself to wait!!
Copyright 2007-2017 ATTS
Copyright 2007-2017 ATTS
Resistance:
- Defines a price zone where late buyers got in to the previous move up.
- It requires positive energy to break out above resistance.
- Institutional trades may start to take profit at this level, i.e. selling pressure.
- 2 Biggest challenges with Support & Resistance?
1. Waiting for Zones to be reached
2. Whipsaw!
Copyright 2007-2017 ATTS
Copyright 2007-2017 ATTS
Price Envelopes Bonus Slides
Copyright 2007-2017 ATTS
Price Envelopes Bonus Slides• Shows Extreme Price Levels
• Shows Strength of Trends
• Provide Clues on when to enter & when to exit trades
• Often Set up Reversion Trade Opportunities
• Combining Keltner’s and MA Envelopes provide confirming clues
• Encourages Patience
Copyright 2007-2017 ATTS
Copyright 2007-2017 ATTS
Secondary Active Trend Trading Indicators
The Active Trend Trading System has Two levels of indicators to aid in timing both entries and exits❖ Primary Indicators include
❖ Price Action—This is King!
❖ Moving Averages—8 ema, 20 ema, 50 ema, 100 sma & 200 sma
(On weekly chart the only the 8 ema (approx the 50 day), 20 and 40 sma
❖ Candlestick Reversal Patterns
❖ Trend Lines & Price Level Support and Resistance Zones
❖ Pattern Breakouts & Breakdowns
❖ Secondary Indicators include:❖ True Strength Index (8,8,3 setting on TOS Charts)
❖ Momentum (12 setting on TOS Charts)
❖ Keltner Channels (20 EMA, 2 ATR settings on TOS Charts)
❖ 20 Period Moving Average Envelope set for different time periods
• Originally developed by Chester Keltner in the late 1950’s and early 1960’s
• Refined by Linda Raschke in the 1980’s
• A Volatility-based envelope set above and below an exponential moving average (some use SMA) which captures approximately 80-90% of price movement. (Including the 20 period EMA envelope increases to about 95%)
• A Trend Following indicator used to identify reversals with channel breakouts and channel direction
• Works on all timeframes (intraday, daily, weekly, monthly)
Keltner Channels
Copyright 2007-2017 ATTS
Keltner Channels vs. Bollinger Bands
• Keltner Channels are smoother than Bollinger Bands because the width of the B Bands are based on standard deviations while K Channels are based on Average True Range (ATR).
• Many believe the K Channels are more sensitive because they use the exponential moving average, however some traders do use a simple moving average with the K Channels
• The smooth appearance makes K Channels well suited for trend following and trend identification
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Keltner Channels vs. Bollinger Bands
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Keltner Channels: How to use them
There is an excellent tutorial at:
http://stockcharts.com/school/doku.php?id=chart_school:technical_indicators:keltner_channels
This tutorial provides the basics on how to use K Channels for trade
timing. However remember K Channels are still a secondary indicator.
As always, Price is King!
Copyright 2007-2017 ATTS
Keltner Channels: How to use themUptrend
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Keltner Channels: How to use themDowntrend
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Keltner Channels: How to use them
Sideways Trend
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• Daily: 20 EMA (OHLC) +/- 10%
• Weekly: 20 EMA (OHLC) +/- 25%
• 1 Hour Intraday: 20 EMA (OHLC) +/- 5%
• Basically the same interpretation as the Keltners
• Typically shows greater extremes and trigger reversion to mean price action
20 Period Moving Average Envelope
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Combined Clues
Down TrendBegins
Up Trend Begins
What about now?
Early Clues
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Combined Clues
Down TrendBegins
Up Trend Begins
What about now?
Early Clues
What about now?
Early Clues
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Combined Clues – Weekly
Down TrendBegins
Early Clues
What about now?
Early Clues
What about here?
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Combined Clues – 1-Hour Intraday
Up TrendBegins
Early Clues
What about now?
Early Clues – 6/27/16
What about here?
On Intraday ChartsExtremes on either TSI or MomentumProvide Solid Clues when combined with price location
Copyright 2007-2017 ATTS
Summary
• When Used together the value of price action clues are increased
• Great for planning trades
▪ Strategy
▪ Entries & Exits
Copyright 2007-2017 ATTS
Clarify, Simplify & Multiply
This has been the Motto of Active Trend Trading from the beginning!
We continuously work to Clarify & Simplify through refinements to the system to make it objective and easy to both learn and use.
The purpose of all presentations is to provide our fellow Active Trend Trader Members a jump start to accelerate progress up the Learning Curve.
We welcome suggestions on how to improve the learning process!
Trade Wisely & Profitably,
Dennis W. Wilborn
Founder & Lead Technical Analyst