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Disclaimer
U.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.
Dont trade with money you cant afford to lose. This is neither a solicitation nor an offer to
Buy/Sell futures or options. No representation is 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 CERTAIN
LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT
REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE
RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN
MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN
GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT
OF HINDSIGHT.
NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO 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.
What To Trade
Stock Strategy
ETF Strategy
Option Strategy
SYSTEM
2.
3.
Stop Losses: 1-2% above or below swing high or swing low or Closing Price violates
moving average that triggered trade
2.
3.
Profit Stop: Cash Flow Trade a set percentage 5-10%; or closing price violates selected
moving average; or at Support/Resistance
4.
Profit Stop after candlestick reversal signal & close below/above 8 day EMA
What To Trade
Weekly & Running IBD 50 Watch List
Excellent Yearly Performance
Time Efficiency
Stocks & ETFs with Weekly Options
Other Growth Stocks
Trading Over $10
Ave Volume Greater than or Equal to 500K/Day Ave
Over $15/Share
Focus on IBD stocks trading over 500K shares/day
The IBD 50 stocks may be more than enough to
focus on and heres why.
I absolutely believe that price movement patterns are repeated. They are
recurring patterns that appear over and over, with slight variations. This
is because the markets are driven by humansand human nature never
changes.
~ Jesse Livermore
1.
2.
3.
4.
When To Trade:
Identify Current Trends
Uptrend:
1.
2.
3.
Downtrend:
1.
2.
3.
Sideways: Chaos
1. Box like pattern or Consolidation Pattern
Chaos
The basic thesis behind moving averages is to identify key resistance and support levels
of the underlying security so that one can detect the continuation of a price trend or the
emergence of a new price trend.
Moving averages watched by institutions:
20 or 21 Daily
50 Daily
200 Daily
Traders also use shorter timeframe moving averages to better trigger entries and exits.
8 or 10 period EMA works well for these triggers.
Weekly Period Moving Averages which approximate the Daily Moving Averages can also
be helpful during analysis.
50 Day Moving Average approximately equals the 8-10 Week Moving Average
200 Day Moving Average approximately equals the 40 Week Moving Average
50 SMA
20 SMA
200 SMA
8 EMA
Uptrend to Downtrend
8 EMA
20 SMA
50 SMA
Lower Low
200 SMA
IBD Patterns
2.
3.
4.
2.
4
2
Cup Break
Out
Trend Line
Break
1
Action Point: Moving
Average Bounce
1
5
Cup Break
Out
How one answers these questions can help with pre-trade strategies on where
and how to take profit.
See Alternative Exits at the BAMM Site under files.
Profit Targets
Exit Trade 5:
26.5% in 24 days
5
Entry 5: Cup
Break Out
2
Entry 2: Bounce off 200 day SMA
Objective or Subjective?
Profit Targets
Max Profit Target on Downside
Trades = 20-25%
Exit Trade 3:
8% in 27 days
2.
3.
Stop Losses: 1-2% above or below swing high or swing low or Closing Price violates
moving average that triggered trade
2.
3.
Profit Stop: Cash Flow Trade a set percentage 5-10%; or closing price violates selected
moving average; or at Support/Resistance
4.
Profit Stop after candlestick reversal signal & close below/above 8 day EMA