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THE STRAT
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CREATED BY: TTRADES & GERB TRADES
MOVE WITH MARKET TRADING AND EDUCATION LEARN, PRINT, REPEAT
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2
T H E
S T R A T
MODULES
TABLE OF CONTENTS
(1) WHAT IS THE STRAT?
5
(2) CANDLESTICK FORMATION & NUMBERS
7
(3) STRAT COMBOS
11
(4) ENTRIES AND EXITS
32
(5) STOP LOSSES
36
(6) TTO
39
(7) TIME FRAME ANALYSIS
41
(8) TIME FLIP
44
(9) INTRADAY STRATEGY
46
(10) SWING STRATEGY
48
(11) BROADENING FORMATIONS
50
(12) PMG
52
(13) COMBINATION WITH TRADITIONAL TA
54
(14) INTRADAY EXAMPLE
56
(15) SWING EXAMPLE
59
T H E
MODULE
S T R A T
WHAT IS THE STRAT
1
INTRODUCTION
M W M
4
WHAT IS THE STRAT?
CREATED BY
RELIES ON
FEATURES
SIMPLIFIES
ROB SMITH; FORMER FLOOR
PRICE ACTION AND TIME FRAME
COMPREHENSIVE CANDLESTICK
TRADING FOR NEWCOMERS AND
TRADER WITH 20+ YEARS OF
ANALYSIS. PLAY WITH THE TREND,
COMBINATIONS FOR TRADE ENTRY,
EXPERIENCED TRADERS ALIKE
EXPERIENCE
NOT AGAINST IT
EXIT, AND STOP LOSS
5
WHY USE THE STRAT? OVER TRADITIONAL TECHNICAL ANALYSIS
COMPREHENSIVE
CONSISTENT
SIMPLE, NO INDICATORS
A PROVEN STRATEGY
NEEDED, EXECUTE WITHOUT
MINIMIZING FAKE OUTS AND
SECOND GUESSING
REDUCES TRADING STRESS
VERSATILE
PROFITABLE
WHETHER A SCALP,
CLEAR TARGETS TO TAKE
DAYTRADE, OR SWING, THE
PROFIT AND EXIT ON
STRAT WORKS ON ALL TIME
WINNINGS TRADES
FRAMES
6
T H E
MODULE
S T R A T
CANDLESTICK FORMATION AND NUMBERS
M W M
2
7
CANDLESTICK FORMATION HIGH CLOSE
BULLISH CANDLE
CANDLESTICK ANATOMY
BODY
•
PRICE IS MOVING UP
•
PRICE CLOSED HIGHER THAN IT OPENED
OPEN LOW
CANDLESTICK FORMATION IS EASY TO LEARN YET A CRUCIAL CONCEPT TO GRASP. TRADERS MUST
HIGH
UNDERSTAND THE ANATOMY OF A CANDLESTICK TO LEARN THE STRAT.
BEARISH CANDLE
OPEN
CANDLESTICKS CAN CAPTURE VARIABLE TIME PERIODS FOR EXAMPLE: ONE CANDLE COULD EQUAL: 1 MINUTE ELAPSED, 5 MINUTES ELAPSED, 1 DAY ELAPSED, ETC
BODY
•
PRICE IS MOVING DOWN
•
PRICE CLOSED LOWER THAN IT OPENED
CLOSE
LOW
8
TYPES OF CANDLES SHOOTER
HAMMER
DOJI • A DOJI REPRESENTS INDECISION BETWEEN BUYERS AND SELLERS
PRESSURE
PRESSURE
• NO ONE IS IN CONTROL
HIGH
HIGH
BODY OPEN
HIGH
OPEN
OPEN
BODY
HIGH
HIGH
CLOSE
BODY CLOSE
BODY
OPEN
CLOSE
CLOSE
OPEN
• SELLERS ARE TAKING CONTROL
• BUYERS ARE TAKING CONTROL
HIGH
CLOSE
• A SHOOTER REPRESENTS BEARISH
• A HAMMER REPRESENTS BULLISH
BODY OPEN LOW
LOW
LOW
LOW
BODY CLOSE
LOW
LOW
9
STRAT CANDLE NUMBERS CONSOLIDATION
DIRECTIONAL BAR
INSIDE BAR
OUTSIDE BAR
•
FAILS TO BREAK THE HIGH OR LOW OF THE PREVIOUS CANDLE
•
BREAKS THE HIGH OR LOW OF THE PREVIOUS CANDLE
•
BREAKS THE HIGH AND LOW OF THE PREVIOUS CANDLE
•
REPRESENTS CONSOLIDATION
•
REPRESENTS DIRECTIONAL MOVEMENT
•
REPRESENTS RANGE EXPANSION
DIRECTION
RANGE EXPANSION or 10 DOES NOT MATTER COLOR OF CANDLE
T H E
MODULE
S T R A T
STRAT COMBOS
M W M
3
11
STRAT COMBOS
OPTIMAL CANDLESTICK COMBINATIONS TO ENSURE HIGH PROBABILITY TRADES.
THE [1] CONSOLIDATION, [2] DIRECTIONAL, AND [3] RANGE EXPANSION CANDLES FORM VARIOUS, EASY TO UNDERSTAND COMBINATIONS. THIS ALLOWS TRADERS TO UTILIZE FORMING TRENDS AND PRICE ACTION TO ENTER HIGH-PROBABILITY, LOWRISK TRADES.
OUR FAVORITES
12
CONTINUATION
WHAT IS A REVERSAL? OCCURS WHEN PRICE MOVES IN THE OPPOSITE DIRECTION IT PREVIOUS TREND
BULLISH CONTINUATION
WHAT IS A CONTINUATION? OCCURS WHEN PRICE CONTINUES IN THE SAME DIRECTION AS PREVIOUS TREND
BEARISH CONTINUATION
BEARISH REVERSAL
BULLISH REVERSAL
REVERSAL 13
2-2 BULLISH CONTINUATION
✓
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) UP
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) UP
ENTRY
3-1-2 BEARISH CONTINUATION 3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + GREAT FOR CONTINUATION PLAYS + STAYING IN PLAYS
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
+ ENTER CURRENT TREND + EASY TO RECOGNIZE - CAN LEAD TO FAKE OUTS MORE OFTEN THAN OTHER COMBOS
14
2-2 BEARISH CONTINUATION
2-2 BULLISH CONTINUATION
✓
2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) DOWN
3-1-2 BEARISH CONTINUATION 3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + GREAT FOR CONTINUATION PLAYS + STAYING IN PLAYS
ENTRY
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
+ ENTER CURRENT TREND + EASY TO RECOGNIZE - CAN LEAD TO FAKE OUTS MORE OFTEN THAN OTHER COMBOS
15
2-2 BULLISH REVERSAL
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION
✓
2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
A DIRECTIONAL BAR (2) UP
ENTRY
3-1-2 BULLISH CONTINUATION 3-1-2 BEARISH CONTINUATION 3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + VERY COMMON ON ALL TIME FRAMES + GREAT FOR QUICK TRADES (DAYTRADES & SCALPS)
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- MAGNITUDE OF GAINS CAN BE SMALL AS REVERSAL MAY NOT SUSTAIN
16
2-2 BEARISH REVERSAL
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL
✓
2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) UP
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) DOWN
3-1-2 BEARISH CONTINUATION 3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + VERY COMMON ON ALL TIME FRAMES + GREAT FOR QUICK TRADES (DAYTRADES & SCALPS)
ENTRY
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- MAGNITUDE OF GAINS CAN BE SMALL AS REVERSAL MAY NOT SUSTAIN
17
3-2-2 BULLISH REVERSAL
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL
✓
3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN OUTSIDE BAR (3)
2-1-2 BEARISH REVERSAL
FOLLOWED BY • •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) DOWN FOLLOWED BY
3-1-2 BEARISH CONTINUATION
A DIRECTIONAL BAR (2) UP
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL ENTRY
STRENGTH/WEAKNESS + LARGE MAGNITUDE TO FIRST TARGET + EARLY ENTRY INTO LARGER MOVE
1-2-2 BULLISH REVERSAL STRAT 1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- PRICE MAY BECOME TRAPPED IN PREVIOUS OUTSIDE BAR (3)
18
3-2-2 BEARISH REVERSAL
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL
✓
3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN OUTSIDE BAR (3)
2-1-2 BEARISH REVERSAL
FOLLOWED BY • •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) UP FOLLOWED BY
3-1-2 BEARISH CONTINUATION
A DIRECTIONAL BAR (2) DOWN
3-1-2 BULLISH REVERSAL ENTRY
STRENGTH/WEAKNESS + LARGE MAGNITUDE TO FIRST TARGET + EARLY ENTRY INTO LARGER MOVE
3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT 1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- PRICE MAY BECOME TRAPPED IN PREVIOUS OUTSIDE BAR (3)
19
2-1-2 BULLISH CONTINUATION
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL
✓
2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) UP
2-1-2 BEARISH REVERSAL
FOLLOWED BY • •
3-1-2 BULLISH CONTINUATION
AN INSIDE BAR (1) FOLLOWED BY A DIRECTIONAL BAR (2) UP
2-1-2 BULLISH CONTINUATION
3-1-2 BEARISH CONTINUATION ENTRY
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + ALLOWS ENTRY DURING MOMENTUM, NOT CONSOLIDATION + GREAT FOR SAFE ENTRY INTO ESTABLISHED TREND
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- RISK OF TURNING INTO AN OUTSIDE BAR (3) RESULTING IN A 1-3 REVERSAL
20
2-1-2 BEARISH CONTINUATION
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION
✓
IDENTIFYING •
2-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY • •
2-1-2 BEARISH CONTINUATION
3-1-2 BULLISH CONTINUATION
AN INSIDE BAR (1) FOLLOWED BY
3-1-2 BEARISH CONTINUATION
A DIRECTIONAL BAR (2) DOWN
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL
STRENGTH/WEAKNESS + ALLOWS ENTRY DURING MOMENTUM, NOT CONSOLIDATION + GREAT FOR SAFE ENTRY INTO ESTABLISHED TREND
ENTRY
1-2-2 BULLISH REVERSAL STRAT 1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- RISK OF TURNING INTO AN OUTSIDE BAR (3) RESULTING IN A 1-3 REVERSAL
21
2-1-2 BULLISH REVERSAL
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
✓
A DIRECTIONAL BAR (2) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY • •
AN INSIDE BAR (1)
2-1-2 BULLISH REVERSAL
ENTRY
3-1-2 BULLISH CONTINUATION
FOLLOWED BY
3-1-2 BEARISH CONTINUATION
A DIRECTIONAL BAR (2) UP
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + OFFERS LARGE MAGNITUDE TO FIRST TARGET + ENTER AT BEGINNING OF MOVE
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
+ ENTER AFTER CONSOLIDATION NOT DURING - RISK OF TURNING INTO AN OUTSIDE BAR (3)
22
2-1-2 BEARISH REVERSAL
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) UP
✓
FOLLOWED BY •
AN INSIDE BAR (1) FOLLOWED BY
•
A DIRECTIONAL BAR (2) DOWN
2-1-2 BEARISH REVERSAL
3-1-2 BULLISH CONTINUATION ENTRY
3-1-2 BEARISH CONTINUATION 3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + OFFERS LARGE MAGNITUDE TO FIRST TARGET + ENTER AT BEGINNING OF MOVE
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
+ ENTER AFTER CONSOLIDATION NOT DURING - RISK OF TURNING INTO AN OUTSIDE BAR (3)
23
3-1-2 BULLISH CONTINUATION
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN OUTSIDE BAR (3) UP
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
FOLLOWED BY •
✓
AN INSIDE BAR (1) A DIRECTIONAL BAR (2) UP
3-1-2 BULLISH CONTINUATION 3-1-2 BEARISH CONTINUATION
ENTRY
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + ALLOWS ENTRY DURING MOMENTUM, NOT CONSOLIDATION + GREAT FOR SAFE ENTRY INTO ESTABLISHED TREND
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- RISK OF TURNING INTO AN OUTSIDE BAR (3) RESULTING IN A 1-3 REVERSAL - RISK OF CHOP WITHIN OUTSIDE BAR (3) RANGE
24
3-1-2 BEARISH CONTINUATION
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN OUTSIDE BAR (3) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
3-1-2 BULLISH CONTINUATION
AN INSIDE BAR (1)
✓
FOLLOWED BY •
3-1-2 BEARISH CONTINUATION 3-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) DOWN
3-1-2 BEARISH REVERSAL
STRENGTH/WEAKNESS + ALLOWS ENTRY DURING MOMENTUM, NOT CONSOLIDATION + GREAT FOR SAFE ENTRY INTO ESTABLISHED TREND
ENTRY
1-2-2 BULLISH REVERSAL STRAT 1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- RISK OF TURNING INTO AN OUTSIDE BAR (3) RESULTING IN A 1-3 REVERSAL - RISK OF CHOP WITHIN OUTSIDE BAR (3) RANGE
25
3-1-2 BULLISH REVERSAL
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN OUTSIDE BAR (3) DOWN
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
AN INSIDE BAR (1) FOLLOWED BY
•
A DIRECTIONAL BAR (2) UP
3-1-2 BULLISH CONTINUATION
ENTRY
3-1-2 BEARISH CONTINUATION
✓
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + OFFERS LARGE MAGNITUDE TO FIRST TARGET + ENTER AT BEGINNING OF MOVE
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
+ IF RANGE OF OUTSIDE BAR (3) IS CLEARED, OFFERS A CONTINUATION PLAY - RISK OF TURNING INTO AN OUTSIDE BAR (3)
26
3-1-2 BEARISH REVERSAL
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN OUTSIDE BAR (3) UP
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
AN INSIDE BAR (1) FOLLOWED BY
•
3-1-2 BULLISH CONTINUATION ENTRY
3-1-2 BEARISH CONTINUATION 3-1-2 BULLISH REVERSAL
A DIRECTIONAL BAR (2) DOWN
✓
3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + OFFERS LARGE MAGNITUDE TO FIRST TARGET + ENTER AT BEGINNING OF MOVE
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
+ IF RANGE OF OUTSIDE BAR (3) IS CLEARED, OFFERS A CONTINUATION PLAY - RISK OF TURNING INTO AN OUTSIDE BAR (3)
27
1-2-2 BULLISH REVERSAL STRAT
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN INSIDE BAR (1)
2-1-2 BEARISH REVERSAL
FOLLOWED BY • •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) DOWN FOLLOWED BY
3-1-2 BEARISH CONTINUATION
A DIRECTIONAL BAR (2) UP
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL ENTRY
STRENGTH/WEAKNESS + PLAY OFF FAILED DIRECTIONAL BAR POST CONSOLIDATION RESULTING IN EARLY TREND ENTRY
✓
1-2-2 BULLISH REVERSAL STRAT 1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- IF PREVIOUS CONSOLIDATION IS NOT CLEARED, CHOP WILL ENSUE
28
1-2-2 BEARISH REVERSAL STRAT
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN INSIDE BAR (1)
2-1-2 BEARISH REVERSAL
FOLLOWED BY • •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) UP FOLLOWED BY
3-1-2 BEARISH CONTINUATION
A DIRECTIONAL BAR (2) DOWN
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL
STRENGTH/WEAKNESS + PLAY OFF FAILED DIRECTIONAL BAR POST CONSOLIDATION RESULTING IN EARLY TREND ENTRY
ENTRY
1-2-2 BULLISH REVERSAL STRAT
✓
1-2-2 BEARISH REVERSAL STRAT 1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- IF PREVIOUS CONSOLIDATION IS NOT CLEARED, CHOP WILL ENSUE
29
1-3 BULLISH REVERSAL STRAT
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN INSIDE BAR (1)
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) DOWN WHICH FAILED AND REVERSED, BREAKING THE OTHER SIDE OF THE INSIDE BAR (1)
3-1-2 BEARISH CONTINUATION
RESULTING IN AN OUTSIDE BAR (3)
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT
STRENGTH/WEAKNESS + PLAY OFF FAILED DIRECTIONAL BAR POST CONSOLIDATION RESULTING IN EARLY TREND ENTRY
1-2-2 BEARISH REVERSAL STRAT ENTRY
✓
1-3 BULLISH REVERSAL STRAT
1-3 BEARISH REVERSAL STRAT
- ENTERING DURING RANGE EXPANSION, PRICE CAN REVERSE
30
1-3 BEARISH REVERSAL STRAT
2-2 BULLISH CONTINUATION 2-2 BEARISH CONTINUATION 2-2 BULLISH REVERSAL 2-2 BEARISH REVERSAL 3-2-2 BULLISH REVERSAL 3-2-2 BEARISH REVERSAL 2-1-2 BULLISH CONTINUATION 2-1-2 BEARISH CONTINUATION
IDENTIFYING •
2-1-2 BULLISH REVERSAL
AN INSIDE BAR (1)
2-1-2 BEARISH REVERSAL
FOLLOWED BY •
3-1-2 BULLISH CONTINUATION
A DIRECTIONAL BAR (2) UP WHICH FAILED AND REVERSED, BREAKING THE OTHER SIDE OF THE INSIDE BAR (1) RESULTING IN AN OUTSIDE BAR (3)
3-1-2 BEARISH CONTINUATION ENTRY
3-1-2 BULLISH REVERSAL 3-1-2 BEARISH REVERSAL 1-2-2 BULLISH REVERSAL STRAT 1-2-2 BEARISH REVERSAL STRAT
STRENGTH/WEAKNESS + PLAY OFF FAILED DIRECTIONAL BAR POST CONSOLIDATION RESULTING IN EARLY TREND ENTRY
1-3 BULLISH REVERSAL STRAT
✓
1-3 BEARISH REVERSAL STRAT
- ENTERING DURING RANGE EXPANSION, PRICE CAN REVERSE
31
T H E
MODULE
S T R A T
ENTRIES AND EXITS
M W M
4
32
ENTRIES
TIME FRAME CONTINUITY PLAY WITH THE TREND INSTEAD OF AGAINST IT. EXAMINE HIGHER TIMEFRAMES TO CONFIRM ENTRY.
ACTIONABLE CANDLESTICK COMBINATIONS NOT ALL CANDLESTICK COMBINATIONS ARE ACTIONABLE. FOR EXAMPLE, 2-2 CONTINUATIONS CAN BE USED TO REMAIN IN A PLAY, BUT NOT ALWAYS FOR ENTRY.
NON-CONSOLIDATION RANGE DO NOT ENTER WHEN THE
EXECUTE WITHOUT EMOTIONS
TIME FRAME ABOVE IS AN
THE STRAT COMBINATIONS GIVE ENTRIES ON HIGH OR LOW
CONSOLIDATION WILL RESULT
BREAKS OF THE PREVIOUS CANDLE. THIS PREVENTS THE
IN A SIGNIFICANT AMOUNT OF
NEED FOR EMOTIONS, RESULTING IN ACTIONABLE TRADES
CHOP DUE TO INDECISION
ONLY.
BETWEEN BUYERS AND
INSIDE BAR (1). ENTRY WITHIN
SELLERS.
33
EXITS
PREVIOUS CANDLES ARE TARGETS PREVIOUS CANDLESTICK HIGHS OR LOWS ARE USED AS PRICE TARGETS.
SCALE SCALE OUT AND SECURE PROFITS AS THE CANDLE REACHES PRICE TARGETS.
NEVER QUESTION EXITS AGAIN LET PLAYS DEVELOP
THE STRAT GIVES MULTIPLE TARGETS/EXITS. THIS ENABLES POSITION SCALING
BY HAVING TARGETS AND
AND RUNNERS HELD WITH CONVICTION.
SCALING OUT, MAXIMIZE GAINS AND LET PLAYS REACH THEIR FULL POTENTIAL.
34
EXITS TARGET 2
TARGET 1
ENTRY
•
PREVIOUS CANDLES ARE TARGETS
•
NEXT TARGET IS THE CANDLE PREVIOUS THAT
•
CREATE AS MANY TARGETS AS DESIRED
35
T H E
MODULE
S T R A T
STOP LOSSES
M W M
5
36
STOP LOSS SHARES
RESPECT STOP LOSSES TO MINIMIZE MASSIVE LOSS
STOP
BASED OFF THE UNDERLYING’S PRICE
•
STOPS WITH SHARES ARE STRAIGHT FORWARD
•
PLACE A STOP LOSS AT THE BOTTOM OR TOP OF THE ENTRY
ENTRY
CANDLE •
REDUCE RISK BY PLACING STOP ON A LOWER TIME FRAME CANDLE
ENTRY STOP
37
STOP LOSS OPTIONS
RESPECT STOP LOSSES TO MINIMIZE MASSIVE LOSS
STOP
BASED OFF THE UNDERLYING AND GREEKS •
OPTIONS STOPS ARE MORE COMPLICATED AS GREEKS ARE INVOLVED
•
STOP LOSSES SHOULD BE DETERMINED AROUND CONTRACT VALUE AS
ENTRY
WELL AS INVALIDATION - MWM RECOMMENDS STOPS AT ~20% PREMIUM VALUE •
REDUCE RISK BY PLACING STOP ON A LOWER TIME FRAME CANDLE
ENTRY STOP
38
T H E
MODULE
S T R A T
TTO
M W M
6
39
TRIANGLE THEY OUT TAKE OUT HIGHS TAKE OUT LOWS FIND ENTRY
TOOK OUT PREVIOUS HIGHS
“TRIANGLE THEY OUT” IS CORRECTIVE ACTIVITY.
ENTRY LONG
PRICE WILL TAKE OUT THE HIGHS AND LOWS, ESSENTIALLY CREATING AN OUTSIDE BAR (3) ON LARGER TIME FRAMES. WAIT FOR THIS CORRECTIVE ACTIVITY TO CONCLUDE AND FIND ENTRY.
TOOK OUT PREVIOUS LOWS
40
T H E
MODULE
S T R A T
TIME FRAME ANALYSIS
M W M
7
41
FULL TIME FRAME ANALYSIS DAY TRADING
KNOW WHAT THE LARGER TIME FRAMES ARE DOING.
WEEKLY CANDLE
DAILY CANDLE WHEN ENTERING A DAY TRADE OR SCALP,
4 HOUR 1 HOUR CANDLE
WHAT IS FULL TIME FRAME CONTINUITY?
MONITOR THE TIME FRAMES ABOVE TO ENSURE THERE IS NO CONFLICTION BETWEEN HIGHER TIME FRAMES.
ALL THE TIME FRAMES ABOVE FOLLOW THE SAME TREND. THIS RESULTS IN THE HIGHEST PROBABILITY OF A SUCCESSFUL
30 MIN 15 MIN 5 MIN 1 MIN CANDLES
TRADE.
42
FULL TIME FRAME ANALYSIS SWING TRADING
KNOW WHAT THE LARGER TIME FRAMES ARE DOING.
QUARTERLY CANDLE
MONTHLY CANDLE WHEN ENTERING A SWING, MONITOR THE
WEEKLY CANDLE
WHAT IS FULL TIME FRAME CONTINUITY?
TIME FRAMES ABOVE TO ENSURE THERE IS NO CONFLICTION BETWEEN HIGHER TIME FRAMES.
ALL THE TIME FRAMES ABOVE FOLLOW THE SAME TREND. THIS RESULTS IN THE HIGHEST PROBABILITY OF A SUCCESSFUL TRADE.
DAILY CANDLE
43
T H E
MODULE
S T R A T
TIME FLIP
M W M
8
44
TIME FLIP
TABLE SHOWING THE FLIP TIME
5 MINUTE CANDLE
15 MINUTE CANDLE
= NEW CANDLE FORMS 30 MINUTE CANDLE
1 HOUR CANDLE
9:30 9:35 KNOW WHEN THE NEXT CANDLE STARTS
TIME FLIP IS WHEN A NEW CANDLE ON THE GIVEN TIME PERIOD FORMS
9:40 9:45 9:50
9:55 10:00 10:05 10:10
10:15 10:20 10:25 10:30
45
T H E
MODULE
S T R A T
INTRADAY STRATEGY
M W M
9
46
INTRADAY STRATEGY 5 MINUTE CANDLES
30 MINUTE CANDLES
USE 5 MIN CANDLES FOR
USE 30 MIN CANDLES FOR
ENTRY AND STOP
COMBINATIONS, ENTRY, AND TARGETS
DAILY CANDLES
WEEKLY CANDLES
USE DAILY TO CONFIRM
OPTIONAL. FOR FULL TIME
TREND
FRAME CONTINUITY
5 MINUTE :
ENTRY
30 MINUTE :
CHECK
1 HOUR :
CHECK
DAILY :
CHECK
47
T H E
MODULE
S T R A T
SWING STRATEGY
M W M
10
48
SWING STRATEGY DAILY
WEEKLY
USE DAILY CANDLES FOR
USE WEEKLY CANDLES FOR
ENTRY, STOP
COMBINATIONS, ENTRY, AND TARGETS
MONTHLY
QUARTERLY
USE MONTHLY TO CONFIRM
OPTIONAL. FOR FULL TIME
TREND
FRAME CONTINUITY
DAILY :
ENTRY
WEEKLY :
CHECK
MONTHLY :
CHECK
QUARTERLY :
CHECK
49
T H E
MODULE
S T R A T
BROADENING FORMATIONS
M W M
11
50
BROADENING FORMATIONS WHAT IS A BROADENING FORMATION?
A BROADENING FORMATIONS OCCUR WHEN HIGHS AND LOWS ARE PROGRESSIVELY TAKEN OUT ON A GIVEN TIME FRAME. CONNECTING THESE HIGHS TO HIGHER HIGHS AND LOWS TO LOWER LOWS RESULTS IN THE CREATION OF A BROADENING FORMATION. THIS CAN PROVIDE TARGETS AND FUTURE POINTS OF SUPPORT AND RESISTANCE. NOTE: TTO IS A BROADENING FORMATION ON A SMALLER TIME FRAME
51
T H E
MODULE
S T R A T
PMG
M W M
12
52
PIVOT MACHINE GUN HIGHER LOW (ENTRY) HIGHER LOW
WHAT IS A PIVOT MACHINE GUN?
HIGHER LOW HIGHER LOW HIGHER LOW
•
A PIVOT MACHINE GUN IS A SERIES OF HIGHER LOWS OR LOWER HIGHS
•
EACH OF THESE POINTS ARE WHERE TRADERS' STOPS ARE. ESSENTIALLY WHEN TAKEN OUT, TRADERS MUST COVER OR
LOWER HIGH
SELL THEIR POSITION, ADDING TO THE GROWING
LOWER HIGH
MOMENTUM.
•
THIS CAUSES THE STOPS TO BE TAKEN OUT IN RAPID
LOWER HIGH
SECESSION AND A VOLATILE REVERSAL TO TAKE PLACE. LOWER HIGH LOWER HIGH (ENTRY)
53
T H E
S T R A T
COMBINATION WITH TRADITIONAL TA
MODULE
M W M
11
54
COMBINATION WITH OTHER TA COMBINE WITH OTHER TECHNICAL ANALYSIS
EMA STACK
DEPTH OF MARKET
ALTHOUGH THE STRAT CAN BE USED EFFICIENTLY BY ITSELF, PAIRING THE STRAT ALONGSIDE TRADITIONAL TA CAN YIELD EVEN MORE CONSISTENCY. MOVE WITH MARKET RECOMMENDS THE FOLLOWING TA PAIRINGS:
•
SUPPORT & RESISTANCE LEVELS
•
EMA (EXPONENTIAL MOVING AVERAGE) STACKS
•
SUPPLY & DEMAND ZONES
•
DEPTH OF MARKET & OTHER ORDER FLOW TECHNIQUES
SUPPORT AND RESISTANCE LEVELS
SUPPLY AND DEMAND ZONES
55
T H E
MODULE
S T R A T
INTRADAY EXAMPLE
M W M
12
56
INTRADAY EXAMPLE INSIDE BAR (1)
•
THE 30 MINUTE CHART PRESENTS A DIRECTIONAL BAR (2) UP AND THEN AN INSIDE BAR (1). POSSIBLE 2-1-2 REVERSAL
•
THE INSIDE BAR IS ALSO A SHOOTER, SHOWING BEARISH PRESSURE
•
ENTRY WOULD BE ON THE BREAK OF THE 30 MINUTE CANDLE DOWN
•
MARK ENTRY AND TARGETS ON THE 30 MINUTE CHART
•
BEFORE LOOKING TO GET ENTRY LOOK AT THE HOUR AND DAILY CHART TO SEE IF THERE IS TIME FRAME CONTINUITY
ENTRY TARGET 1
SINCE BOTH, THE HOUR AND DAILY CHART ARE SHOWING BEARISH PRESSURE, THERE IS TIME FRAME CONTINUITY. NEXT LOOK AT THE 5 MINUTE CHART FOR ENTRY AND STOP
TARGET 2
30 MINUTE CHART
HOUR CHART
DAILY CHART
57
INTRADAY EXAMPLE STOP
•
AFTER MARKING ENTRY AND TARGETS ON THE 30 MINUTE CHART, SIGNALS WILL ALSO APPEAR ON THE 5 MINUTE CHART
•
WAIT FOR PRICE TO BREAK BELOW THE ENTRY AND THEN ENTER A SHORT POSITION
•
FOR LIMITED RISK, PLACE A STOP ON THE TOP OF THE 5 MINUTE CANDLE ENTERED OFF OF
•
AS DETAILED BELOW, PRICE HIT BOTH TARGETS AND RESULTED IN A PROFITABLE TRADE
ENTRY
TARGET 1
STOP ENTRY TARGET 1
TARGET 2
TARGET 2
5 MINUTE CHART
30 MINUTE CHART – REFERENCE
58
T H E
MODULE
S T R A T
SWING EXAMPLE
M W M
12
59
SWING EXAMPLE TARGET 3
•
THE WEEKLY CHART PRESENTS A DIRECTIONAL BAR (2) DOWN AND THEN A DIRECTIONAL BAR (2) UP. POSSIBLE 2-2 REVERSAL
•
ENTRY WOULD BE ON THE BREAK OF THE WEEKLY CANDLE UP
•
MARK ENTRY AND TARGETS ON THE WEEKLY CHART
•
BEFORE LOOKING TO GET ENTRY LOOK AT THE MONTHLY AND QUARTERLY CHART TO SEE IF THERE IS TIME FRAME CONTINUITY
TARGET 2 TARGET 1
SINCE BOTH, THE MONTHLY AND QUARTERLY CHART ARE SHOWING BULLISH PRESSURE AND CONTINUATION, THERE IS TIME FRAME CONTINUITY. NEXT LOOK AT THE DAILY CHART FOR ENTRY AND STOP
ENTRY
2-2 REVERSAL
WEEKLY CHART
MONTHLY CHART
QUARTERLY CHART
60
SWING EXAMPLE •
AFTER MARKING ENTRY AND TARGETS ON THE WEEKLY CHART, SIGNALS WILL ALSO APPEAR ON THE DAILY CHART
•
WAIT FOR PRICE TO BREAK ABOVE THE ENTRY AND THEN ENTER A LONG POSITION.
•
FOR LIMITED RISK, PLACE A STOP ON THE BOTTOM OF THE DAILY CANDLE ENTERED OFF OF. HOWEVER, SINCE THE STOP WOULD BE SO CLOSE TO ENTRY, FIND A PREVIOUS SUPPORT OR RESISTANCE AND PLACE STOP THERE.
•
AS DETAILED BELOW, PRICE HIT ALL TARGETS AND RESULTED IN A PROFITABLE TRADE
TARGET 1
ENTRY STOP
TARGET 3 TARGET 2 TARGET 1 ENTRY
DAILY CHART
WEEKLY CHART – REFERENCE
61