Edition 716 - March 2, 2018

Chart Scan with Commentary - Ledge Trade

by Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed

This issue of Chart Scan is about "ledges." Ledges are a formation described in the Law of Charts. A Ledge must occur in a trend. It must consist of not more than 10 bars from beginning to end. A ledge must have two matching highs or very close to matching highs, and two matching or very close to matching lows.

You trade a breakout of the ledge only in the direction of the major trend or swing. The 30-minute Gold chart below contains an almost perfect ledge, with two exact matching lows at 1231.20 and two almost matching highs at 1233.50 and 1233.40. In this case a sell stop was placed at 1233.50. The question is: "What was the direction of the former trend or swing?" We can see that prices had already made a 1-2-3 low, followed by a Ross Hook (RH).

We can confirm that uptrend by going to the daily chart, which I have inset into the graph of the 30-minute chart (upper left corner). What we see is that the direction of the current swing is up. Therefore we trade the breakout of the ledge to the upside.

© by Joe Ross. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.

Trading Article - Staying with Winners

by Master Trader Joe Ross
Author, Trader, Trading Mentor, and Founder of Trading Educators, Inc.
Developer of Instant Income Guaranteed

When you are riding a winner, avoid looking at it all the time.  Search out new trades in other markets.  Absorb yourself with looking for opportunities elsewhere, if you are the type that must have market action.  Diversification is the key word here.  But remember, you can afford to take only the very, very best trades elsewhere when you are riding a winner.  Don’t blow away the profits you are making on your winner by maniacal trading in other markets.

The best and perhaps the only way to make money in the markets is to cherish and succor your winning positions.  Stand back and admire them, appreciate them.  Let them develop, unfold, and make you money.

Please don’t confuse staying with winning trades with long term trading.  They are not the same.  In my own case, most of my long held winners start with a short term daytrade held overnight because I am trading towards the breakout of a major entry signal, such as a Ross hook, or a 1-2-3 high or low.

For most traders, because they don’t have the deep pockets, the patience, or both, to be long term traders, shorter term trading is best.  It is in shorter term that the trader with the smaller account can profit.

Here’s a good way to handle your money management:  Divide your risk capital into 8 percent segments of declining equity balance. (For example, $10,000 account, risk maximum $800 total on your first trade. If you lose $500, then risk a maximum of 8% of $9,500 on the next trade.)

Such a strategy will allow you to successfully take more than a dozen hits in a row.  The odds of such NOT happening are greatly in your favor.  With mediocre trade selection or worse, such as the flip of a coin, you should get at least one winner.  If you ride that winner, you should come out ahead.

Practice not trading as often as you have been.  The brokers are rich enough, you don’t need to trade to make them happy.  When you have a winner, reset your stops often, keep them moving.

There’s a saying in poker that you should think about from time to time.  It goes something like this: “If you’ve been in the game for twenty minutes, and haven’t yet figured out who the patsy is, then it’s YOU!”  Think about that when you run your business of trading.  Take your time, be patient, let the markets show you what to do.  Let the markets come to you, fill your positions, and then take you for the supreme joyride of making a year’s pay on a single trade.  The ride is worth the wait. 

© by Joe Ross. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.

Trading Example:  Instant Income Guaranteed

Philippe Gautier: Administration and New Developments
Developer: Joe Ross
 

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© by Joe Ross and Philippe Gautier. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.

Trading Example - GFJ18 – GFK18

by Professional Trader Andy Jordan
Educator for Spreads, Options, Swing/Day Trading, and
Editor of Traders Notebook Complete and Traders Notebook Outrights

© by Marco Mayer. Re-transmission or reproduction of any part of this material is strictly prohibited without the prior written consent of Trading Educators, Inc.

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Note: Unless otherwise noted, all charts used in Chart Scan commentary were created
by using Genesis Financial Technologies' Trade Navigator (with permission).

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© by Trading Educators, Inc. Re-transmission or reproduction of any part of this material is strictly prohibited without prior written consent.