TrinTick

(1)

How to Increase Your Odds for

A Successful Trend Trade

Greg Capra

Live Presentation Starts at 3:30 PM Chicago Time

DISCLAIMER:

DISCLAIMER: Futures and options Futures and options trading are speculative and trading are speculative and involve risk of loss. The ininvolve risk of loss. The information in this seminar is taken fromformation in this seminar is taken from sources believed to besources believed to be reliable.

reliable. It is It is intended intended for informatifor information and on and education education only andonly and is not is not guaranteed by guaranteed by the CBOT the CBOT as to as to accuracy, completeness, accuracy, completeness, nornor any trading any trading result. result. It isIt is not intended as i

not intended as investment advice, nor does nvestment advice, nor does CBOT endorse or support CBOT endorse or support any product or service represented any product or service represented in the presentatioin the presentation. n. TheThe views and opinionsviews and opinions offered by individuals or

offered by individuals or their associated firms in interactive seminars are solely those of their associated firms in interactive seminars are solely those of the authors, and do not necessarilythe authors, and do not necessarily represent the views of therepresent the views of the Chicago Board of Trade.

Chicago Board of Trade. The Rules & Regulations of The Rules & Regulations of the CBOT remain the authoritthe CBOT remain the authoritative source on all current contract specifications & regulations.ative source on all current contract specifications & regulations. "Dow Jones," "The Dow," "Dow Jones Industrial Average," and "DJIA" are service marks of Dow Jones & Company, Inc. and have been licensed for use "Dow Jones," "The Dow," "Dow Jones Industrial Average," and "DJIA" are service marks of Dow Jones & Company, Inc. and have been licensed for use for certain purposes by

for certain purposes by the Board of Trade of the Cithe Board of Trade of the City of Chicago (CBOT). The CBOT'sty of Chicago (CBOT). The CBOT's futures and futures-options contrafutures and futures-options contracts based on the Dow Jonescts based on the Dow Jones Industrial Average are not sponsored, endorsed, sold, or promoted by Dow Jones, and Dow Jones makes no representation regarding the advisability of Industrial Average are not sponsored, endorsed, sold, or promoted by Dow Jones, and Dow Jones makes no representation regarding the advisability of trading in such products. Information provided is taken from sources believed to be reliable but is not guarant

trading in such products. Information provided is taken from sources believed to be reliable but is not guaranteed as to its accuracy or eed as to its accuracy or completeness. Thecompleteness. The Rules and Regulations of the Chicago Board of Trade

(2)

An Introduction To Trading the mini

DOW with the Pristine Method®

www.pristine.com www.pristine.com www.pristine.com

www.pristine.com

PRESENTED

PRESENTED BY BY GREG GREG CAPRACAPRA

PRESIDENT AND CEO OF PRISTINE CAPITAL HOLDINGS PRESIDENT AND CEO OF PRISTINE CAPITAL HOLDINGS WWW.PRISTINE.COM

(3)

Disclaimer

It should not be assumed that the methods, techniques, or indicators presented in this book and seminar will be It should not be assumed that the methods, techniques, or indicators presented in this book and seminar will be profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples in profitable or that they will not result in losses. Past results are not necessarily indicative of future results. Examples in this book and seminar are for education

this book and seminar are for educational purposes only. This isal purposes only. This is not a solicitation of any order to buy or sell.not a solicitation of any order to buy or sell.

“HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. “HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING.

TRADING. ALSO, SINCE ALSO, SINCE THE TRADES THE TRADES IN THIS IN THIS BOOK and SBOOK and SEMINAR HAVE EMINAR HAVE NOT ACTUALLY NOT ACTUALLY BEENBEEN EXECUTED, THE RESULTS WE STATE MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT, EXECUTED, THE RESULTS WE STATE MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING 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 PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT.

BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR ISNO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS

LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.

LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.”” The authors and

The authors and publisher assume no publisher assume no responsibilities fresponsibilities for actionsor actions taken by readers. The taken by readers. The authors and publisher authors and publisher are notare not providing investment advice. The authors and publisher do not make any claims, promises, or guarantees that any providing investment advice. The authors and publisher do not make any claims, promises, or guarantees that any suggestions, systems, trading strategies, or information will result in a profit, loss, or any other desired result. suggestions, systems, trading strategies, or information will result in a profit, loss, or any other desired result. AllAll readers and seminar attendees assume

readers and seminar attendees assume all risk, including all risk, including but notbut not limited to the risk limited to the risk of trading lossesof trading losses..

Day Trading can result in large losses and may not be an activity suitable for everyone.

Day Trading can result in large losses and may not be an activity suitable for everyone. Copyr

Copyright ©ight © 1994-1994-2007 b2007 byy Pristine Capital Holdings, IncPristine Capital Holdings, Inc. . All riAll rights reservghts reserved. ed. Printed Printed in the in the United SUnited States of tates of America.America. Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or distributed in any for

distributed in any form or by any means, or stored in a databasem or by any means, or stored in a database or retrieval system, without prioor retrieval system, without prior written permission of r written permission of the publisher.

(4)

4 4

Combining Support and Resistance,

Market Internals, Trends and Price

Patterns for high probability trades.

MasterTrader.com

(5)

The Plan for trading the mini-sized Dow (YM)

Define the

“reference

points”

of suppo

rt and

resistance

or, more

importantly the lack thereof.

Define the market environment each day with

market internals.

Define the current trend or lack thereof.

Trade when a predefined price pattern forms in alignment with

the above.

TREND TRADE PLAN

(6)

Pristine Capital Holdings, Inc. Pristine Capital Holdings, Inc.

Actual Support and Resistance

Subjective Support and Resistance

Fib

Retracements-Exten

sions

Moving Averages

An unfilled gap between price bars

Prior price highs and lows, e.g., pivots

A series of price bars, e.g., a base

Trendlines

Trading Bands or Envelopes

These analysis tools are used by many to These analysis tools are used by many to locat

locate or prede or predictict supposupport or resisrt or resistancetance.. The only real support or resistance is The only real support or resistance is price. This the key to objective analysis. price. This the key to objective analysis.

6 6

SUPPORT and RESISTANCE

(7)

SUPPORT and RESISTANCE

Price support and resistance reference points tell us where Price support and resistance reference points tell us where others are likely to act (buy-sell) or react (take stops).

others are likely to act (buy-sell) or react (take stops). When those points are far

When those points are far apart, the odds are that pricesapart, the odds are that prices will trend toward those points when internals are supporting. will trend toward those points when internals are supporting.

(8)

8 8

When price support When price support (demand) and resistance (demand) and resistance (supply) are in a range, (supply) are in a range,

trend trading does not work. trend trading does not work.

Distance Distance Void Void Void Void Breakout failures Breakout failures have “

have “ shock value shock value” ” that overcome demand that overcome demand

Prior support, as well as market internals, guide

Prior support, as well as market internals, guide us to theus to the

odds of potential trend reversals. Most trends

odds of potential trend reversals. Most trends end once theyend once they

become climactic based on emotional extremes. become climactic based on emotional extremes.

SUPPORT and RESISTANCE

(9)

Retr

acem

ent

leve

ls, mov

ing av

erag

es,

and/

or tren

dline

s

did not st

op this mo

ve lowe

r.

Trends like this one occur when there

are few

pr

ice

ref

ere

nce p

oin

ts

of support

with market internals in alignment.

The distance to those points and

there

size will indicate their potency as support.

SUPPORT and RESISTANCE

(10)

10 10

Market Internals provide an objective comparison between the

current market environment and past based on

historical references.

Market Internals act as “

gauges

”

to de

ter

min

e the b

roa

der

market’s current level of strength,

weakness and sentiment.

Mar

ket Inter

nal readi

ngs shou

ld be read in combina

tion

with

each other. One internal gauge alone may

be misleading.

Market Internals guide our bias –

Bullish

–

Bearish

–

Ne

u

tr

a

l.

This stops us from projecting our own bias

that may be influenced

by our wishes, fear or greed at

the moment.

Why Use Market Internals

(11)

Market Internals

Intra-day Internals

NYSE TICK NYSE TICK NYSE TRIN NYSE TRIN

NYSE Advance-Decline Line

NYSE Advance-Decline NYSE Advance-Decline Volume Volume NYSE VIX NYSE VIX DOW TIKI DOW TIKI

Buy and Sell programs Buy and Sell programs

Total Put/Call Ratio Total Put/Call Ratio

End-of-day Internals

McClellan Oscillator McClellan Oscillator Advancing Stocks Ratio Advancing Stocks Ratio Advancing Volume Ratio Advancing Volume Ratio

VIX and VIX Oscillator VIX and VIX Oscillator 5-MA of the NYSE TRIN 5-MA of the NYSE TRIN

10-MA of the NYSE TRIN 10-MA of the NYSE TRIN Closing NYSE TRIN

Closing NYSE TRIN Closing DOW TICKI Closing DOW TICKI

Equity Put/Call Ratio Equity Put/Call Ratio

Total Put/Call Ratio Total Put/Call Ratio OEX Put/Call Ratio OEX Put/Call Ratio Sentiment Surveys Sentiment Surveys

(12)

The TICK is used to determine very short-term changes in

The TICK is used to determine very short-term changes in market momentum.market momentum. Trading ranges above 0 indicate a Bullish Bias.

Trading ranges above 0 indicate a Bullish Bias. Trading ranges below 0 indicate a Bearish Bias. Trading ranges below 0 indicate a Bearish Bias. Extreme

Extreme TICK TICK readings readings (+ (+ 1000, 1000, -- 1000) 1000) suggest suggest a a short-term short-term turn, turn, butbut consistent readings between + 600 and + 1000 are

consistent readings between + 600 and + 1000 are very bullish, and vice versa.very bullish, and vice versa. Divergences, or a non-conformation of price highs or lows, and TI

Divergences, or a non-conformation of price highs or lows, and TICK highs and CK highs and lows, indicate relative strength or weakness, signaling

lows, indicate relative strength or weakness, signaling a potential trend change.a potential trend change. Confirmation of price highs or lows by TICK highs

Confirmation of price highs or lows by TICK highs or lows suggests continuation.or lows suggests continuation.

THE TICK

TICK Guidelines:

(13)

TICK s

pend

ing tim

e betw

een +, -

600 is n

eutr

al.

This is a scalper’s market!

NYSE TICK

(14)

TICK staying well above zero and TICK staying well above zero and moving to extremes, very bullish. moving to extremes, very bullish.

TICK often stays at a high level when TICK often stays at a high level when prices trend higher.

prices trend higher.

Trend traders should use this as a guide Trend traders should use this as a guide to hold onto longs.

to hold onto longs. New high and extreme!

New high and extreme! Breakouts in YM should go Breakouts in YM should go higher after a pullback! higher after a pullback!

TICK Support TICK Support

NYSE TICK

14 14

(15)

TICK spending most of the time above zero TICK spending most of the time above zero and between + 600 and + 1000, very bullish. and between + 600 and + 1000, very bullish.

When the TICK pulls back, ideally near the When the TICK pulls back, ideally near the zero line, consider longs.

zero line, consider longs. Support

Support

NYSE TICK

Resistance at extremes. Don’t sell or sell short based on this information alone! Resistance at extremes. Don’t sell or sell short based on this information alone!

(16)

NYSE TICK

TICK spends most time below zero, bearish. TICK spends most time below zero, bearish.

Lower Highs Lower Highs

Below -600 to -1000, very bearish. Below -600 to -1000, very bearish.

While bounces do occur from While bounces do occur from

-1000, avoid longs, unless climactic. -1000, avoid longs, unless climactic.

HHs HHs

HLs HLs

HH-HL TICK, environment changing HH-HL TICK, environment changing LLs

LLs

16 16

(17)

TICK extremes can indicate a bottom, as well as TICK extremes can indicate a bottom, as well as confirm an upward move.

confirm an upward move.

While Tick extremes suggest a stall in an

While Tick extremes suggest a stall in an uptrend,uptrend,

trends typically do not end until prices

trends typically do not end until prices reach a pointreach a point

of price resistance. of price resistance.

Stars show bullish price-tick action. Stars show bullish price-tick action.

TICK divergences can lead a turn in TICK divergences can lead a turn in YM, but the most reliable signals will YM, but the most reliable signals will come when prices are also in an

come when prices are also in an areaarea

of

of price price support support or or resistance.resistance.

Bullish Divergence

Bullish Divergence TICK SupportTICK Support

YM & NYSE TICK

(18)

Readings

Readings above 1.00 above 1.00 indicates more volume is associated with declining stocks.indicates more volume is associated with declining stocks. Readings

Readings below 1.00 below 1.00 indicate more volume is associated with advancing stocks.indicate more volume is associated with advancing stocks.

The TRIN

The TRIN’s’s trend is as imptrend is as importanortant as the current as the current valuet value..

A TRIN

A TRIN rising rising from 1.2 towards 2.0 indicates a more bearish market than one from 1.2 towards 2.0 indicates a more bearish market than one rising

rising from .55 to 1.0. from .55 to 1.0. Declining Declining from 1.2 to .50 is a from 1.2 to .50 is a more bullish environment thanmore bullish environment than one

one declining declining from from 2.3 2.3 towards towards 1.5. 1.5. A A sideways sideways TRIN TRIN is associs associated iated with with its its level.level. While a

While a Rising trend is Bearish Rising trend is Bearish and a and a Declining trend is Bullish. Declining trend is Bullish. This guideThis guide

alone can be incomplete; therefore, a deeper understanding of the TRIN is needed. alone can be incomplete; therefore, a deeper understanding of the TRIN is needed. 18 18

TRIN Guidelines

:

THE TRIN

(19)

Sideways,

Sideways, TRIN risingTRIN rising . . Note wide range bars Note wide range bars

Y

M

R

i

s

i

n

g

,

T

R

I

N

f

a

l

i

n

g

YM’

s

ran

ge co

ntr

act

s onc

e

YM and TRIN are in sync.

Range expands after YM Range expands after YM

is rising for two hours! is rising for two hours!

TRIN does not always trend opposite YM

NYSE TRIN

Below 1, Below 1, but rising but rising

(20)

TRIN is below 1, so TRIN is below 1, so bullish, but rising bullish, but rising bearish. Volume is bearish. Volume is increasing into increasing into decliners. decliners.

This chart tells us that the This chart tells us that the market can rise while the market can rise while the

TRIN is rising, so there must TRIN is rising, so there must be more to this indicator. be more to this indicator.

TRIN below 1 and flat to

TRIN below 1 and flat to declining.declining. Bullish, but this does not truly give a Bullish, but this does not truly give a complete picture of the environment. complete picture of the environment.

NYSE TRIN

(21)

TRIN is an excellent market internal indicator,

but can be misleading at times, if you don’t know

how to interpret it.

By

viewi

ng t

he T

RIN’s

compo

nents

, it

provi

des

a deeper understanding of the TRIN and its use.

THE TRIN

(22)

(Advancing Stocks / Declining Stocks) /

(Advancing Stocks / Declining Stocks) / (Advancing Volume / Declining Volume)(Advancing Volume / Declining Volume)

How is it calculated?

Adv

Advancing ancing StocStocks -ks - 1715 1715 / / D

Deecclliinniinng g SSttoocckks s -- 552288

Adva

Advancing ncing VolumVolume -e - 12221222310 / 310 / D

Deecclliinniinng g VVoolluumme e -- 773388889944

3.25

3.25 Divided by

Divided by

1.654

1.654 Equals a

Equals a

1.97

1.97 TRIN

TRIN

Although this TRIN indicates a bearish environment, this TRIN

value alon

e is mislead

ing. The

numbers c

alculated are

not

bearish.

+ 1187

+ 1187 + 48416+ 48416

THE TRIN

(23)

(Advancing Stocks / Declining Stocks) /

(Advancing Stocks / Declining Stocks) / (Advancing Volume / Declining Volume)(Advancing Volume / Declining Volume)

How is it calculated?

A

Advdvanancicing ng StStococks ks -- 57576 6 / / De

Decliclinerners Stocs Stocks -ks - 1651657 7

Adva

Advancing ncing VolumVolume -e - 12221222310 / 310 / D

Dececlilinining Vng Vololumume -e - 18185555121200

.349

Divided by

.659

Equals a

.53

TRIN

Although this TRIN indicates a bullish environment, this TRIN

-1081

-1081 --636328281010

THE TRIN

(24)

24 24

The Adv

The Advance –

ance –

Decl

Decline li

ine line meas

ne meas

ures th

ures the numbe

e number of

r of

stocks

stocks that

that are

are advancing verses

advancing verses declining.

declining.

When

When more

more are

are

advancing, the lines rises; more declining, the line falls.

The A-D line does not consider how much each stock has

moved or how much volume is associated with advancers or

decliners, so its information is not complete.

That sa

That said, the

id, the advance

advance -

-

decline

decline line, when

line, when added

added to othe

to other

r

market internals, does provide a complete picture of what is

occurring in the market.

A

(25)

General A-D Line Guidelines:

A rising A-D line indicates the

A rising A-D line indicates the number stocks advancing vs. declining is number stocks advancing vs. declining is increasingincreasing

A declining A-D line indicates the number stocks declining vs. advancing is increasing A declining A-D line indicates the number stocks declining vs. advancing is increasing

An A-D li

An A-D line betweene between + / -n + / - 500 is neut500 is neutral, but fral, but follow itollow its trend s trend

The higher an A-D line rises, the more bullish. Values above + 500 are decisive The higher an A-D line rises, the more bullish. Values above + 500 are decisive

The lower an A-D

The lower an A-D line falls, the morline falls, the more bearish. Vae bearish. Values below -lues below - 500 are decisive500 are decisive

Readi

Readings of + or -ngs of + or - 1000 and great1000 and greater are ideal foer are ideal for a trend to continur a trend to continuee

A

(26)

26 26

Set horizontal lines at every 500 increments

Flat at neutral level means Flat at neutral level means the market is choppy.

the market is choppy. Good forGood for

scalpers, but not trend traders.

Now the market is getting

ugly. Don’t fight the trend!

A

(27)

Although this was at a very bearish level, Although this was at a very bearish level, the trend turned up. Now look at

the trend turned up. Now look at the TICK the TICK to see if it moved to a more

to see if it moved to a more bullish level.bullish level. Market environments change!

Market environments change!

Although the A-D is still at a Although the A-D is still at a negative level, it is improving. negative level, it is improving.

A

(28)

28 28 The trend is up and

The trend is up and the level isthe level is

bullish, don’t short. Hold those longs. bullish, don’t short. Hold those longs.

It’s very likely that the TICK was It’s very likely that the TICK was hitting high extremes (+1000).

hitting high extremes (+1000).

That’s bullish with this A-D Line, That’s bullish with this A-D Line, and not a reason to exit

and not a reason to exit long positions.long positions.

A

(29)

Advancing volume is the volume in stocks trading above

yesterday’s close. Declining Volume is the volume in stocks

trading below yesterday’s close.

The Adv

The Advance –

ance –

Decl

Decline Vo

ine Volume L

lume Line mea

ine measure

sures the

s the

advancing volume minus declining. When more is

advancing, the lines rises; more declining, the line falls.

When the A-D Volume Line is added to other market

internals, it provides a complete picture of what is occurring

in the market.

AD

(30)

General A-D Volume Guidelines:

A rising A-D Volume line indicates

A rising A-D Volume line indicates advancing vol. vs. declining vol. advancing vol. vs. declining vol. is increasingis increasing

A declining A-D Vol. line indicates advancing vol. vs. declining vol. is decreasing A declining A-D Vol. line indicates advancing vol. vs. declining vol. is decreasing

An A-D Vol

An A-D Vol. line near th. line near the 0 area or + / -e 0 area or + / - 150000k is n150000k is neutral eutral

An A-D vol. value above + 200000k and rising is decisively bullish An A-D vol. value above + 200000k and rising is decisively bullish

An A-D vol. valu

An A-D vol. value below –e below – 20000200000k and declin0k and declining is decising is decisively bearively bearishish

Readi

Readings grengs greater thater than + or –an + or – 200000200000k, and trk, and trendingendingare ideaare ideal for a trl for a trend to coend to continuentinue

30 30

AD

(31)

Sideways at a bullish level.

_R

i

s

i

n

g

r

a

p

i

d

l

y

a

t

v

e

r

y

b

u

l

i

h

s

l

e

v

e

l

s

AD

VAN

CI

NG –

DEC

LI

NI

NG VOL

UM

E

Maintain a bullish bias, but be open to change

if inte

(32)

32 32

A-D Volume is declining and

declining rapidly to lower levels.

Bearish, but at a neutral level. Bearish, but at a neutral level.

Check other internal gauges for guidance. Check other internal gauges for guidance.

AD

(33)

A

-D Volume is rising, but rising slowly at

neutral levels. This indicates a slightly bullish

market, but not a decisive one.

Check other internals for

guidance

AD

(34)

COMBINING MARKET INTERNALS

34 34 Conflict Conflict Agreement Agreement A-D Volume A-D Volume A-D Line A-D Line NYSE TRIN NYSE TRIN NYSE TICK NYSE TICK

(35)

Conflict

Agreement

COMBINING MARKET INTERNALS

A-D Volume A-D Volume A-D Line A-D Line NYSE TRIN NYSE TRIN NYSE TICK NYSE TICK

(36)

36 36

Bullish Market Environment

TICKS 0 to +1000 with many

ticks + 600 to + 1000 are key

TRIN declining, ideally below

1.0, or sideways below .50

A-D line rising, ideally above

+ 500

A-D Volume rising, ideally

above + 200000

Bearish Market Environment

TICKS 0 to -1000 with many

ti

tickcks -s - 60600 to 0 to -- 101000 00 arare kee keyy

TRIN rising, ideally above

1.0, or sideways above 1.2

A-D line falling, ideally below

-- 550000

A-D Volume falling, ideally

be

below low -- 200200000000

Neutral Market Environment

TICKS

TICKS betwbetween een -- 600 600 to to + + 600,600,

or oscillating in that area.

TRIN sideways, ideally

between .90 to 1.05

A-D line sideways, ideally

bet

betweween –en – 500 500 to + 50to + 5000

A-D Volume sideways, ideally

betw

between -een -2000200000 to + 00 to + 200020000000

These are ideal scenarios, and they can and do occur. But

realize

that there are many combinations of levels and trends.

Experience will teach how to

combine and interpret them.

COMBINING MARKET INTERNALS

(37)

DEFINING a TREND and TREND CHANGES

If there i

If there is a “Voids a “Void”” of price rof price refereeference ponce points (suints (support –pport – resistresistance)ance), the odd, the odds ares are high that a trend will develop when market internals are supporting.

high that a trend will develop when market internals are supporting.

To take advantage of this, an objective method of trend analysis is needed. To take advantage of this, an objective method of trend analysis is needed.

Movi

Moving averang average crossge crossoversovers, Trendl, Trendlineine breakbreaks and/or Fis and/or Fibonacbonaccici retraretracemecementsnts are all subjective and potentially misleading as methods of

are all subjective and potentially misleading as methods of trend analysis.trend analysis.

By simp

By simply moly monitoring nitoring pivotal pivotal price price points, points, as the as the market market formsforms them, them, we cwe canan objectively follow the market’s trend.

objectively follow the market’s trend.

This method will also signal trend changes in the time frame being viewed. This method will also signal trend changes in the time frame being viewed.

(38)

Demand has increased

Supply has increased

All price pivot lows begin with All price pivot lows begin with higher low (

higher low ( HL HL ) bars adjacent to ) bars adjacent to both sides of the “pivot bar.” both sides of the “pivot bar.”

All price pivot highs begin with All price pivot highs begin with lower high (

lower high ( LH LH ) bars adjacent to ) bars adjacent to both sides of the “pivot bar.” both sides of the “pivot bar.”

For a change in trend to

For a change in trend to occur, aoccur, a prior price pivot

prior price pivot must must be overcome be overcome on a closing basis.

on a closing basis.

It cannot happen any other way! It cannot happen any other way!

HL HL _HL_HL LH LH LH LH

The next bar will determine if a pivotal

point of significance has formed.

?

DEFINING a TREND and TREND CHANGES

38 38 LH LH HL HL

(39)

While pivot lows formed (support), a down

trend within a void, with supporting internals,

suggests that they can be overcome.

DEFINING a TREND and TREND CHANGES

YM never traded above a prior

pivot high within this trend.

(40)

40 40

Trading is psychological to a great extent.

Let’s use that to our advantage through technical analysis.

Price patterns are pictures of psychology in motion.

Have you ever bought a breakout or shorted a breakdown?

Have any of those breakouts or breakdowns ever failed?

How did it make you feel, think and what did you do?

DEFINE A PRICE PATTERN

(41)

DEFINE A PRICE PATTERN

A breakout failure catches buyers on

the wrong side of the prevailing trend.

This typically results in a continuation

of the trend soon afterward.

Short under the failure bar’s low, stop 2

ticks above its high.

Breakout Failure Breakout Failure

(42)

TREND and all INTERNALS in AGREEMENT

Breakdown Failure Breakdown Failure signals a buy with bullish signals a buy with bullish trend and internals.

trend and internals. Breakout Failures are

Breakout Failures are not taken.

not taken.

The trend and internals The trend and internals are bullish.

are bullish.

A-D Line is bullish

V

Vooll. . LLiinne e iis s bbuulllliisshh TTRRIIN N iis s bbuulllliisshh

TICK is bullish

With all internals in agreement at bullish levels and a

bullish

trend, the odds are high that the breakdown failure pattern will

result in a continuation of the prevailing bullish trend.

(43)

Price patterns are pictures of the thoughts, expectations and emotions of the Price patterns are pictures of the thoughts, expectations and emotions of the traders that formed them.

traders that formed them.

When those pictures tell you that others have been caught on the

When those pictures tell you that others have been caught on the wrong side of wrong side of the trend and market internals, you have an opportunity to take advantage of it. the trend and market internals, you have an opportunity to take advantage of it.

Odds of simil

Odds of similar patterns repeaar patterns repeating an outcomting an outcome in exacte in exactlyly the same way the same way are low.are low.

That

That said, said, pattern pattern recognition recognition does does suggest suggest a a similarsimilar outcome.outcome.

Accept the fact that you do not know what will

Accept the fact that you do not know what will happen next.happen next.

The odds will be on your side, if

The odds will be on your side, if you have a method of trading that you have a method of trading that you haveyou have

FINAL THOUGHTS

(44)

44 44

3 REAL TIME TRADING ROOMS

NEWSLETTERS NEWSLETTERS PERSONAL PERSONAL COACHING COACHING

Online Home Study Course

14-day access, 24 hours a day 14-day access, 24 hours a day * State-of-the-art Technology * State-of-the-art Technology ONLINE ONLINE SEMINARS SEMINARS

MASTER TRADER, BROKER for TRADING

DVD’s

ONSITE SEMINARS

What makes up Pristine Capital Holdings?

(45)

Home Study Courses

are also Available on DVD

For more information about the

complete

Pristine Path.

For more free

For more free workshops, visit: www.pristineworkshops.comworkshops, visit: www.pristineworkshops.com

http://

http:// www.pristine.com/store/PTUHome.aspxwww.pristine.com/store/PTUHome.aspx http://www.pristine.com/seminars/agendas/ http://www.pristine.com/seminars/agendas/

PRISTINE.COM

(46)

Have

Mastertrader.com

Subsidize

Your Pristine Education

MASTER

MASTERTRADER

TRADER

.com

will provide you:

•

• up to $750 worth of Educational Credits towards a

up to $750 worth of Educational Credits towards a

Pristine

Educational Seminar when you open an account

•

• Seminar costs rebated through trading discounts

Seminar costs rebated through trading discounts

•

• Taking even 1 trade gets you 25% off

Taking even 1 trade gets you 25% off

Pristine Analytical

Services

•

• With Each Trade earn 1 MT Reward Point for

With Each Trade earn 1 MT Reward Point for

Other

Discounts and Benefits

•

• THREE DIFFERENT PLATFORMS TO CHOOSE FROM

THREE DIFFERENT PLATFORMS TO CHOOSE FROM

FOR ALL TYPES OF TRADERS & INVESTORS

(47)

Have

Mastertrader.com

Subsidize

Your Pristine Education

MASTER

MASTERTRADER

TRADER

.

com

Contact JOE ELY

1-800-424-3934 OR

[email protected]

The risk of loss in electronic trading can be

substantial. Therefore, you should carefully consider

whether such trading is suitable for you in light of

your circumstances and financial resources. System

access and trade executions may be delayed or fail

due to market volatility, system failure, high volume

or

othe

r fa

ctor

s.

Plea

se

visi

t

www.mastertrader.com

to

read additional risk disclosures.

(48)

TrinTick

How to Increase Your Odds for

How to Increase Your Odds for

How to Increase Your Odds for

How to Increase Your Odds for

A Successful Trend Trade

A Successful Trend Trade

A Successful Trend Trade

A Successful Trend Trade

Greg Capra

Greg Capra

Sponsored by Mastertrader

Sponsored by Mastertrader

Live Presentation Starts at 3:30 PM Chicago Time

Live Presentation Starts at 3:30 PM Chicago Time

Live Presentation Starts at 3:30 PM Chicago Time

Live Presentation Starts at 3:30 PM Chicago Time

An Introduction To Trading the mini

An Introduction To Trading the mini

DOW with the Pristine Method®

DOW with the Pristine Method®

Disclaimer

Disclaimer

Disclaimer

Disclaimer

Combining Support and Resistance,

Combining Support and Resistance,

Market Internals, Trends and Price

Market Internals, Trends and Price

Patterns for high probability trades.

Patterns for high probability trades.

Sponsored by The Chicago Board of Trade and

Sponsored by The Chicago Board of Trade and

MasterTrader.com

The Plan for trading the mini-sized Dow (YM)

The Plan for trading the mini-sized Dow (YM)

Define the

Define the

“reference

“reference

points”

points”

of suppo

of suppo

rt and

rt and

resistance

resistance

or, more

or, more

importantly the lack thereof.

importantly the lack thereof.

Define the market environment each day with

Define the market environment each day with

market internals.

market internals.

Define the current trend or lack thereof.

Define the current trend or lack thereof.

Trade when a predefined price pattern forms in alignment with

Trade when a predefined price pattern forms in alignment with

the above.

the above.

TREND TRADE PLAN

Actual Support and Resistance

Actual Support and Resistance

Subjective Support and Resistance

Subjective Support and Resistance

Fib

Fib

Retracements-Exten

Retracements-Exten

sions

sions

Moving Averages

Moving Averages

An unfilled gap between price bars

An unfilled gap between price bars

Prior price highs and lows, e.g., pivots

Prior price highs and lows, e.g., pivots

A series of price bars, e.g., a base