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    Underlying Trading Principles

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    wiafelawrence03

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    © All Rights Reserved
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    Underlying Trading Principles

    Uploaded by

    wiafelawrence03
    3 views2 pages

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    Underlying Trading Principles

    Uploaded by

    wiafelawrence03

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    © All Rights Reserved
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    Underlying Trading Principles

    In this section, we will focus specifically on the indicators and


    strategies that identify one- to seven-day market highs and lows.
    Special focus will be placed on the VIX, which we believe is the most
    superior indicator available to traders.

    Before we do this, let us share some underlying principles and


    philosophy that guides our methods.

    1. Any indicator, method, and strategy you trade must be


    conceptually correct. What does this mean? That you will
    have far greater long-term success if your strategies take
    advantage of inherent market characteristics.

    For example, going long the market whenever Pedro Martinez


    pitches on a Tuesday does not exploit an inherent market
    characteristic. We don’t care if it has correctly predicted the
    market direction 100% of the time over the past decade, this is
    simply nonsense. The methods we will share with you have an
    edge because they identify and exploit specific market
    conditions that have occurred over and over again for the past
    decades and will likely occur over and over again for years to
    come.

    2. Our methods have a built-in edge, but are correct only


    approximately two-thirds of the time. This means we will be
    wrong at least 33% of the time. How you trade around those
    times that you are wrong will dictate your overall success. We
    will pay special attention to this in weeks to come.

    3. How you protect yourself from losses is the single most


    important factor to your trading success. This is a
    continuation of #2. The gains take care of themselves when you
    correctly identify short- and intermediate-term market turns.
    Sometimes these gains are spectacular. It’s the losses you
    need to focus on.

    Most of our strategies get you into the market in the opposite
    direction of the short-term trend. When the trend continues and
    you are wrong, you must make sure you have the correct
    protective stops in place. As we stated earlier, this will ultimately
    dictate your long-term success as a trader and investor.

    4. Your strategies must be dynamic, not static. Markets


    change. Many of the strategies and indicators we will teach you
    have self-adjusting mechanisms and are the ones that provide
    us with the biggest advantage.
    The goal of our market timing strategies is to give us an edge. It’s to
    get us into the market before prices move higher and to get a short
    before prices move lower. When this can be done 55-65% of the
    time, as these methods do, your chances of success are obviously
    greatly improved.

    Okay, theory and philosophy class is now over--let’s move on to the


    strategies!

    On to the Trading Strategies

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