Search the Community

Good Morning All: If the title sounds a little confusing, it was meant to. The issue to be discussed today is not just 'when' to trade. There are trades that can be done any time the market is trading. That does not mean that you should be trading all day long, it just means that the times you pick to trade can be any time, IF you know what to trade. These next three articles will discuss this issue, and are geared toward the 'intraday trader', not the swing trader. When to Trade What, Part 1 of 3 The comment above said that trades can be done any time of the day, does that mean even lunch? Yes. While it is often much discussed 'not' to trade lunch, part of that statement is left off. Do not trade lunch, unless you know how to trade it. Lunch is the time when many traders get into trouble, because they do not realize that many things will not act the same during lunch as they do during 'non-lunch' times. The first issue to consider is the volatility and target expectations. If you could give a 'volatility rating' to the market, or stocks in general, it would look like this. If things move '1' during lunch, they move '3' between 2:15 and close, and move '5' between open and noon. If you do not realize this, targets will be unrealistic and lead to frustration. Before Open: So how do you focus your time? For many people, the time spent between 8:30 and 9:30 may be the most productive (all times are Eastern, New York, market time). Preparing your watchlist, forming a gap list, and starting a market bias can be key to how your day goes. Get ready for the open by picking the best of your favorite stocks, the best of your daily watchlist, and the best of your gapping stocks and know how you will play them, if at all, before the market opens. The First Five and Thirty Minutes: Very few traders realize the power of reversal times, or the power of having the knowledge of how to trade each part of the day. Most traders, who play trends and breakouts, should not even be playing the first thirty minutes of the day. Look at your records. The chances are that you have a very low batting average for trades taken during the first thirty minutes. The only trades that should be taken during the first thirty minutes are based on gaps or other very special strategies. The 9:35 reversal time is one of the most reliable, yet few traders realize its power. Many get stopped out of plays, rather than profiting from, the 9:35 reversal. The above chart shows an example of a price pattern that gapped bearishly, sold off hard for less than two minutes, and turned around so quickly, most traders who mistakenly tried to short the move down suffered losses. Knowing that this flurry move down offers a buying opportunity on a regular basis when played on the right stock can turn potential losers into big winners. Once the five-minute reversals are over, many stocks have solid moves into the 10:00 reversal time. This reversal time can run anywhere from 9:50 - 10:10, but the power move usually comes closer to 10:10. Trends between 9:35 and 10:00 are usually very reliable, if backed by a strategy. However, 10:00 or 10:30 are the reversal times that often set highs or lows for the day. Stocks that do not reverse at these key times may go on to be 'power trends'. Paul Lange Vice President of Services Pristine Capital Holdings, Inc.

Based on my own experience as well as working with hundreds of traders over the years, I have come to the conclusion that there are three major components to winning in the stock market. An excellent Method, a customized Plan that fits YOU, and the right Mental Approach. While mastery of each of them is paramount, building the right Mental Approach seems to be the most challenging to master for the majority of traders. Without a winning attitude and the proper mindset, even the soundest of all methods will lead to lost money. In fact, a winner is more defined by mental make-up than by method. This is why the trader with a winning attitude and a faulty approach can still produce positive results, while the trader with a loser's mentality will stumble and fall, despite an excellent approach. Don't think so? What do you actually think causes one trader to play six winners in a row, and another to experience six consecutive losses? How is it that one trader can use a daily newsletter and win, while another uses it and loses? What do you think differentiates the person who buys XYZ and wins, from the person who buys the same XYZ and loses? The difference lies in the Mind, plain and simple. One of the most revolutionary axioms I have ever come across is this: "As a man thinks in his heart, so is he," and this universal truth is just as applicable to traders as it is to anyone else. Monitor the attitude of a winner and you will find a level of confidence and certainty that is almost beyond belief. And while most people will make the mistake of assuming that winners are confident and certain because they win; the truth is that winners consistently win because they are confident and certain. No method, however sound, will work for the trader who mentally pictures himself losing before each trade is placed. And no amount of Money, however large, will save the individual who secretly harbors the belief that, "Whatever I touch, turns to mush." As choice-making individuals, we must choose a winner's mindset. You can never fail, or even feel like a failure, if you recognize the simple fact that you are not your results. You create them, which means that you posses the power to alter them if you happen not to care for them. There is room at the top for all dedicated traders, but the first step is to actually believe that. The second is to start acting like it. Think the part, then act the part and the rest mysteriously takes care of itself. But don't take my word for it. Just try it. Jared Wesley

Good Morning All: If the title sounds a little confusing, it was meant to. The issue to be discussed today is not just 'when' to trade. There are trades that can be done any time the market is trading. That does not mean that you should be trading all day long, it just means that the times you pick to trade can be any time, IF you know what to trade. These next three articles will discuss this issue, and are geared toward the 'intraday trader', not the swing trader. When to Trade What, Part 1 of 3 The comment above said that trades can be done any time of the day, does that mean even lunch? Yes. While it is often much discussed 'not' to trade lunch, part of that statement is left off. Do not trade lunch, unless you know how to trade it. Lunch is the time when many traders get into trouble, because they do not realize that many things will not act the same during lunch as they do during 'non-lunch' times. The first issue to consider is the volatility and target expectations. If you could give a 'volatility rating' to the market, or stocks in general, it would look like this. If things move '1' during lunch, they move '3' between 2:15 and close, and move '5' between open and noon. If you do not realize this, targets will be unrealistic and lead to frustration. Before Open: So how do you focus your time? For many people, the time spent between 8:30 and 9:30 may be the most productive (all times are Eastern, New York, market time). Preparing your watchlist, forming a gap list, and starting a market bias can be key to how your day goes. Get ready for the open by picking the best of your favorite stocks, the best of your daily watchlist, and the best of your gapping stocks and know how you will play them, if at all, before the market opens. The First Five and Thirty Minutes: Very few traders realize the power of reversal times, or the power of having the knowledge of how to trade each part of the day. Most traders, who play trends and breakouts, should not even be playing the first thirty minutes of the day. Look at your records. The chances are that you have a very low batting average for trades taken during the first thirty minutes. The only trades that should be taken during the first thirty minutes are based on gaps or other very special strategies. The 9:35 reversal time is one of the most reliable, yet few traders realize its power. Many get stopped out of plays, rather than profiting from, the 9:35 reversal. The above chart shows an example of a price pattern that gapped bearishly, sold off hard for less than two minutes, and turned around so quickly, most traders who mistakenly tried to short the move down suffered losses. Knowing that this flurry move down offers a buying opportunity on a regular basis when played on the right stock can turn potential losers into big winners. Once the five-minute reversals are over, many stocks have solid moves into the 10:00 reversal time. This reversal time can run anywhere from 9:50 - 10:10, but the power move usually comes closer to 10:10. Trends between 9:35 and 10:00 are usually very reliable, if backed by a strategy. However, 10:00 or 10:30 are the reversal times that often set highs or lows for the day. Stocks that do not reverse at these key times may go on to be 'power trends'. Closing Comments: Traders who do not have clearly defined trading plans will not make it in this business; it is that simple. All plans should pay close attention to 'when' trades are being taken and factor in the power of reversal times. Next week, we will look at the power of these two critical morning reversals, and the arrival of lunch. Paul Lange

Do you ever wonder what separates an average trader from a great trader? There are two very important things that differentiate these two types of traders: Discipline and Confidence. Today, I would like to focus on the latter. Being a confident trader is paramount to succeeding. Quite frankly, without it, it will be very difficult to attain a high level of success. There is a fine line between confidence and doubt, especially in trading. After several winning trades, most people typically have a positive approach to their next trade. However, after a few unsuccessful trades, many traders lose that "swagger" and the shrouds of doubt begin to creep into their mind. These demons can appear in several aspects of trading. Sometimes it's as simple as being afraid to pull the trigger on your next trade. Other times it's that strong desire to make your money back at any cost and then taking every trade you see, despite the patterns being of lower quality. Confidence will even affect trade management. For example, selling the winners too soon, and allowing the losers to run right into your stop loss, and on the extremely undisciplined side, letting losers run past your stop loss. These are just a few of the things that can happen when a trader loses confidence and let's doubt cloud their vision. This is why confidence can literally make or break a trader! I'm sure many of us have watched a basketball game in which a great player scores 50 points. After the game the interviewer commonly asks, "You were on fire! So what was it like out there?" The player often responds with something to the effect of, "I hit a few early on, built some confidence and after that I was in the zone! The basket looked twice as big as usual! I was really feeling it tonight." Trading is not much different. After 4 or 5 winning trades in a row, we believe we can do nothing wrong. Why? Confidence. On the flip side, if a basketball player misses 10 shots in a row, they might be more hesitant to take the next shot. However, the best players still want the ball. Despite missing 10 shots in a row, they still want to take the game winning shot. In this situation most average players would shy away from that kind of pressure, especially after such a terrible game. But the best always want the ball, regardless of the situation. It's simply a matter of confidence. Down to their core, they still believe they have what it takes to win the game, regardless of what happened previously. Do you have that level of confidence? How can we keep a confident, consistent approach to trading despite the inevitability of losses? The first thing any good trader will do is OBJECTIVELY evaluate the situation. Take a step back and look at the trades you've taken and ask yourself if they are within your trading plan, and what was the root cause of the problem? Were the patterns lacking in quality? Were you distracted by an outside influence or some other event in your life? Was the market not conducive to trading (i.e. a no-follow-through market)? Or was it just a matter of simple odds? Yes, sometimes it's just a matter of odds. Although it doesn't happen often, on occasion even good trades don't work. Unfortunately, after most traders have lost a few in a row, they get very "gun-shy" and start thinking about all the negative things that could happen if they took another trade. In this way, we start to question whether a certain pattern is "good enough" or whether we ourselves are good enough to make it in this business. By this point, our positive mental approach has been shattered, filled with fear and riddled with doubt. So the next time a great pattern appears; we will often pass on the opportunity, due to our increased sense of loss. One of the huge differences between a novice trader and a successful experienced trader is the ability to recognize what is happening, without letting our emotions make the decisions for us. A professional trader is a disciplined, objective individual who is extremely confident in their approach. Not only does this relate to taking trades, but it also relates to managing trades. Many novice traders will sell too soon in fear that the trade will go against them, yet they are all too happy to let a trade stop them out. The novice will take full advantage of the losers, yet cut the winners short. The root of this problem is confidence, or lack thereof. For a professional trader, his/her hope for gain far exceeds their fear of loss, whereas with a novice trader; their fear of loss far exceeds their hope for gain. The experienced trader knows that in the long run, over the course of a week, a month or a year, the odds will work in their favor. So, maybe they lose 3 in row, or perhaps they have a trade that gets within 3 or 4 cents of their target only to watch it pull back and stop them out. Despite these circumstances, they are not tempted to deviate from their trading plan when the same situation arises again, because they are supremely confident that the odds will work in their favor in the longer term. How many people have "almost" gotten to their target, only to watch the trade pull back and stop them out? What happens the next time this situation occurs? Many novices will take the money and run, in fear that the same situation might happen again. Once bitten twice shy. Yet, to their dismay, this time, the trade continues on and not only hits their 1st target, but eventually goes on to hit their final target. Frustrating isn't it!? This is why it is so important to stay disciplined and confident at all times and to not adjust your plan until you have back tested the results over a period of several weeks or several months. Professional traders come in everyday with the same positive attitude, expecting to make money. Even if, for some reason, they lose money on Monday, this absolutely will not change their approach on Tuesday or Wednesday. They wake up with the same belief every day, and that belief is the product of confidence. They are confident that what they are doing is right, and it will produce results. Even the best traders have losing trades, and on occasion, losing days. Losing is part of this business, it is completely unavoidable. It's just a matter of time before you have a losing trade. This doesn't mean you are a failure, or that you don't know what you're doing, it just means that for 1 trade out of 100's or even 1000's something went wrong. It's our job to figure out what went wrong, and to fix it. Remaining confident and positive allows the astute trader to quickly evaluate the situation and move on with even more confidence than before, because they've now eliminated one more way to lose. Remember, confidence breeds success, and success breeds confidence!! So, the next time you find yourself in a rut, perhaps having lost several trades in a row, do not let fear and doubt creep into your psyche. Just remain focused on the task at hand, which is to find quality patterns that produce results. We've all had losing trades; it's how we handle them that will define our success. Remember, those "few" losing trades will be very insignificant compared to a lifetime of trades. Don't let your fear of loss overpower your hope for gain, because the disciplined, confident trader is a successful trader! Always stay positive and objective! Jared Wesley The Confident Trader Day Trader School

Good Morning All: If the title sounds a little confusing, it was meant to. The issue to be discussed today, is not just 'when' to trade. There are trades that can be done any time the market is trading. That does not mean that you should be trading all day long, it just means that the times you pick to trade can be any time, IF you know what to trade. That is the point of this article. When to Trade What, Part 2 of 3 That was the opening paragraph last week in part one of this three part series. In the last letter we looked at some 'pre market' organization, and we discussed the first reversal time, 9:35 (all times are Eastern, New York, 'market' time). We then mentioned the next two reversal times, 10:00 and 10:30. This week, we will talk about those two key times, as well as the beginning of the 'lunch hour'. Next week we will conclude with part three. There are 9 micro reversal times. 4-5 of them are major and critical. Also, understanding HOW to use them and HOW they interact is imperative. Let's look at the morning reversals, 10:00 and 10:30: There is also a minor reversal time at 11:15. It is simply amazing how many traders do not use the reversal times to their advantage. This probably spawns from the fact that many traders do not even know or understand them. If you are one of those traders, you are going to learn something that will change your trading career in the next couple of paragraphs. A picture says a thousand words, so look at the charts below. These are the three five-minute charts of the QQQ from the LAST THREE TRADING DAYS, period. We generally give the reversal times a window of 5-10 minutes on each side. The key is when the Pristine Buy or Sell setup occurs, at the approximate time. The yellow 'stars' show the two major reversal times we are discussing. They are all happening 'right on the money', though they do not need to in order to be effective. Second, these charts are simply that last three days. They are not the result of a special search. If you continue this exercise on your own, you will be astonished. Most other days are even more amazing. Note, that the 10:00 and 10:30 major reversal times form a reversal, every time, and one of them usually sets the high or low for the day, or at least for the morning. This is typical of what you will find every day. Again, no effort was used to find these charts for this article. The only time this is not 'amazing' is when we have 'power trend' days that do not really reverse at all, and that is because the very definition of a power trend day is that the market carries a trend one way all day. Sometimes these days don not begin until the 10:00 reversal time puts in the first reversal, but these power trend days are rare; usually one every other month. Don't believe it? No problem, go take a look for yourself. Go print out a bunch of five-minute charts. Print them from the market, the futures, or your favorite stocks. Print some from this week, some from a month ago, some from two months ago. It does not matter. Then go through and draw vertical lines at 10:00, and 10:30. You will be shocked and amazed that virtually every day, you have drawn lines though the high and low of the day, or at least the high, until much later in the day. And you thought trading was tough. The next time period to look at is the beginning and ending of lunch. These times can change a little depending on if the market is 'trending' or choppy. Generally, the last true move ends around 12:20. We often count lunch as starting at 12:00, but if there is a strong trend in place, it may follow through until 12:30. On strong trend days, the last reversal around 1:30 often sets the trend back in place. If it is a choppy market (80% of the time), lunch may stay choppy, until the 2:15 reversal time. This one is usually in stone, and the whole lunch concept, as well as the afternoon reversals, will be discussed next week. Closing Comments: Traders who do not have clearly defined trading plans will not make it in this business; it is that simple. All plans should pay close attention to 'when' trades are being taken and factor in the power of reversal times. Next week, we will look at the power the lunch and after noon reversal. Paul Lange Vice President of Services Pristine Capital Holdings, Inc.

Last week the EURUSD broke to the downside completing the formation of a daily breakout failure. There will likely be some follow through to the downside, so look for shorting opportunities. The next daily support levels are in the 1.3700 and 1.3650 areas. Weekly support is in the 1.3500 area. Last week the GBPUSD pound daily broke support and started to get some follow through to the daily double top in the area of weekly and monthly resistance. There is a void down to support in the 1.6250 - 1.6300 area, so look for shorting opportunities until we reach this level. At that level there will likely be a bounce or stall. Last week the AUDUSD daily continued to consolidate bullishly making relatively equal highs and another higher low. The daily and weekly charts still look to be forming a shakeout pattern so focus on long opportunities. It may continue to consolidate some more, so the conservative play is to wait for a break above resistance in the 0.9175 area and then look for a pullback to support to get long. The USDJPY bounced at support last Wednesday on the Fed announcement, and then stalled in the area of a 50% retracement on the daily chart. From here we could go either way. If Friday's bottoming tail holds, we could get follow through to the upside to retest the 103.75 area. If we move down from here and retest last week's low, then it will start looking like a breakout failure/shakeout on the weekly, and a break of the weekly base low could see a move down to the next weekly support around 97.00. Pristine Capital Holdings, Inc.

When I began learning about the trading using technical analysis over 20-years ago I filtered through much of the same information you are. I examined the use of trendlines, moving averages, countless indicators and other types of technical measures. All of which were supposed to define a trend, signal changes of a trend or turning points within those trends. What I found is that nothing worked with any consistently and there were too many variables. Especially flawed are the concepts of overbought and oversold, which I will convince you of. Whether you are a stock, commodity or currency trader, at some point you have been lead to believe that by using price oscillators like Stochastic, RSI, Williams %r or the many others you will be able to determine turning points in those tradable instruments. The idea with these is that they can measure the price action and determine when those prices have become overbought (moved too high) or oversold (moved too low). When a signal is given prices will then reverse. Once you've learned this and their ability to signal turns has been instilled in your beliefs of what is possible, you have been setup to fail. It's not your fault since those that teach the use of these indicators in trading courses will show you how well they worked in the past. Of course, real-time experience will show you how often it doesn't work. Let's look at a couple of examples Before we do that, if you have not read the article I wrote called Bringing Common Sense to Trading. In it you will learn how to trade prices action that has moved too far too fast. In the above chart of Google (GOOG), once prices began their move higher there weren't any pullbacks of significance. While conventional thinking would suggest that prices would or should pullback it didn't happen. You see, overbought is a flawed concept that does work and it will limit what you believe is possible. There is a meaning to the word of course, but it has no real existence in the markets. When buyers are in control and there is little to no price resistance to the left prices can move higher and higher regardless of the overbought belief. It is obvious from the chart above, what is overbought can become more overbought and then move even higher. If you still have any doubt that the idea of overbought or oversold is flawed, this chart should take care of it. As Research in Motion (RIMM) started its decline there was never a point where it was overbought within the decline, which is still intact. I know that we can make some oscillator with some setting show an overbought signal at the Pristine Sell Setup (PSS). However, that would setup another limiting belief that it may work in the future or on another stock or currency. FA Get About It. At this point, RIMM could be oversold at zero, but look at this chart. From the high, it fell 20 points and no bounce and then another 20 and nothing. It fell about 50 points before being able to move up and form that PSS! Is that when some oscillator read oversold? There is no oversold or that it has moved too far lower when big money institutions are overloaded and caught. In addition, when there is no significant price support to the left (a Pristine Price Void), the odds are extremely high that the decline is going to continue until the Void is closed. If you are reading this you are passionate to learn about trading and failure is not an option. You are in search of the truth in technical analysis; same as I was. I found it and it isn't in the accepted, over-taught indicator based methods. The truth is in keeping it simple and understanding the messages within the price action. This is the same for day-trading, swing-trading or long-term investing and the same for FOREX, Stocks or E-minis. If you have a trading screen full of indicators I am sure that you have been affected by the plague that infects everyone wanting to learn trading based on chart reading. Consider what I've shown you and remove them, read my other article Bringing Common Sense to Trading and the light will start to come on. All the best, Greg Capra President & CEO Pristine Capital Holdings, Inc.

Good Morning All: "Amateur traders want to be right; professional traders want to make money." Today's topic reflects off the very true and powerful quote above. Many of these Monday Morning 'Eyes' editions are technical ones with charts and lots of markings on the charts. However, many of the best ones are just words. They are comments on 'soft' topics, such as the topic today. The Need to Be Right If you are in the stages of learning to trade, you will become a compilation of all those from whom you learned. You will become your own unique breed of trader. We all come to the table with certain expectations and beliefs. We all come with some emotional baggage. We all learn from reading, studying websites, and other traders. Some informally, some by paying for education in the form of trading rooms, seminars and mentors. Every time you learn something, it adds to your experience as a trader. Eventually you become the sum of all you have learned. Even if you have a mentor you have tried to emulate, you will never be exactly like your mentor. You will be unique. However, while no two traders are identical, most successful traders do share some common characteristics. Most have learned the value of a trading plan. Most have learned the need for stops. Most have learned many other disciplines that have I have addressed in a previous weeks of "Eyes". It takes many a long time to understand the subject of this article. That subject is, the belief traders have that they need to be "right". The topic is a simple one. Yet it eludes many traders. It seems only obvious that if we want to be successful, we need to be right in our underlying assumptions in our trades. If we want to trade stocks, we should focus on being 'right' about the direction stocks are going. Correct? Well, not really. Most traders focus too much on their need to be right. This can be detrimental and needs to be addressed. The truth of it is, we are dealing in the stock market. There is not a system, method or pattern that can produce accurate results all the time. If there were, it would be known to all. All would be using it. Ironically, if this was the case, when all started using the system, it could no longer work. A 'catch 22' of sorts, but just goes to show that it is obvious that there will never be a perfect system or indicator. The best we can do is to study each situation, collect the evidence, and make a high probability decision at the proper moment. What is of primary importance is how the situation is handled when the trader is right, how the situation is handled when the trader is wrong. What is the most common reason traders fail? The answer is not following stops. What is another top reason traders fail? The answer is not letting winners run. Not following a stop is an example of handling the situation improperly when a trader is wrong about the trade. Not letting a trade hit a target is an example of handling the situation improperly when a trader is right about the trade. What good is being 'right' if you are not paid for it? Good traders assume from the beginning that the trade may go bust. They know how much money they have risked. They know when they will get out, and they will analyze other options, such as profiting from the stock, which is now moving 'against the odds'. Good traders also know how go balance being 'right' and being timely. I know of an advisory service that took credit for predicted the fall of the Dow in 2001. The only problem is that they began that prediction when the Dow hit 6000 a long time before that. Quite a hollow victory. Waiting for too much information may make you 'right' more often, but to what avail? It is like the trader that finally decides the NASDAQ is going higher intra-day, because it broke the high of the day. The only problem is that the NASDAQ rallied 30 points to come back to break the high of the day, it is so extended, there is no room left for profit. The trader may be 'right', but his late decision awards him no money. Closing Comments: Yes, we need to be 'right' a fair amount when we trade. However, if your average winner is three times your average loser, you only need to be right 25% of the time to be breaking even gross. Accept that this is not an exact science, and never will be. We are reading peoples emotions. Accept that you will be wrong a certain amount of the time and accept that graciously. Done properly, this is a very profitable business. Focus on how you handle your winners and losers. Make timely, high probability decisions when you have sufficient evidence, and do so consistently and objectively. Paul Lange Vice President of Services Pristine Capital Holdings, Inc.

f there's one trading dilemma that tends to inspire the most heated discussions among professionals and novices alike, it would have to be the one dealing with the decision to trade "with the trend" or "against the trend". Countless books have been written on the subject, and although there are no definitive answers, I've decided to set the record straight in regards to the realities of these two approaches and the proper way to handle each. First of all, let's define these two approaches for greater clarity. For our purposes, we'll consider "trend following" any strategy looking to take advantage of a directional move in the context of an existing trend within the timeframe in question. This requires that we make sure that there is an existing trend and then looking for tradable patterns to take advantage of a continuation of said trend. Technical traders learn to recognize the parameters that define a trend, and then look to "cherry pick" among the healthiest trends available (Ref. Trading the Pristine Method® (TPM) and Advanced Technical Strategies (ATS) seminars). On the other hand, "counter-trend" strategies revolve around taking advantage of perceived "excesses" in the directional move of a trend, looking to capture the retracements toward some form of "median" or "support/resistance" area. Although I'm obviously biased toward one of these styles (Trend following), allow me to discuss the pros and cons of each and the way to use each style to obtain the best results within a given trading environment. Trend-following styles base their approach on a simple principle: The trend displays the direction of the group in control (Buyers or sellers) and thus, trend-following traders will want to take positions using reliable patterns to try and take advantage of this potential continuation of the current direction, at least until the trend changes. These traders have developed "objective" ways to define a trend, its quality and odds of continuation. The idea is a rather simple one...trend-followers want to swim with the current. Whenever there's an established trend, the group in control (buyers for uptrends and sellers for downtrends) tends to push prices in the direction of the trend, at least until the imbalance of supply/demand created ceases to exist. Such imbalances create "momentum" that helps them achieve larger moves when they're right. How long can any given trend last? That's anyone's guess, although the analysis of supply/demand levels (Ref. title="technical trading"Pristine's ATS seminar) can sometimes help determine that with great precision. There will be a time when trading in the direction of a given trend becomes higher risk, because the trend could be "extended" or nearing support/resistance areas. In the end, these traders will have confidence in the trend at hand as long as the objective conditions that created and fuel the trend remain in place, looking to trade the patterns included in their respective Trading Plans within the trend. When said trend changes, they'll reevaluate the trading direction and use a new set of tactics better suited to the new trend. Counter-trend traders try to capitalize from those "retracements" toward the median price that typically take place within a trend. If you take any given chart displaying a decent trend, you'll notice that these "retracement" moves do happen, but when compared with the usual moves in the direction of a trend, they tend to be smaller in size and shorter in time. Execution also tends to be an issue when dealing with "counter-trend" trades, as the act of swimming "against the current" makes for greater levels of "slippage" when stops are hit (In many cases the "stop" of a counter-trend trader will be the entry signal of a trend-follower" and since the trend is in the opposite direction...). That's not to say they're not tradable, but the clues mentioned above should set the stage for the way in which a Pristine Trained Trader should normally handle these (Usually as short-term "scalp" trades instead of looking for holding periods similar to those that usually are expected when taking a "trend-following" position). The Pristine Method® seminar series teaches traders very specific parameters to trade some of these "counter-trend" events, looking for just those with the greater odds of producing a decent move. In the end, I'm a trend-following trader for most of my trades, looking to focus on the direction created by the stronger group of traders. Then I'll apply the strategies I learned in my Pristine education to profit from these trends, and when the trend changes I'll have the necessary objectivity to change with it. That's the professional way. Also, Pristine has been nominated for the Trader Planet STAR Award in the categories of Best Trading Course and Best Live Trading Room. We need your vote. Please go to http://www.traderplanet.com/l/9Kc and vote. You can vote everyday! Trade Well! Jeff Yates Contributing Editor Interactive Trading Room Moderator Gap and Intra-Day Trading Specialist Instructor and Traders Coach

Good Morning All; Of all the articles I have written, my favorite articles are ones that bring out some of the subtleties of chart patterns that many new traders may miss. But the purpose of this letter, "Eyes", is not to 'teach' technical analysis; that is what our seminars are for. That is why perhaps the most helpful articles, for those that listen, are the ones that talk about how to go about learning the business of trading. Through the Cracks That is correct, the business of trading. It is a business like any other. True, it does not generally involve employees or large facilities for most traders. But it does involve education, planning and preparation. Traders need to be educated in the method of making money in the markets, as well as all of the surrounding concepts that are needed. They need to plan the business in the big picture by opening accounts, allocating money, figuring out living expenses for a period of time, allocating the proper time and money to the new venture, allocating money to initial and ongoing education, as well as many other important issues. Traders also need to prepare for each and every trade by forming trading plans and proper follow up procedures, and the proper research for their trade. Let's take a harder look at the first concept; getting an education in the markets, as well as all of the surrounding concepts that are needed. Deciding what approach is right for you; fundamental or technical, long term or short term or both, using news or not, understanding how to use platforms, how to enter orders, what types of orders should be used, understanding what actually moves prices, and the 'math' of making money. It should seem obvious that everyone would have a handle on all these topics before risking capital in their new business. But experience tells me nothing could be further from the truth. Learning the actual concepts of technical trading is what our Trading the Pristine Method seminar is all about. But that course is about understanding price movement; how prices go through stages, transitions, and how to play those movements to make money. Plus a whole lot more. But many of the other concepts are things traders need to understand but often don't. Many are touched on in seminars, but some are not. It is expected that traders will learn from our free webinars, or from their broker, and maybe some are even in the 'common sense' category. Many important items seem to 'fall through the cracks'. Sitting in the Pristine Method Trading Room, I am often mildly shocked at some of the things that 'experienced' traders ask. To that end, we have created a new course, "Online Trading Essentials". It covers many important topics. If you are looking at a career in the markets, or if you have recently begun pursuing that opportunity, this class is a must. I also feel 'anyone' would enjoy the class. It is free to current clients who have attended a seminar. If you are currently talking to your counselor about becoming a client, see if you can get into the class for free. Closing Comments Paul Lange Vice President of Services Pristine Capital Holdings, Inc. Day Trader School

It was almost twenty-five years ago that I began my education on the markets and technical based trading. After a period of time using the indicator based method still used today, I came to the realization that method was too subjective. I also saw times (too many) that price could move in the opposite direction signaled by an indicator or a group of them. Pattern recognition was the only concept that made sense; however, the most powerful price concept I discovered was NFT. Before I get to the concept of NFT, I first have to touch on some basics of Candlesticks. Candlestick analysis essentially is the recognition of reversal patterns. There are one, two or three bar candlestick reversals have different names like Dark-Cloud Cover, Morning Star, Evening Star, Shooting Star, Star, Hammer, Inverted Hammer, Doji and there are many more. All indicate a turn and the probability of a price movement in the direction of the reversal. Some with a stall in momentum first or at the same time of the reversal pattern. It all depends on the time frame being viewed, so candle patterns change or can even conflict. The explanation of these candle reversals related to multiple time frames (MTF) analysis is virtually non-existent in the education industry. Why? Because an understanding of MTF makes all of these names unnecessary. If you understand that if prices move in one direction and suddenly turned in the other, it's a reversal. What difference does it make if it happened in one, two or three candles? A two or three candle reversal is a one candle reversal in a higher time frame and vice versa. It comes down to understanding MFT and retracements between reference points. You're getting an insight into Pristine education. As I studied and traded these individual candle or multiple candle reversals that had No follow Through (NFT), it became clear that NFT was a very powerful message. Price patterns are a reflection of what traders and investors believe and have acted on with real money. Money, put into action has emotion connected to it, and when beliefs and emotions in the moment change abruptly - it's a message to pay close attention to. Let's look at a normal or typical type of a reversal and an NTF. Both are tradable when combined with other supporting technicals; however, the NFT concept expands your opportunities and increases your odds of profitable trading setups. The above chart of Citibank © shows typical reversal signals within an uptrend. It doesn't matter what the name of the signal is according to the candlestick textbook. Even the novice to candle technical analysis can see the turn. Can you begin to see how the names are irrelevant now? If there was a Doji candle between those reversal candles, would it change your opinion of the turn? In the above chart of QCOM, there's a big bearish candle (doesn't matter what its name is, it's big) signaling lower prices. Rather than following through lower, QCOM had NFT and negated the bearish signal. Clearly, buyers were in control and were going to continue running over sellers. Can you imagine being a seller inside that big bearish candle? How are feeling the next day? What are going to do? As a trader or investors recognizing the NFT, can you take advantage of this? he concept of NFT is universal to all tradable instruments, since anything traded is affected by human beliefs and emotions. In the above chart of the Aussie dollar versus the U.S. dollar is another big bearish candle that had NFT. The move above that bearish candle hasn't happened to confirm the signal yet, but the NFT to it suggests that short-sellers are caught and a counter-trend move that will likely test price resistance and the declining 20-MA is coming once prices move above that bearish red candle. No Follow Through is a concept that I developed years ago after getting caught in trades based on candles that were negated. The NFT concept along with my Bar-by-Bar concept will put you the right side of most trades. While there is no guarantee of a sure thing in the markets, NFT when combined with other Pristine concepts is the closest thing to it you're going find to it. Greg Capra President & CEO Pristine Capital Holdings, Inc

Good Morning All; Sometimes identifying the process we go through in learning can help the learning process itself. For example, any difficult task, such as trading, is generally learned in four phases. This assumes of course that one even gets to the later phases. When students read the following, it often helps them understand they may be making great progress, even if it does not appear that way. The Learning Process The first phase is what we call the "unconsciously incompetent" level. This means that we do not know the material, and worse than that, we are unaware of the vast amount of material we need to know. Most traders are in this phase when they begin trading. Perhaps you know someone like this. They feel they have all the tools they need to make proper decisions and are completely oblivious to what the market has in store for them. The next learning level is a vast improvement as it is what we call the "consciously incompetent" level. At this level, the trader still does not know material, but at least they are now aware that there is a vast amount of information they need to learn and they need to begin that process. In other words, at least at this level, they are aware of their ignorance, and that is a big step forward. Many traders who seek out seminars or who begin to look for training are at this level because they have tried on their own, and not succeeded. The next level of learning is the one that takes longest time. It is to get to the point of being "consciously competent". This is all that traders should be striving for, realistically. This is the ability to be able to know and memorize all the techniques that have been studied, and to be able to reproduce them, with the trader consciously making an effort to follow the same plan every day. The next level would be the final level and considered one of mastery. It is rarely found in trading. It is the level of "unconscious competence", where all the rules and strategies fall into place without effort by the student to enforce them day after day. Closing Comments If you are learning to trade, you will pay your tuition one way or another. You can pay a fair amount toward education, or you can pay a lot more to the market. Often when you pay it directly to the market, it is more of a 'fee' because you do not get an education in return. People often put off an education thinking they will try it on their own, or they should wait for a better market. Unfortunately new traders often get the attitude of waiting to pay for an education with the profits they get from the market without an education; so it never happens. The market is ALWAYS good. There has never been a better time to get involved in the market. Paul Lange Vice President of Services Pristine Capital Holdings, Inc

Gaps occur every day to varying degrees on stocks and indices. To the stock trader, these gaps can offer enough trading opportunities to be done trading by mid-morning and many are. That being said, these gapers, depending how they have gapped, can provide additional trade setups later in the day as well as in the coming days. In this Chart of the Week, we'll review two gaps and a strategy how to have played them, use in the future and why they should continue the move. As I mentioned, gaps occur in varying degrees. Those gaps also can be in the direction of the prior day's movement or against them. With the prior days of movement the gap can be a continuation (pro) type of gap or it can be an exhaustion (novice) type of gap. The difference is based on whether the gap occurred after some type of correction within a trend, e.g., a gap up after a pullback or a consolidation base within an uptrend. The exhaustion gap occurs after prices have been trending in one direction for a period of time and then prices gap in that direction. All price movement reflects traders' and investors' beliefs and emotions; however, gaps can provide a shock element to price movement when the gap is against the recent price direction. Those educated and experienced trading gaps aren't shocked by continuation and exhaustion gaps, since they are expected based on the existing trend, location of support, resistance and pattern of candles. When prices gap in the opposite direction of the current pattern that partially or completely reverse the direction of the prior bar or two, it's a shock. The larger the immediate candle before the gap and the size of gap against it, the greater the shock and potential opportunity to profit. Let's look at two. American Express (AXP) had started to move lower with a large gap down, slightly recovered, stalled and then broke lower and closed with a huge red candle that closed near the low of the day. That day also occurred with an increase in volume. The pattern was pointing toward AXP moving lower, but that didn't happen. Rather, AXP gapped up the next day more than 50% into the prior red candle's range! Gaps like this shock traders since the prior pattern did not suggest such a large move in the opposite direct. We can correctly assume that traders are short were expecting AXP to move lower based on the pattern. What do you think they are going to do if AXP doesn't immediately collapse lower? This is what sets up a "Gap and Go" type of morning for stock traders to take advantage of. If AXP can move higher above the high (red line), it should continue moving up. But let's look at the intra-day chart that day and how it setup. On the gap up AXP cleared its resistance area, but the gap higher also leaves a partial void of support that has the potential to be filled. For that reason, entering long immediately could result in a move lower and without a clear area to place a stop-loss. What to do? Let AXP form a price pattern signaling that buyers are stepping up and taking control again in the form a reversal pattern. These patterns can happen in many ways, but the trained trader will follow Bar by Bar and see whatever the pattern is as it unfolds. The odds are AXP will move up based on the daily shock setup. AOL Inc. (AOL) is another example of a gap and shock. AOL was moving up toward resistance, but had closed strong the near the day's high and with an expanding range. The next day AOL gapped under that large green daily bar. What are all the traders that bought AOL that day now holding or anyone that bought in the prior two weeks? Right, losses! What would you do if you were long? Cut and run? Hope it comes back to get even? Buy more? The last two choices typically don't work out very well. No one likes losing, but it happens. Professional traders and investors have a plan that includes a stop-loss and stick to it. A gap lower under a large daily green candle strongly signals that prices will go lower, but gaps create voids and the intra-day entry must be formed. Here I have included the15-minute chart to see why prices stalled moving higher; the resistance (supply) to the left. The 2-minute detail provides the pattern signaling the setup on the current day in alignment with the big picture. These are some of the basics of what to look for when trading a gap. Look for daily shocks, prior areas of support or resistance where traders will take positions and a current pattern that forms in alignment with the big picture analysis. The odds will be in your side. All the best, Greg Capra President & CEO Pristine Trading

Your level of confidence (not arrogance) as a trader will have a huge positive impact on your success. The more confident you are the less time you will spend on second guessing your decisions. The more confident you are the more positive energy you will focus toward your desired outcome. Confidence is based on two things; what you do and who you are. When a trade stops for a loss your confidence becomes rattled. This is because confidence is based on what you do. When confidence is based on who you are and your ability as a trader, one who is prepared for all outcomes whether a loss or a profit, then you are consistent with yourself no matter what the result. You will feel confident because you took the loss as intended or because you closed with a profit. You will choose correctly in either scenario! This is because confidence is based on you. Each time you correctly make a decision in trading whether it is for a loss or gain, the more confident you will become with your ability to act accordingly to the current market situation in a manner that is appropriate. Your confidence is now based on your awareness as a trader (you) not on failures, mistakes or missed opportunities. Let me say that again . . . Your confidence is now based on your awareness as a trader, one who will make the correct decisions. Help build confidence by reviewing your trades diligently to discover when, why and how you chose to act during the time of the trade. It will help your understanding of the markets and yourself. The more you choose to learn from each trade failure and success the stronger and more confident you will become. This confidence will increase your flexibility in your decisions and your behavior. This flexibility will help create comfort in your trading. This comfort will feed your confidence and the cycle continues. Begin working on your confidence today. Believe in yourself and have faith in your abilities. KURT CAPRA Contributing Editor Instructor and Traders Coach www.pristine.com

Good Morning All; Have you ever felt the inability to pull the trigger to get in a trade at the right moment, and then chased the stock only to your detriment? Have you ever taken profits way before your target the first time a stock 'jiggled', only to sit on the sidelines as your stock ran to its original target? If so, you are experiencing the effects of fear. You are not alone. Psychological aspects make up 85% of the trading equation. Fear is one of the aspects. Ideally, we would all be "emotionless" traders. No fear, no greed, just pure discipline. While this may be a worthy goal, not many can take the leap to this level just because I say you need to. While most people cannot eliminate fear, there are some things you can do to keep it in check. Here are some suggestions. First, the greatest enemy of fear is a well-laid plan. Have a trading plan that you use that clearly spells out what strategies you will play, when, you can trade, when you cannot trade, how many shares you will play, how much money you are willing to lose on a single trade. There are many aspects to a trading plan, these are some of the basics. Next, plan the individual trade. When you see a trade come up that fits into your plan, study the play to find the proper stop loss and target. Play the proper share size so a stop out does not violate your maximum loss per trade. Make your decisions before the trades hit, while you have a clear level head, then follow the plan without question. You must "execute" the trades you have "planned". The next step may be the most important. Let your plan go to work. Let the play finish. Unless something changes about the trade, let it come to its natural conclusion, either the target or the stop, or perhaps management based on your plan; not an overreaction to what you see. Think about it. You have planned a trade while you had a clear head. You believe the trade is worth your hard earned money. Give it a chance to finish. There are sometimes reasons to end the trade early. Perhaps there has been a change in market environment. For example, you might be long in your play and the futures just took out key support. Alternatively, maybe you planned on reaching the target by reversal time and it is almost at the target with reversal time now here. However, this happens the minority of times; the majority of times you should leave the play alone. Do not be jiggled out by your Level 2 screen. The chart pattern is all that matters. If you are still so nervous that you can't handle it, try this next. Sell half the position at the reduced target. Get used to taking partial profits and this will let you have confidence letting the back half hit the target. This will also be likely to put you in a 'no lose' situation with the trade, giving you some patience. Good traders sell incrementally, on the way up all of the time. If that does not help, then you need to cut back on your share size so the size of the potential loss does not trigger your "pain factor". Closing Comments The real answer to this question is 'just do it', but few are able to. Playing with a share size that doesn't trigger your 'fear button' is critical until you develop a winning record. Try these ideas if you are having a problem with 'fear'. Paul Lange Vice President of Services Pristine Capital Holdings, Inc. www.pristine.com

Every trader at some point in his career will face one or several "losing streaks". This is a fact of this business, and whoever tells you this isn't so has not traded very long or at all. Losing streaks can be produced by the faulty use of a tactic, inefficient analysis of market direction and internals, or other situations. These consecutive losing events can not only produce a drastic drawdown in your account, but even worse, can cause considerable psychological damage that might take a long time to correct. Let's talk about some of these issues and some ways to correct them. The first problem with a losing streak is the fact that it "tends to produce mounting losses". After the trader has finished his paper trading period (Interestingly, losing streaks rarely happen at this stage), the trader will have to deal at some point in his development with the diminishing capital caused by a streak of losses. Depending on whether the trader has established a proper trading plan to deal with his development, this streak will be more or less bearable. Consistency in the application of a plan and a set of tactics takes time, so it's more likely that a trader will have to contend with losing streaks during his development when he is trying to grasp and refine his approach. Thus, a proper money management scheme that looks to protect capital during the developmental stages is paramount. As the trader gains consistency, his plan will protect him from extremely bruising losing streaks, by establishing maximum losses per day or month, and by regulating the steps a trader should take in case he is facing one of these streaks. Even more troublesome to the trader might be the psychological consequences of a bad losing streak. When you face a losing streak, and you lack a proper plan, you might have to deal with 'trader's paralysis". This occurs when you had a severe loss, which produces such a fearful state that makes it impossible in your mind to take a new position. Confidence is lost. To climb back in the saddle, the trader has to create a process to recuperate such confidence step by step. It should begin with a brief paper trading period. Then, when the trader begins to trade real money, it's a very common mistake to try to enter into positions with very small stops. This might be a huge mistake. I believe that in order to regain confidence, the trader should enter into positions with wide enough stops so that the probability of it getting hit short term is very small. He might even consider entering into positions with not so great risk/rewards, just so he'll be able to remain in the position for as long as it takes until it hits the target or stop. This might allow him to regain his confidence that he can hold a position. Small shares during this process is suggested until a regained good win to loss ratio is achieved. Of course, this is only to regain confidence, and afterwards the proper selection of risk-reward plays is still paramount to a trader's success. If you have not taken a trial to our Interactive Live Trading rooms in a while, drop on by to see how you can gain more experience in how you trade and learn from some of the profitable trading idea's we generate daily. Take a free trial or call your Counselor at 1-800-340-6477. Would love to see you drop by with any questions you might have or to just gain some great insights into trading the current market. Jeff Yates Contributing Editor Interactive Trading Room Moderator Gap, Intra-Day and Swing Trading Specialist Instructor and Traders Coach pristine.com

Good Morning All; "Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan 'press on' has solved and always will solve the problems of the human race." Calvin Coolidge. Perseverance There is a famous story that is told about a prospector that set out to find fortune in the famous gold rush days. He took his life savings and bought the necessary mining equipment, and set out for the 'hot' mining spot. After months of drilling, he was on the last hole that his finances would allow him to dig. He was running out of money, and would not be able to set up in a new area. Another man came by and observed this prospector's operation. This man had seasoning and experience and made his living picking up the deserted mines of others. He had come to recognize when the rock formations in a mine were such that a gold vein was more likely to be close. He also knew that it was not hard to pick up old mines from miners who were broke and tired and had not found their fortunes. So it came to be that this man struck a deal to buy the prospectors equipment and rights to his mine that had not yet produced one cent of gold. The prospector had been mining for months, was tired and discouraged, and happy to get a little money for his worthless mine and equipment. He quit digging and sold all to the man. The man who took over only had to dig six more feet before running into what proved to be one of the biggest gold veins of that time. Had the prospector held out one more day, skipped one lunch, taken one less break, or done anything to delve six more feet, he would have had his fortune. Read today's quote at the top of the page. It is more than just a quote to fill in space. Today, it is the theme of the story and one of the best quotes of all time, and applies nicely to trading. Most traders who come to the market are talented, smart, and well educated. Most traders who come to the market fail at trading. You must resolve to do more than rely on your past successes. Read this quote and article again. It may prove to be one of the most important paragraphs you ever read. Closing Comments The process of learning to trade is unique because in addition to learning the technical skills, you are battling your emotions all the way. You will find that you will accumulate lots of knowledge, without seeing a marked improvement in your trading results. Then, all of a sudden, you will have what seems to be an epiphany, and soar ahead, and wonder how you could have even struggled at something so easy. Then you will stumble, and doubt if you are really making progress. If you are going to be successful, you will find your stumbles are less severe, last shorter each time, and your surges ahead are stronger. Paul Lange Vice President of Services Pristine Capital Holdings, Inc.

Good Morning All; One of my favorite trading quotes; "You must be rigid in your rules and flexible in your expectations. Most traders are flexible in their rules and rigid in their expectations." Mark Douglas, Trading in the Zone. Rules and Expectations Read today's quote again. "You must be rigid in your rules and flexible in your expectations. Most traders are flexible in their rules and rigid in their expectations". This is from Mark Douglas in his book, Trading in the Zone. This should be one of the top quotes you keep near your monitor at all times. You may have read this quote prior to this, but perhaps many of you have now gained the experience to recognize the pure wisdom in the words. That is the reason an entire "Eyes" is being devoted to this quote, so everyone reading can recognize its importance. The reason that this advice is so important is because two of the most common problems among new or struggling traders are addressed here. The first problem raised is that most traders are flexible in their rules. Actually, the truth is most traders do not even have a firm set of rules they trade by. Sure, if you ask most traders they will say that they follow stops, and set targets. However, very few have the rules that are generated by a quality trading plan. Those that do, usually view them as optional, which really defeats the purpose of having rules. The second problem is that traders are rigid in their expectations. They form or acquire a market bias, or a 'feeling' about a particular stock, and hold to that expectation regardless of what the chart (reality) is telling them. When good news is released, they go long the stock and stay steadfast in their bullish view; even though the chart (reality) is telling them that the stock is falling. Some say that you cannot follow rigid rules, because trading requires your expectations to be flexible and change as needed, as the second part of the quote implies. Obviously, it is true that trading requires you to be flexible. However, all of the contemplated flexibility can be part of your plan and your rules. For example, you can decide ahead of time and define what a 'change in market direction' is and then define how you react to that new information. You could react by selling all of your position, selling half, raising the stop, etc. Closing Comments Those of you that have not embraced these concepts will hopefully take a new look at the quote above and use it to help improve your trading. Paul Lange Vice President of Services Pristine Capital Holdings, Inc.

You're scanning your interest list of charts and making a list of symbols separated into minders of uptrends, down trends, pullbacks, retests, etc. From those lists, you look for the various setups within your trading plan and you come up on one that you've seen countless times, and it's as close to a sure thing as it comes. Well, I came across one of those about a week and a half ago. What happened is... Trading with the trend is always the highest odds play, however; counter-trend setups have their place at the right time. One of those "right times" setup in the Dow Jones Utilities Average ($DJU), many stocks within that average and/or stocks and ETFs related to the sector. You may have spotted them. For a counter-trend play, it had multiple technical concepts coming together that suggested the setup had to work out and it started to, but you just never know. Let's review it. The break below Major Support (MS) in May signaled a change in trend and that the odds of lower prices were high. However, shorting after a sharp drop like the one seen requires a setup that provides an entry point and reasonable reward-to-risk. Retest patterns are a favorite since sellers have "created a new area of resistance" that should not be overcome if the trade is working, of course. From the retest, prices fell hard and fast. It was what we refer to as a "fluid move" that creates a "Price Void." These types of moves leave little to no overhead resistance, so prices tend to retrace back up to price resistance with relative ease. Typically, prices will not retrace the whole drop that occurred, but enough of it to make for an attractive trading opportunity. This fluid move lower stopped right where it should have. It was text book. Price support was to the left and the 200-day moving average was in the same area. Pristine students learn that moving averages are subjective reference points of support and resistance. However, widely followed moving averages like the 200-MA on the daily time frame often become a self-fulfilling prophecy. The initial reversal was retested and the reversal that formed on the retest was a larger green candle that even occurred with an increase of volume. It doesn't get much better for a counter-trend play. The combination of concepts coming together should have/could have moved prices to the red area on the chart where those candles were overlapping. It didn't happen. Prices stopped at the Topping Tails (TT) just to the left and then setup failed completely. I could have shown you many setups virtually the same as this one and how they moved higher for large profits. Technical analysis done properly can put the odds overwhelmingly in your favor, but it cannot guarantee a winning result. Educated investors and traders know that it's an odds game, and even with the odds in your favor, you just never know. So have that stop-loss in! All the best, Greg Capra President & CEO Pristine Capital Holdings, Inc. pristine.com

Good Morning All; You buy a stock and watch it climb to its target. You see it becoming extended, and into resistance at a key reversal time, and you sell it just as it rolls over. It was a perfect trade. If you sold it, it means someone bought it from you. Did you ever wonder who just bought your stock? Who Just Bought That Stock - In case you were not aware, for every buyer there is a seller. There is no magic "stock warehouse", where you load up on stock, and dispose of it when you are finished. In addition, you are not dealing with the company who issued the stock. You are buying and selling from other people. Traders, investors, fund managers, market makers, etc. The only exception is when stock is first offered to the public, or when additional shares are made available from the company, but these are rare instances. So if you sold your stock at the 'perfect' spot, the question remains, who bought it? Well, there are two answers. The first one you may be thinking but are afraid to say. Yes, a 'fool' may have purchased your stock from you. On any day when the market stays flat, the market is a zero sum game (negative after commissions) and for every winner there is a loser. It is possible that someone made a very untimely purchase of your stock and took a loss on it. Do not feel bad, the market place thrives on novices who feel it is "easy" to take money from the market. They are needed to support the market. Just make sure you are not on the losing end of too many of these trades. The second answer is a bit more complicated. It is possible that you sold your 'scalp' for a nice profit, but the area you sold possibly took out resistance on the 15 minute or hourly chart and got the interest of a day trader who is willing to hold for a bigger target with a wider stop. Then the day trader who buys if from you may hold it for several hours, and sell into the prior day's high, and wonders, "Who bought this stock at this extended price?" The answer to that question may be the 'swing' trader. While it may be extended on an intraday basis, the fact that it traded over the prior day's high may be the trigger needed to entice a swing trader. Again, with a wider stop and target expectation. In addition, at any 'buy point' in any timeframe, there may be a host of other players jumping in based on sound, or not so sound, reasons. There may be real price support. There may be a nice trend holding. There may also be things like moving average crossovers, Gann Lines, Fibonacci levels, uptrend lines, stochastic triggers, MACD crossovers, etc, etc, etc. While any one of these may not be terribly relevant, a certain price area may trigger several of these and begin a rally. The bottom line is simple. Having as many time frames pointing in the same direction as possible, combined with as many 'triggers' hitting in the same area, will be the best chance of getting a stock moving in the right direction. Then your job is to beat the crowd getting in. Paul Lange Vice President of Services Pristine Capital Holdings, Inc.

When scanning for stocks that are likely to continue to move in one direction overall, I want those stocks to have a few criteria in alignment. I want the move up to have already started, but not that long ago. I want multiple time frames in alignment. I want the sector that the stocks are in to be in favor by institutions. I also want - and this is important - there to be a VOID of overhead resistance. Here are two stocks that meet all those criteria and are going higher. he above stocks, Prudential Finl. (PRU) and CME Group (CME) meet all of my criteria to move higher. The daily time frames have clearly established their uptrends and are well on their way. The monthly time frames have just move above long-term resistance. The Financial sector is a favorite of many analysts featured in the media. Lastly, there is a clear "tradable void" above for prices to continue the move higher that has just started. These two stocks are going higher based on the criteria I've defined. Greg Capra President & CEO Pristine Capital Holdings, In

The prior Chart of the Week (COTW) dated May 20th was titled "Ripe for Breakout Failures." In it, I showed you a couple of breakout failures and I gave you a few stocks to watch including the S&P 500 ETF symbol SPY. Break-out failures (BOF) are all over the place now and are obvious to even the most novice chart reader. Pristine students, and hopefully you as a reader of these COTW lessons were prepared for the moves lower that have occurred since that time. Many of the daily Break-Out Failures (BOF) have now formed monthly Topping Tails (TT) in May, so let's look at a few and the differences in how they have formed. A Topping Tail (TT) is a signal that buying (demand) was not strong enough to overcome selling (supply) at the high of the range, so prices fell. This can often signal that the end of a long-term uptrend is at hand when the TT forms on the monthly time frame. However, the truth is that we really never know when an uptrend is no longer an uptrend until it doesn't meet the definition of one; higher highs (HH) and higher lows (HL). That being said, with the signal of a monthly TT, those educated in the proper use of multiple time frames analysis can find excellent "swing-trading" and "day-trading" opportunities. Let's look at some different chart patterns with monthly TTs. Before we review the charts, here is some food for thought for those of you are not Pristine Students, yet and are in search for the truth when it comes to understanding technical analysis. I said above that the definition of an uptrend no longer being in effect is a simple way of knowing that an uptrend no longer exists. It's that simple, but virtually every commercial we see to open an "online trading" account (they seem to be endless) and from those that tell you they can teach you how to use technical analysis will show you a break of an uptrend trend line, a moving average, a retracement level or any of the other technical trend tools used to do it. Also added are some of the hundreds indicators that come with an endless combination of settings. All of these are often meaningless as a guide to a trend break and are outright misleading. Sometimes, it may even look like they got it right because the definition was violated at the time (e.g. the break below a prior low) Why do so many use these indicators? I assume it's because that is what they were taught and they never seriously questioned why those indicators fail as a guide so often. Why do the brokers wanting you to open an account with them show these? First, most actually know nothing about the technical analysis tools in the platforms they offer. To them more is better compared to than what the competition may have. They also want you to believe software can make you money. An educated, disciplined investor or trader - with a plan - can make money with any charting software. Let's continue. The TTs in the above charts all formed after what we refer to as a "fluid move" higher. Fluid moves have continuous higher high (HH) and higher low (HL) candles and these preceded the TT. This type of price move is the strongest possible and displays the most certainty about the buyers' view on the stock. This is the type of trend you want to buy on the pullback in anticipation of a higher swing low to be followed by a higher high in the trend. Realize that the lower time frames will not look good to the untrained eye at the time the monthly swing low is forming. That is when the knowledge of how to use multiple time frames will benefit you most. Without it, you'll miss a big part of the move. Here price have spent time moving sideways before the TT formed, so there is a larger area of supply (caught buyers) above. These can also form a higher swing low on a pullback, but these highs tend to be more difficult to overcome. The uptrend has not been violated on any of these, so keep them on your watch list. The TTs within a range tend to continue the erratic price action that has been happening. Red Hat (RHT) has the largest TT compared to its most recent price ranges. For that reason, it has higher odds of testing the bottom of the range. Notice that BRCM has an opposing Bottoming Tail (BT) that is significantly larger than the TT. This suggests that BRCM is least likely to move to the bottom of the range. YUM Brands (YUM) is more neutral since its TT is inside the range of the prior candles. YUM could be a breakout play higher if it stays at the top of the range during a market correction (i.e. relative strength). These two TTs have formed after a breakout above their resistance areas and failed to hold onto the move higher. A breakout above resistance followed by prices falling back to the breakout point historically will result in more selling. Everyone that bought the breakout as well as points inside that TT candle are now holding a loss and are likely to sell on any further weakness. United Parcel Service (UPS) is likely to see more selling pressure than BEAM if it moves below the prior candle's low, which was a BT candle. The reason for that is because of how it moved up from the 2012 low (star). UPS moved up in a "fluid" arrangement of HH - HL candles whereas BEAM move up, but within a sideways to upward motion. You're most likely thinking, "but UPS was the stronger move up, so why would it be likely to see more selling pressure?" That's an excellent question. The answer is because fluid price moves like seen in UPS leave little to no support reference points for traders to use as new buy points if prices pull back. In addition, the BOF in UPS was preceded by a continuation buy signal. BEAM on the other hand has many overlapping candles that display a higher level of uncertainty. Another way of understanding the traders' expectations within these patterns is this: The UPS price move up (fast and fluid) is virtually a sure thing (trade) to continue its move higher. The BEAM move up (slow and overlapping) should move higher, but a stall would not be a big surprise since that is how it has been moving all along. The TT candle in both has changed that to different degrees. Buyers of UPS are shocked to see its continuation of the prior strong move result in a TT. Pristine Tip: Technical Analysis of current price movement and the patterns that preceded it is a representation of the thoughts, beliefs and expectations of all those that created the chart. This includes independent traders, investors, hedge fund managers, money managers, those running auto-trading computers, etc. Lastly, the TT candles in these stocks are also in the process of making lower highs. A move under the respective TT candles lows will begin to establish those lower highs. Each stock fell relatively hard in 2012. Notice the large red candles and the weak recovery in 2013. Clearly, these stocks have shown relative weakness and have higher odds of falling to their prior lows, and potentially below them to make lower lows. The month of May has produced many Topping Tails (TT) candles that have signaled increased selling pressure. As you have read and viewed, the knowledge of a TT without an understanding of the price action that preceded it is close to no knowledge at all. Having some knowledge may be even worse than no knowledge at all, since you are likely to use that information incorrectly and potentially lose a lot of money. Isn't that what we all do when starting out? As you can see, TT candles can and do come with many different arrangements of patterns and the reaction to that TT will be different based on those different patterns. In addition, there are other technical factors to consider like volume, prior support and resistance, market environment at the time, sector rotation, multiple time frame analysis, relative strength or weakness, market internals and more. At Pristine, we teach all of these and most importantly how to combine their information together to find high probability investing, swing-trading and day-trading opportunities. All the best, Greg Capra President & CEO Pristine Capital Holdings, Inc.

The Trend Really is Your Friend How many times have you heard the saying "The trend is your friend." Most likely more times that you've wanted to and if all you had to do is follow the trend to make money there would be a lot more successful traders. The saying really is true, but it's not that simple. There can be many different trends in different time frames, so which one do you use? Here is what I suggest. What I am going to show you is for intra-day trading. However, you can use the concept for swing-trading or long-term investing. Simply change the time frames used. First, understand that is no best time frame to use. It's a choice, there are many and none will be perfect providing you with what will work all the time. Those of you searching for a trading method will hear about using minute charts ranging from 1-minute to as high as a 240-minute chart and anything in between. Charts can also be viewed in seconds of time. They can also be view in Ticks, which is an activity based chart. This can be useful for viewing overnight or pre-market activity when trading volume is low. Then there is also range based charts, which create bars that are all the same range from high to low. There may be other types, but these are the main types used. All of them manipulate the same data to expand or contract it, so make a choice what you'll use and stay with it. Getting caught up in a search for the best type and for the best setting will put you on a never-ending quest for that Holy Grail. Don't do it. Okay, hear is my suggestion that I have taught to many traders for you to consider. Use the 60-minute time frame as the primary trend for your intra-day bias. The definition of an uptrend is higher pivot highs and higher pivot lows. A downtrend, lower pivot highs and lower pivot lows. If a prior pivot low in an uptrend is violated the trend is no longer up since the definition of an uptrend no longer exists and vice-versa for a downtrend. I am going to use a 20-period moving average as a "visual aid" to speed up the analysis here. This helps when scanning many charts quickly to simply view if prices are above or below the moving average. If above the moving average, think long and if below think short. If the moving average is intersecting through the middle of prices back and forth it would indicate that there is no trend, so stand aside. Very simple. Think you can do this? Once you have your bias from the 60-minute time frame, wait for setups that you have defined as such in the 5-minute time frame to enter. For example, if the prices on the 60-minute time frame are below the 20-MA and trending lower, a 5-minute Pristine Breakdown (PBO) or a Pristine Sell setup (PSS) would be taken as a short-sale and vice-versa for a 60-minute uptrend. The price pattern on the 60-minute chart is not important to us for entries. Those come from the 5-minute time frame. It's the trend we are interested in on the 60. Now I am going to show you how to know what that is without having to look at the 60-minute time frame. You may find this helpful since you will be looking at less information; one chart. Here is how to do that. As you recall, I said we would use the 20-MA on the 60-minute chart as a visual aid. What we are going to do is put a moving average on the 5-minute chart that is the equivalent of the 60-minute 20-MA. Here is how to do that. There are twelve 5-minute bars that make up one 60-minute bar. For that reason, we are going to multiple the 20-MA by twelve, which gives us a 240-period moving average. View a 60-minute time frame with a 20-MA and then look at a 240-MA on the 5-minute. You will see that they are virtually the same and end in the same place or very close to it. Here is the plan. When the 20-MA is under the 240-MA and trending lower on the 5-minute time frame take short setups. When the 20-MA is above the 240-MA and trending higher on the 5-minute time frame take long setups. Be aware of prior support and resistance areas and more importantly the lack thereof. These will affect turning points within the trend or allow prices to trend. Greg Capra President & CEO Pristine Capital Holdings, Inc.

As markets and stocks move higher and then higher again with very little retracement or sideways corrections the potential for breakout failures increase. Because of the surprise or shock to traders playing the breakout, these failures can produce great opportunities for swing-trading over a few days and even higher odds day-trading opportunities. Let's look at a couple of examples that have happened and some current patterns that may. As with all Pristine trading patterns, understanding the thought process of traders that created the pattern is an important component to having confidence in the play. The breakout failure pattern is an easy one to understand since everyone has been caught in one at some time in the past. But let's review it. As prices are trending higher, traders are waiting for an entry point to get on board the trend. The most popular entry is when prices pullback to a reference point of support. Some traders will use a prior high, a moving average, a percentage of retracement or simply a dollar about. However, when prices move sideways (a very strong tread), rather than retrace, the trader is confronted with the choice of having to buy a breakout. If the breakout results in prices falling back under the breakout bar's low, the unexpected or shock has happened. What are you going to do? Breakouts are high odds trading setups, however, they are best used after the initial start of a move. This could be after the first rally from a bottom phase or it could be a gap-trading setup where the gap was a daily Pro-Gap, followed by prices basing for a period of time intra-day. Breakout failures increase when prices have been trending higher for a long time or have moved too far, too fast. There aren't a lot of these failures happening yet, but there are a couple that I can show you and a few that might result in failures. Last week, Deere (DE) broke out above a several day base and at the time it looked like higher prices were a sure thing. However, the next morning DE gapped well below the breakout bar's low. Can you imagine the shock to traders and fund managers that had bought the breakout the prior day? DE is an example of prices moving too far, too fast. Think about what you would do if you bought DE and it continued to show more weakness. What if you were a fund manager with cash on hand and starting buying a lot more shares of DE, but sellers just kept on dumping, so price barely moved up. Are you feeling it? In the above chart of Castel Crown Intl. (CCI), the daily time frame actually looked good for a breakout to continue. The base was a reasonable length and it was forming at the top of a Bullish Wide Range Bar (+WRB). However, the weekly was up from its base five-weeks in a row. Now, that doesn't always mean the breakout could not have worked, but it was lower odds. That being said, the breakout failed when prices broke under the breakout bar's low. It's shock-time for the breakout traders, what are you and other traders going to do? HCN has been moving up on the weekly time frame since the end of last year, and notice that last week's range was the widest since the move started. In addition, it closed almost at the high of the week; no wick or upper shadow. In other words, buyers were falling over themselves to get these shares after multiple weeks of a straight up run into a weekend. Thinking must be that there is no risk of moving lower. Hum, well maybe that's true and we'll see. Friday, HCN broke out above two bars with equal highs. That was a minor stall of course and not what many would consider a base, but this is what strong trends do. If prices break under Friday's low it will come as a big surprise to those that bought last week. Universal INS Hldgs. (UVE) has had a big run this year and may move higher still, but right now it looks ripe for a breakout failure. Last week's range narrowed after the prior week having had a huge range. That signals that the bullish momentum reached an extreme and then slowed. Buyers of UVE are not expecting a move under Friday's low, so if prices do - the trap will be set. Lastly, here is a chart of the S&P 500 ETF symbol SPY. It also broke out above two prior days with relatively equal highs Friday. Buyers stepped up all day Friday and when there was no pullback mid-day, they scrambled to buy shares right into the close. Notice the size of last week's range compared to the prior ones. If SPY breaks under Friday's low, it will be a shock to those recent buyers and that is likely to bring in sellers short-term. However, it will not change this bullish uptrend simply because the trend will still be up. What I have shown you in this Chart of the Week (COTW) is how to recognize one type of failure/shock pattern. Educated short-term day-traders and swing-traders know how to take advantage of these moves when they happen. If you are holding long in this market for the intermediate-term there is nothing for you to do. That being said, watch to see if there are any breakout failures next week and what happens.

Long before bull markets end and the majorities are jumping in, the markets reach a point where the advance has been ongoing and starts to become unbelievable. By unbelievable I don't mean that the markets aren't moving higher, obviously they are. What is unbelievable is that the advance continues as long as it does. Bull markets do end at some point, but not until the majority of investors and traders do believe completely that the market will continue to move higher. Let's monitor this. At the start of a bull move, few believe it is the start because of the many failed rallies within the prior downtrend and the typical sharp, fast drops. Another reason is that, as prices are trending higher, most traders and investors using technical analysis are caught up in the indicator-based method. As prices trend higher, the indicators give overbought signals that create a belief that prices have moved too far and need to correct. Well, in a strong bull market corrections are typically shallow or even sideways. I like to tell students new to Pristine, who ask about overbought readings, what is overbought in a bull market is going to get even more overbought; forget the indicators, they are meaningless. What we do use are market internal breadth and sentiment gauges. In the above chart is the S&P 500 ETF symbol SPY and the CBOE Put/Call Ratio. Clearly, the trend is up and prices have moved further above the moving averages than they have in the recent past. For that reason, prices may move sideways or pullback a bit; however, just being further from the moving averages is only one piece of information, and limiting if used on its own. The other piece of information on this chart that we want to take note of is that option traders started to become more aggressive with their call buying (bullish bets) last week. While this increases the odds of the uptrend stalling, it won't be a signal of traders becoming too bullish until the 5-period moving average (blue line) moves between the red lines. Option traders have a great record of getting fully committed to the market's trend at the worst possible time. For that reason, I keep an eye on their trading and suggest you do as well. For market breadth internal gauges, I use the two measures of advancing and declining stocks. The top is the McClellan Oscillator, which is simply the difference between two moving averages of advancing stocks minus declining stocks. This gives us a short-term measure of when the broader markets (many stocks) have moved a bit too far. The lower is a 21-period moving average of a ratio of advancing stocks divided by advancers plus decliners and is an intermediate-term measurement. As you can see, both have moved to high levels. However, this isn't much of a concern at this time because those option traders we monitor have not jumped "all in" yet buying call options. When they do, and these breadth internals are at high levels, history tells us that a correction within the bull market is close. That being said, it does not mean the end of the bull market. There are other factors that would guide us to that bias. The next chart is nothing short of amazing to me and I think you will be amazed at this fact as well. As markets decline during a correction, it's normal for investor sentiment to become more bearish. When the majority becomes bearish, historically the odds are that a market low is close at hand. This can be monitored with the American Association of Individual Investors Survey. At the website http://www.aaii.com, the Association polls their subscribers each week as to whether they are bullish, bearish or neutral. The results are then published each Wednesday on the AAII home page. Let's take a look. The above chart displays a 4-week moving average of those investors that are bullish, divided by those that are bullish plus those that are bearish; a bull ratio. The historical data for this, and many other market internals, indices and currencies is available at http://www.pinnacledata.com. As I said, it's normal for investors to become overly bearish during a market decline, but they are too bearish now! This is amazing to see after the markets have been advancing and making all-time highs. What will it take for them to believe in the uptrend and become too bullish? Higher prices of course! The markets have been moving up since the 2009 low; and while it would be normal to think this bull market could be near an end, you should fight those bearish feelings. Human nature and common sense is not a good guide in the markets. For that reason, we need objective tools, like those shown here, to guide us. Greg Capra President & CEO Pristine Capital Holdings, Inc