Crossings of the MO with the MOS is quite often a sign of changing direction, but not always, depending on the high-frequency noise level in the oscillators.

4. Identify congestion building patterns by noting when the MO approaches zero from larger values. The move can approach zero from above or from below. This is a warning of a potential upcoming move. As the oscillator crosses through zero, the direction of the price move usually follows in the same direction as the oscillator move, but not always. Sometimes there is a little reverse blip before the stronger move in the other direction. Be careful.

5. Consider other indicators for confirmation of an upcoming move and its probable direction. For example, the 30-year T-Bond is useful for the OEX as are other related markets such as the NASDAQ Composite that may show confirmation, divergence, or a leading indication.

6. Select a position that manages risk, for example, credit spreads. Establish entry points for a position. These could be at peak congestion, after a crossing, or off a bounce. There are advantages to buying positions when congestion is building or low as things are quiet and premiums reflect low, short-term volatility. There are advantages to selling positions when mobility is high and premiums are high, reflecting high, short-term volatility.

7. Establish exit conditions. If there is nothing better, then use stop-loss and trail stops. A better choice might be placement near support and resistance levels. Another strategy might be the conditions of another market.

8. Back-test the preceding before executing to match the analysis to the issue, the trading time horizon, and trading style.

Conclusion

Do markets remember what they did previously? I think so, at least to some degree. Building on this premise, an analysis method was constructed to quantitatively describe and measure prior market price action. Price Distribution Functions (PDF) give a precise picture of where the market price previously spent time. PDFs can be further concentrated into a practical forecasting tool, the Mobility Oscillator (MO). Examples are provided that support the validity of this analysis and show a relationship with mobility and future price behavior. There are always exceptions as the market depends on things other than past history, so exercise caution. Changing conditions such as interest rates, economic data, and world events influence the situation, especially if the news is unexpected and extreme. Sometimes these things are "in the market," sometimes not. In any case, the Mobility Oscillator forecasting approach offers signals during times when other oscillators that identify extreme conditions are often in-between signals. It also identifies developing conditions well in advance that may lead to movement. Given enough data and the ability to pick and choose, of course, just about any claim can be supported. I invite you to try the method, back-test, become familiar , v. with common patterns and interpretation, and judge for yourself

References

Achelis, Steven ., Technical Analysis from A to Z, Chicago: Probus Publishing, 1995.

Bollinger, John, "Using Bollinger Bands," Technical Analysis of Stocks and Commodities, June, 1992.

Lane, George, "Lanes Stochastics," Technical Analysis of Stocks and Commodities, February, 1984.

McMillan, Lawrence G., Options as a Strategic Investment, Paramus, NJ: New York Institute of Finance, 1986.

Murphy, John J., Technical Analysis of the Futures Markets, Paramus, NJ: New York Institute of Finance, 1986.

Visual Basic Users Guide, Microsoft Corporation, 1993-1994.

Widner, Mel, "Gauging Mobility with Price Distributions," Technical Analysis of Stocks and Commodities, February, 1996. 4

Widner, Mel, "Signaling Change with Projection Bands," Technical Analysis of Stocks and Commodities, July, 1995.

Widner, Mel, "Rainbow Charts," Technical Analysis of Stocks and Commodities, July, 1997. Widner, Mel, "Automated Support and Resistance," Technical Analysis of Stocks and Commodities, May, 1998

Trading is a game of odds. Having a strong disciplined mind-set, statistical proven strategies, and strict money management are crucial in stacking the odds in your favor.

A trade consists of an entry and an exit. The entry and exit of a trade are what constitute the implementation of a sound strategy. Most people feel that having a good entry is 50 percent of the game. I think it is at least 75 percent of the game. A good entry allows you to limit losses to a minimum in a losing trade, a higher chance of a profitable exit, and more money being made on a profitable trade.

Before showing you how I trade successfully with my entry strategies and methods, I will first explain the basic types of entries.

Basic Types of Entries

A market order is used to buy or sell stock or futures at the market. This means the floor broker or the specialist on the exchange must execute the order promptly at the most favorable price possible. Market orders are normally filled at the ask (offer) price. For example, if Microsoft is quoted as 123 bid and 123/4 offer, a market order will likely fill you at 123 4.

A limit order is used when the trader has imposed a limit price that precludes the floor broker from paying more on a buy order or selling for less on a sell order. This lir$k assures the trader at least the price he or she wants if the order is executed. For example, "if you place a limit to buy Apple Computers at 27A, your fill must at most be 27& However, you would run the risk of not getting an execution if the price stays beyond your limit or there is not enough liquidity to fill your order when the • price is afyour limit. , A buy stop order is an order that gets executed only if the price rises to a specified price. Once the price hits the stop, it will be executed as a market order. A sell

Entering a Market

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