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90 the reversal. The stock went against me for a few days before rallying. Also, I could have sold my position closer to the .382 retracement. But, the stock was up strongly on this day. After I observed the stock breaking down, I closed my position and took the profit. Analyzing your trading in this manner will improve your executions immensely. I have leamed a great deal fi-om reviewing my past trades and still maintain a file of former trades that I look at from time to time. Equity Slope: Tracking the Experience After I record each trade on a chart, I will maintain a total record of all trades on an "equity summary sheet." This sheet tracks my performance of each trade, the total profit/loss, the total equity drawdown and the length of time in each trade. Tracking these results has helped me understand the nature of my profits and losses. For example, I have realized that my best trades are positions that I am in for a week or two - at most. Also, when I do not limit my losses when a trade goes against me, I usually end up with a larger than average deficit. Also, this record will define my "equity slope." EQUITY SLOPE CONSISTENT ERRATIC
Equity slope is the degree or angle in which your total equity is growing or declining. The equity slope can indicate the true nature of your trading success. For example, if you have a nice, steadily rising equity slope, this would suggest that your trading is consistentiy profitable. Although you might experience a few losers, a steady, upward slope is the mark of a consistently successful trader. However, if your equity slope is quite jagged and volatile, rising on big wins and falling on larger losses, your trading is erratic. Such erratic trading is very dangerous, since your past performance indicates that you are susceptible to huge swings and potentially devastating losses. I cant emphasize enough the importance of recording your performance to be consistently successful. It is the only way in which you will accelerate your learning and prevent you from repeating the same mistakes. Tracking your feelings, thoughts and actual performance are the basis for improvement. After you understand your actual performance, you can reassess your past mistakes and design strategies to improve your trading. If you really want to become a successful trader, these are the true means of improvement.
Conclusion My purpose for writing this book was to clearly illustrate the effectiveness of these techniques. Hopefully, I have presented the material in a straightforward manner. This material may have seemed very complex at first. But, as the chart examples have shown, a stocks price action is affected by Fibonacci numbers. Also, price pattems have been proven historically that they indicate critical areas for potential reversals. Therefore, if you can do some basic calculations and determine the greatest area where these numbers converge, you will be a successful trader. This area of convergence - the potential reversal zone - is the most important concept of this book. Although the numbers and the pattems can be different, they are simply elements used to discover the same outcome -where trading behavior will most likely change. As you now know, when several harmonic calculations converge in a defined area, the probability for a reversal is very likely. The next important concept is to let the market tell you when to trade. Although anything can happen and "the market is alwavs right," the harmonic set-ups will indicate the areas where you should be buying and selling. These methods have a very high degree of accuracy in identifying profitable opportunities. I believe that the stock charts in this book provide enough evidence to support this claim. The most difficult part of the process can be waiting for a clear set-up. But, if you can be patient, the market will
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