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4 Tho BreakoiJi oJ a Ledge This is what a ledcje rTuglit < like; This is ivovj I dctemiiae what consdtutcs a ledge: I look lof Gor.cclion or cofignsiiori thai is oi iensi three drirs in ength, but no more than ten bars in (cngtn. TbiC (edge is characterized by a "squaring off" ot tiighs and/or lows, tfie flaiter (he borter. Peilecr squares are best. \ trade the potential breakout in either dtrectiun. Opiiiion CAfNOT be allowed to ntuer the piciure. l do MOT know which way the (jreakout will occur! For every alert oo one side of tfie ledge, there is an opposite alert entered at die otlier side of the Sedge, . can go back only as far as the fusi leg of tlie previous market swing to find a matcfiing high or low. / \ <Shese are 3wings-> \ \ / / -i-Tfic-se are thct legs of the r.wLng -> \ / \ \ / \ 1 go b.nc:k on J / \ / \ \ / \ / - ,:fth0e? i6?rj ; -->/ \ / \ ----->\ / \ / do matter hew r<i\ort / \/ \ \/ \/ tho leg if:. [It r.oy bo only one bar Long at timc:}. VVh.at 1 h:ive done here is to allow (ho marker to tell rue wh.at it is going to rio. In a SGnse, ihis terhniiiuc is a "stradfile". hs not a sladdle as the W4)rd is uied in the stock market or in option trading. Tfie straddle I use becomes poss:l:le l.ecause the market decides to rriovo SKlf.ways for a nuniber of bars on the chart, therEd:y niakmg it possible (or ntn to s.n:u}Ohi ] } puces wiilt my buy and so;l orders at natural support aod fe.)."danr:r? noiiws. mark ther>e off as soon as i can draw a line wib, a roler rcioss two htghs. two lows, a high and a tow, or a low and a high, jjsi so long as they iTiatch, 1 will enter a trade only d prices break out of the lee ge by Iradmg through iho higJt or ;he low (ot both), f will not erdcr a trade if prices gap past enuy puinls. Once tiicre are more than ten bars on the chart, L stf>p trying to trade the ledges. 1 wait Jor die market to start trending again or for a full blovn trading raiHJ lo complete Jtself. Why does this entry tectiraif ue work so well? Because it lakes advantage of naiura support and fcsistaiice points, A brtjakout of a natural support nr resistance prjim wfll itz,,r>]\< r-.r.. - - liere should
SUIES FRANC  1*11 up t}ic boxed off section qF the Suiss Franc Cliart . SUISS FEnHC  7462 7365 7269 7172 7075 &97e 6001 6704 Filled luG ridlc}iinif liifflis. <- Find tuu nfttcJiiiHj Irnjs. Then bay dm brKJlfciut cjf the ; FT biybsjersell the hreakoiit of the Inus. - - It rfoesnl hdtter which conts firat, as long cvs the tuo matches r separated bj at least 1 price bar. \ I TT 1 can natch a bigb yitlt a lou, or a Iolp uith a higJip as lonj as the first nAtcli is separated fron the seciJiul by at least one prit:e bar. the Matches do nat \ to be exact. Tlicy can be off by 1-2 ticks, but no more than that. Exact natcbcs are best. If I baue ftatibt, I leaue it flbne. 66B7 659B  7365 7Z6D 7172 6970 * I uoulJ trade tJiiy une j. J" W . and this one. but nnt tikis one 6704 66G7 6590 Nat a 11 Icyes are tradeab le. 1 oinly those ill uliich there is no gap openinij past the ETitrij point. or tbiti nne hecau.vt; of the Here wis a niee •r I I I he entry rnay bo uade only an actual ( i\ gap breakout of tho cdye. orior to or at the breakout point. The jreakout point is where [ fiave dravn The tmc connectirif] two matcfuru} hacihs or two niatchiny lows. tJoh!. this inay ncu be the a[>.soluIe iurjh or iOvV of iIkj C[}iigt?S!mn o;. ihe daNy ch.Lir[.
\\ Grcakoul ot Hook A Ross hook looks like ttiis: Tho top is the poi nt of the hc:ok . Ik 1 - 2 -3 1 ow LormG t i on is not ! ry . If pr icos go % : n p and t }: f? out tho point of the hook, I buy. The bottom is the point of the hooK. 1-2-3 high formation is not nocoEsary. If prices cont back down and take out the point of the hook I sell. n a sense, a hook is a part of a 1-2-3, bul it doesnt have to fiavc a definitive high of luw. It may pop oot of a congestion area. Of utherwise be uulistiuguishab-e as to any exact formation. Ross hooks occur at any leve only in trending markets, whereas 1-2-3 lows occur at iiderrnediate and major market lows, and 12-3 liighs occur ai intermediate and major market higlis- Ross fiook does not need more ifian one correchon bar on the ciiarL [n a down market, as soon as you have a higiter low, you liave a hook. In an up market, as soon as you have a lower iiigli, you liave a hook. The next figure sfinvs what I mean by Russ iiooks. &71 fi2b9 5020  Srjne Itoss llaabs Ch) [ tlieir iny ctitry foiats. 1 -> Tiie difference botw«Je)i a l~Z-3 ]ou a liook 1 can be seen Iierc. The above Fnss Hooks "h" were tracJable because dicy fiad non-gap breakouts. There are other fiooks shown, but. because of gap openings, they were r"iot lradaf)lE:. The -> shows wfiere the entry would have been. Ive also shown a 1-2-3 k3v/ to ciCfTtonstraie the diiference l)elwcen V2-3 lows and ross (looks. An automatic aferi sfiould \m placed the minute a maiket makes a hook on the daiiy ctiar fiook. place tfie alert at a point prior to die taking out of the SurT-mary; Major Entry Signals Tfie breakout of a trading range. Ttie breakout uf a 1-2 3 h:Cih or tow. ° Ti;o Ijreakout of a Icdgr;, Tfie hreakovit of a Ross fiook Nolo, some of tfiese may tie concurrent widi one anoifker as well as with soaie of Ihe intermediate and minor trsduig signals wfiich follow.
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