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14

2B84B

28410

27982 27S3 27124

26695 26266 25837 25408

24979

24558

P=0105 0=28858 H=28&75 L=28B00 C=28650

Figure 26 Now, winat is my objective for ttiis trade? As shown previously I am loolcing for a 1.00 expansion of the last A,B,C swing prior to the breakout. The formula will be - A 4- = Objective.

The last A,B,C swing prior to the breakout was from the low at A of 26925, to the high at of 28125, and then back again to the low at of 27350, for a projected objective of 28550.

However, the projection has already been surpassed by the close at 28650. My objective for this move will have to be greater. If I am going to use a Fibonacci objective projection, then I will need to increase the magnitude of the expansion. To do that I will use a 1.618 expansion of the three point swing from A, to B, to C. The formula for this expansion is 1.618 (B - A) + C. The result is an objective of 29300 rounded to the nearest tick.



Trading By The Boole - Part I At that point I would expect some sort of congestion to occur before prices move

I want to point out here that it is important to take profits when they are available. I refuse to do top or bottom fishing when I am in a trade. As soon as I have my anticipated piece of the market, I am quick to get out. 1 am perfectly willing to let others have the rest of the market. Wisdom dictates that I get out too soon rather than too late Wisdom will keep me from being greedy and losing what I already have. I recall the fable about the dog and the bone. The dog had a bone in his mouth when he saw a reflection of himself in the water. He then opened his mouth to grab the bone away from the dog he saw in the reflection. Oops! There went the bone, into the water. Its the same thing in the markets, t take whats mine and run for safety. The market is bigger and stronger than anyone, i want to be a commando. I fight with guerrilla tactics. Hit and run. Take a piece out of the middle and quickly run to the bank. Do this consistently anc I pile up the winnings. Im patient, wait for opportune moments, and then strike, i wait for the market to come to me. I never chase a market. Im consistent, Im diligent. I strive for self-control. If the market turns on me and goes the wrong way, I get out! I get out NOWl Im urgent to get out. I cant let paralysis set in. I dont sit there and watch myself take a bath. I have developed a low tolerance for pain. I lose my commission and get out. I can afford many small losses. 1 will make them all back and more, on one good move.

Very often I reverse a losing trade and turn it into winner. More often than not, I can substantially minimize my losses by reversing. Learning to reverse, which will be discussed more fully later, is a concept that 1 think every successful trader should learn. I know of no one who will not benefit from learning do that.

1 have to be humble to reverse. I have to be willing to admit that the market knows more about where it is going than do I. I cant force a market to do my bidding. ! have to be flexible and yield to its greater power.

Projecting objectives is worth learning because it forces me to really think about where a market might be going. Then if it doesnt go my way, or falls short of my projection, I know sooner than others that the market is not behaving in the anticipated manner. Very often this lets me get out sooner. Its better to be out with a profit than a loss. Its better to reverse and recoup than to eat your hat.



38470

29871

29272 28673 28874 2?4?5

26277

Projected objective-

25678 25079 24480

I

Figure 27 Im out at my projected objective, awaiting my next opportunity. 1 can trade other markets while t wait. My next opportunity In Wheat comes when, on January 19, 1 realize that Wheat is once again in a congestion phase.



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