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23

By the way, 1 should explain here that slippage occurs because I cant always buy at the exact price that 1 nnay want, or sell at the exact price that I expect. In other words, orders are not always filled at the prices I anticipate.

As both a daytrader and a position trader, I know that it is the daytrader who leaves nnost of the money on the table. A market can trend wonderfully, making fabulous profits for the position trader, while the daytrader is getting clobbered having to fight his way into the market each day.

Harmony

This manual is in part about harmony. One objective is to show how to get in harmony with markets. There are a number of ways to state this concept, none of them are new. Here are some different quaint ways I have heard it expressed: "The trend is your friend." "Ride with the tide." "Go with the flow." The fact is that they are all correct. I cannot emphasize this strongly enough.

No one of us is big enough to resist the forces of the market. I cannot make the market come my way. The very best I can do is to harmonize with the market - get in step with it.

i have tried to surf out to sea! 1 can for a short time! 1 can paddle along with, anc ride the outward surge until I run into the first incoming wave, and then I have to duck under quickly or be pounded into the sand. The choice is mine to make. If the incoming wave is big enough, it may pick me up and smash me onto the bottom (ouch Ive done It}. Numerous surfers have been injured and even killed trying this stunt. Somehow the\ get the notion that they are bigger than the relentless and crashing waves.

There are traders who do the sanne thing. They think they are bigger than the markets. They think they can get in a quick thrill by going against the tide. Sometimes they are badly hurt, and sometimes they are financially killed by the magnitude of a market move that knocks them for a loop. Sooner or later they will be out of the market: one way or another.

That is why I trade in harmony with the markets. I want the market to clearly tell me which way it is going. Then, i hope that by skill I can go along for a profitable ride.

When a skillful surfer is waiting for just the right wave, he observes every wave. Unless the wave forms just right for a ride, he will let it pass by.

So it is in the market, unless the wave comes my way in just the right way, I let it go by. There wilt be plenty of other waves.

If the surf is not up the way it should be at one beach, then a good surfer will go to another beach.

If the market Im watching is NOT doing the right things, then I go to another market and look there. There are plenty of markets to choose from. I capture data on over twenty of them,

I cant make the market do what I want it to do. It is relentless. It will do what il will do and I cannot change that fact.



<buy breakout

of #2 point <uptrend

<dQwntrend

<sell breakout of #11 point

I will put some rules around these trades as I go, so that they make sense, •i Gaps or long magnitude price bars will give an alert : , / or \/\ wili cause me to start an envelope.

; or \/\/ will cause me to exit all positions of a trade and also to take extreme caution until 25 price bars are reached. These usually mean a congestion area has been reached.

CHAPTER 4

Little Things Mean a Lot

It has always astonished me that so many people who trade, busy themselves with all kinds of complicated and magic formulas, arcs and circles, Gann lines and fan lines, various and sundry indicators and oscillators, cycle projections, pitchforks, pennants, flags, heads and shoulders, speed lines and many other "tools" that are supposed to tell them how to trade, while ignoring totally what is right there under their noses.

What I am going to show in this section of the manual is so simple that most have a hard time believing it. The natural tendency will be to laugh to scorn such utter simplicity. How can trading be this easy? Yet it is easy, when you know how. This section of the manual is not going to be as long as I might have made it. It is not the number of pages that it contains that make it worth while. 1 could make it 500 pages long if that were important, but its not.

What I will show here occurs frequently on all charts. This is a high percentage trade. It comes from paying attention to the little things.

Rather than try to describe in words what I am talking about, let me first show a number of illustrations. Then Ill explain what its all about. I think that its astounding! Really study the charts that follow Here are some clues: Look for 1-2-3 lows and l-ll-lll highs. I look for this pattern on at least somewhat well-defined turning points. Some of it, of course, is in the eye of the beholder:



<buy breakout

of #2 point <uptrend

<downtrend

<sell breakout of #11 point

I will put some rules around these trades as I go, so that they make sense. fl] Gaps or long magnitude price bars will give an alert , / or \/\ will cause me to start an envelope.

; or \/\/ wilt cause me to exit all positions of a trade and also to take extreme caution until 25 price bars are reached. These usually mean a congestion area has been reached.

CHAPTER 4

Little Things Mean a Lot

It has always astonished me that so many people who trade, busy themselves with all kinds of complicated end magic formulas, arcs and circles, Gann lines and fan lines, various and sundry indicators and oscillators, cycle projections, pitchforks, pennants, flags, heads and shoulders, speed lines and many other "tools" that are supposed to tell them how to trade, while ignoring totally what is right there under their noses.

What I am going to show in this section of the manual is so simple that most have a hard time believing it. The natural tendency will be to laugh to scorn such utter simplicity. How can trading be this easy? Yet it is easy, when you know how. This section of the manual is not going to be as long as I might have made it. It is not the number of pages that it contains that make it worth while. I could make it 500 pages long if that were important, but its not.

What i will show here occurs frequently on all charts. This is a high percentage trade. It comes from paying attention to the little things.

Rather than try to describe in words what I am talking about, let me first show a number of illustrations. Then Ill explain what its all about, i think that its astounding! Really study the charts that follow. Here are some clues: Look for 1-2-3 tows and l-ll-lll highs, t look for this pattern on at least somewhat well-defined turning points. Some of it, of course, is in the eye of the beholder:



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