valez setup 2
DESCRIPTION
analiseTRANSCRIPT
Page
1
“7-
Day
Mas
ter
Tra
der
Prog
ram”
an i
ntro
duct
ion
to
trad
ing
for
a li
ving
CH
APT
ER
1
Page
2
Disc
laim
er
C
opyr
ight
© 2
007-
201
1 iF
undt
rade
rs
Pu
blis
hed
iFun
dtra
ders
All
right
s co
vere
d
Rep
rodu
ctio
n or
tran
slat
ion
of a
ny p
art o
f thi
s w
ork
beyo
nd th
at p
erm
itted
by
sect
ion
107
or 1
08 o
f the
197
6 U
nite
d St
ates
C
opyr
ight
Act
with
out t
he p
erm
issi
on o
f the
cop
yrig
ht o
wne
r is
unla
wfu
l. R
eque
sts
for p
erm
issi
on o
r fur
ther
info
rmat
ion
shou
ld b
e ad
dres
sed
to th
e Pe
rmis
sion
s D
epar
tmen
t at i
Fund
Tra
ders
, LLC
.
iFun
d Tr
ader
s, L
LC is
adv
isin
g an
yone
to tr
ade
or u
se a
ny s
yste
m il
lust
rate
d in
this
cou
rse.
The
se a
re e
duca
tiona
l ex
ampl
es o
f sci
ence
of s
yste
m te
stin
g an
d de
velo
pmen
t tha
t iFu
ndtr
ader
s, L
LC w
ant t
o sh
are
with
you
. N
one
of th
e in
form
atio
n ill
ustr
ated
in th
ese
exam
ples
is to
be
cons
true
d as
offe
rs to
buy
or s
ell c
omm
oditi
es, s
tock
s, o
r any
oth
er
finan
cial
inst
rum
ent.
Non
e of
the
info
rmat
ion
pres
ente
d pu
rpor
ts to
be
a co
mpl
ete
stat
emen
t of a
ll m
ater
ial f
acts
rela
ted
to
trad
ing.
Als
o, s
imul
ated
per
form
ance
resu
lts h
ave
cert
ain
inhe
rent
lim
itatio
ns; t
he re
sults
do
not r
epre
sent
act
ual t
radi
ng.
Sinc
e m
any
of th
e tr
ades
in th
is s
erie
s ha
ve n
ot b
een
exec
uted
, the
resu
lts m
ay h
ave
unde
r or o
ver c
ompe
nsat
ed fo
r the
impa
ct,
if an
y, o
f cer
tain
mar
ket f
acto
rs, s
uch
as la
ck o
f liq
uidi
ty.
No
repr
esen
tatio
n is
bei
ng m
ade
that
the
syst
ems,
met
hods
or
idea
s sh
own
in th
is c
ours
e w
ill p
rodu
ce th
e re
sults
that
are
des
crib
ed o
r illu
stra
ted.
This
pub
licat
ion
is d
esig
ned
to p
rovi
de a
ccur
ate
and
auth
orita
tive
info
rmat
ion
in re
gard
to th
e su
bjec
t mat
ter c
over
ed.
It is
so
ld w
ith th
e un
ders
tand
ing
that
nei
ther
the
auth
or n
or th
e pu
blis
her i
s en
gage
d in
rend
erin
g le
gal,
acco
untin
g, o
r oth
er
prof
essi
onal
ser
vice
s. I
f leg
al a
dvic
e or
oth
er e
xper
t ass
ista
nce
is re
quire
d, th
e se
rvic
es o
f a c
ompe
tent
pro
fess
iona
l pe
rson
sho
uld
be s
ough
t.
From
a D
ecla
ratio
n of
Prin
cipl
es jo
intly
ado
pted
by
a C
omm
ittee
of t
he A
mer
ican
Bar
Ass
ocia
tion
and
a C
omm
ittee
of
Publ
ishe
rs.
A
ctiv
e tr
adin
g is
an
activ
ity th
at p
osse
sses
a h
igh
leve
l of r
isk
and
may
not
be
suita
ble
for e
very
one.
ISB
N 1
-592
80-2
53-2
Prin
ted
in th
e U
nite
d St
ates
of A
mer
ica.
Page
3
ww
w.iF
undt
rade
rs.c
om
Page
4
ww
w.iF
undt
rade
rs.c
om
Page
5
“Eve
ry s
ingl
e tr
ansa
ctio
n is
bot
h a
buy
and
a se
ll, a
nd is
ther
efor
e ne
utra
l. Th
e op
enin
g tr
ansa
ctio
n or
tick
, for
any
tim
e fr
ame
is th
e m
ost i
mpo
rtan
t for
iFun
d Tr
ader
s” –
Oliv
er L
. Vel
ez
Can
dles
Lig
ht
The
Way
The
M
arke
t’s
Four
Maj
or T
icks
C
HA
PTE
R 2
Page
6
The ‘O
pen
ing’
is E
very
thin
g
iFun
d T
rade
rs T
ip: T
he
open
ing
trad
e of
a t
ime
peri
od d
eter
min
es t
he
star
tin
g po
int.
Th
e fu
rth
er a
sto
ck r
ises
abo
ve t
he
open
, th
e st
ron
ger
the
bulls
. Th
e fu
rth
er a
sto
ck d
rops
bel
ow
the
open
ing
pric
e, t
he
stro
nge
r th
e be
ars.
Page
7
The
ELEP
HA
NT
BAR
Ever
y in
divi
dual
bar
repr
esen
ts a
bat
tle th
at w
as fo
ught
by
two
grou
ps, t
he b
ulls
and
bear
s, th
e bu
yers
and
selle
rs. W
hen
the
clos
e is
wel
l abo
ve th
e op
en, t
he b
ulls
win
, pr
oduc
ing
the
colo
r gre
en. W
hen
the
clos
e is
wel
l bel
ow th
e op
en, t
he b
ears
win
, pr
oduc
ing
the
colo
r red
. How
muc
h ea
ch si
de w
ins i
s det
erm
ined
by
how
muc
h gr
een
or re
d th
ey p
rodu
ce. I
n ot
her w
ords
, the
wid
er th
e di
stan
ce b
etw
een
the
open
and
cl
ose,
the
grea
ter t
he w
in.
Whe
n th
e ba
r is b
ig, r
elat
ive
to th
e re
cent
bar
s on
the
char
t, it
is ca
lled
an “
elep
hant”
bar
.
Bear
s Win
Bu
lls W
in
Hig
h
Low
Hig
h
Low
Page
8
Ele
phan
t B
ars
1
4
5 6
7 8
9
10 11
12
2 3
13 14
Do
you
see
an el
epha
nt b
ar(s
)? I
t sh
ould
be
obvi
ous,
so if
non
e of
the
bars
st
and
out a
s obv
ious
elep
hant
bar
s, th
en
stop
look
ing
for o
ne, i
t is e
ither
ther
e or
it
is no
t – th
ey a
re b
ig a
nd ca
n't h
ide.
Page
9
Ele
phan
t B
ars
1
4
5 6
7 8
9
10 11
12
2 3
13 14
D
o yo
u se
e an
elep
hant
bar
(s)?
It
shou
ld b
e ob
viou
s, so
if n
one
of th
e ba
rs
stan
d ou
t as o
bvio
us el
epha
nt b
ars,
then
st
op lo
okin
g fo
r one
, it i
s eith
er th
ere
or
it is
not –
they
don
’t h
ide.
Page
10
“Eve
ry s
ingl
e tr
ansa
ctio
n is
bot
h a
buy
and
a se
ll, a
nd is
ther
efor
e ne
utra
l. Th
e op
enin
g tr
ansa
ctio
n or
tick
, for
any
tim
e fr
ame
is th
e m
ost i
mpo
rtan
t for
iFun
d Tr
ader
s” –
Oliv
er L
. Vel
ez
Rea
l Ele
phan
t B
ar E
xam
ples
C
HA
PTE
R 3
Page
11
Ele
phan
t B
ars
Page
12
Ele
phan
t B
ars
Page
13
Ele
phan
t B
ars
Page
14
Ele
phan
t B
ar
Page
15
Ele
phan
t B
ars
Page
16
Ele
phan
t B
ars
Page
17
Ele
phan
t B
ars
Page
18
Ele
phan
t B
ar
Page
19
Ele
phan
t B
ars
Page
20
Ele
phan
t B
ars
Page
21
Ele
phan
t B
ars
Page
22
Ele
phan
t B
ars
Page
23
Ele
phan
t B
ars
Page
24
“In
the
real
est
ate
mar
ket,
we
lean
that
the
gold
en r
ule
to m
akin
g m
oney
is,
loca
tion,
loca
tion,
loca
tion.
Thi
s is
als
o tr
ue fo
r th
e st
ock
mar
ket,
or a
ny m
arke
t fo
r th
at m
atte
r. ”
– O
liver
L. V
elez
Loca
tion
s
The
Mar
ket’
s 5
Hot
Spo
ts.
CH
APT
ER
4
Page
25
Loca
tion
s Th
ere
are
5 K
ey L
ocat
ions
: Ju
st li
ke re
al e
stat
e, th
e lo
catio
n, o
r “w
here
” som
ethi
ng h
appe
ns is
in m
ost c
ases
m
ore
impo
rtant
than
the
even
t or “
wha
t” is
hap
peni
ng
1) A
t (or
on)
the
20m
a: If
a tr
adab
le e
vent
occ
urs
touc
hing
the
20m
a, it
is a
an
actio
nabl
e ev
ent a
nd g
ener
ally
sho
uld
be ta
ken.
2)
A li
ttle
belo
w th
e 20
ma:
If a
trad
able
eve
nt o
ccur
s a
little
bel
ow th
e 20
ma
but
is n
ot to
uchi
ng it
, it a
lso
is a
n ac
tiona
ble
even
t and
gen
eral
ly s
houl
d be
take
n.
3) A
littl
e ab
ove
the
20m
a: If
a tr
adab
le e
vent
occ
urs
a lit
tle a
bove
the
20m
a bu
t is
not
touc
hing
it, i
t als
o is
an
actio
nabl
e ev
ent a
nd g
ener
ally
sho
uld
be ta
ken.
4)
Far
bel
ow th
e 20
ma:
If a
trad
able
eve
nt o
ccur
s “w
ay” b
elow
the
20m
a, it
is a
m
ajor
occ
urre
nce
and
gene
rally
sho
uld
be ta
ken
in a
n ag
gres
sive
man
ner.
5) F
ar a
bove
the
20m
a: If
a tr
adab
le e
vent
occ
urs
“way
” abo
ve th
e 20
ma,
it is
a
maj
or o
ccur
renc
e an
d ge
nera
lly s
houl
d be
take
n in
an
aggr
essi
ve m
anne
r.
Page
26
“Eve
ryth
ing
is n
ot a
lway
s w
hat i
t see
ms.
Wha
t oft
en lo
oks
bulli
sh c
an a
ctua
lly b
e be
aris
h, a
nd w
hat a
ctua
lly lo
oks
bear
ish
can
be v
ery
bulli
sh.”
– O
liver
L. V
elez
Igni
tin
g vs
. E
xhau
stio
n E
leph
ant
Bar
s
Lear
ing
how
to
inde
nti
fy t
he s
tart
of
a m
ove
and
the
end
of a
mar
ket
mov
e.
CH
APT
ER
5
Page
27
Ign
itin
g vs
. Exh
aust
ion
Ther
e ar
e tw
o ty
pes
of E
leph
ant B
ars:
Ig
nitin
g an
d E
xhau
stio
n Ig
nitin
g El
epha
nt B
ars
chan
ge th
e di
rect
ion
of th
e cu
rren
t tre
nd. I
n ot
her
wor
ds, t
hey ignite
a b
rand
new
mov
e or
sta
rt a
dire
ctio
n th
at w
as n
ot in
pl
ace
befo
re.
Exha
ustio
n El
epha
nt B
ars
cont
inue
or e
xasp
erat
e an
alre
ady
wel
l es
tabl
ishe
d di
rect
iona
l tre
nd. S
aid
anot
her w
ay, r
athe
r tha
n ch
ange
, the
y ac
tual
ly c
ontin
ue th
e cu
rren
t col
or d
omin
ated
mov
e.
Not
e: T
he m
ain
key
to id
entif
ying
exh
aust
ion
bars
is th
at th
ey o
rigin
ate
or
begi
n fa
r aw
ay fr
om th
e 20
ma.
A s
tock
can
get
far a
way
from
the
20m
a,
but a
ctua
lly s
tart
near
it. T
he e
xhau
stio
n ba
r not
onl
y st
arts
its
form
atio
n fa
r aw
ay, i
t get
s ev
en fu
rther
aw
ay fr
om it
.
Page
28
Ele
phan
t B
ars
Ign
itin
g or
Exh
aust
ing
IGN
ITIN
G
IGN
ITIN
G
EXH
AU
STIN
G
EXH
AU
STIN
G
Elep
hant
Bar
s (ak
a W
RB’
s wid
e ra
nge
bars
) tha
t sta
rt a
new
m
ove
or tr
igge
r a n
ew e
ntry
in th
e con
tinua
tion
of a
tren
d te
nd to
be
igni
ting
in n
atur
e and
follo
w th
roug
h is
expe
cted
. W
hen
thes
e sa
me
bars
app
ear a
fter a
mov
e ha
s alr
eady
bee
n un
derw
ay th
ey
repr
esen
t the
fina
l pus
h, th
e las
t hoo
rah,
and
ofte
n le
ad to
a
paus
e and
or c
hang
e th
e m
omen
tum
to th
e opp
osite
dir
ectio
n
Page
29
Ign
itin
g E
leph
ants
Page
30
Ign
itin
g E
leph
ants
Page
31
Ign
itin
g E
leph
ants
Page
32
Ign
itin
g E
leph
ants
Page
33
Ign
itin
g E
leph
ant
Page
34
Ign
itin
g &
Exh
aust
ion
Page
35
Exh
aust
ion
Ele
phan
ts
Page
36
Exh
aust
ion
Ele
phan
t
Page
37
Exh
aust
ion
Ele
phan
t
Page
38
Exh
aust
ion
Ele
phan
t
Page
39
Exh
aust
ion
Bar
Page
40
Exh
aust
ion
Ele
phan
t
Page
41
Ign
itin
g E
leph
ant
Page
42
Bu
ll E
leph
ants
Page
43
Bu
ll E
leph
ant
Page
44
Bu
ll E
leph
ants
Page
45
Bu
ll E
leph
ants
Page
46
Bu
ll E
leph
ants
Page
47
Bea
r E
xhau
stio
n
Page
48
Bu
ll E
leph
ants
Page
49
Bu
ll E
leph
ants
Page
50
Bu
ll E
leph
ants
Page
51
Rig
ht
Sid
e Pl
ay
Page
52
Loca
tion
s
Page
53
Ign
itin
g E
leph
ant
Page
54
Ign
itin
g B
ear
Igni
ting
Bea
r
Page
55
IGN
ITIN
G B
EA
R
Page
56
Ign
itin
g B
ull
Ele
phan
t
Page
57
Abs
olut
e C
ontro
l
Bear
s in
abso
lute
con
trol
Bulls
in a
bsol
ute
cont
rol
Abs
olut
e co
ntro
l exi
sts w
hen
a ve
ry so
lid c
olor
ed b
ar is
trad
ing
at it
s ext
rem
e. W
hen
a so
lid
gree
n ba
r is c
urre
ntly
trad
ing
at it
s abs
olut
e hi
gh, b
ulls
are
in a
bsol
ute
cont
rol.
Whe
n a
solid
re
d ba
r is c
urre
ntly
trad
ing
at it
s abs
olut
e lo
w.
iFun
d Tr
ader
s Tip
: Tra
ders
usin
g a
m
omen
tum
styl
e w
ould
look
to e
nter
the
bar f
ollo
win
g a
stro
ng “
win”
bar
, but
not
at
the
open
. Mor
e th
an th
e op
en is
nee
ded
in o
rder
to c
omm
it to
the
trad
e. T
he n
ext b
ar
has t
o co
nfir
m th
e st
reng
th o
f the
ori
gina
l “w
in”
bar
by
first
pro
duci
ng a
smal
l am
ount
of
the
sam
e co
lor t
hat c
lear
s the
hig
h (g
reen
bar
) or l
ow (r
ed b
ar) o
f the
“w
in”
bar
Hig
h
Low
Hig
h
Low
Page
58
Kee
ping
con
trol –
the
2/3
rule
Hig
h
Low
Hig
h
Low
The
bigg
er a
nd m
ore
solid
the
bar,
the
grea
ter t
he d
egre
e of
con
trol i
s bei
ng d
ispl
ayed
. Th
e id
eal b
ar is
one
show
ing
abso
lute
con
trol w
ith a
big
solid
bar
and
no
wic
ks.
Bar
s sh
owin
g a
bsol
ute
cont
rol d
urin
g fo
rmat
ion
may
not
alw
ays c
ompl
ete
at th
e sa
me
leve
l of
cont
rol a
s the
y on
ce d
emon
stra
ted.
The
re c
an b
e va
rious
stag
es o
f con
trol a
nd it
is n
ot
cons
ider
ed lo
st u
ntil
2/3
or m
ore
of th
e ba
r’s c
olor
has
bee
n er
ased
. iF
und
Trad
ers T
ip:
If m
ore
than
2/3
of
a ba
r’s c
olor
is su
dden
ly e
rase
d, th
e la
w o
f fol
low
-thro
ugh
is ne
gate
d. W
e us
e the
2/3
retr
acem
ent m
ark
as t
he tu
rnin
g po
int.
2/3
2/3
Bear
s in
abso
lute
con
trol
Bulls
in a
bsol
ute
cont
rol
Page
59
Full
Con
trol
Bear
s in
full
cont
rol
Bulls
in fu
ll co
ntro
l
Full
cont
rol e
xist
s whe
n a
very
solid
col
ored
bar
is tr
adin
g ju
st a
tad
bit o
ff its
ext
rem
e. W
hen
a re
lativ
ely
solid
gre
en b
ar h
as p
ulle
d ba
ck o
ff th
e hi
gh, b
ut th
e ba
r is s
till d
omin
antly
gre
en, b
ulls
are
in
full
cont
rol.
Whe
n a
rela
tivel
y so
lid re
d ha
s mov
ed u
p of
f the
low
, but
the
bar i
s stil
l dom
inan
tly re
d,
bear
s are
in fu
ll co
ntro
l. iF
und
Trad
ers T
ip: I
repe
at, i
t’s t
he u
pper
end
of a
gre
en b
ar a
nd th
e lo
wer
end
of a
red
bar t
hat t
ruly
det
erm
ines
the
pote
ncy
or la
ck th
ereo
f of t
he g
roup
curr
ently
pr
oduc
ing
the
colo
r.
Hig
h
Low
Hig
h
Low
2/3
2/3
Page
60
Goo
d C
ontro
l
Bear
s stil
l in
cont
rol
Bulls
still
in c
ontro
l
Goo
d co
ntro
l exi
sts w
hen
a so
lid c
olor
ed b
ar h
as m
oved
wel
l off
the
extre
me,
but
not
eno
ugh
to
just
ify c
allin
g th
e ba
r wre
cked
or w
eak.
Whe
n a
gree
n ba
r has
pul
led
wel
l off
the
high
, but
the
bar i
s st
ill m
ostly
gre
en, b
ulls
are
in g
ood
cont
rol.
Whe
n a
red
has m
oved
up
wel
l off
the
low
, but
the
bar i
s st
ill m
ostly
red,
bea
rs a
re in
goo
d co
ntro
l. iF
und
Trad
ers T
ip: T
his i
s ofte
n w
hat a
bar
will
do
afte
r the
trad
er h
as a
lrea
dy co
mm
itted
to a
pla
y. T
hese
bar
s sho
uld
not n
eces
sari
ly sc
are
trad
ers o
r m
ake
them
dou
bt th
e po
wer
of t
he g
roup
pro
duci
ng th
e co
lor…
not a
t thi
s poi
nt.
This
bar t
ypic
ally
repr
esen
ts th
e sq
uat b
efor
e a
danc
er’
s lea
p ba
ck to
stre
ngth
.
Hig
h
Low
Hig
h
Low
2/3
2/3
Page
61
Wea
k C
ontro
l
Bear
s’ w
eake
ning
con
trol
Bulls’
weak
enin
g co
ntro
l
Wea
k co
ntro
l exi
sts w
hen
a so
lid c
olor
ed b
ar h
as lo
st a
bout
½ o
f the
col
or it
onc
e ha
d. W
hen
a gr
een
bar h
as p
ulle
d do
wn
wel
l off
the
high
to e
limin
ate
abou
t 50%
of t
he g
reen
it o
nce
had,
bul
ls m
ight
be
in tr
oubl
e. W
hen
a re
d ba
r has
mov
ed u
p w
ell o
ff th
e lo
w to
elim
inat
e ab
out 5
0% o
f the
red
it on
ce h
ad, b
ears
mig
ht b
e in
trou
ble.
iFun
d Tr
ader
s Tip
: Thi
s sce
nari
o do
es n
ot g
uara
ntee
that
a
full
lost
of c
ontr
ol w
ill m
ater
ializ
e, b
ut if
the
mar
ket i
s beh
ind
the
coun
ter c
olor
mov
e, th
e od
ds a
re g
ood
that
the
cont
rol i
s goi
ng to
cha
nge.
Hig
h
Low
Hig
h
Low
2/3
2/3
Page
62
Page
62
Lost
Con
trol
Bulls
lose
con
trol t
o Be
ars
Bear
s los
e co
ntro
l to
Bulls
Lost
con
trol e
xist
s whe
n a
prev
ious
ly so
lid c
olor
ed b
ar lo
ses 2
/3 o
r mor
e of
the
colo
r it
once
had
, lea
ving
the
tail
as th
e m
ost d
omin
ant p
art o
f the
bar
. Whe
n a
very
solid
gre
en
bar h
as p
ulle
d ba
ck so
far o
ff th
e hi
gh, l
eavi
ng b
ehin
d m
ore
tail
than
col
or, b
ulls
hav
e lo
st
thei
r pow
er. W
hen
a ve
ry so
lid re
d ba
r has
pul
led
back
so fa
r off
the
low
, lea
ving
beh
ind
mor
e ta
il th
an c
olor
, bea
rs h
ave
lost
thei
r pow
er.
Hig
h
Low
Hig
h
Low
2/3
2/3
Page
63
The
2/3
Ret
race
men
t
Hig
h
Low
Hig
h
Low
The i
dea
is to
be
able
to c
lear
ly se
e w
hen
a bi
g so
lid b
ar h
as lo
st 2
/3 o
r mor
e of
its
colo
r, th
e fir
st si
gn in
a sl
owin
g or
cha
nge i
n m
omen
tum
. Thi
s sho
uld
be o
bvio
us,
it sh
ould
not
take
mor
e th
an a
split
seco
nd g
lanc
e an
d do
es n
ot re
quir
e yo
u to
m
easu
re o
r cal
cula
te a
nyth
ing.
2/3
2/3
Page
64
Tota
lly O
ver!
!
Bear
s in
perm
anen
t co
ntro
l Bu
lls in
per
man
ent c
ontro
l
100%
100%
Rem
embe
r, ea
ch b
ar re
pres
ents
a b
attle
bet
wee
n th
e bu
lls a
nd b
ears
( bu
yers
and
selle
rs).
Whe
n th
e cl
ose
is a
bove
the
open
, the
bul
ls w
in, p
rodu
cing
the
colo
r gre
en. W
hen
the
clos
e is
bel
ow th
e op
en, t
he b
ears
win
, pro
duci
ng th
e co
lor r
ed. H
ow m
uch
each
side
win
s is
det
erm
ined
by
how
muc
h gr
een
or re
d th
ey p
rodu
ce. I
n ot
her w
ords
, the
wid
er th
e di
stan
ce b
etw
een
the
open
and
clo
se, t
he g
reat
er th
e w
in, a
nd w
hen
thos
e ty
pes o
f bar
s are
co
mpl
etel
y er
ased
, the
gre
ater
the
win
for t
he o
ppos
ite g
roup
!
Page
65
Con
trol F
orev
er!!
Bear
s in
cont
rol f
orev
er
Bulls
in c
ontro
l for
ever
100%
100%
Rem
embe
r, ea
ch b
ar re
pres
ents
a b
attle
bet
wee
n th
e bu
lls a
nd b
ears
( bu
yers
and
selle
rs).
Whe
n th
e cl
ose
is a
bove
the
open
, the
bul
ls w
in, p
rodu
cing
the
colo
r gre
en. W
hen
the
clos
e is
bel
ow th
e op
en, t
he b
ears
win
, pro
duci
ng th
e co
lor r
ed. H
ow m
uch
each
side
win
s is
det
erm
ined
by
how
muc
h gr
een
or re
d th
ey p
rodu
ce. I
n ot
her w
ords
, the
wid
er th
e di
stan
ce b
etw
een
the
open
and
clo
se, t
he g
reat
er th
e w
in, a
nd w
hen
thos
e ty
pes o
f bar
s are
co
mpl
etel
y er
ased
, and
the
othe
r gro
up p
rodu
ces i
t’s o
wn
colo
r, it
beco
mes
an
even
gr
eate
r the
win
for t
hat g
roup
!
Page
66
“Tai
ls B
ars
are
noth
ing
mor
e th
an E
leph
ant B
ars
tota
lly o
r pa
rtia
lly r
ever
sed.
The
re
pres
ent o
ne o
f the
firs
t sig
ns th
at a
mar
ket i
s sh
iftin
g fr
om o
ne s
ide
to th
e ot
her
(buy
ing
to s
ellin
g or
sel
ling
back
to b
uyin
g”
– O
liver
L. V
elez
“T
ail
Bar
s”
CH
APT
ER
6
Page
67
Bot
tom
ing
Tail
Page
68
Bot
tom
ing
Tail
Page
69
Bot
tom
ing
Tail
Page
70
Bot
tom
ing
Tail
Page
71
Bot
tom
ing
Tail
Page
72
Bot
tom
ing
Tail
Page
73
Bot
tom
ing
Tail
Page
74
Topp
ing
Tail
Page
75
55%
Ret
race
men
ts
Page
76
Full
Con
trol
Each
bar
repr
esen
ts a
bat
tle b
etw
een
the
bulls
and
bea
rs (b
uyer
s and
selle
rs).
Whe
n th
e cl
ose
is a
bove
the
open
, the
bul
ls w
in, p
rodu
cing
the
colo
r gre
en. W
hen
the
clos
e is
bel
ow
the
open
, the
bea
rs w
in, p
rodu
cing
the
colo
r red
. How
muc
h ea
ch si
de w
ins i
s det
erm
ined
by
how
muc
h gr
een
or re
d th
ey p
rodu
ce. I
n ot
her w
ords
, the
wid
er th
e di
stan
ce b
etw
een
the
open
and
clo
se, t
he g
reat
er th
e w
in
Bear
s in
Cont
rol
Bulls
in C
ontro
l
Hig
h
Low
Hig
h
Low
2/3
2/3
Page
77
Goo
d C
ontro
l
Bear
s stil
l in
cont
rol
Bulls
still
in c
ontro
l
Hig
h
Low
Hig
h
Low
2/3
2/3
Goo
d co
ntro
l stil
l exi
sts w
hen
a so
lid c
olor
ed b
ar h
as fo
rmed
and
the
follo
win
g ba
r mov
e ag
ains
t it,
but n
ot e
noug
h to
just
ify c
allin
g th
e pr
ior b
ar w
reck
ed o
r wea
k. iF
und
Trad
ers T
ip: T
his i
s ofte
n w
hat a
bar
will
do
afte
r the
trad
er h
as a
lrea
dy co
mm
itted
to a
pla
y. T
hese
bar
s sho
uld
not
nece
ssar
ily sc
are
trad
ers o
r m
ake
them
dou
bt th
e po
wer
of t
he g
roup
pro
duci
ng th
e co
lor…
not
at th
is po
int.
This
bar t
ypic
ally
repr
esen
ts th
e sq
uat b
efor
e a
danc
er’
s lea
p ba
ck to
stre
ngth
.
Page
78
Wea
k C
ontro
l
Bear
s wea
keni
ng c
ontro
l Bu
lls w
eake
ning
con
trol
Hig
h
Low
Hig
h
Low
2/3
2/3
Wea
k co
ntro
l exi
sts w
hen
a so
lid c
olor
ed b
ar h
as th
e fo
llow
ing
bar e
rase
abo
ut h
alf
the
colo
r of t
he
prio
r bar
. Whe
n a
gree
n ba
r has
a fo
llow
ing
red
bar r
etra
ce d
own
and
elim
inat
e ab
out 5
0% o
f the
pr
ior g
reen
bar
, the
bul
ls m
ight
be
in tr
oubl
e. W
hen
a re
d ba
r has
a fo
llow
ing
gree
n ba
r ret
race
up
and
elim
inat
e ab
out 5
0% o
f the
prio
r red
bar
, the
bea
rs m
ight
be
in tr
oubl
e. iF
und
Trad
ers T
ip:
This
scen
ario
doe
s not
gua
rant
ee th
at a
full
lost
of c
ontr
ol w
ill m
ater
ializ
e, b
ut if
the
mar
ket i
s be
hind
the
coun
ter c
olor
mov
e, th
e od
ds a
re g
ood
that
the
cont
rol i
s goi
ng to
cha
nge.
Page
79
Lost
Con
trol
Bear
s bac
k in
con
trol
Bulls
bac
k in
con
trol
Hig
h H
igh
Low
2/3
2/3
Lost
con
trol e
xist
s whe
n a
prev
ious
ly so
lid c
olor
ed b
ar h
as th
e fo
llow
ing
bar e
rase
2/3
or
mor
e of
the
prio
r bar’
s col
or.
Whe
n a
very
solid
gre
en b
ar h
as a
follo
win
g re
d ba
r re
trace
2/3
or m
ore
of th
e pr
ior g
reen
bar
, the
bul
ls h
ave
lost
thei
r pow
er. W
hen
a ve
ry
solid
red
bar h
as a
follo
win
g g
reen
bar
retra
ce 2
/3 o
r mor
e of
the
prio
r red
bar
, the
bea
rs
have
lost
thei
r pow
er.
Page
80
Tota
lly O
ver F
orev
er!
Bear
s in
cont
rol f
orev
er
Bulls
in c
ontro
l for
ever
Hig
h
Low
100%
100%
Rem
embe
r, ea
ch b
ar re
pres
ents
a b
attle
bet
wee
n th
e bu
lls a
nd b
ears
( bu
yers
and
selle
rs).
Whe
n th
e cl
ose
is a
bove
the
open
, the
bul
ls w
in, p
rodu
cing
the
colo
r gre
en. W
hen
the
clos
e is
bel
ow th
e op
en, t
he b
ears
win
, pro
duci
ng th
e co
lor r
ed. H
ow m
uch
each
side
win
s is
det
erm
ined
by
how
muc
h gr
een
or re
d th
ey p
rodu
ce. I
n ot
her w
ords
, the
wid
er th
e di
stan
ce b
etw
een
the
open
and
clo
se, t
he g
reat
er th
e w
in, a
nd w
hen
thos
e ty
pes o
f bar
s are
co
mpl
etel
y er
ased
by
the
follo
win
g ba
r, th
e gr
eate
r the
win
for t
he o
ppos
ite g
roup
!
Page
81
“The
mar
ket h
as o
nly
a sm
all h
andf
ul o
f tru
ly p
oten
t eve
nts.
The
Bul
l and
Bea
r 18
0 is
the
mos
t pot
ent o
f all.”
– O
liver
L. V
elez
Intr
o to
the
Bul
l 180
Eve
nt
Le
arni
ng t
he B
asic
s of
the
Mar
kets
Mos
t Po
ten
t C
HA
PTE
R 7
Page
82
Bu
ll 18
0 E
ven
t
Page
83
Bu
ll 18
0 E
ven
t
Page
84
Bu
ll 18
0 E
ven
t
Page
85
Bu
ll 18
0 E
ven
t
Page
86
Bea
r 18
0 E
ven
t
Page
87
Bea
r 18
0 E
ven
t
Page
88
Bea
r 18
0 E
ven
t
Page
89
Bea
r 18
0 E
ven
t
Page
90
“I’m
not
sur
e if
Sir
Isaa
c N
ewto
n ev
ery
play
ed th
e m
arke
t, bu
t man
y of
his
di
scov
erie
s an
d re
aliz
atio
ns le
nd th
emse
lves
to p
rope
r m
arke
t pla
y.”
–
Oliv
er L
. Vel
ez
“V
elez
Mar
ket
Law
1”
CH
APT
ER
8
Page
91
Vel
ez M
arke
t Law
#1
The
Law
of M
omen
tum
D
urin
g M
OVI
NG
mar
ket e
nviro
nmen
ts, st
ocks
and
oth
er tr
adab
le it
ems t
end
to fo
llow
thro
ugh
or c
ontin
ue th
e m
ost r
ecen
tly c
ompl
eted
col
or-c
oded
bar
, 80%
of t
he ti
me,
as
long
as m
ost o
f the
col
or h
as b
een
mai
ntai
ned.
Sir I
saac
New
ton:
“An
obj
ect i
n m
otio
n te
nds t
o sta
y in
mot
ion.”
D
iffer
ent w
ays t
o co
mm
unic
ate
the
law
:
1) A
fter a
solid
Gre
en B
ar, e
xpec
t ano
ther
one
to fo
llow
80%
;
2) A
fter a
solid
Red
Bar
, exp
ect a
noth
er o
ne to
follo
w 8
0%
3)
The
big
ger t
he g
reen
or r
ed b
ar, t
he h
ighe
r the
odd
s of f
ollo
w
t
hrou
gh, m
eani
ng y
ou’
ll se
e co
ntin
uanc
e cl
oser
to 9
0% o
f the
tim
e.
4)
A sm
all a
mou
nt o
f gre
en o
r red
doe
s not
giv
e th
e iF
und
Trad
ers
enou
gh to
go
on.
Mor
e in
form
atio
n is
nee
ded
in th
at c
ase.
Page
92
“The
re a
re o
nly
13 b
ars
the
mar
ket c
an fo
rm. T
hey
repr
esen
t the
mar
ket’
s al
phab
et, i
f you
will
. Lea
rn th
ese
bars
and
wha
t the
y m
ean
and
you’
ll be
set
to
Trad
e fo
r Li
fe™
.” –
Oliv
er L
. Vel
ez
“T
he M
arke
t’s
13
Bar
s”
Page
93
The
10 C
olor
ed C
andl
es
The
first
set o
f bar
s is w
on b
y th
e bu
lls in
var
ying
deg
rees
, with
the
last
bar
bei
ng a
n ac
tual
loss
. The
mos
t bul
lish
is a
t the
left,
the
leas
t is a
t the
righ
t. Th
e sa
me
goes
for t
he
bear
win
s. Th
e m
ost b
earis
h st
arts
at t
he le
ft, th
e m
ost q
uest
iona
ble
is a
t the
far r
ight
.
Most Bullish
2nd Most Bullish
Least Bullish
Neutral Bull
Normal Bullish
Most Bearish
2nd Most Bearish
Least Bearish
Neutral Bear
1 2
3 4
5
6 7
8 9
10
Normal Bearish
Page
94
The
3 N
on-C
olor
Can
dles
Bot
tom
ing
tails
(BTs
) and
Top
ping
Tai
ls (T
Ts) o
ffer i
Fund
Tra
ders
som
e in
cred
ible
trad
ing
oppo
rtuni
ties,
whi
ch w
e w
ill se
e sh
ortly
.
Tip:
Whi
le te
chni
cally
no
one
win
s, du
e to
the
open
and
clo
se b
eing
eve
n, th
e la
st g
roup
in
cont
rol o
f the
stoc
k is
con
side
red
the
win
ner.
Bar
1, i
s com
plet
ely
a dr
aw, B
ar 2
is w
on b
y th
e be
ars a
nd B
ar 3
is w
on b
y th
e bu
lls.
Bot
tom
ing
Tail
(BT)
Topp
ing
Tail
(TT)
Buyers dominate this entire area
Sellers dominate this entire area
All green was lost
All red was lost
Draw
11
12
13
Page
95
“Mon
ey a
nd it
s flo
w is
the
lifeb
lood
of t
he m
arke
t. K
now
ing
how
to r
ead
the
foot
prin
ts o
f mon
ey is
you
r ke
y to
trad
ing
mas
tery
” –
Oliv
er L
. Vel
ez
The
Mos
t Im
port
ant
Bar
s of
All
Lear
ning
How
to
Iden
tfy
the
Foot
prin
ts o
f th
e B
ig I
nsti
tuat
ion
s.
CH
APT
ER
10
Page
96
The
Mos
t Po
ten
t B
ars
The
4 M
ost P
oten
t Bar
s
Page
97
The
Mos
t Po
ten
t B
ars
Copy
right
© 2
010
*
i
Fund
Trad
ers.
com
*
2
576
Broa
dway
, #15
8, N
Y, N
Y, 1
0025
Page
98
The
Mos
t Po
ten
t B
ars
Copy
right
© 2
010
*
i
Fund
Trad
ers.
com
*
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576
Broa
dway
, #15
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Y, N
Y, 1
0025
Page
99
The
Mos
t Po
ten
t B
ars
Copy
right
© 2
010
*
i
Fund
Trad
ers.
com
*
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576
Broa
dway
, #15
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Y, N
Y, 1
0025
Page
100
The
Mos
t Po
ten
t B
ars
Copy
right
© 2
010
*
i
Fund
Trad
ers.
com
*
2
576
Broa
dway
, #15
8, N
Y, N
Y, 1
0025
Page
101
The
Mos
t Po
ten
t B
ars
Copy
right
© 2
010
*
i
Fund
Trad
ers.
com
*
2
576
Broa
dway
, #15
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Y, N
Y, 1
0025
Page
102
“Eve
ryth
ing
is n
ot a
lway
s w
hat i
t see
ms.
Wha
t oft
en lo
oks
bulli
sh c
an a
ctua
lly b
e be
aris
h, a
nd w
hat a
ctua
lly lo
oks
bear
ish
can
be v
ery
bulli
sh.”
– O
liver
L. V
elez
How
To
Tra
de T
he M
ost
Pote
nt
Bar
s Le
arni
ng H
ow t
o E
nter
and
Pla
ce S
tops
on
th
e M
ost
Pote
nt
Bar
s.
CH
APT
ER
11
Page
103
Bu
y an
d S
top
Met
hod
Copy
right
© 2
010
*
i
Fund
Trad
ers.
com
*
2
576
Broa
dway
, #15
8, N
Y, N
Y, 1
0025
Step
1:
Buy
tow
ard
the e
nd o
f the
Bul
l Ba
r’s f
orm
atio
n
Step
2:
Plac
e a
hard
stop
2 to
5 ce
nts
belo
w th
e Bul
l Bar
’s lo
w.
Buy
Stop
Buy
Buy
iFun
d Tr
adin
g Ti
p:
With
this
stop
met
hod,
the V
elez
Tra
ined
Tr
ader
onl
y lo
ses o
ne b
ar
Bull
Elep
hant
C
olor
ed
Botto
min
g Ta
il N
on-C
olor
ed
Botto
min
g Ta
il
Buy
Page
104
Sh
ort
Sto
p M
eth
od
Copy
right
© 2
010
*
i
Fund
Trad
ers.
com
*
2
576
Broa
dway
, #15
8, N
Y, N
Y, 1
0025
Step
1:
Sell
tow
ard
the e
nd o
f the
Bea
r Ba
r’s f
orm
atio
n
Step
2:
Plac
e a
hard
stop
2 to
5 c
ents
ab
ove
the B
ear B
ar’s
high
.
Sell
Stop
Sell
Sell iFun
d Tr
adin
g Ti
p:
With
this
stop
met
hod,
the V
elez
Tra
ined
Tr
ader
onl
y lo
ses o
ne b
ar
Bear
Ele
phan
t C
olor
ed
Topp
ing
Tail
Non
-Col
ored
To
ppin
g Ta
il
Sell
Page
105
Nev
er F
orge
t Th
is!
Copy
right
© 2
010
*
i
Fund
Trad
ers.
com
*
2
576
Broa
dway
, #15
8, N
Y, N
Y, 1
0025
All A
ctio
nabl
e Ba
rs F
ar A
bove
The
20-
ma
are
Sella
ble
A
LL O
F TH
EM!
Es
peci
ally
the
bulli
sh o
nes!
Page
106
“The
follo
win
g th
ree
time
fram
es a
re u
sed
by iF
und
Trad
ers
to e
arn
a liv
ing
in th
e m
arke
ts. T
hese
tim
e fr
ames
are
inco
me
gene
rato
rs, n
ot w
ealth
bui
lder
s. T
hey
are
used
to im
plem
ent t
he H
igh-
Oct
ane,
ATM
app
roac
h to
mak
ing
mon
ey d
aily
that
O
liver
Vel
ez h
as m
ade
so fa
mou
s.”
The
Thr
ee T
radi
ng
Tim
e Fr
ames
C
HA
PTE
R 1
2
Page
107
Thre
e Tr
adin
g Ti
me
Fram
es
1)
5-m
inut
e Cha
rt –
Thi
s tim
e fr
ame
is th
e iF
und
Trad
ers n
umbe
r one
stap
le. I
f the
re w
ere
only
one
tim
e fr
ame
with
whi
ch to
mak
e a
livin
g, it
wou
ld b
e th
is on
e. It
per
fect
ly si
ts
betw
een
the
15-m
inut
e, w
hich
can
be
a bi
t too
long
, and
the
2-m
inut
e, w
hich
can
be
a bi
t too
no
isy
at ti
mes
. The
pat
tern
s we
trade
at i
Fund
Tra
ders
app
ear f
requ
ently
eno
ugh
in th
e 5-
min
ute
win
dow
to k
eep
us a
ctiv
e, y
et in
freq
uent
ly e
noug
h to
pre
vent
us f
rom
ove
r tra
ding
. Th
is is
“th
e” o
ne, “
the”
tim
e fr
ame
to m
aste
r.
2)2-
min
ute C
hart
– T
his f
ast m
ovin
g ch
art i
s a g
od-s
end
whe
n th
e m
arke
t is n
ot p
rodu
cing
cl
ear s
igna
ls o
n th
e 5-
min
ute
or m
ore
actio
n is
des
ired.
It’
s also
use
ful i
f and
whe
n th
e en
try
and/
or ex
it po
ints
dic
tate
d by
the 5
-min
ute c
hart
are
too
far a
way
or u
ncle
ar.
Dro
ppin
g do
wn
to th
e 2-
min
ute
char
t for
a fi
ner e
ntry
, exi
t or s
top
will
usu
ally
pro
vide
the
best
alte
rnat
ive.
We
call
this
“dr
oppi
ng d
own
to th
e 2-
min
ute
char
t” ta
king
an
x-ra
y, o
r lo
okin
g in
side
the
stoc
k.
3)
1-m
inut
e Cha
rt –
Thi
s sup
er fa
st m
ovin
g tim
e fr
ame
beco
mes
a m
ajor
focu
s whe
n th
e ul
timat
e lev
el o
f pre
cisio
n an
d ac
cura
cy is
requ
ired
. It o
ffers
the
abili
ty to
take
an
x-ra
y of
th
e x-
ray,
whi
ch is
ofte
n re
quire
d w
hen
the
bars
on
the
2-m
inut
e ch
art a
re to
o w
ide
and
a fla
t m
arke
t dev
elop
s as i
s ofte
n th
e ca
se d
urin
g th
e m
idda
y do
ldru
ms p
erio
d. B
y dr
oppi
ng to
the
1-m
inut
e, th
e iF
und
Trad
ers c
an u
se fl
at p
erio
ds to
scal
p ex
tra in
com
e, w
hile
oth
ers a
re e
ither
si
tting
it o
ut o
r get
ting
knoc
ked
arou
nd in
the
bigg
er m
ore
unre
liabl
e tim
e pe
riods
.
No
te: T
he 8
-per
iod
mov
ing
aver
age
(8m
a), t
he 2
0-pe
riod
mov
ing
aver
age
(20m
a), a
nd th
e 20
0-pe
riod
mov
ing
aver
age
(200
ma)
are
use
d on
all
thre
e, th
e 5,
2 a
nd 1
-min
ute
char
ts. K
eep
in m
ind
that
the
20m
a an
d 21
ma
are
inte
rcha
ngea
ble.
It’
s a p
erso
nal c
hoic
e.
Page
108
Char
t Cou
rtes
y of
iFun
d Tr
ader
s
The
5-M
inu
te C
har
t
Tra
ding
Tip
: iF
und
Tra
ders
look
to
go l
ong
whe
n th
e r2
0ma
is
abov
e th
e 20
0ma.
T
hey
look
to
go s
hort
wit
h th
e d2
0ma
is
blow
the
200
ma
iFun
d T
rade
rs w
ould
loo
k to
go
long
at
or n
ear
the
r20m
a. S
ee
Cir
cles
.
Page
109
The
2-m
inut
e C
hart
iFun
d Tr
ader
s Tip
: A
risin
g st
ock
over
a r
ising
8 a
nd
risin
g 20
ma
repr
esen
ts o
ne o
f the
mos
t PO
TEN
T tr
ends
in e
xist
ence
. Rar
ely
Shou
ld it
be
foug
ht. T
he iF
und
Tra
der l
ooks
for a
ny b
uy se
t up
to e
nter
Page
110
The
1-m
inut
e C
hart
Cir
cles
sho
w w
ell-
defi
ned
buy
oppo
rtun
itie
s fo
r th
e iF
und
Tra
ined
Tra
der.
iFun
d T
rade
rs T
ip:
Thi
s ti
me
fram
e of
fers
nic
e op
port
unit
ies
to
capt
ure
enti
re s
hort
-ter
m t
rend
s us
ing
the
8ma
to e
nter
or
trai
l.
Page
111
“The
follo
win
g th
ree
time
fram
es h
elp
iFun
d Tr
ader
s es
tabl
ish
a bi
as fo
r th
e m
arke
t and
the
stoc
ks th
ey tr
ade.
Kno
win
g ho
w to
det
erm
ine
wha
t dir
ectio
n is
m
ore
likel
y th
an th
e ot
her
over
the
next
day
, hou
r or
15
min
ute
peri
od is
one
of
the
true
key
s to
acc
urac
y as
a tr
ader”
– O
liver
L. V
elez
The
Thr
ee A
naly
tica
l
Tim
e Fr
ames
C
HA
PTE
R 1
3
Page
112
Thre
e Ana
lytic
al T
ime
Fram
es
1)
Dai
ly C
hart
– T
his t
ime
fram
e is
key
to d
eter
min
ing
whi
ch st
ocks
hav
e up
side
bi
ases
and
whi
ch h
ave
dow
nsid
e bi
ases
for t
he fo
llow
ing
day.
Cer
tain
pric
e pa
ttern
s th
at fo
rm o
n th
e da
ily c
hart
have
a h
igh
prob
abili
ty o
f mov
ing
in a
pre
dete
rmin
ed
dire
ctio
n th
e fo
llow
ing
mor
ning
. Thi
s pro
ves v
ery
valu
able
to iF
und
Trad
ers a
nd
ofte
n le
ads t
o qu
ick
prof
its in
the
first
30-
min
utes
of t
radi
ng. A
dditi
onal
ly, m
any
stoc
ks w
ith w
ell d
efin
ed d
aily
cha
rt pa
ttern
s will
pro
duce
a m
ulti-
day
dire
ctio
nal
bias
that
may
now
be
focu
sed
on fo
r sev
eral
day
s.
2)60
-min
ute
Cha
rt –
Thi
s tim
e is
alm
ost n
ever
use
d fo
r tra
ding
, but
like
its s
mal
ler
15-m
inut
e br
othe
r, it
is u
nriv
aled
whe
n it
com
es to
find
ing
maj
or “
refle
ctio
n po
ints
,” a
reas
of m
ajor
sign
ifica
nce
whi
ch o
ften
lead
to a
brup
t sto
ppag
es a
nd
sudd
en re
vers
als d
urin
g th
e da
y. T
he iF
und
Trad
ers w
ill u
se th
e 60
-min
cha
rt si
mpl
y to
refe
renc
e th
ese
poin
ts a
nd to
gau
ge th
e m
ajor
tren
d of
the
unde
rlyin
g st
ock.
3)15
-min
ute
Cha
rt –
Thi
s tim
e fr
ame
will
be
used
prim
arily
for t
rend
ana
lysi
s and
su
ppor
t and
resi
stan
ce re
fere
nce
poin
ts. W
hile
iFun
d Tr
ader
s will
trad
e on
it fr
om
time
to ti
me,
its u
se a
s a g
auge
of t
he st
ock’
s pow
er a
nd it
s ove
rbou
ght-n
ess o
r ov
erso
ld-n
ess i
s unr
ival
ed. W
ith th
at b
eing
said
, tra
des o
n th
e 15
-min
ute
char
t do
tend
to b
e th
e cl
eane
st a
nd th
e tru
est.
In a
sens
e, fo
r the
pro
fess
iona
l tra
der e
arni
ng
a liv
ing
via
the
mar
kets
, thi
s tim
e fr
ame
wou
ld b
e co
nsid
ered
the “
core”
one
, for
lo
nger
term
trad
es th
roug
hout
the
day.
N
ote:
The
8, 2
0 an
d 20
0 M
As a
re ty
pica
lly u
sed
for t
he d
aily
, 60-
and
15-
min
ute c
hart
s.
Page
113
The
Dai
ly C
har
t
iFun
d Tr
ader
s Tip
: Eac
h da
y, o
ur tr
ader
s sca
n th
e m
arke
t afte
r hou
rs to
com
pile
a sh
ort l
ist o
f sto
cks t
hat
shou
ld h
ave
an u
psid
e or d
owns
ide
bias
ove
r the
nex
t se
vera
l day
s, ba
sed
on th
e dai
ly ch
art.
The
circ
les s
how
whe
n th
e iFu
nd T
rade
rs w
ould
hav
e a d
efin
ite u
psid
e bia
s. U
sing
bigg
er ti
me f
ram
es (d
aily
, 60-
min
and
15-
min
) to
dete
rmin
e yo
ur “
bias”
giv
es y
ou th
e ne
cess
ary
skill
and
conf
iden
ce to
take
the
signa
ls on
the s
mal
ler t
ime f
ram
es w
hen
they
are
in sy
nc w
ith th
at b
ias.
Page
114
The
60-m
inu
te C
har
t
Tip:
Dur
ing
decl
inin
g pe
riod
s on
the 6
0-m
inut
e cha
rt (6
0-m
inut
e cha
rt u
nder
a d
eclin
ing
21m
a), t
he iF
und
Trad
ers
wou
ld h
ave
a de
finite
shor
t bia
s on
smal
ler t
ime
fram
es
(2-,
5-, 1
5-m
in. c
hart
s). T
he sa
me
appl
ies i
n re
vers
e.
Page
115
The
15-m
inu
te C
har
t
iFun
d Tr
ader
s Tip
: Tra
ders
look
to g
o lo
ng, w
hen
the
r20m
a is
abov
e the
200
ma.
The
y lo
ok to
go
shor
t with
the
d20m
a is
belo
w th
e 200
ma.
iFun
d Tr
ader
s wou
ld lo
ok to
go
long
in th
e ar
ea o
f the
r20m
a (c
ircl
es).
Page
116
“The
re a
re th
ree
mov
ing
aver
ages
iFun
d Tr
ader
s m
onito
r at
all
times
." Th
e m
ovin
g av
erag
es fo
rm th
e ba
sis
for
man
y of
our
big
gest
mon
ey m
akin
g st
rate
gies
.”
- Oliv
er L
. Vel
ez
The
Thr
ee T
radi
ng
Mov
ing
Ave
rage
s C
HA
PTE
R 1
4
Page
117
Thre
e M
ajor
Mov
ing
Ave
rage
s 1)
8-pe
riod
Mov
ing A
vera
ge (8
ma)
– T
his s
impl
e m
ovin
g av
erag
e is
supe
rior a
t ca
ptur
ing
and
supp
ortin
g th
e m
arke
t’s m
ost p
ower
ful m
oves
. If a
stoc
k is
mov
ing
with
a fu
ry (u
p or
dow
n), i
t is t
his m
ovin
g av
erag
e th
at th
e st
ock
will
ofte
n re
act o
ff of
. We
also
use
this
mov
ing
aver
age
as th
e ba
sis f
or o
ne o
f our
mos
t effe
ctiv
e tra
iling
stop
met
hods
, whi
ch w
e w
ill d
iscu
ss sh
ortly
. iFu
nd T
rade
rs h
ave
the
8ma
on e
very
cha
rt th
ey lo
ok a
t.
2)20
-per
iod
Mov
ing A
vera
ge (2
0ma)
– T
his s
impl
e m
ovin
g av
erag
e is
the
num
ber
one
stap
le fo
r iFu
nd T
rade
rs. N
o ch
art i
s eve
r loo
ked
at w
ithou
t the
aid
of t
he
20m
a. In
fact
, I d
on’
t reg
ard
a ch
art a
s bei
ng v
alid
unl
ess i
t is a
ccom
pani
ed b
y th
e 20
ma.
It re
veal
s a st
ock’
s dire
ctio
nal b
ias,
acts
like
a m
agne
t and
tells
the
trade
r w
here
sign
ifica
nt a
reas
of s
uppo
rt an
d re
sist
ance
are
. Kee
p in
min
d th
at th
e pu
rest
wou
ld u
se a
21-
perio
d M
A. W
e ro
und
to 2
0, k
now
ing
that
mov
ing
aver
ages
are
si
mpl
y ar
eas,
not s
peci
fic p
rices
.
3)20
0-pe
riod
Mov
ing A
vera
ge (2
00m
a) –
Thi
s sim
ple
but m
ajor
mov
ing
aver
age
is
the
gran
ddad
dy o
f the
m a
ll. It’
s alm
ost m
agic
al h
ow o
ften
stoc
ks a
nd th
e ov
eral
l m
arke
t obe
y th
is sl
ow m
ovin
g lin
e. M
any
of iF
und
Trad
ers’
mos
t suc
cess
ful t
rade
s or
igin
ate
off t
he 2
00m
a. It
is a
lway
s in
view
and
is g
iven
the
utm
ost r
espe
ct.
Page
118
The
Pow
erfu
l 8M
A &
20M
A
1)
8 &
20
Peri
od S
impl
e M
ovin
g Ave
rage
– T
he 8
ma
& 2
0ma
(or t
he 2
1ma)
are
so im
porta
nt to
iFun
d Tr
ader
s tha
t no
char
t is e
ver s
tudi
ed o
r vie
wed
with
out t
hem
. Th
eir p
ower
and
relia
bilit
y ar
e un
rival
ed,
thus
NO
cha
rt is
a ch
art u
nles
s it i
s acc
ompa
nied
by
thes
e al
l-im
porta
nt te
chni
cal i
ndic
ator
s. W
e us
e th
em o
n ev
ery
time
fram
e or
cha
rt w
e lo
ok a
t. Ti
p: T
he iF
und
Trad
ers T
rade
r can
lite
rally
ear
n hi
s en
tire
livin
g in
the
mar
ket w
ith th
e 8m
a &
20m
a. H
ere
are
the
mos
t im
porta
nt th
ings
to k
now
abo
ut th
e 8m
a &
20m
a an
d th
eir p
rope
r use
:
a)
Tra
de w
ith th
e 8m
a &
20m
a, n
ot a
gain
st th
em -
Mos
t of y
our t
rade
s sho
uld
be in
sync
with
the
20m
a. If
the
8 &
20m
a ar
e ris
ing
in a
smoo
th fa
shio
n, y
our f
ocus
shou
ld
al
mos
t alw
ays b
e lo
ng. C
onve
rsel
y, if
the
8 &
20m
a ar
e de
clin
ing
in a
smoo
th fa
shio
n, y
our
focu
s sho
uld
alm
ost a
lway
s be
to sh
ort.
If th
e 20
ma
is fl
at (f
20m
a), y
our f
ocus
can
be
to
liqui
dity
trad
e w
ith th
e “
bid
and
offe
r” a
ppro
ach
(buy
bel
ow th
e 20
ma;
sell
abov
e th
e 20
ma)
.
b)
Use
8m
a &
20m
a as
supp
ort &
Res
istan
ce –
If a
nd w
hen
the
8 an
d/or
20m
a ar
e ris
ing
, it
will
serv
e as
stro
ng su
ppor
t. If
the
8 an
d/or
20m
a ar
e de
clin
ing,
it w
ill se
rve
as st
rong
ove
rhea
d
resi
stan
ce. L
ook
for b
uys a
t or n
ear a
r8m
a or
r20m
a. L
ook
for s
ells
/sho
rts a
t or n
ear a
8m
a or
20
ma.
c)
Use
20m
a as
a m
edia
n lin
e –
Whe
n a
stoc
k is
con
solid
atin
g in
a si
dew
ays p
atte
rn,
th
e 20
ma
will
be
flat a
nd u
sual
ly p
ositi
oned
righ
t in
the
mid
dle
of th
e si
dew
ays t
rend
.
If a
nd w
hen
this
is th
e ca
se, b
iddi
ng fo
r sto
ck in
a ra
nge
belo
w th
e 20
ma
and
offe
ring/
shor
ting
stoc
k in
a ra
nge
abov
e th
e 20
ma
is th
e ga
me
to p
lay.
Alw
ays b
e w
atch
ful o
f whi
ch si
de th
e
20
ma
even
tual
ly h
alts
the
stoc
k on
.
d)
Use
20m
a as
a m
agne
t – S
tock
s can
not r
emai
n ex
tend
ed to
o fa
r abo
ve o
r bel
ow
th
e 20
ma
for l
ong.
If a
nd w
hen
stoc
ks g
et to
o fa
r aw
ay, a
vio
lent
snap
bac
k to
the
20m
a is
emin
ent.
This
is w
hen
the
iFun
d T
rade
r can
inte
llige
ntly
look
to ta
ke a
dvan
tage
of a
co
unte
r tre
nd m
ove.
The
re w
ill b
e m
ore
on th
is “
rule
-bre
akin
g” c
once
pt la
ter o
n in
the
cour
se
Page
119
Char
t Cou
rtes
y of
iFun
d Tr
ader
s Pro™
The
Dai
ly C
har
t
Cir
cles
show
whe
n th
e iFu
nd T
rade
rs
wou
ld h
ave
a de
finite
ups
ide b
ias o
n th
e sm
alle
r tim
e fr
ames
.
Whi
le i
Fund
Tra
ders
don
’t
trad
e of
f th
e da
ily,
the
y us
e it
eac
h ni
ght
to c
ompi
le a
sho
rt l
ist
of s
tock
s th
at s
houl
d ha
ve u
psid
e or
dow
nsid
e bi
ases
for
the
nex
t da
y or
wee
k.
Page
120
“The
num
ber
1 ha
s ne
ver
and
neve
r w
ill b
e a
popu
lar
num
ber
for
the
mar
ket.
It al
way
s se
ems
to r
equi
re s
omet
hing
mor
e th
an o
ne, o
r on
ce, o
r on
e tim
e. In
oth
er
wor
ds, t
he m
arke
t lik
es c
onfir
mat
ion.
‘O
ne ti
me’
nev
er c
uts
it.”
– O
liver
L. V
elez
“V
elez
Mar
ket
Law
2”
CH
APT
ER
15
Page
121
Vel
ez M
arke
t Law
#2
The
Law
of “
2”
The
mar
ket n
ever
acc
ompl
ishes
any
thin
g wi
th ju
st on
e ba
r. It
need
s at
leas
t two
bar
s to
rega
rd so
met
hing
as b
eing
real
or s
igni
fican
t. Fo
llow-
thro
ugh
by a
seco
nd b
ar is
cru
cial
, oth
erwi
se th
e on
e ba
r ev
ent,
no m
atte
r how
app
aren
tly si
gnifi
cant
, is n
ot y
et re
al.
D
iffer
ent w
ays t
o co
mm
unic
ate
the
law
:
1) A
one
bar
bre
akou
t is o
nly
sign
ifica
nt if
follo
wed
thro
ugh
by a
seco
nd u
p ba
r;
2)
A o
ne b
ar b
reak
dow
n is
onl
y si
gnifi
cant
if it’s f
ollo
wed
thro
ugh
by
a
seco
nd d
own
bar;
3)
One
bar
eve
nts w
ith n
o fo
llow
thro
ugh
tend
to e
vent
ually
pro
duce
stro
ng m
oves
in th
e op
posi
te d
irect
ion.
Page
122
Char
t Cou
rtes
y of
iFun
d Tr
ader
s Pro™
The
pow
er o
f the
20
MA
Page
123
Char
ts C
ourt
esy
of iF
und
Trad
ers T
rade
r Pro
®
The
pow
er o
f the
20
MA
Onc
e th
e st
ock
gets
abo
ve t
he 2
0ma
and
a su
bseq
uent
de
clin
e is
hel
d in
che
ck b
y th
e 20
ma,
the
Bul
l Pi
ctur
e of
Po
wer
(+PO
P) i
s in
ful
l ef
fect
and
the
iFu
nd T
rade
r ca
n lo
ok t
o pl
ay s
ever
al m
ore
20m
a R
etes
t pl
ays.
The
sto
ck i
s he
ld i
n ch
eck
by t
he 2
0ma
here
for
the
fir
st t
ime.
iF
und
Tra
ders
wou
ld l
ook
for
seve
ral
mor
e su
cces
sful
ret
ests
.
Page
124
Char
ts C
ourt
esy
of iF
und
Trad
ers T
rade
r Pro
The
pow
er o
f the
20
MA
Page
125
The
20m
a H
alt!
Char
ts C
ourt
esy
of iF
und
Trad
ers T
rade
r Pro
®
Page
126
The
20m
a H
alt
iFun
d Tr
ader
s Tip
: Afte
r the
fir
st 2
0ma
Hal
t, th
e iFu
nd
Trad
er a
ssum
es th
ere
will
be
seve
ral m
ore
to ex
ploi
t.
Page
127
The
Pow
er o
f th
e 20
MA
Page
128
The
Mig
hty
200
MA
2)
20
0 Pe
riod
Sim
ple M
ovin
g Ave
rage
(200
ma)
– T
he 2
00m
a is
so u
nive
rsal
ly w
atch
ed, i
n al
l tim
e fr
ames
, tha
t for
all
prac
tical
pur
pose
s, it
has b
ecom
e a
self-
fulfi
lling
pro
phes
y. S
o ra
rely
do
stoc
ks fa
il to
obe
y (g
et h
alte
d by
) the
200
ma
that
we’
ve g
iven
it th
e hi
ghes
t nic
k-na
me
of a
ll, G
olia
th. I
t’s p
ower
, for
ce, a
nd re
liabi
lity
are
so g
reat
, tha
t it t
ruly
is g
olia
th-
like.
We
use
the
200m
a on
all
time
fram
es (1
-, 2-
, 5-,
15-,
60-m
in a
nd D
aily
cha
rts).
Her
e ar
e a
few
thin
gs th
at y
ou m
ust k
eep
in m
ind
rega
rdin
g th
is m
ight
y m
ovin
g av
erag
e:
a) F
latn
ess i
s kin
g: -
Whi
le th
e 20
ma
is m
ost p
ower
ful w
hen
it is
risi
ng a
nd
de
clin
ing
(tren
ding
), th
e 20
0ma
is m
ost p
ower
ful w
hen
it is
flat
(tre
nd-le
ss).
b) U
se a
s sup
port –
Whe
neve
r a st
ock
decl
ines
to a
flat
200
ma,
it w
ill a
lmos
t
alw
ays e
xper
ienc
e so
me
form
of r
ebou
nd, p
artic
ular
ly if
the
20m
a is
far a
way.
c)
Use
as r
esist
ance
– W
hene
ver a
stoc
k ra
llies
to a
flat
, ove
rhea
d 20
0ma,
it w
ill
al
mos
t alw
ays
expe
rienc
e so
me
form
of r
etra
cem
ent b
ack
dow
n, p
artic
ular
ly if
the
20
ma
is fa
r awa
y.
d) U
se a
s a m
agne
t – a
) If a
stoc
k ge
ts to
o fa
r abo
ve o
r bel
ow it
s 20m
a, a
nd b
)
its 2
0ma
gets
too
far a
bove
or b
elow
the
200m
a, th
en c
) a m
ajor
reve
rsal
is u
sual
ly
very
clo
se a
t han
d. T
his i
s whe
n th
e iF
und
Trad
ers T
rade
r can
look
to
take
adv
anta
ge o
f a c
ount
er tr
end
mov
e. In
oth
er w
ords
, it’
s thi
s sce
nario
that
al
low
s for
inte
llige
ntly
goi
ng a
gain
st th
e pr
evai
ling
trend
. Th
ere
will
be
mor
e
on th
is “
rule
-bre
akin
g” c
once
pt la
ter.
Trad
ing
Tip:
iFun
d Tr
ader
s kno
w th
at fl
at 2
00m
a pl
ays c
all f
or b
igge
r pos
ition
s
Page
129
The
Flat
Mig
hty
200
ma
Char
ts C
ourt
esy
of iF
und
Trad
ers T
rade
r Pro
®
Page
130
200m
a R
esis
tan
ce
Page
131
200m
a R
esis
tan
ce
Page
132
200m
a R
esis
tan
ce
Page
133
Flat
Mig
hty
200
ma
Page
134
The
Flat
Mig
hty
200
MA
Page
135
The
Flat
Mig
hty
200
MA
A iF
und
Trad
er B
uy S
et-u
p w
/ a b
otto
min
g Ta
il
Page
136
iFun
d Tr
ader
s Q
uote
: “A
ll m
arke
ts h
ave
stat
istic
al li
mits
. The
trad
er w
ho
thor
ough
ly u
nder
stan
ds w
hen
mar
kets
are
sta
tistic
ally
at o
r ne
ar th
e ou
ter
boun
ds o
f the
ir n
orm
s w
ill b
ecom
e a
mas
ter,
and
pos
sibl
y ev
en r
ich!”
- Oliv
er L
. Vel
ez
“V
elez
Mar
ket
Law
#3”
CH
APT
ER
16
Page
137
Vel
ez M
arke
t Law
#3
The
3, 5
, 8 B
ar M
ax
Dur
ing
NO
RMAL
mar
ket e
nviro
nmen
ts, st
ocks
and
oth
er tr
adab
le it
ems
cann
ot m
ove
in th
e sa
me
dire
ctio
n m
ore
than
5 to
8 b
ars i
n a
row;
how
ever
, sto
cks t
end
to st
ay tr
appe
d in
a 3
to 8
bar
max
cyc
le 8
0% o
f the
tim
e. 2
0% o
f th
e tim
e, a
stoc
k’s m
oves
can
top
and
botto
m o
utsid
e of
this
zone
. But
5 b
ars
is tru
ly th
e pi
vota
l num
ber.
Diff
eren
t way
s to
com
mun
icat
e the
law
:
1) A
fter a
3 to
5 b
ar r
un (u
p or
dow
n) th
e m
arke
t/sto
ck
te
nds t
o sh
arpl
y re
vers
e, cr
eatin
g a
nice
trad
ing
oppo
rtun
ity. E
very
now
and
agai
n, st
ocks
can
slip
into
the
next
5 to
8 b
ar zo
ne.
2)
Nei
ther
the
bulls
nor
the
bear
s can
cons
isten
tly w
in m
ore
than
5 b
attle
s
(bar
s) in
a ro
w. A
fter a
shar
p 3
to 5
bar
ral
ly, t
he b
ears
usu
ally
quic
kly
rega
in co
ntro
l. A
fter a
shar
p 3
to 5
bar
dec
line,
the
bulls
usua
lly q
uick
ly re
gain
cont
rol.
Thes
e m
oves
can
mov
e to
the
5 to
8 b
ar
zo
ne a
t tim
es.
3)
Las
tly, t
his l
aw c
an b
e sa
id th
is w
ay: “
Afte
r 3 to
5 g
reen
bars
in a
row,
the
iFun
d Tr
ader
shou
ld lo
ok to
take
adv
anta
ge
of
an
upco
min
g se
ries
of r
ed b
ars.
Afte
r 3 to
5 re
d ba
rs in
a
ro
w, th
e iF
und
Trad
er sh
ould
look
to ta
ke a
dvan
tage
of a
n
upco
min
g se
ries
of g
reen
bar
s.”
Page
138
The
3 to
5 B
ar B
uy R
ule
In ea
ch o
f the
scen
ario
s abo
ve, t
he iF
und
Trad
er w
ould
be
look
ing
for a
trad
able
rebo
und
to th
e ups
ide,
once
the
high
of a
pri
or b
ar h
as b
een
take
n ou
t. H
ow m
uch
of a
rebo
und
wou
ld d
epen
d on
the a
nsw
ers t
o se
vera
l key
qu
estio
ns su
ch a
s: a
) is t
he 3
-5 b
ar d
ip o
ccur
ring
in a
n up
tren
d, d
own
tren
d or
side
way
s tre
nd; b
) are
any
of t
he
mos
t pow
erfu
l rev
ersa
l sig
ns p
rese
nt; c
) how
far a
way
is th
e nea
rest
are
a of
resis
tanc
e; d
) was
ther
e a
volu
me
surg
e th
at to
ok p
lace
tow
ard
the e
nd o
f the
dec
line;
e) w
here
is th
e dip
in re
latio
n to
the 2
0ma;
and
f) is
the
curr
ent d
eclin
e po
tent
ially
bot
tom
ing
at o
r aro
und
one
of th
e ke
y re
vers
al ti
mes
? Th
e an
swer
s to
all t
hese
qu
estio
ns a
re c
over
ed in
the
man
y tr
adin
g co
ncep
ts ta
ught
in u
pcom
ing
chap
ters
and
thro
ugh
out o
ur 5
-day
live
tr
adin
g la
bs
Page
139
In ea
ch o
f the
scen
ario
s abo
ve, t
he iF
und
Trad
er w
ould
be
look
ing
for a
trad
able
rebo
und
to th
e ups
ide,
once
the
high
of a
pri
or b
ar h
as b
een
take
n ou
t. H
ow m
uch
of a
rebo
und
wou
ld d
epen
d on
the a
nsw
ers t
o se
vera
l key
qu
estio
ns su
ch a
s: a
) is t
he 3
-5 b
ar d
ip o
ccur
ring
in a
n up
tren
d, d
own
tren
d or
side
way
s tre
nd; b
) are
any
of t
he
mos
t pow
erfu
l rev
ersa
l sig
ns p
rese
nt; c
) how
far a
way
is th
e nea
rest
are
a of
resis
tanc
e; d
) was
ther
e a
volu
me
surg
e th
at to
ok p
lace
tow
ard
the e
nd o
f the
dec
line;
e) w
here
is th
e dip
in re
latio
n to
the 2
0ma;
and
f) is
the
curr
ent
decl
ine
pote
ntia
lly b
otto
min
g at
or a
roun
d on
e of
the k
ey re
vers
al ti
mes
? Th
e an
swer
s to
all t
hese
que
stio
ns a
re
cove
red
in th
e m
any
trad
ing
conc
epts
taug
ht in
the
futu
re ch
apte
rs a
nd th
roug
h ou
t our
5-d
ay li
ve tr
adin
g la
bs
The
3 to
5 B
ar B
uy R
ule
Page
140
In ea
ch o
f the
scen
ario
s abo
ve, t
he iF
und
Trad
er w
ould
be
look
ing
for a
trad
able
rebo
und
to th
e ups
ide,
once
the
high
of a
pri
or b
ar h
as b
een
take
n ou
t. H
ow m
uch
of a
rebo
und
wou
ld d
epen
d on
the a
nsw
ers t
o se
vera
l key
qu
estio
ns su
ch a
s: a
) is t
he 3
-5 b
ar d
ip o
ccur
ring
in a
n up
tren
d, d
own
tren
d or
side
way
s tre
nd; b
) are
any
of t
he
mos
t pow
erfu
l rev
ersa
l sig
ns p
rese
nt; c
) how
far a
way
is th
e nea
rest
are
a of
resis
tanc
e; d
) was
ther
e a
volu
me
surg
e th
at to
ok p
lace
tow
ard
the e
nd o
f the
dec
line;
e) w
here
is th
e dip
in re
latio
n to
the 2
0ma;
and
f) is
the
curr
ent
decl
ine
pote
ntia
lly b
otto
min
g at
or a
roun
d on
e of
the k
ey re
vers
al ti
mes
? Th
e an
swer
s to
all t
hese
que
stio
ns a
re
cove
red
in th
e m
any
trad
ing
conc
epts
taug
ht in
up
com
ing
chap
ters
and
thro
ugh
out o
ur 5
-day
live
trad
ing
labs
The
3 to
5 B
ar B
uy R
ule
Page
141
In ea
ch o
f the
scen
ario
s abo
ve, t
he iF
und
Trad
er w
ould
be
look
ing
for a
trad
able
rebo
und
to th
e ups
ide,
once
the
high
of a
pri
or b
ar h
as b
een
take
n ou
t. H
ow m
uch
of a
rebo
und
wou
ld d
epen
d on
the a
nsw
ers t
o se
vera
l key
qu
estio
ns su
ch a
s: a
) is t
he 3
-5 b
ar d
ip o
ccur
ring
in a
n up
tren
d, d
own
tren
d or
side
way
s tre
nd; b
) are
any
of t
he
mos
t pow
erfu
l rev
ersa
l sig
ns p
rese
nt; c
) how
far a
way
is th
e nea
rest
are
a of
resis
tanc
e; d
) was
ther
e a
volu
me
surg
e th
at to
ok p
lace
tow
ard
the e
nd o
f the
dec
line;
e) w
here
is th
e dip
in re
latio
n to
the 2
0ma;
and
f) is
the
curr
ent
decl
ine
pote
ntia
lly b
otto
min
g at
or a
roun
d on
e of
the k
ey re
vers
al ti
mes
? Th
e an
swer
s to
all t
hese
que
stio
ns a
re
cove
red
in th
e m
any
trad
ing
conc
epts
taug
ht in
up
com
ing
cha
pter
s and
thro
ugh
out o
ur 5
-day
live
trad
ing
labs
The
3 to
5 B
ar B
uy R
ule
Page
142
To fi
nd st
ocks
in p
lay
thro
ugho
ut th
e day
, iFu
nd T
rade
r wou
ld fi
rst l
ook
for s
ecto
rs e
xper
ienc
ing
the p
ictu
re o
f str
engt
h, th
en d
elve
into
thos
e sec
tors
to fi
nd th
e top
stoc
ks w
ith th
e sam
e pi
ctur
e.
The
Pict
ure
of S
treng
th
Page
143
The
3 to
5 B
ar S
ell R
ule
In ea
ch o
f the
scen
ario
s abo
ve, t
he iF
und
Trad
er w
ould
be
look
ing
for a
trad
able
rebo
und
to th
e dow
n sid
e, on
ce
the l
ow o
f a p
rior
bar
has
bee
n ta
ken
out.
How
muc
h of
a re
boun
d w
ould
dep
end
on th
e ans
wer
s to
seve
ral k
ey
ques
tions
such
as:
a) i
s the
3-5
bar
rally
occ
urri
ng in
an
up tr
end,
dow
n tr
end
or si
dew
ays t
rend
; b) a
re a
ny o
f the
m
ost p
ower
ful r
ever
sal s
igns
pre
sent
; c) h
ow fa
r aw
ay is
the n
eare
st a
rea
of su
ppor
t; d)
was
ther
e a
volu
me s
urge
th
at to
ok p
lace
tow
ard
the
end
of th
e ra
lly; e
) whe
re is
the
rally
in re
latio
n to
the 2
0ma;
and
f) is
the
curr
ent r
ally
po
tent
ially
topp
ing
at o
r aro
und
one o
f the
key
reve
rsal
tim
es?
The
answ
ers t
o al
l the
se q
uest
ions
are
cov
ered
in
the m
any
trad
ing
conc
epts
taug
ht in
up
com
ing
chap
ters
and
thro
ugh
out o
ur 5
-day
live
trad
ing
labs
Page
144
The
3 to
5 B
ar S
ell R
ule
In ea
ch o
f the
scen
ario
s abo
ve, t
he iF
und
Trad
er w
ould
be
look
ing
for a
trad
able
rebo
und
to th
e dow
n sid
e, on
ce
the l
ow o
f a p
rior
bar
has
bee
n ta
ken
out.
How
muc
h of
a re
boun
d w
ould
dep
end
on th
e ans
wer
s to
seve
ral k
ey
ques
tions
such
as:
a) i
s the
3-5
bar
rally
occ
urri
ng in
an
up tr
end,
dow
n tr
end
or si
dew
ays t
rend
; b) a
re a
ny o
f the
m
ost p
ower
ful r
ever
sal s
igns
pre
sent
; c) h
ow fa
r aw
ay is
the n
eare
st a
rea
of su
ppor
t; d)
was
ther
e a
volu
me s
urge
th
at to
ok p
lace
tow
ard
the e
nd o
f the
rally
; e) w
here
is th
e ra
lly in
rela
tion
to th
e 20m
a; a
nd f)
is th
e cur
rent
ral
ly
pote
ntia
lly to
ppin
g at
or a
roun
d on
e of t
he k
ey re
vers
al ti
mes
? Th
e an
swer
s to
all t
hese
que
stio
ns a
re c
over
ed in
the
man
y tr
adin
g co
ncep
ts ta
ught
in u
p co
min
g ch
apte
rs a
nd th
roug
h ou
t our
5-d
ay li
ve tr
adin
g la
bs
Page
145
The
3 to
5 B
ar S
ell R
ule
In ea
ch o
f the
scen
ario
s abo
ve, t
he iF
und
Trad
er w
ould
be
look
ing
for a
trad
able
rebo
und
to th
e dow
nsid
e, o
nce
the l
ow o
f a p
rior
bar
has
bee
n ta
ken
out.
How
muc
h of
a re
boun
d w
ould
dep
end
on th
e ans
wer
s to
seve
ral k
ey
ques
tions
such
as:
a) i
s the
3-5
bar
rally
occ
urri
ng in
an
up tr
end,
dow
n tr
end
or si
dew
ays t
rend
; b) a
re a
ny o
f the
m
ost p
ower
ful r
ever
sal s
igns
pre
sent
; c) h
ow fa
r aw
ay is
the n
eare
st a
rea
of su
ppor
t; d)
was
ther
e a
volu
me s
urge
th
at to
ok p
lace
tow
ard
the
end
of th
e ra
lly; e
) whe
re is
the
rally
in re
latio
n to
the 2
0ma;
and
f) is
the
curr
ent r
ally
po
tent
ially
topp
ing
at o
r aro
und
one o
f the
key
reve
rsal
tim
es?
The
answ
ers t
o al
l the
se q
uest
ions
are
cov
ered
in
the m
any
trad
ing
conc
epts
taug
ht in
up
com
ing
chap
ters
and
thro
ugh
out o
ur 5
-day
live
trad
ing
labs
Page
146
The
3 to
5 B
ar S
ell R
ule
In ea
ch o
f the
scen
ario
s abo
ve, t
he iF
und
Trad
er w
ould
be
look
ing
for a
trad
able
rebo
und
to th
e dow
nsid
e, o
nce
the
low
of a
pri
or b
ar h
as b
een
take
n ou
t. H
ow m
uch
of a
rebo
und
wou
ld d
epen
d on
the a
nsw
ers t
o se
vera
l key
qu
estio
ns su
ch a
s: a
) is t
he 3
-5 b
ar ra
lly o
ccur
ring
in a
n up
tren
d, d
own
tren
d or
side
way
s tre
nd; b
) are
any
of t
he
mos
t pow
erfu
l rev
ersa
l sig
ns p
rese
nt; c
) how
far a
way
is th
e nea
rest
are
a of
supp
ort;
d) w
as th
ere
a vo
lum
e sur
ge
that
took
pla
ce to
war
d th
e en
d of
the
rally
; e) w
here
is th
e ra
lly in
rela
tion
to th
e 20m
a; a
nd f)
is th
e cu
rren
t ral
ly
pote
ntia
lly to
ppin
g a
t or a
roun
d on
e of t
he k
ey re
vers
al ti
mes
? Th
e an
swer
s to
all t
hese
que
stio
ns a
re c
over
ed in
th
e man
y tr
adin
g co
ncep
ts ta
ught
in u
p co
min
g ch
apte
rs a
nd th
roug
h ou
t our
5-d
ay li
ve tr
adin
g la
bs
Page
147
3 to
5 B
ar S
ell R
ule
The
iFu
nd T
rade
r ca
n of
ten
coun
t hi
s w
ay t
o pr
ofit
s
Page
148
Quo
te: “
Mar
ket f
ailu
res
tend
to c
ause
maj
or p
robl
ems
for
mos
t ord
inar
y tr
ader
s,
but t
hey
can
serv
e as
maj
or m
oney
mak
ing
oppo
rtun
ities
for
wel
l tra
ined
iFun
d Tr
ader
s! In
oth
er w
ords
, we
are
alw
ays
prep
ared
to p
rofit
from
the
mar
ket’
s fa
iled
atte
mpt
to d
o so
met
hing
hig
hly
expe
cted
.”
- Oliv
er L
. Vel
ez
“V
elez
Mar
ket
Law
#4”
CH
APT
ER
17
Page
149
The
Faile
d N
ew L
ow/H
igh
Law
“I
f a st
ock
fails
to m
ake
a ne
w lo
w, a
fter i
t has
alre
ady
mad
e 3
or m
ore
lowe
r lo
ws, i
t will
mak
e a
new
high
. Con
vers
ely,
if a
stock
fails
to m
ake
a ne
w hi
gh,
afte
r it h
as a
lread
y m
ade
a se
ries o
f hig
her h
ighs
(3 o
r mor
e), i
t will
mak
e a
new
low
on th
e ne
xt m
ove.”
D
iffer
ent w
ays t
o co
mm
unic
ate t
he la
w:
1)
The
firs
t fai
led
atte
mpt
to m
ake
a ne
w lo
w in
a w
ell e
stab
lishe
d do
wnt
rend
is th
e fir
st si
gn th
at th
e ba
lanc
e of p
ower
has
shift
ed fr
om th
e se
llers
bac
k to
the
buye
rs.
The
tren
d ha
s lik
ely
chan
ged
and
the
first
low
in th
e ne
w tr
end
ha
s bee
n id
entif
ied.
2) T
he fi
rst f
aile
d at
tem
pt to
mak
e a
new
hig
h in
a w
ell e
stab
lishe
d up
tren
d
is th
e fir
st si
gn th
at th
e ba
lanc
e of p
ower
has
shift
ed fr
om th
e bu
yers
bac
k to
the
selle
rs. T
he tr
end
has l
ikel
y ch
ange
d an
d th
e fir
st h
igh
in th
e ne
w tr
end
ha
s bee
n id
entif
ied.
3) T
he fi
rst f
aile
d at
tem
pt to
mak
e a
new
hig
h or
low
in a
wel
l est
ablis
hed
tr
end
is th
e fir
st si
gn th
at th
e ba
ck o
f the
exi
stin
g tr
end
has b
een
brok
en a
nd
th
e op
posin
g sid
e is
read
y to
rega
in c
ontr
ol.
Vele
z M
arke
t Law
#4
Page
150
“The
idea
is to
get
out
fast
whe
n a
trad
e go
es a
gain
st y
ou.”
- J
esse
Liv
erm
ore
“iF
und
Tra
ders”
The
Thr
ee M
ajor
T
rail
ing
Stop
Met
hods
C
HA
PTE
R 1
8
Page
151
iFu
nd
Trad
ers
Trai
ling
S
top
Met
hod
1
iFun
d Tr
ader
s Bar
-by-
Bar S
top
Met
hod
Onc
e th
e iF
und
Trad
er h
as e
nter
ed h
is lo
ng, a
nd p
lace
d hi
s ini
tial s
top,
it’
s a b
oom
or b
ust s
cena
rio, m
eani
ng th
at
eith
er th
e tra
der w
ill h
it hi
s ant
icip
ated
targ
et o
r get
out
at h
is in
itial
stop
. Onc
e th
ere
is a
two
bar l
ift (t
his i
nclu
des
the
entry
bar
if it
end
s hig
her t
han
the
buy
pric
e), t
he tr
ader
wou
ld la
unch
into
“TR
AIL
ING
STO
P” m
ode.
Dur
ing
whi
ch, t
he tr
ader
mai
ntai
ns a
men
tal s
top
$0.0
1 be
low
the
prio
r bar’
s low
at a
ll tim
es. A
s eac
h ne
w b
ar b
egin
s, th
e TR
AIL
ING
STO
P is
mov
ed u
p, a
lway
s sta
ying
onl
y on
e ba
r beh
ind
the
bar c
urre
ntly
trad
ing.
The
sam
e w
ould
ap
ply
in re
vers
e, a
s evi
denc
ed b
y Fi
gure
2.
Page
152
Bar
-by-
Bar
Tra
ilin
g S
top
Page
153
Bar
-by-
Bar
Tra
ilin
g S
top
Char
ts C
ourt
esy
of iF
und
Trad
ers T
rade
r Pro
®
The
num
bers
show
eac
h on
e of t
he T
RA
ILIN
G S
TOP
mov
es m
ade
by
the i
Fund
Tra
der.
Tip:
Rem
embe
r, be
gin
TRA
ILIN
G S
TOP
mod
e onl
y AFT
ER y
ou h
ave
two
bars
of p
rofit
abili
ty.
Befo
re th
at, i
t’s t
he in
itial
stop
(s) t
hat s
erve
s as y
our l
ine i
n th
e sa
nd.
Page
154
iFu
nd
Trad
ers
Tr
ailin
g S
top
Met
hod
2
In th
e ab
ove
Figu
re 1
, the
iFun
d Tr
ader
wou
ld si
mpl
y bu
y at
poi
nt 1
, and
sell
into
the
initi
al ri
se, a
ntic
ipat
ing
a pu
llbac
k be
fore
the
seco
ndar
y le
g. A
t buy
poi
nt 2
, the
iFun
d Tr
ader
cou
ld tr
y an
d ho
ld o
n to
the
stoc
k as
long
as
it re
mai
ned
abov
e th
e r8
ma.
Ess
entia
lly, a
t tha
t poi
nt, t
he 8
ma
wou
ld b
ecom
e th
e iF
und
Trad
ers T
RA
ILIN
G
STO
P. E
very
thin
g w
ould
be
hand
led
in re
vers
e fo
r Fig
ure
2. T
he m
etho
d ap
plie
d to
1- 2
- and
5-m
inut
e ch
arts
w
orks
ext
rem
ely
wel
l.
2) iF
und
Trad
ers 8
ma
Mom
entu
m S
top
Met
hod –
This
is b
y fa
r the
mos
t dyn
amic
TR
AIL
ING
STO
P m
etho
d w
e de
ploy
, but
re
quire
s ner
ves o
f ste
el to
put
into
pra
ctic
e. It
repr
esen
ts o
ne o
f my
pers
onal
favo
rites
bec
ause
of i
ts su
perio
r abi
lity
to k
eep
the
trade
r in
a tra
de d
urin
g th
e sw
eete
st (s
trong
est)
part
of th
e m
ove.
Bar
-by-
bar n
oise
is e
limin
ated
, allo
win
g th
e tra
der t
o fo
cus o
n w
hat c
ount
s, th
e fo
rce
of th
e tre
nd. W
hat m
ust b
e ke
pt in
min
d is
that
whe
n st
ocks
are
not
in a
tren
ding
mod
e, th
is st
op m
etho
d w
ill re
sult
in fr
eque
nt “
whi
p-sa
ws.”
But
, with
pro
per t
imin
g, it
(lik
e its
big
ger b
roth
er, t
he 2
0ma
traili
ng st
op m
etho
d) is
unr
ival
ed
whe
n it
com
es to
“m
ilkin
g” th
e be
st p
art o
f a st
ock’
s mov
e. N
ote:
We
allo
w iF
und
Trad
ers t
o us
e th
is sto
p m
etho
d rig
ht fr
om th
e be
ginn
ing
stage
s of t
heir
tradi
ng. Buy
(1)
Buy
(2)
a
8ma
Figu
re 1
Shor
t (1)
Sh
ort (
2)
8ma
Figu
re 2
a
Page
155
The
8ma
Bu
ll R
un
iFun
d Tr
ader
s Ti
p
Page
156
The
8ma
Bu
ll Po
wer
Tip
: iF
und
Tra
ders
add
to
win
ning
pla
ys b
y bu
ying
at
each
iFu
nd T
rade
r B
uy T
acti
c.
Page
157
8ma
Bu
ll R
un
iFun
d T
rade
rs T
ip:
Page
158
Taki
ng
the
8 Tr
ain
Char
ts C
ourt
esy
of iF
und
Trad
ers P
ro®
8
Page
159
Char
ts C
ourt
esy
of iF
und
Trad
ers P
ro®
8ma
Bea
r R
un
iFun
d T
rade
rs T
ip:
The
8m
a is
an
iFun
d T
rade
rs n
umbe
r on
e tr
aili
ng s
top
guid
e.
Cir
cles
sho
w t
hree
iFu
nd T
rade
r Se
ll T
acti
cs.
Com
e ba
ck l
ater
to
iden
tify
eac
h on
e.
Page
160
8ma
Trai
ling
Sto
p
Char
ts C
ourt
esy
of iF
und
Trad
ers P
ro®
Circ
les
show
wel
l def
ined
ent
ries
for t
he iF
und
Trai
ned
Trad
er.
Not
e ho
w e
ffect
ive
the
8ma
keep
s th
e tra
der i
n th
e st
ock
durin
g th
e st
rong
est p
art o
f the
mov
e.
Page
161
The
8ma
Ret
est
iFun
d Tr
ader
s Ti
p:
Afte
r the
firs
t suc
cess
ful r
etes
t of a
n iF
und
Trad
ers
mov
ing
aver
age,
alw
ays
assu
me
anot
her w
ill o
ccur
. The
circ
le s
how
s th
e su
cces
sful
rete
st o
f the
8m
a.
Page
162
iFu
nd
Trad
ers
Tr
ailin
g S
top
Met
hod
3
In th
e ab
ove
Figu
re 1
, iF
und
Trad
ers w
ould
sim
ply
buy
at p
oint
1, a
nd se
ll in
to th
e in
itial
rise
, ant
icip
atin
g a
pullb
ack
befo
re th
e se
cond
ary
leg.
At b
uy p
oint
2,
iFun
d Tr
ader
s cou
ld tr
y an
d ho
ld o
n to
the
stoc
k as
long
as i
t re
mai
ned
abov
e th
e r2
0ma.
Ess
entia
lly, a
t tha
t poi
nt, t
he 2
0ma
wou
ld b
ecom
e th
e iF
und
Trad
ers T
RA
ILIN
G
STO
P. E
very
thin
g w
ould
be
hand
led
in re
vers
e fo
r Fig
ure
2. T
he m
etho
d ap
plie
d to
2- a
nd 5
-min
ute
char
ts
wor
ks e
xtre
mel
y w
ell.
3) iF
und
Trad
ers 2
0ma
TRA
ILIN
G S
TOP
Met
hod –
This
is b
y fa
r the
mos
t bas
ic T
RA
ILIN
G S
TOP
met
hod
we
depl
oy, a
nd th
e ea
sies
t to
put i
nto
prac
tice.
In m
any
way
s, it
is th
e m
ost s
uper
ior m
etho
d of
all,
as i
t for
ces t
he tr
ader
to
focu
s on
the
trend
, ins
tead
of t
he b
ar-b
y-ba
r noi
se, w
hich
can
be
quite
con
fusi
ng a
t tim
es. H
owev
er, i
ts su
perio
r nat
ure
only
wor
ks in
tren
ding
stoc
ks a
nd m
arke
ts a
nd it
lose
s all
of it
s lus
ter w
hen
stoc
ks a
nd m
arke
ts a
re n
ot tr
endi
ng. B
ut,
with
pro
per t
imin
g, it
is u
nriv
aled
whe
n it
com
es to
“m
ilkin
g” a
stoc
k’s m
ove
for a
ll it’
s wor
th. N
ote:
We
ONL
Y al
low
iFun
d Tr
ader
s to
use
this
met
hod
AFTE
R th
ey h
ave
grad
uate
d to
leve
l 4.
Buy
(1)
Buy
(2)
a
20m
a
Figu
re 1
Shor
t (1)
Sh
ort (
2)
20m
a
Figu
re 2
a
Page
163
The
20m
a Tr
ailin
g S
top
Onc
e th
e 20
ma
begi
ns to
hal
t the
pric
e de
clin
es,
the
iFun
d Tr
ader
con
fiden
tly b
uys s
ubse
quen
t re
test
s. Th
e 20
ma
serv
es a
s a tr
ailin
g st
op fo
r tho
se w
ho
don'
t min
d th
e bi
gger
swin
gs.
Circ
les s
how
trad
ing
oppo
rtuni
ties.
Page
164
The
20m
a Tr
ailin
g S
top
The
iFun
d Tr
ader
has
mul
tiple
opp
ortu
nitie
s to
en
ter a
sho
rt in
INTU
and
add
to it
, whi
le ri
ding
ea
ch o
pen
posi
tion
for m
axim
um g
ains
usi
ng
the
20m
a as
the
trai
ling
stop
. N
ote:
The
iFun
d Tr
ader
is s
till h
oldi
ng a
ll op
en
posi
tions
.
Page
165
“Yo
u ca
n be
at a
hor
se r
ace,
but
you
can
’t b
eat t
he r
aces
.”
- Unk
now
n
“iF
und
Tra
ders”
The
Mar
ket’
s
Thr
ee T
rend
s C
HA
PTE
R 1
9
Page
166
The
Mar
ket’
s Th
ree
Tren
ds
1)
Upt
rend
2)
Dow
ntre
nd
3) S
idew
ays
Tren
d
1) T
he U
p Tr
end –
The
up tr
end,
by
far t
he m
ost p
opul
ar o
f all,
is u
sual
ly d
efin
ed b
y a
serie
s of
high
er h
ighs
and
hig
her l
ows.
Our
def
initi
on is
a b
it m
ore
invo
lved
. In
addi
tion
to h
ighe
r hig
hs
and
low
s, w
e w
ant a
n up
tren
d to
pos
ses a
smoo
th ri
sing
20m
a ab
ove
a 20
0ma.
Tip:
In U
p Tr
ends
, iFu
nd T
rade
rs b
uy
dips
towa
rd th
e 20
ma,
buy
bre
akou
ts
away
from
the
20m
a an
d sh
ort
clim
actic
runs
too
far f
rom
the
20m
a.
2) T
he D
own
Tren
d –
The
dow
n tre
nd, b
y fa
r the
mos
t fea
red
of a
ll, is
usu
ally
def
ined
by
a se
ries o
f low
er h
ighs
and
low
er lo
ws.
Our
def
initi
on is
a b
it m
ore
invo
lved
. In
addi
tion
to lo
wer
hi
ghs a
nd lo
ws,
we
wan
t a d
own
trend
to p
osse
s a sm
ooth
dec
linin
g 20
ma
belo
w a
200
ma.
3) T
he S
idew
ays T
rend
– T
he si
dew
ays t
rend
, by
far t
he m
ost f
rust
ratin
g, is
usu
ally
def
ined
by
a se
ries o
f rel
ativ
ely
equa
l hig
hs a
nd lo
ws.
This
stag
e ca
n be
wid
e, u
sual
ly w
hen
it fo
rms a
fter
an a
dvan
ce, o
r it c
an ti
ght a
nd n
arro
w, u
sual
ly w
hen
it is
just
a p
ause
or a
fter a
shar
p de
clin
e.
Tip:
In S
idew
ays T
rend
s, iF
und
Trad
ers b
uy/b
id d
ips
and
shor
t/offe
r ral
lies.
Tip:
In D
own
Tren
ds, i
Fund
Tra
ders
sh
ort r
allie
s tow
ard
the
20m
a, sh
ort
brea
kout
s awa
y fro
m th
e 20
ma
and
buy
clim
actic
dec
lines
too
far f
rom
th
e 20
ma.
Page
167
The
Mar
ket’
s Th
ree
Up
Tren
ds
1)
Reg
. Up
tren
d
1) T
he R
egul
ar U
p Tr
end –
This
upt
rend
, def
ined
as a
risi
ng st
ock
abov
e a
smoo
th ri
sing
20m
a,
is a
iFun
d Tr
ader
s bre
ad a
nd b
utte
r tre
nd.
This
tren
d w
ill b
e pl
ayed
mor
e th
an a
n ot
her.
Tip:
In R
egul
ar u
p tre
nds,
iFun
d Tr
ader
s bu
y di
ps to
ward
the
20m
a, b
uy b
reak
outs
aw
ay fr
om th
e 20
ma
and
shor
t clim
actic
ru
ns to
o fa
r fro
m th
e 20
ma.
2) T
he P
ower
Upt
rend
– T
his u
ptre
nd, d
efin
ed a
s a ri
sing
stoc
k ab
ove
a ris
ing
20m
a w
hich
is
also
abo
ve th
e 20
0ma,
is a
step
abo
ve th
e re
gula
r upt
rend
. An
over
head
200
ma
repr
esen
ts
clou
ds in
the
sky,
som
ewha
t. W
hen
the
200m
a is
bel
ow a
ll th
e ac
tion,
it’
s typ
ical
ly c
lear
er
saili
ng fo
r the
stoc
k.
3) T
he S
uper
Upt
rend
– T
he u
ptre
nd, d
efin
ed a
s a ri
sing
stoc
k ab
ove
a ris
ing
8ma,
whi
ch is
als
o ab
ove
a ris
ing
20m
a, is
the
mos
t pow
erfu
l one
in e
xist
ence
. It’
s em
erge
nce
sign
ifies
pur
e un
adul
tera
ted
buyi
ng p
ower
that
one
can
trus
t abs
olut
ely.
It d
oes n
ot g
et b
ette
r tha
n th
is!
Tip:
In S
uper
up
trend
s, bu
ying
any
wher
e an
d an
ytim
e du
ring
the
trend
wor
ks
amaz
ing
well.
Tip:
In P
ower
up
trend
s, di
ps a
re n
o co
ncer
n an
d ca
n be
use
d to
ac
cum
ulat
e la
rger
pos
ition
s.
2)
Pow
er U
ptre
nd
3)
Sup
er U
ptre
nd
20m
a
20m
a 8ma
20m
a
200m
a
Page
168
The
Mar
ket’
s Th
ree
Dow
n
Tren
ds
1)
Reg
. Dow
ntre
nd
1) T
he R
egul
ar D
own
Tren
d –
This
dow
ntre
nd, d
efin
ed a
s a d
eclin
ing
stoc
k be
low
a sm
ooth
de
clin
ing
20m
a, is
a iF
und
Trad
ers b
read
and
but
ter s
hort
trend
. Th
is tr
end
will
be
play
ed o
n th
e sh
ort s
ide
mor
e th
an a
n ot
her.
Tip:
In R
egul
ar d
ownt
rend
s, iF
und
Trad
ers
shor
t ral
lies t
owar
d th
e 20
ma,
shor
t br
eakd
owns
aw
ay fr
om th
e 20
ma
and
buy
clim
actic
runs
too
far b
elow
the
20m
a.
2) T
he P
ower
Dow
ntre
nd –
Thi
s dow
ntre
nd, d
efin
ed a
s a d
eclin
ing
stoc
k be
low
a d
eclin
ing
20m
a w
hich
is a
lso
belo
w th
e 20
0ma,
is a
step
abo
ve th
e re
gula
r dow
ntre
nd. A
200
ma
belo
w
the
stoc
k re
pres
ents
a fl
oor o
f sup
port.
Whe
n th
e 20
0ma
is a
bove
all
the
actio
n, th
e st
ock
is
typi
cally
free
r to
fall.
3) T
he S
uper
Dow
ntre
nd –
The
dow
ntre
nd, d
efin
ed a
s a d
eclin
ing
stoc
k be
low
a d
eclin
ing
8ma,
w
hich
is a
lso
belo
w a
dec
linin
g 20
ma,
is th
e m
ost p
ower
ful o
ne in
exi
sten
ce. I
t’s e
mer
genc
e si
gnifi
es p
ure
unad
ulte
rate
d se
lling
pow
er th
at o
ne c
an tr
ust a
bsol
utel
y. It
doe
s not
get
bet
ter
than
this
for b
ears
!
Tip:
In S
uper
dow
ntre
nds,
shor
ting
anyw
here
and
an
ytim
e du
ring
the
trend
wo
rks a
maz
ing
well.
Tip:
In P
ower
dow
ntre
nds,
ralli
es
are
no c
once
rn a
nd c
an b
e us
ed to
bu
ild la
rger
shor
t pos
ition
s.
2)
Pow
er D
ownt
rend
20m
a
20m
a
8ma
20m
a
200m
a
Page
169
iFu
nd
Trad
ers
S
upe
r U
ptre
nd
Char
ts C
ourt
esy
of iF
und
Trad
ers P
ro®
Ch
arts
Cou
rtes
y of
iFun
d Tr
ader
s Pro
®
iFun
d Tr
ader
s Ti
p:
A ris
ing
stoc
k ab
ove
a ris
ing
8ma
and
20m
a re
pres
ents
one
of t
he m
ost
pote
nt u
ptre
nd’s
in e
xist
ence
. Rar
ely
shou
ld it
be
foug
ht. R
athe
r, th
e iF
und
Trad
er lo
oks
for a
ny e
xcus
e to
fall
in
or e
nter
.
Buy
Her
e
Page
170
15-M
inu
te U
p Tr
end
Char
ts C
ourt
esy
of R
ealti
ck®
Whe
n s
tock
s ar
e in
str
ong
up t
ren
ds o
n th
e 15
-min
ute
char
t, b
uyin
g di
ps a
nd
brea
kout
s on
the
2-m
inut
e an
d 5-
min
ute
char
ts h
ave
bett
er o
dds
of w
orki
ng.
Whe
n st
ocks
are
in
stro
ng u
p tr
ends
on
the
15-m
inut
e ch
art,
buy
ing
dips
an
d br
eako
uts
on t
he 2
-min
ute
and
5-m
inut
e ch
arts
hav
e be
tter
odd
s of
wor
king
.
Page
171
Char
t Cou
rtes
y of
Rea
ltick
®
15-M
inu
te D
own
Tre
nd
Whe
n st
ocks
are
in
stro
ng d
own
tren
ds o
n th
e 15
-min
ute
char
t, s
hort
ing
ralli
es a
nd
brea
kdow
ns o
n th
e 2-
min
ute
and
5-m
inut
e ch
arts
hav
e be
tter
odd
s of
wor
king
.
Page
172
5-M
inu
te U
p Tr
end
If th
e iF
und
Trad
er U
p Tr
end
1 –
Ris
ing
Sto
ck a
bove
the
2 –
Ris
ing
20m
a (r
20m
a)
3 –
r20m
a ab
ove
the
200
ma
Tip:
iFun
d Tr
ader
s ca
n bu
y di
ps a
nd b
reak
outs
th
at o
ccur
(orig
inat
e) a
t or n
ear t
he r2
0ma
(or 2
1ma)
Page
173
5-M
in D
own
tren
d V
BS
s Cir
cles
sho
w i
Fund
Tra
ders
Opp
ortu
niti
es
Page
174
2-m
in U
p Tr
end
Com
e ba
ck a
fter
the
cou
rse
to n
ame
thes
e iF
und
Tra
ders
Tra
des
This
dip
bac
k to
th
e r2
0ma
was
a b
it
too
slop
py. I
n a
ddit
ion
, it
occu
rred
to
o cl
ose
to t
he
end
of t
he
day
for
the
iFu
nd
Trad
ers
to t
ake.
Page
175
Char
t Cou
rtes
y of
Rea
ltick
®
2-m
in D
own
tren
d
We’
ve s
een
th
is c
har
t se
vera
l tim
es,
alre
ady,
bu
t it
com
mu
nic
ates
so
mu
ch
that
it t
augh
t by
iFu
nd
Trad
ers,
yo
u’ll
see
it s
ever
al m
ore
tim
es.
Com
e ba
ck s
omet
ime
afte
r th
e co
urs
e to
n
ame
thes
e iF
un
d Tr
ader
s S
et-u
ps
(eve
nts
).
Page
176
5-M
inu
te S
idew
ays
Tren
d
Page
177
1-M
inu
te S
idew
ays
Tren
d
Page
178
“The
Pow
er T
rend
is w
hat e
very
trad
er c
rave
s fo
r. W
hen
it ar
rive
s, it
s yo
ur
chan
ce to
sit
back
and
do
noth
ing
but e
njoy
the
ride
.” –
Oliv
er L
. Vel
ez
Pow
er T
rend
s
The
Mar
ket’
s B
igge
st R
ewar
d.
CH
APT
ER
12
Page
179
Pow
er T
ren
ds
Pow
er T
ends
or S
uper
Tre
nds:
Th
ey re
pres
ent t
he m
uch
awai
ted
for “
rew
ard”
of a
ll tra
ders
Po
wer
Tre
nds
are
com
pris
ed o
f the
follo
win
g ch
arac
teris
tics:
1)
Sto
cks
(or a
ny o
ther
item
) in
pow
er tr
ends
rise
or d
eclin
e at
45
degr
ee a
ngle
s - K
eep
in m
ind
that
an
gles
muc
h sh
arpe
r tha
n 45
deg
rees
are
ver
y sh
ort l
ived
and
the
spee
d an
d ve
loci
ty o
f suc
h tre
nds
are
so h
igh
they
can
’t en
dure
ove
r ext
ende
d pe
riods
of t
ime.
The
y ex
pend
too
muc
h en
ergy
too
quic
kly
to la
st. T
hink
of a
n O
lym
pic
sprin
ter.
2)
Thes
e po
wer
tren
ds a
re fo
rmed
by
and
larg
e by
sm
all,
little
bar
s: -
Pow
er tr
ends
rise
in a
tigh
t, al
mos
t non
-dra
mat
ic w
ay. S
mal
l bar
s m
ake
mos
t of t
he s
tock
’s 4
5 de
gree
tren
d, w
hich
mea
ns it
s ris
ing
with
the
grea
test
am
ount
of e
ase
and
effic
ienc
y. B
ig b
ars
expe
nd to
ns o
f ene
rgy.
Thi
nk M
arat
hon
runn
er v
ersu
s th
e sp
rinte
r. 3)
Ther
e is
ver
y fe
w c
onta
cts
with
the
20m
a, if
any
at a
ll –
Pow
er tr
ends
tend
to e
asily
and
eve
r-so
-gr
acef
ully
glid
e ab
ove
thei
r 20m
as. T
hey
may
hav
e a
few
con
tact
s al
ong
the
way
but
they
are
like
jets
th
ey fl
y sm
ooth
ly a
bove
the
clou
ds, n
ot th
roug
h th
em.
4)Th
ey fr
eque
ntly
igno
re s
ingl
e re
d ba
rs –
In o
ther
wor
ds, p
ower
tren
ds te
nd to
freq
uent
ly p
rodu
ce o
nly
one
red
bar o
nly.
Red
bar
s ar
e of
ten
imm
edia
tely
follo
wed
by
gree
n ba
rs, d
emon
stra
ting
the
anxi
ous
and
exci
ted
natu
re o
f the
buy
ers.
We
call
this
freq
uent
igno
ring
of re
d ba
rs (R
BIs
). Ex
haus
tion
Elep
hant
Bar
s co
ntin
ue o
r exa
sper
ate
an
alre
ady
wel
l est
ablis
hed
dire
ctio
nal t
rend
. Sai
d an
othe
r w
ay, r
athe
r tha
n ch
ange
, the
y ac
tual
ly c
ontin
ue th
e cu
rren
t co
lor d
omin
ated
mov
e.
Not
e: A
ny E
leph
ant B
ar fa
r aw
ay fr
om th
e 20
ma
is a
bar
of
“maj
or” i
mpo
rtanc
e, b
ecau
se th
ey ig
nite
big
mov
es.
Page
180
Pow
er T
ren
d
Page
181
Pow
er T
ren
d
Page
182
Pow
er T
ren
d
Page
183
Pow
er T
ren
d
Page
184
Pow
er T
end
Page
185
“Do
not h
ave
an in
tere
st in
too
man
y st
ocks
at o
ne ti
me.
It
is m
uch
easi
er to
wat
ch a
few
than
man
y.”
- Jes
se L
iver
mor
e
“T
he T
hree
Mod
es o
f T
radi
ng”
Left
, Rig
ht &
Bot
tom
C
HA
PTE
R 2
1
Page
186
Def
ine
Wh
o Yo
u A
re
Left
Side
, Rig
ht S
ide,
Bot
tom
to R
ight
: Th
ese
3 st
yles
repr
esen
t the
thre
e ty
pe o
f pro
buy
ers
Left
Side
Buy
er: W
hen
a st
ock
is le
ft-si
ding
, it i
s te
ndin
g do
wnw
ard
unde
r a d
eclin
ing
20m
a.
The
left-
side
buy
er lo
oks
to g
radu
ally
ent
er s
mal
l lot
s w
hile
a s
tock
is s
till d
eclin
ing
unde
r its
20
ma,
bui
ldin
g a
posi
tion
in a
ntic
ipat
ion
of a
nea
r-by
turn
to th
e up
side
. My
fam
ous
ATM
trad
ing
met
hod
falls
into
this
cat
egor
y. T
his
appr
oach
is th
e m
ost a
ggre
ssiv
e st
yle
of th
e th
ree
and
is
only
for t
he m
ost s
kille
d at
tim
ing
near
-by
botto
ms.
R
ight
Sid
e B
uyer
: Whe
n a
stoc
k is
righ
t-sid
ing,
it is
tren
ding
upw
ard
abov
e a
risin
g 20
ma.
The
le
ft-si
de b
uyer
look
s to
ent
er p
lays
onl
y af
ter a
sto
ck h
as d
emon
stra
ted
its in
abilit
y to
dec
line
belo
w th
e 20
ma
agai
n. h
is b
uyer
will
only
mak
e hi
s/he
r ini
tial e
ntry
afte
r a s
tock
has
de
mon
stra
ted
its a
bilit
y to
get
abo
ve th
e 20
ma
and
stay
ther
e. T
his
mos
t con
serv
ativ
e st
yle
of
the
thre
e of
ten
has
the
trade
r buy
ing
rath
er h
eavi
ly a
fter t
he fi
rst s
ucce
ssfu
l ret
est o
f the
20m
a.
Bot
tom
to R
ight
Buy
er: T
he tr
ader
pra
ctic
ing
this
sty
le is
a h
ybrid
bet
wee
n th
e ab
ove
two
styl
es. W
hile
the
buys
with
this
sty
le d
o oc
cur u
nder
the
20m
a, th
ey o
nly
take
pla
ce w
hen
an
actio
nabl
e ev
ent f
orm
s de
ep b
elow
the
20m
a. T
he in
itial
buy
s te
nd to
be
quite
hea
vy a
t firs
t and
be
com
e lig
hter
as
the
play
evo
lves
. N
ote:
Whi
le a
trad
er c
an le
an to
war
d on
e st
yle
mor
e th
an o
ther
s, m
ixin
g th
ese
styl
es
is a
lso
an o
ptio
n. O
ne d
oes
not h
ave
to h
ave
a rig
id “e
ither
or"
sta
nce
with
them
.
Page
187
Rig
ht
Sid
e Pl
ay
Page
188
“T
HE
GIF
T”
The “
GIF
T” B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
The “
GIF
T” B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
The “
GIF
T” B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
The “
GIF
T” B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
The “
GIF
T” B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
The “
GIF
T” S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
The “
GIF
T” S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
The “
GIF
T” S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
The “
GIF
T” S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Clic
k to
add
subt
itle
Pg 1
27
“D
o yo
u kn
ow w
hat y
ou a
re s
uppo
sed
to d
o, a
nd if
so,
do
you
actu
ally
do
wha
t yo
u ar
e su
ppos
ed to
do
whe
n yo
u ar
e su
ppos
ed to
do
it?”
- Dr.
Dan
iel M
ielc
arsk
i
IGN
ITIN
G B
AR
S T
HE
MO
ME
NT
UM
BU
Y
AN
D M
OM
EN
TU
M S
ELL
The
Mom
entu
m B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Onc
e yo
u ha
ve in
dent
ified
an
igni
ting
bar,
the
mom
entu
m b
uy is
mad
e on
ce th
e hi
gh o
f the
igni
ting
bar i
s cle
ared
and
a st
op is
pla
ced
unde
r th
e lo
w o
f the
igni
ting
bar.
The b
est i
gniti
ng b
ars m
ost c
lose
ly re
sem
ble
thos
e w
ith A
bsol
ute
Con
trol
and
also
hav
e a p
rice
voi
d (e
mpt
y sp
ace)
abo
ve o
n th
e cu
rren
t tim
e fr
ame
and
the
larg
er ti
me
fram
es.
In o
ther
wor
ds w
e do
not
wan
t to
buy
righ
t int
o th
e fa
ce o
f im
med
iate
or
ver
y ne
ar b
y re
sista
nce.
In
that
inst
ance
it is
bet
ter t
o w
ait f
or th
e re
sista
nce
to b
e cl
eare
d an
d re
test
ed, a
s sup
port
, or c
lear
ed a
nd a
noth
er
buy
trig
ger f
orm
s to
conf
irm
the
follo
w th
roug
h of
mom
entu
m.
Onl
y a
one b
ar li
ft is
need
ed to
beg
in u
sing
a Ba
r-By
-Bar
trai
ling
stop
. If
a m
omen
tum
bar
is to
be
ente
red
befo
re c
ompl
etio
n, th
e TIF
Rul
es
(cov
ered
in th
e ne
xt se
ctio
n) m
ust b
e fo
llow
ed
The
Mom
entu
m B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Igni
ting
Bar
The
Mom
entu
m B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Igni
ting
Bar
Entr
y
Stop
The
Mom
entu
m B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Igni
ting
Bar
Trai
ling
Stop
Cur
rent
bar
still
form
ing
The
Mom
entu
m B
uy
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Igni
ting
Bar
Trai
ling
Stop
Cur
rent
bar
still
form
ing
The
Mom
entu
m S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Onc
e yo
u ha
ve in
dent
ified
an
igni
ting
bar,
the
mom
entu
m se
ll is
mad
e on
ce th
e lo
w o
f the
igni
ting
bar i
s cle
ared
and
a st
op is
pla
ced
abov
e the
hi
gh o
f the
igni
ting
bar.
The b
est i
gniti
ng b
ars m
ost c
lose
ly re
sem
ble
thos
e w
ith A
bsol
ute
Con
trol
and
also
hav
e a p
rice
voi
d (e
mpt
y sp
ace)
bel
ow o
n th
e cu
rren
t tim
e fr
ame
and
the
larg
er ti
me
fram
es.
In o
ther
wor
ds w
e do
not
wan
t to
sell
righ
t int
o th
e fa
ce o
f im
med
iate
or
ver
y ne
ar b
y su
ppor
t. In
that
inst
ance
it is
bet
ter t
o w
ait f
or th
e su
ppor
t to
be c
lear
ed a
nd re
test
ed, a
s res
istan
ce, o
r cle
ared
and
ano
ther
se
ll tr
igge
r for
ms t
o co
nfir
m th
e fo
llow
thro
ugh
of m
omen
tum
. O
nly
a on
e bar
lift
is ne
eded
to b
egin
usin
g a
Bar-
By-B
ar tr
ailin
g st
op .
If a
mom
entu
m b
ar is
to b
e en
tere
d be
fore
com
plet
ion,
the T
IF R
ules
(c
over
ed in
the
next
sect
ion)
mus
t be
follo
wed
The
Mom
entu
m S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Igni
ting
Bar
The
Mom
entu
m S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Igni
ting
Bar
Entr
y
Stop
The
Mom
entu
m S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Igni
ting
Bar
Trai
ling
Stop
Cur
rent
bar
still
form
ing
The
Mom
entu
m S
ell
Cop
yrig
ht ©
201
0
*
iFu
ndTr
ader
s, LL
C.
*
257
6 Br
oadw
ay, #
158,
NY,
NY,
100
25
Igni
ting
Bar
Trai
ling
Stop
Cur
rent
bar
still
form
ing
Page
209
iFun
d T
rade
rs S
ervi
ces:
S
upp
orti
ng
Trad
ers
Page
210
Sta
y In
Tou
ch