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The1HourTrade
MakeMoneywithOneSimpleStrategy,
OneHourDaily
ByBrianAnderson
Http://www.LanghamTrading.com
Copyright©2014byBrianAndersonAllrightsreserved.
Nopartofthispublicationmaybereproduced,storedinaretrievalsystem,ortransmittedinanyformorbyanymeans,electronic,mechanical,photocopying,recording,scanning,orotherwise,exceptaspermittedunderSection107or108ofthe1976UnitedStatesCopyrightAct,withoutthepriorwrittenpermissionoftheauthor.LimitofLiability/DisclaimerofWarranty:Whileeveryefforthasbeenmadeinpreparingthisbookandrepresentingthismethodanditspotential,theauthormakesnorepresentationsorwarrantieswithrespecttotheaccuracyorcompletenessofthecontentsofthisbookandspecificallydisclaimsanyimpliedwarrantiesofmerchantabilityorfitnessforaparticularpurpose.Nowarrantymaybecreatedorextendedbysalesrepresentativesorwrittensalesmaterials.Theadviceandstrategiescontainedhereinmaynotbesuitableforyoursituation.Youshouldconsultwithaprofessionalwhereappropriate.Theauthorshallnotbeliableforanylossofprofitoranyothercommercialdamages,includingbutnotlimitedtospecial,incidental,consequential,orotherdamages.
FreeMembershipAsawayofsayingthanksforyourpurchase,I’mgivingyouaccesstoa30dayMembershipatwww.langhamtrading.com/membershipsforfree.Simplyforwardamazon’sorderconfirmationemailforthisbookto:Orders@1HourTrade.comandIwillsendyouapromocodeforthefreemonthmembership.
TableofContentsIntroductionChapter1–HighVolumeRunnersChapter2–BasicTrainingChapter3–VolumeandPriceActionChapter4–ControllingRiskChapter5–IdentifyingHighVolumeRunnersChapter6–AftertheAlertChapter7–GainingEntryChapter8–TakingProfitsChapter9–ChartReviewChapter10–Step-By-StepRecapFinalRemarks&ContactInfo
Introduction
Thereareveryfewworthwhileskills in thisworld, ifanyatall, thatareeasilymastered.Painstakinglydifficultskills,likegolforsurfing,forinstance(Atleast
for me; I’m terrible at both.), take years of regular practice just to become“good;”tobecomeanexperttakesdecades.Tradingthemarketsisnodifferentthantheseandotherhard-earnedskills.Afteryearsofgrindingawayinpracticeofthesepursuits,thesubconscioustakesonanincreasingrole.Onedayyouwakeup,andwhatwasoncesodifficultforsolongnowseemssimple,fluid,eveneasy.Withalmostnoexceptions,therearenoshortcuts.Here’sthegoodnews...withtrading,itispossibletofast-trackyourskill.Youcan become a successful trader, creating income for yourself, in a very shortperiodoftime.Inordertofast-trackyourtradingskill,youneedtoadoptalaserbeamfocusonone specific setup, follow detailed rules and parameters, and ignore all otherpotentialtradingactivityuntilyou’vemasteredyouronesetup.Itdoesn’thavetobe theone I provide in this book, butwhatever setupyou endup choosing, itmust remainyour singular focusuntil youhavebecomegreat at it.After that,youcanexpandintoothers,onebyone,masteringeachbeforethenext.I’ve been trading full-time for several years. 90% of that time, I was losingmoneyorjustscrapingbywithmarginalgains.I’vemadeeverymistakeandbaddecisiononecanmakeinthemarket.Thegoalofthisbookistosaveyoufromasmuchofthataspossibleandgetyoustartedonaprofitablesetupfromwhichyoucangenerateanincome.
Duringthefirstseveralyearsofmytradingcareer,IstudiedeverybookIcouldget my hands on. I studied value investing, day trading, technical analysis,fundamentalanalysis,chartpatterns,traderpsychology,andriskmanagement—everythingandanythingIthoughtmightgivemeanedge.
Mychartshadadozenindicatorsonthem;Ihadseveralscannersalertingmetoanumberofidealsetupsinreal-time.Iknewexactlywhattolookforandhowtoexecute on many patterns and setups. I was eager and excited to make mymillionsinthemarket.Despitehavingallthetheoreticalknowledgeandafirmgraspofitall,Icontinuedtomakemistakeaftermistakeandlosemoney.Isuspectatleastsomeofyouhavehadsimilarexperiences.Sowhatchangedforme?There’sasaying,somethingtotheeffectof,“Adogchasingtworabbitscatchesneither.”After reviewingmy trading history, I realized Iwas chasing about adozenrabbits,andIwasn’tcatchinganyofthem.IreflectedonallthebooksIhadinvestedin,rereadingsections,reviewingnotes,tryingtofindwhateveritmightbethatwouldhelpmefindthemissingpiecetosuccessandconsistentprofit.Duringthisreflection,somethingoccurredtome.In examining the practices of several of the most successful investors andtraders,bothaliveandingenerationspast,theyallhavetwothingsincommonwithregardtotheirstrategies:
1. They have an extremely limited playbook, only a handful ofsetups they search for and commit capital to.Many have onlyone.
2. They have very specific rules and parameters, which their
potentialsetupmustmeet.Ihadoverlookedthis importantfactand, instead,wastryingtoincorporatetoo
many strategies into one plan. After this realization, I stopped trying to be amasterofeverytrade.Istoppedchasingadozendifferentrabbits.Isimplified.Idecided,“I’mgoingtofocusononespecificsetupandbecomeanexpertatit.”Mygoal,formerlyto“becomeasuccessfultrader,”became“tomasterthreeorfourhighreward,lowrisksetups,andbuildmysuccessaroundthem.”Withthisnewfocusedgoal,Iwenttowork.Ibecameconsistentlyprofitable,allbecauseIadoptedahyper-focusononlyasinglesetup.Thisbookistheproductofyearsofexperience,failure,success,andeducation.Itwillteachyoutocreateasecondsourceofincome,orsignificantlygrowyouraccountbalance,bytradingthatfirstsetuponwhichIbuiltmyconsistency.If you’re familiar with trading, this book should be easy for you to grasp. Ifyou’renewtotrading,Idomybesttogiveyouthefoundationalknowledgeyouneed,butdependingonhownewyouare,thematerialmaybealittleadvanced.Ifyoufindthistobethecaseafteryou’rethroughreading,pleaseemailmeandIwillansweranyquestionsyouhavetogetyouuptospeedandsuccessfulwiththisstrategy.Mycontactinformationisattheendofthebook.The setup I’ve chosen for you is one I believe offers the best combination ofhigh reward and simple implementation. It is possible to execute if you, likemostpeople,can’tspendtheentiredaywatchingthemarket(Itonlytakesaboutanhoureachmorningaroundthemarket’sopenat9:30amEST.)toidentifythesetupandexecuteanentry.With thatbeing said,youwillneed tohaveaccess toyouraccount tomonitorandmanageyourexitorderthroughoutthedayandespeciallybeforethemarketcloses.Nearlyeverybrokerageofferssmartphoneappstomanageyouraccount,sothisshouldn’tbeaproblem.
Now please understand, “simple” DOES NOT mean easy. Successfullyimplementing this strategy and creating consistent income takesdiscipline andpatience. These two skills can be harder to manage than every other singlecomponentoftradingcombined.And,unfortunately,they’reimpossibletogainfromabook,butItrytohelpabit.Iwill give you a formula to succeedwith step-by-step instructions, and Iwilloutlinethefullrangeofdecisionmakingrequiredtoappropriatelyidentifysolidopportunitiesandcapitalizeonthemforprofits.Itismygoaltobringyoutoconsistentincome,whilesavingyoufromthehighcost of “trader tuition” and the years of unprofitability most have to endurebeforebecomingsuccessful,ifever.Aslongasyoubringpatienceanddisciplinetothetable, thiscanbethestartofabeautifulrelationship,andyouwillmakemoney.Ifyoucan’tbringthementalside,youraccountbalancewillnotendwell.Let’sbesuccessful.
Aquicknote: I realize that some of the charts in the eBook versionwill behard to see on some devices. There is a link below each chart routing to alargeronlineviewifnecessary.Thefullgalleryofchartimagescanbefoundhere:http://langhamtrading.com/chart-gallery
Chapter1–HighVolumeRunners
There are rainmakers on Wall Street—brilliant, gifted, world beating minds.They’re hired by the largest hedge funds and investment banks on the planet.Someofthemprogramtradingrobots,knownas“blackboxes”andcreatehighfrequency trading algorithms, capitalizing on arbitrage opportunities betweenglobalmarketsandwhoknowswhatelseorwhatnext.Ifyouaren’toneofthesebeautifulminds,ifyoudidn’tgraduateMIT,don’tworry;thereishope.Youcanmakealivingoutoftradingwithoutbeingarainmaker.Onewayistofindoutwhereitisrainingandholdoutyourbucket.Whenlargevolumecomesintoastock,thereissignificantpricemovement.Itispossibletoalignyourselfwiththepricemovementandridethewaveofvolumetobiggains. Icall thesesetups“HighVolumeRunners.”Thisbookwillallowyou to identify thesestocks likely tohavehugepricemovements,andgetyouintothesestocksatlowrisk/highrewardentries.Herearesomeexamplesofthesesetups:
Chart1-1ACHN,up109%fromalowof$3.72to$7.81in twodays.Hadyoucapturedtheentiremove,youwouldhavedoubledyourinvestment.
Chart1-7USU,gained197%inoneday,a311%totaltwo-daygain.
These types of movements aren’t rare; all of these, and more not shown,occurredovera60-dayspanorso.The defining characteristic of this setup, other than the significant pricemovement,isthelargeincreaseinvolumerelativetothestock’saverage.Whathappensissomekindofsignificantcatalystoccurs,forinstanceapositiveearnings surprise, a news story creating expectations of growth, etc. This cancausearushofbothretailandinstitutionalbuyersintothestock,whichcreatesdemandanddrivesthepriceup.Nowthatyouknowthesehugemovesexist,thenextseveralchapterswillteachyoutheindividualcomponentsyou’llneedtobesuccessfulatidentifyingthem,capitalizingonthem,andavoidingtheonesyoushouldstayawayfrom.
Chapter2–BasicTraining
Thisbookwaswrittenassumingyouhavesomebaseknowledgeoftradingandinvesting. I’ll provide a quick overview in this chapter, just in case you needsome brushing up on your vocabulary or basic foundational concepts. If thisstuff is brand-new to you, and by the end of the bookyou “just don’t get it,”again,pleaseemailmeandwe’llfigureoutwhatyouneed.FundamentalAnalysisvs.TechnicalAnalysisThese are two differing schools of thought when it comes to justifying aninvestmentortradingdecision.
Fundamental analysis attempts to unravel what a company is trulyworthcurrentlyandwhatitwilllikelybeworthinthefuture,basedonfinancial reports and underlying factors that affect the business and
operations. Someone performing fundamental analysis of a stock isattemptingtoarriveatthevalueofacompanyinordertocomparethatvaluetothesharepricetodetermineifthecurrentpriceisoverinflatedorundervalued.
Technical analysis assumes that the price of a stock has little to dowithits“truevalue”andmoretodowithhowthebuyersandsellersinthe market are reacting toward its price. Someone performingtechnical analysis is attempting topredictwhere thepriceof a stockwill be in the future, based on chart patterns and mathematicalindicators.
Tradingvs.InvestingGenerally, “investing” describes a longer term holding period and a focus onfundamental analysis; the idea is to buy value that will appreciate over time.“Trading”describesashort-termholdingperiodandfrequentbuyingandsellingwithafocusmainlyontechnicalanalysis;theideaistotakeadvantageofshort-termfluctuationsinprice.Bulls&BearsThosemarketparticipantswhobelieveastock’spricewillrisearereferredtoas“bulls”orasbeingbullish.Marketparticipantswhobelieveastock’spricewillfallarereferredtoas“bears”orasbeingbearish.Buyersarebullish;sellersarebearish.Supply&DemandAsinanyfreemarket,stockpricesaredeterminedbysupplyanddemand.Forany given stock, the current price of that stock represents the equilibriumbetween demand driving the price higher, and supply sinking the price lower.Thosewithdemand for the stock are thebuyers, and thosewith supplyof thestockarethesellers.Support&ResistanceSupportisapricelevelthatastockhashistoricallyhaddifficultyfallingbelow,
due to thehighdemand in thatparticularpricearea. Imagineagroupofmanybuyers, allbiddingaroundacertainpricepoint; thedemandpushesupagainstthesupplyatthatlevel.Inthechartbelow,thesupportlineisdetailedingreen:
At,andimmediatelybelowthepricelevelrepresentedbythegreenline,iswheremanybuyersareallbidding topurchase stock.Because therearemorebuyerswithdemandforthestockthansellerswithsupplyofthestockatthatparticularlevel,thepricehasdifficultysinkingbelowthatlevel.Resistance,incontrasttosupport,isapricelevelthatastockhashistoricallyhaddifficultyrisingabove,duetothehighvolumeofsupplyinthatparticularpricearea.Inthiscase,imagineagroupofmanysellers,allsellingtheirpositionstotakeprofitsoropeningshortpositionsaroundaparticularpricelevel.Thepricecannot riseabove that levelbecause there ismoresupplyofstockfromsellers
thanthereisdemandforstockfrombuyers.Inthechartbelow,theresistancelineisdetailedinred:
It is important to understand that, many times, support and resistance levelsbehavemorelikenetsthanwalls;meaningtheyareelasticratherthanfirmandstaticatexactpricepoints.Support and resistanceare twoof themost important ideas tounderstandwithregardtothistradingstrategybecauseknowingtheselevelsallowsyoutomakebetterdecisionsaboutenteringandexitingtrades.Wewilldiscussmoreonthislater.Bid&AskandLevel2
Thebid is anorder fromabuyer topurchaseanumberof shares at a specificprice.Thebidwill detail thepriceoffered andwhat quantity tobepurchased.Thebidvolumecanbethoughtofasdemandforastock.Theaskisthepriceaselleriswillingtoacceptforhershares,alsoknownastheofferprice.Theaskwilldetailthesellingpriceandquantitytobesold.Theaskvolumecanbethoughtofassupplyofastock.Thedifferencebetweenthehighestcurrentbid,andlowestcurrentask,iscalledthe“spread.”TheLevel2isareal-timeviewofeverycombinationofbidprice/quantityandaskprice/quantitycurrentlyavailableforstock.HereisanexampleofaLevel2screen from E*Trade:
Forthisbook’spurposes,allyoureallyneedtoknowregardingLevel2ishowto identify the volume (size) of the various bids and asks. The size of theseordersgivesusinsightintoareasofsignificantdemandandsupplythatmayact
assupportandresistancelevels.
LiquidityLiquidity is themeasure of how easily a stock can be bought or soldwithoutaffectingthestock’sprice.Thehigher the tradingvolume, themore liquidityastock has. Trading stocks with low liquidity is dangerous because large pricechangescanhappenveryquicklyonlowvolume.Youneedtobeawareoftheliquidityinanystockinwhichyou’reconsideringopeningaposition.Thewaytojudgeaminimumamountofliquidityisbylookingataveragedailyvolume;stocks averaging over a million shares traded daily have enough liquidity formost trading sizes. If you’re trading small positions, you canmove into lowerliquidity stocks safely. Just be sure there’s enough minute-to-minute tradingactivitytoallowyoutoexityourpositionsizewithoutaffectingthepriceinanysignificantway.
VolatilityVolatilityisameasureofthedegreetowhichastock’spricecanfluctuate.Highvolatilitymeansthepricecanchangesignificantlyoverashortperiodoftime.Incontrast,lowvolatilityimpliesthatastock’spricehasalowrangeofpricelevelsit’sexpectedtohitfortheneartermfuture.
OrderTypesMarketOrder–Thistypeoforderguaranteesyou’llbefilled(Yourfullquantitywillbepurchasedor sold.),but itwillbe filledat theavailableprice(s)at thatmoment.Whenenteringamarketorder,youcannotbe100%sureatwhatpriceyou’llbefilleduntilyourorderiscomplete.Thistypeoforderisusefulifyouneedtoexitorentera tradequickly;however, itcanbedangerous if thestockhaslowliquidity,orifthepriceismovingquickly.Ifyouenteramarketorderwhenyouseea stockat$X.XX,youmaybe filledat amuchhigheror lowerprice,dependingoncurrentvolumeandyourpositionsize.LimitOrder–Thistypeoforderguaranteeswhatpriceyouwillpaybutdoesnotguaranteeyou’llbefilledwiththefullquantityyou’reattemptingtobuyorsell.Whenenteringalimitorder,youdictatethepriceatwhichyou’rewillingtobuyorsellshares.StopOrder – This is an order to buy or sell a stockwhen its price touches apredetermined point. Once the stock’s price meets the “stop” price, a marketorder is triggered.Theseordersareeffectiveandusefulforprofitprotectionorlosslimitation,aswellasbreakoutentries.Stop-LimitOrder–This is identical to anormal stoporder, but insteadof thestoptriggeringamarketorder,ittriggersalimitorder.
NOTE:Usingstoporderswillnotprotectagainstovernightpricegaps.
Conditional Orders – These orders are conditional on certain events. Theyincludecontingentorders,One-Cancels-Allorders,One-Triggers-Allorders,andOne-Triggers-OCOorder.We’llgooverthesetypesofordersinChapter7.Candlesticks(orCandles)“Candles”areusedinchartstodetailthepriceactionofasetperiodinapictorial
format.Theyaremoreusefulthanotherformsofpriceactionchartingbecausethey can reveal underlying sentiment (Is the current sentimentmorebullish orbearish?) and potential reversals of sentiment sooner than other forms ofcharting. In thisbookwhen I refer to“priceaction,” I’m referring towhat thecandle(s) is revealing. A candle example is shown below:
Whenthecandleiswhite(orgreen),thepriceclosedhigherthantheopenfortheperiod,sotheopenisatthebottomoftherealbody,andthecloseisatthetopoftherealbody.Whenthecandleisblack(orred),thepriceclosedlowerthantheopenfortheperiod,sotheopenisatthetopoftherealbody,andthecloseisatthebottom.We’llgoovercandlesinmoredetailinChapter3.
IndicatorsAn indicator is amathematical calculationbasedonpriceandvolume,usuallyrepresented graphically below, above, or overlaid onto a chart. There arehundreds,ifnotthousands,ofpotentialindicatorsyoucanuse.Weuseonlyoneindicatorforthissetup,simplemovingaverages.SimpleMovingAverage–SMAAnSMAisalinearrepresentationoftheaverageclosingpriceoverthelast[x]amountofdays. (Forexample,a12SMAis thesimplemovingaverageof theclosingpriceoverthelast12days.)
Chart2-1WeuseSMAsinoursetuptoidentifyifamoveismoreorlesslikelytooccurdependingonwherethecurrentpriceisrelativetovariousSMAs.We’llgooverthisinmoredetaillater.
GapsGapsformwhentheopeningpricecreatesablank“gap”onachart.Agapupiswhen theopeningprice ishigher than thepreviousday’shigh.Agapdown iswhen theopeningprice is lower than thepreviousday’s low.Mostgapsoccurwhenthereisextended-hourtradingmovingtheprice.Theyaresignificantwhenaccompaniedbyhighrelativevolume.
OpeningRangeTheopeningrangeisthefirstfifteenminutesofthetradingday.It isusuallyagoodideatosteerclearofanytradecommitmentsuntilyougetanideaofhowthepriceactionandvolumeareplayingoutduringtheopeningrange.HOD/LODHighoftheDay/LowoftheDayTheserefertothehighestandlowestpricesthestockhastouchedsofarduringthetradingday.Ourhighvolumerunnerstrategyreliesonbuyingabreakabovethefifteen-minuteHOD,meaningthehighestpriceofthefirstfifteenminutes.
PullbackAlsoreferredtoasaretracement,apullbackisadeclineinpricefromarecentpeak. A pullback can either be a short-term pause in upward momentum,representingabuyingopportunitybeforetheprevailinguptrendcontinues,oritcan be the start of a full reversal in the trend, inwhich case potential buyersshouldstayaway,andthoseholdingshouldplananexit.
BreakoutAbreakoutisapricemovementthroughandaboveanestablishedlevelofpriceresistance. Usually, a breakout is accompanied by an increase in volume andvolatility.Generally, themore volume accompanying the breakout, the higherthe chance itwill sustain its upwardmomentum.Aprice breakoutwith lowervolumeor a lot of sellingpressure in the price action ismore likely to fail tocontinueincreasinginprice.
Chapter3–VolumeandPriceAction
Thismaywellbethemostimportantchapterinthebook.Ifyouunderstandtheanalysisofvolumeand its correspondingpricemovement, youcanapply it toeverypotentialtradingsetupthereis.Thereisnoindicatoravailablethatismoreeffectiveatshowingyouwherethepriceofastockislikelyheadedthanvolumewhen analyzed in relation to the price action associated with it (i.e. thecandlestick).Most traders today treat volume as background information—a mereafterthoughttowhattheirtechnicalindicatorsaretellingthem.Thisisamistake.Ifyouareskilledatanalyzingpriceactionandvolume,youreallydonotneedanyotherindicatorstobesuccessful.You’ll need to understand candlesticks and what the different candle typessignify.Thepriceaction,asdetailedthroughcandlesticks,revealstheunderlyingstrugglebetweenbuyersandsellersandindicateswherepriceislikelytohead.Sincegoingintodetailonthevariouscandlesticktypesandpatternswouldtakeanentirebook,we’llonlycoverthebasicshere.IhighlyrecommendyoupickupSteve Nison’s book The Candlestick Course to get a more comprehensiveeducationonthesubject.
While reading this chapter, try to gain an understanding of the fundamentalessenceofthematerial.Don’tgettoohunguponsearchingchartsfortheexactcandletypesandpatterns.Moreimportantthanmemorizingthedifferentcandletypesandwhattheysignifyisanintuitiveunderstandingofwhattheindividualcandle’svarious components (upper and lowerwicks, real body, redorgreen)aredetailingabouttheunderlyingstrugglebetweenbuyersandsellers.
CandlesticksAgain,hereistheanatomyofacandlestick:
White or green candles represent a price move higher than the open of theperiod,whileblackorredcandlesrepresentapricemovelowerthantheopenoftheperiod.
Shortcandlesdetaila tightlyboundpricerangebetweentheopeningpriceandclosing price of the period, while long candles detail a significant pricemovement/rangebetweentheopeningpriceandclosingpriceoftheperiod.Long candles (big pricemovement) associated with large relative volume(big supply/demand) are what you’d expect; this means either the bulls(buyers)orbears(sellers)arefirmlyincontrolofthemovement.Ahighvolumeofsupplyfrombearswouldbeexpectedtocreatealargedropinprice.Ahighvolumeofdemandfrombullswouldbeexpectedtocreatealargeriseinprice.Incontrast,shortcandles(littlepricemovement)arewhatyou’dexpectwithlowrelativevolume(littlesupply/demand).
WhattoWatchForIfyouseeashortcandle(littlepricemovement)withhighrelativevolume(bigsupply/demand),thisshouldcauseyouconcern.Ashort candle (littlepricemovement)with largevolume (big supply/demand)couldmeanthecurrenttrendisweakening,that thesidethatwaspreviouslyincontrol is running into resistance or support. The large volume of buying(demand)orselling(supply)isn’tmovingthepricebecausetheoppositesideiscoming in strong at that price level and preventing the significant pricemovementexpected.Conversely, if you see a long candle with low volume, this could signal themoveisrunningoutofsteamandreachingthefinalrunbeforeareversalcomesin.
Spinningtopsarecandlesthatdetaillargepricemovementbetweenthehighandthe low; however, the open and close are closely bound or equal. Doji arecandles that detail a tight range between the high and the low, aswell as theopenandclose.Whatthesecandlesaresignifyingisthatthere’saconsiderablestrugglegoingonbetweenbuyersandsellers,withneithercontrollingthepriceaction.
What to Watch For: Watch for these to signal potential reversals orretracementsineitheranuptrendordowntrend;itdetailsastruggleovercontrolofthepricemovementbetweenbullsandbears.Ifyouseethiscandle,putyourguardupandlookforthenextcandletoconfirmthesignal.Forexample,inanuptrend,ifthenextcandle’spricemovesontobreakabovetherecenthigh,thenthebullsregainedcontrol,andthetrendislikelytocontinue;amovebelowtherecent low is agood indication thebears tookover, and the trendwill reversedownuntilanothersignalappearsand/orthepricefindsasupportlevel.
AHammerorHangingManisacandlewithalonglowerwick,smallrealbody,andlittleornoupperwick.Thesesignalpotentialreversals.Asyoucanseefromthegraphic,thecandleiscalledahammerwhenappearinginadowntrend,andahangingmanwhenappearinginanuptrend.WhattoWatchFor:Thinkaboutwhythesecandlessignifyreversals;whatishappeningaccording to thecandle?Inadowntrend, thebearscontrol thepriceaction,forcingitdownuntilthebullssay“thispricehasgottentoolow”andtakeover,forcingthepricetorecovermostofthelossesandclosenearthetop,hencethelonglowerwickandsmallrealbodyatthetop.
AnInvertedHammer,orShootingStar, issimilar totheHammerandHangingMan,thedifferencebeingtheyhavealongupperwickinsteadofalonglowerwick.Thesesignalthesamepotentialtrendreversals.WhattoWatchFor:Again,trytounderstandwhatisfundamentallyhappeningunder the surface.During a downtrendwhen an invertedhammer appears, thelongupperwickrepresentsbuyerstrengthcomingintoplay,drivingthepriceup,thoughgivingitawaytothesellerstocloseatthebottomofthepricerange.Itsignals a potential reversal because the buyers are no longer as weak as theyhave been during the previous downtrend. The opposite is true of a ShootingStar,whichappearsduringanuptrend.Thisshouldgiveyouenoughofafoundationoncandlestogetyougoingwiththe high volume runner setup. You’ll get better at identifying the underlyingactionofpricemovementasyouputyouranalysisintopractice.And remember, it’s more important to understand the essence of what thecandlesareindicatingthantoknoweverydifferentcandletypeormulti-candlepattern. As long as you can look at the candles and understand what thecomponentsaretellingyou,you’llbesuccessful.Before we move on, and this is important, understand that no single candleshould be used tomake any decision about entering or exiting a trade—ever.Youmusthavepatience.Youneedtoconsiderthewholepicturebyidentifyingsupport and resistance, analyzing the price action and associated volume, andlookingatmultipletimeframestoconfirmwhatishappeningandwhatislikelytohappen.Nowontovolume...
Volume–TheOnlyThingThatMattersIhaveatradercolleaguewhoisverybigon“tradingthenews.”HehasCNBCconstantly running in the background of his office; he has a dozen differentinternetwindowsopentoallthemajorfinancialnewsoutlets.Hebelieveshecangetinformationthroughnews,whichcaneffectivelybeusedasanedgetotradeprofitably.Iaskedhimaboutit,andhesaid,“Newsmovesprices.”Ireplied,“Noitdoesn’t;buyersandsellersmoveprices.”Herolledhiseyes,saying,“YouknowwhatImean;thenewscausesbuyersandsellerstomoveprices.”Thatargumentwenton, and in fact still does. In contrast to my colleague’s methods, I havecompletelyabandonedallnewssourcesfortradingideas.I’lladmit,onacertainlevel,he’scorrect;apieceofnewscanbeusedeffectivelyforaprofitabletrade,asthenewscausesalargeamountofbuyersorsellerstocomeinandmovetheprice.Themomentumthat theycreatecanbetradedforprofit.However,Iarguethatthesametradecouldbehadwithoutanyknowledgeoftheunderlyingnews,andthatcomingupontradesthisway—withoutknowingthenews—ismuchmorelikelytoresultinsuccess.I’llexplain...When relying on news for trading ideas, you are making questionableassumptions:
1. Youassumethepieceofnewsyoufoundissignificantenoughtomovethepriceatall.
2. Youassumeyou’veidentifiedthenewsbeforethecomingprice
movement, that themarket hasn’t already priced the news intothestock.
3. You assume you’re able to accurately analyze which direction
thatparticularnewsisgoingtodrivetheprice.
If the idea is to find news likely to cause enough volume to effect significantpricemovements, why not just look for the volume, and let that volume andprice action dictate what’s likely to happen and, in fact, what is actuallyhappening,soyoucanplanyourentryappropriately?Newscancauselargevolumespikes,butwhywastetimeandresourcesandtrustyour uncertain conclusions, trying to position your entry before a pricemovementthatmayormaynotcome?Whocareswhat thenews is, if youcan find thevolumeandcapitalizeon thepricemovementwithoutit?Volume never lies. Volume is much more easily analyzed than news, andscanning for large volume is infinitely less time consuming than scouring theinternetfornews,whichmayormaynotresultinagoodtradesetup.Volume reveals the validity of price movement. It is the great equalizerbetweeninsidersandretailinvestors.Ifyouknowhowtofindvolumeandhowto analyze volume, almost nothing can be hidden from you—not institutionalbuying, not underlying bullish or bearish market sentiment, not the likelydirectionoffuturepricemovement.Ataminimum,youneedtounderstandthisfundamentalidea:
1. Price movements with high relative* volume should be assumedvalid, and price movements with low relative volume should notoverride what the higher volume price movement is telling you(*”relative”totheaveragevolumeforthatparticularstock).
Here’s a five-minute chart detailing how volume and associated price action
detailthelikelyfuturemovementofprice.Thethoughtprogressionisnumbered.
Chart3-1Althoughthethirdcandleappearstohavealotofsellingpressurewiththelongupperwick,thisisafive-minutechart;whenseenthrougha1-minutechart,theupward price movement is associated with high volume, and the selling thatcaused the long upperwick on the five-minute candle is on very low volumewhen viewed through 1-minute increments. This is why it is important toanalyzevolumeandpriceactionusingdifferenttimeframes.There are no hard ratios or indicators telling youwhen a pricemove is valid.Youcan’tmakeadecisionbasedonXnumberofsharestradedorthefactthatcandlewasX/Yratioofaverageprice,etc.
Theanalysisofpriceactionandaccompanyingvolumeissomethingthatyou’llneedtopracticetogetafeelfor,butonceit“clicks”foryou, itwillserveyoubetter thananyother indicatorout thereandwillhelpyouexecutemuchmoresuccessfulandprofitableentriesandexits.
Chapter4–ControllingRisk
Ideallyyourpre-tradereview,whichwe’llgettoinChapter6,shouldkeepyoufromenteringtradesthatdon’thaveahighprobabilityofsuccess.Evenwiththatbeingthecase,wealwaysrunthechancethatwemayhavemorelosingtradesthanwinningtrades.Thatisok.WhileIwon’tgetintothemathematicswhichprovesit,trustmewhenItellyouthatahighwinningpercentageisnotimportant;whatISimportantisensuringtheAMOUNTofyourgainsismorethantheAMOUNTofyourlosses.Thissetup,whenfollowedproperly,willprovidebiggainsforyou.Aslongasyoufollowtherulesandexitlosersforsmalllossesandletthewinnersrun,you’llbeprofitable.Thatisassumingyoumanageyourmoneyandtradesizeappropriately,aswellasmaintaindiscipline.MoneyManagement
Firstthingsfirst;youneedtoknowhowmuchmoneyyouaregoingtoriskpertrade.Neverriskmorethan1%to3%ofyourtotalaccountbalanceonanyonetrade.Tocalculateyourpertrademaximumloss,simplymultiplyyouraccountbalancebyyourchosenriskfigure(1-3%).Forexample,ifyourrisktoleranceis2%pertradeandyouhaveanaccountbalanceof$8,000,yourmaximumallowablelossonanyonetradeis$160(.02x8000).Itshouldincludeentryandexitcommissions,soconservativelywe’llsaythemaximumlosspertradeis$140(Thisistheamountyoucanloseifyourstopishit,nottheamountofcapitalyoucommittoatrade.).ThereasonIlikethismethodisbecauseasyouraccountbalancegrows,itallowsyourtradingsizetogrow;however,ifyouraccountbalanceisdecreasing,itlowerstheamountofmoneyyoucanloseonanyonetrade.Thenextstepiscalculatingthemaximumnumberofsharesyou’llbeallowedtopurchasewhilehonoringyourmaximumallowableloss.Thisnumberwilldifferfromtradetotradedependingonthepriceofyourstop-lossexitandyourentryprice.Inthehighvolumerunnersetup,wewillusuallyknowourstop-lossbeforeouractualentryprice.Tofigureouthowmanytotalsharesyoucanpurchaseinatrade(i.e.yourmaximumpositionsize),divideyourmaximumallowedlossbythepricedifferencebetweenthestop-losspriceandestimatedaverageholdingprice.Forexample,assumeyou’reconsideringasetupwherethestop-lossexitis$3.54,andthecurrentpriceis$3.62.Takingthe$140maximumallowedlosswecalculatedabove,dividethatby$0.08($3.62-$3.54=$0.08),andyouget1,750asyourmaximumpositionsize(140/.08=1750).
I’veprovidedanExcelspreadsheetthatwillquicklycalculatethepositionsizingfiguresforyouhere:www.langhamtrading.com/tradesize.However,youneedtobeabletoquicklycalculatethisstuffinyourhead,becausethesehighvolumerunnersetupsmovequickly.Practiceyourmentalmathmusclesasmuchaspossible.AccountSizeHere’sastorythatiswellworthnoting:OnJuly16th(2014),NasdaqhaltedtradinginNewLeadHoldings(NEWL)inthemiddleoftradinghoursatapriceof$4.38,afterhittingahighof$5.03thatday.NEWLwentontogetdelistedfromNasdaq.OnJuly22nd,itreopenedat$2.55andplummetedfromthere.Thistypeoftradinghaltandsubsequentdelistingrarelyhappens,butbeawarethatitdoes.Andlifeisn’tfair;itcouldhappentoyou.Bytheway,therewereover30MILLIONsharestradedinNEWLthedayitwashalted.Alotofpeoplelostalotofmoneythatday.I’msureyou’veheardbefore,“Don’ttradewithmoneyyoucan’taffordtolose.”Thisisalittleunrealistic,inmyopinion,andseemsmorelikeadisclaimerthanactualadvice.Here’ssomehonestadvice:beconservative,neverriskmorethan1-3%ofyourcapitalonanyonetrade,beverycarefulanytimeyouhavemorethan25%ofyourtotalcapitalatplayinanyonetrade,andjustbeawareoftheriskinvolvedintrading,evenintra-daytrading.Besmart.Ifyouraccountbalanceisunder$25,000(andyouhaveamarginaccount),you’llbesubjectto“patterndaytrading”restrictions,whichmeansyoucan’tmakeoverthreetradesinarollingfive-dayperiod.It’saridiculouslaw,butyou
areatitsmercynonetheless.Makesureyou’reawareofyouronlinebrokerage’sparticulartreatmentandinterpretationofpatterndaytrading(Somebrokeragescountmultipleordersofasinglestockasonetrade,whileotherscounteachseparatepurchaseasanewtrade).Thepatterndaytradingrestrictionsdonotapplytocashaccounts(non-margin)under$25,000,but“FreeRiding”restrictionsdo.FreeRidingisanotheridioticSECrestriction,but,alas,youaresubjecttoitnonetheless.ForreasonsIcan’tfathominthisdayandage,stocktransactionswithyouronlinebrokertakethreedaystosettle.Youcannotusetheproceedsfromasaleofstocktopurchaseanotherstockuntiltheproceedsfromthesalehave“settled.”Thismeansifyou’reinatradeutilizingyourfullaccountbalance,andyouexit,youwon’thaveaccesstothatbalancetoplaceanothertradeforthreedays.Bottomline,ifyou’reworkingwithanon-marginaccountunder$25,000,youmustbeselectivewithyourtrades;onlyenteridealsetups(We’llgettohowtoidentifyidealsetupsshortly).PsychologyEquallyimportanttomanagingyourriskisyourmentaldiscipline.WhenIwasconsistentlylosingmoneyorjustscrapingbywithmarginalgains,IwouldoftenentermarketorderswhenIfoundastockIwantedtoenter. IwasalwaysfearfulthatIhadfoundahugetradebutitwastakingoffthatmoment,secondsafterIhadlocatedit;ifIdidn’tgetinnow,Iwouldmissit.AfterIshiftedmymindsettothenewthinkingof“masteronlyafewsetups,”Istoppedchasingentries.Irarelyplacedmarketordersanylonger,unlessitwasacceptableper theparametersof thesetup(Weneverusemarketorders in this
setup). Inmost ofmy setups now, I put a tight range of bidswhere I believestrongsupporttobe,soIhavealowriskstopundermyentrylevel.ManytimesImisstrades,butthatisok;thereareotherssoontocome.That newly found patiencemade a huge difference inmy profitability.Ratherthanhittingthemarkettoenteratrade,Ipatientlysatwithbidsatalevelwherefearwoulddrive theemotional tradersout,and they’dsell intosupport. Ifyousee an area of support but you think the trade has moved above it, never toreturn,thinkagain.Itmaytakeafewdaysorevenweeks,butitwillcomedownagain to allow a low risk, high reward entry. And If it doesn’t, you’ve lostnothing.Thecreativepartofyourmindisyourenemy.Theemotionsyou’llfeel,thehopesandwishesyouhaveforthetrade,youropinionaboutwherethepriceisgoing,thefearthatyou’regoingtomissoutonaprofitifyoudon’tgetintothetradeatthisverymoment—allthesethoughtsareworkingagainstyou.Youneedtoturnoffeverythingbuttheanalytical,rationalpartofyourmind.Thisiseasiersaidthandone,buttherearetoolsthatcanhelp.Oneisyourstop-lossorder.Donotuseamentalstop.Assoonasyouexecuteanentryorder,executethestop-lossordertosell.Thenmoveithighertothebreak-evenpointassoonasthepriceactionallows(moredetailonthislater).Inthissetup,you’llbeabletoenteraconditionalorder,whichwillexecuteyourstoporderautomaticallyassoonasyourpurchaseorderisfilled.Youneedtodevelopamantra:
“Therewillalwaysbeanothertrade.”
Learnit,knowit,liveit.Aboveallelse,bepatient.Weeksormoremaygobywithoutavalid,optimalgreenflaggedsetupappearing.Holdsteadyandtrustthatoneiscoming;thesesetupswillcontinuetoshowthemselves.Youcannotforceagoodhighvolumerunnersetup.Patiencealonecanactuallybeenoughofanedgeinthemarkettobesuccessful,as long as it’s patience for a good entry. Patience has no place in a losingposition;exityourstop-lossimmediately,andletyourwinnersrun.Itisoktomissatrade.Theworstthingyoucandoishitamarketorderbecauseyou think the stock is running, and you believe you’vemissed the entry. Thechancesofyourmarketordernailingtheidealpriceattheexactmomentofyourexecutionarenexttonil.Everydollar you lose trying to force a tradeor chase an entry is a dollar thatisn’t there foryouwhena50%,100%,200%+runner showsup.Onlyenter atradeaccordingtothelowriskparametersofthissetup,whichwe’llgetto.Neverchaseanentry.Therewillalwaysbeanothertrade.Andonefinaltimeforgoodmeasure...NEVER CHASE AN ENTRY. THERE WILL ALWAYS BE ANOTHERTRADE.
Chapter5–IdentifyingHighVolumeRunnersInordertobealertedinreal-timetothehighvolumerunnersetup,youneedtochooseanonlinebrokeragethathasreal-timescanningandalertfunctionality.IuseE*TradePro;itisfreeifyouplaceatleast30tradesperquarter.Otherwise,itis$99permonth.Thescanningfunctionalityiswellworthitscostifyouraccountbalanceisatleast$2500.Belowthatandthecostbecomesalittleprohibitivecomparedtothereturnsyouneedtocoverthe$99.Feelfreetouseotheronlinebrokerages,butmakesuretheyofferreal-timescanningandcanaccommodatetheparametersdetailedinthischapter.We’regoingtosetuptwoscansworkingintandemtolocateourhighvolumerunnersetups.Thefirstscan(inE*TradePro,undertheStrategyScannertooland“CreateYourOwnStrategy”)isgoingtohavethefollowingparameters:AlertType:“UnusualNumberofPrints”=[30]astheRatio.
Thismeansyou’rescanningforstockswithvolumethatisatleast30timeshigherthanaverageforthetimeofday.
Filters:1)MinimumPrice=$1.00,MaximumPrice=$10
Wecan’tspreadoursearchtoobroad,orwe’llbeinundatedwithalertsandwon’tbeabletoanalyzethemall.Ichoosethislowpricerangebecausetheyaremore
likelytohaveseriouspricemovementsthanhigherpricedstocks.Youmayevenconsidergoingwith$0.50to$5,or$1to$8—whateveryou’recomfortablewith.
2)VolumeToday=30,000MinimumInthepast,I’vehadthisnumbersethigher,butafewtimesitcausedmetomisstheearlyformationofahighvolumerunner.Thetradeoffinloweringitisyougetalertedearlier.However,itwill,attimes,giveyoustocksthataren’tliquid.Aquickglanceatthechartwillrevealifthisisthecase,ifliquidityisn’thighpassonthetrade.
3)“ChangefromtheClose”=4%MinimumValueStocksthataretradingatleast4%abovethepreviousday’sclose.
4)TimeofDay=Setthe“maximum”to20minutesaftertheopen.Ifyouhavethetimetowatchthemarketduringtheday,youcanexpandthisvariablesoyoureceivealertslaterintheday.However,thelongerthetimehaspassedfromtheopen,themorelikelythealertswillbeforveryilliquidstocks.
SymbolList:Onlycheck“NYSE,”“AMEX,”and“NASDAQ.”Otherwise,you’llbegettingtoomanystocksthataren’tliquidenoughandaren’ttradedonthemajorexchanges.Wealsouseasecondscannerthatsearchesforbiggainers;itputsabitofredundancyinplacesowe’relesslikelytomissbigmoves.Therehavebeentimeswhenastockshouldhavebeenalertedonthemainscanbutwasn’t.Afterthathappenedafewtimes,Ijustdecidedtohavethissecondaryscantodoubleupthesearchefforts.SecondScannerSettings:AlertType:“%UpfortheDay”=[6]astheMinimum%Up
Obviously,thismeansyou’rescanningforstocksatleast6%upfromtheir
openfortheday.Filters:
1)MinimumPrice=$1.00,MaximumPrice=$10Thisshouldmatchwhateveryousetyourprimaryscanpricerangeto.
2)VolumeToday=30,000Minimum3)TimeofDay=Maximumis20minutesaftertheopen.
SymbolList:“NYSE,”“AMEX,”and“NASDAQ”Again,ifyoudon’twanttogowithE*Trade,makesuretheonlinebrokerageyoudogowithcanaccommodatetheseparametersbeforeyousignupwiththem.Anotheroptionistosignupforamembershipatwww.langhamtrading.com.IfyouemailtheorderconfirmationforthisbooktoOrders@1HourTrade.com,you’llreceiveaMonthofFreeAccess,evenifyouorderedthebookforfree.We’llperformthepre-tradeanalysis/reviewworkforyou,andonlyalertyoutothetradesthatpassthereviewprocesscompletewithentryandexittargets/parameters.Wetradeadditionalprovenstrategiesthereaswell.Onceanalerthits,weneedtoevaluateitspotentialforalargemovementinprice.Thewaywedothatisthroughanalysisofthechartonthreeseparatetimeframes,whileapplyinga“RedFlag”checklistanda“GreenFlag”checklist.
We’llgetintothosedetailsnow...
Chapter6–AftertheAlert
(TheFirstFifteenMinutesoftheOne-HourTrade)Soyou’vegotthescannersetup,andyoustartgettingalertedtopotentialsetups.Here’swhatyoudonow.StepOne–TripleTimeFrameView
Pullupthestockonthreecharts:1. Weekly2-YearChart2. Daily1-YearChart3. 5-MinuteChart
StepTwo–RedFlag/GreenFlagReview
Thisreviewisdonebothontheweeklyandthedaily.Thegoalistoanalyzethechartstodeterminewhetherthepotentialrunnerislikelytorunorshouldbedisregarded.
RedFlagReview:1. Resistance
Ifthereisasignificantresistancelevelimmediatelyoverhead,bewary.Itmightbebesttodisregardthetrade.Ifresistanceishighenoughabovethecurrentpricetoallowforasignificantgain,thenyou’reok.
2. Largeabruptselloffsinthenearbypast
Formerbuyerswillholdthroughthesecrashes,hopingforachancetosellatasmalllossorbreakeven.
3. LargeGapsUp
Thelargerthegap,themoreattractiveitisfortradersontheshortsideto“fade”themove,lookingforthegaptofillatleastaportionoftheareatowardthepre-gappricing.Withalargegapup,you’llbebattlingthesesellersinmanycases.
4. 30,50,or200-DaySMALinesAbove?
Iftherearesignificantmovingaveragelinesabovethecurrentprice,itcouldcauseresistance.
Ifanyoftheseredflagsarepresent,youshouldbeconservative.Ifmultipleflagsarepresentincombinationwithoneanother,justpassonthetrade.
Thechartbelowshowsanalertwithmultipleredflags.
Chart6-1Therearelotsofredflagspresenthere.Thereisalargegapup,approximately30%,sotherearealotofprofittakersscramblingtosell,aswellasshortsellerstryingtofadethatlargegap.Youalsohaveformerbuyersfromthepriormonthsthatheldthroughtheirmajoraccountbalancedeclinesgettingoutforasmalllossorachancetobreakeven.
GreenFlagReviewThesearetheidealconditionswe’relookingforinapotentialrunner:
1. SupportIstheresignificantlonger-termsupportimmediatelyunderthecurrentpricelevel?
2. Ispriceactionthelast3-12+monthsinatightrange
withnosignificantvolume?Thelongertheperiodofatightpricerangeandlowvolume,thebetterchancesthestockwillrunbig.
3. Didthepricejustsetanewlong-termhigh,orwillitifit
breaksoutofthismorning’sopeningfifteen-minuterange?
Newlonger-termhighstendtohavelowersellingpressure;sellingwon’tbeasignificantfactoruntilprofittakingstarts.
4. Isthestockbreakingaboveits200-dayand/or50-day
movingaverage?Abreakoftheselevelsisafavoritelongentryformanytraders;morebuyerscominginwillcontinuetodrivepriceshigher.
Themoreofthesegreenflagsconfirmed,thebetterthepotentialforseriousupwardpricemovement.
Here’sanexampleofachartwithidealconditions;it’sthesamestock,DPW,afewmonthspriortotheredflagalertdetailedabove:
Chart6-2Asyouseehere,thealertinearlyMarchisasolidsetup.Therewasalong-term,tightrangewithverylowvolume,thereisnosignificantresistancetobefound,norecentselloffs,itisbreakingintoanewlongtermhigh,aswellasbreakingaboveboththe200-dayand50-daymovingaverages.Itgoesontoanearly100%rangeandaroundfivemillionsharestradedthatday.
Chapter7–GainingEntry
Aquicknote:thischapterwasoriginallygoingtocontainapullback/lowofthedayentryoptioninadditiontothestandardentryforthissetup.I’vedecidedtoomitthepullbackentrybecausewhileitcanputyouintomuchmoreprofitableentries,thereisalotinvolvedindecidingwhenitshouldbeused;anditshouldn’tbeusedveryoften.Attheendoftheday,Ithoughtitwouldserveyoubettertoleaveitout.Iwillbeputtingoutaseparateblueprintforthepullback/lowentryinthenearfuture,whichwillapplytoboththehighvolumerunnersetupaswellassetupswithlongertermholds.Ifyou’reinterestedinthis,[email protected],andI’llputyouonthedistributionlist.OnwithChapter7...Theentrywe’lluseforourhighvolumerunnersetupisabreakoutentry.Ithasalowrisktorewardforthissetupandwillkeepyououtoftradesthatdonothavethemomentumtocontinueabigrunpasttheopeningrangehigh.Itisoptimalforthoseofyouneedingtobeselectivewithyourtradingactivitytoavoidpatterndaytradingor“freeriding”restrictions.Inaddition,itallowsforplentyoftimetoanalyzeyourstoplevel,entryprice,andtradesize.Theentryistriggeredwhenthepriceofthepotentialhighvolumerunnerbreaksabovethehighestpriceofthefirstfifteenminutes.ThebestwaytoentertheorderiswithaconditionalOne-Triggers-Allorder.
WithaOne-Triggers-Allorder,youplaceyourbuyorderandstop-lossorderatthesametime;ifthebuyorderisexecuted,thestop-lossordertriggers.Forthebuyorderweuseastop-limit;forthestop-losssellorder,weuseastop-on-quote.Stop-LimitOrderWhencreatingtheOne-Triggers-AllOrder,thestoppriceissetat$0.01abovethehighofthefirstfifteenminutes.Thelimitpriceforyourpurchaseissetaccordingtoyourpreferenceandinconsiderationofyoursituation;hereareyouroptions.
A)Setthelimitpriceforpurchaseafewcentshigherthanthestopprice.Usually,thepricewilldipbacktothebreakoutpointifnotbelowit.However,somebigrunnerswillbreakoutandnevertouchthebreakoutlevelagain.Sosettingthepriceafewcentshigherthanthestopwillgetyouintomostsetupssuccessfully.
B)Setthelimitpriceatorafewcentslowerthanthestopprice.Again,manysetupswilldipbackbelowthebreakoutpricebeforeheadinghigher;thiswillgetyouintothesetupatalowerpriceandexposeyoutoalowerpersharepricerisk.However,youcouldmissasetupthatmovesfast.
C)Identifyasupportlevelonthe1-minutechart,andusethatlevelasyourlimitpurchaseprice.
Stop-LossOrderThesellorderportionoftheconditionalorderisa“stop-on-quoteorder,”andyouhavetodecidewheretoputthestop.Youhaveacoupleofoptions:
A)Youcansetthestop-lossprice$0.01belowtheformerhigh.Iwould
urgeagainstthis.Manytimesarunnerwilldipbackbelowitsformeropeningrangehighbeforefindingbuyingmomentumagainandrunninghigher.Ifyousetyourstopthisclosetoyourentry,youcangetstoppedouttooeasilyandmissagoodrun.
B)Youcansetthestop-lossatapointbelowa“wholenumber”whereusuallyyou’llfindbuyingsupport.Thisisn’tabadoptionwhentheroundnumberisbelowtheentrylevelenoughtoavoidbeingstoppedoutonnormallevelsofpricevolatility.
C)Youcansetthestop-lossbelowthepullbacklowoftheopeningrange.Thisismypreferredplacementforthestop-loss.Itgivesyourpositionenoughroomtoallowfordips,and,generally,ifitheadsbacktobreakthatformerpullbacklow,itisafailedrunner.
D)YoucanidentifyalargevolumeofbidsontheLevel2andputthestopbelowthat.Becarefulwiththisoption;itshouldmainlybeusedasvalidationofsupportandasconfirmationforoneoftheotheroptions.
Here’sachartoutliningthebreakoutentry:
Chart7-1Soaswe’rewatchingthisalertedstock,afteritsetsitsfifteen-minutehighof$5.15,weplaceourconditionalorder.Forourstop-limitpurchaseorder,thestoppriceis$5.16($0.01abovethehigh).Yourbuylimitwouldvarybasedonyourpreferencesandindividualcircumstances,butlet’ssaywesetitwiththestopat$5.16andlimitof$5.19.The“stop-on-quote”sellorderisplacedatthesametime.Youroptionsforthestoppriceare:
A)$4.92($0.01belowthepullback’slow)Riskis$0.25-$0.27pershare
B)$4.99($0.01belowthe$5.00wholenumber)
Riskis$0.18-$0.20pershare
C)$5.14($0.01belowthe$5.15formerhigh)Riskis$0.03-$0.05pershare
HereiswhattheorderlookslikeinE*Trade:
Youcanseeinthegraphicabove,wechosea“Conditional”“One-Triggers-All”order,andthenplacedthestop-limitbuyorderandstop-on-quotesellorder.Let’sgoovertheredflag/greenflagreviewonthisonejusttoseewhatitlookedlike:
Chart7-2Afteritbreaksthe$5.00level,thereisn’tanymoreresistanceuntilitgetsuptothe$6level,anditgoesontoblowrightthroughthat.Sonowyouknowhowtogoaboutexecutingthebreakoutentry.Youneedtounderstandthatthemostimportantcomponentofyourentryhasnothingtodowithyourorder.Itoccursduringyourred/greenreview.Athoughtfulanalysisduringyourredflag/greenflagreviewwillkeepyououtofmostlow-rewardsetups.
Youalwayswantaminimumrewardof3xyourrisk.Soifyouestimatemoststopswillputyouatariskexposurebetween$0.10and$0.30pershare,youwantthesetupyou’rereviewingtohaveenoughroomtorunupappropriatelyforthatamountofrisk.Keepinmindyourentrywillbeabovethefifteen-minutehigh.Ifyou’relookingatastockthathasjustopened,duringyourreviewyouneedtomakesuretheresistanceareasaresignificantlyabovethecurrentpricetoallowforaminimum3xreward.Whenexecutingyourentryonthosesetupswithapositivegreenflagreview,youwillbeintradeswithahighprobabilityofsignificantupwardpricemovementatapricepointthatofferslowrisk,highreward.Thenextstepistheotherhalfoftheequation—closingthetradeandtakingprofits.
Chapter8–TakingProfits
Yourabilitytoexitatradeappropriatelymaybethemostimportantfactorinyoursuccesswiththisstrategy.Inordertobeprofitablelong-termwiththesesetups,youneedtolettherunnersrun.Afteryourentry,switchtoafive-minutecharttomonitortheprogressandidentifyexits.
Ifafteryourentryyou’reunabletomonitoryourtradeaftertheinitialopeninghour,you’llneedtocheckinperiodicallyusingyourbrokerage’ssmartphoneapptomanageyourtrade/adjustyourstop.Trustme,notbeinginfrontofthecomputerwatchingtheminute-to-minutepricemovementofyourtradeisoftenagoodthing.Attheendofthischapter,Igiveafewoptionsformodifiedexitsyoucanuseifyou’reonlyabletocheckthetradeperiodically.Therearethreecomponentsthatwillallowyoutogetthemostoutofyourtrade:
1)Identifyresistancelevelsandadjustyourstopappropriately.
2)MoveyourstopupfollowingpullbacksandnewHODbreakouts.
3)Trustwhatthevolumeandcandlesaretellingyou.
Let’stouchoneach...
IdentifyResistanceandAdjustStopYoushouldhaveidentifiedresistanceduringyourredflag/greenflagreviewonanysetupsyouenter.Oncethepricegetsuptothelevelofresistance,cancelyourstandingstop-lossorderandreplaceitwitheitherastop-on-quoteorderimmediatelyunderthecurrentpriceoruseatrailingstop,ifavailable,andpayverycloseattentiontothecandles/volumeatresistancelevels.
MoveYourStopUpIncrementallyMovingyourstopuptobreakeven,assoonasthesituationallows,removesallriskfromthetrade.Soyoubasicallyhaveafreeridetowardprofitoncethepriceactionallowsforthestoptobemoveduptothislevel.Don’tdothistooearly,oryouwillbestoppedoutandpotentiallymissamajorupwardpricemove.Additionally,movingyourstopupincrementallyfollowingnewhighsandpullbacks,aswellasmovingthemupwhenthepriceaction/volumedictate,willlockyouintoguaranteedprofitswhileallowingforfurtherpotentialgains.Generally,theopportunitytomoveyourstopuptobreakevenwillpresentitselfafterapost-breakoutpullback,whenadipoccursbeforethepricemovesupagain.TrusttheVolumeandPriceActionAlwaysremainvigilantastowhatthecandlesareindicatingaboutwhat’sgoingon“behindthescenes”andtheassociatedvolume.Themajorityofthetime,youcancountonthevolumeandpriceactiontoleadyoutothecorrectdecision.Volumeandpriceactionrarelylie;makesureyou’reconstantlypracticingandworkingonimprovingyourskillintheiranalysis.Hereisanillustrationoftheinitialbreak-evenstop:
Howthestopshouldadvancesubsequently:
Chart8-2Ifyou’reonlyabletomonitorthetradeinfrequentlyduringtheday,hereisamodifiedpracticeformanagingyourstop-loss/profitprotectionsellorder:Afteryourbreakoutentryisexecuted,youcancancelyourcurrentstop-lossorder(whichwastriggeredautomaticallywiththeentryorder)andreplaceitwitha“One-Cancels-All”order.AOne-Cancels-AllorderissimilartoaOne-Triggers-Allorder,inwhichweplacetwotradesatthesametime;exceptanytimeoneof
theordersisexecuted,theotheriscancelled.SowhatwewoulddoinourJRJCexampleis,afterourentry,wewouldentertwoseparatesellorders.Onewouldbethestop-on-quotesellorderwithourstopsetat$4.92(oranotheroptionofyourchoosing),whichisthestop-lossorder;theotherwouldbeastop-limitorder,withthestopatalevelabovethecurrentprice,whichwouldsellyououtofyourpositionforaprofit.Ifyoumustusethispracticebecauseyou’reunabletomonitoryourtradeduringtheday,makesureyouputyourupper,profit-takingsellorderataleveljustbelowwhereyouseearesistancelevel.Don’tbegreedy;setitbelowresistance.Keepinmindyou’regoingtowantitatalevelatleast3xhigherthanyourstop-losslevel(Forinstance,inourexample,ourriskpertradeisaround$0.26[$5.18entry-$4.92stop-loss],sowe’relookingforatleast3/1,whichis$0.78pershare,oranexitof$5.96[$5.18entry+$0.78]).Ifthereisaresistancelevelbelowthat3xprice,youshouldn’tbeinthetradeinthefirstplace.Ifresistanceissignificantlyabovethatprice,youmaybeabletomoveithigherandstillbesafe;you’llhavetouseyourjudgment.Butknowthis—theworstpossiblethingyoucandoisallowasuccessfultradewithaniceprofittoturnaroundandbecomealossforyou.Ifyouareunabletomonitoryourtradeandmanageyourstop-lossduringtheday,erronthesideofconservativecaution.Obviously,thedownsidetothismethodisthatyourprofitislimitedtoyouruppersaleprice,evenifthepricecontinuesmuchhigher.I’mnotsureifotherbrokeragesallowit,butinE*Trade,youcannotenterastoporderthattriggersatrailingstop,whichwouldbeusefulheretoguaranteeaprofitifexecutedwhileallowingthepotentialforfurtherupwardpricemovement.
I’vebeenlobbyingthemtobuildthistypeofordercapabilityintotheirsystemwithoutmuchluckthusfar.Thenextchapterisdedicatedtoreviewingseveralrecentalerts,soyoucanbuildyourawarenessandbegintothinkaboutoptimalstop-loss/profitmanagement.
Chapter9–ChartReview
Thischapteroutlinesrealchartsalertedforoursetupthelast20daysorsoofthiswriting.Foreachsetup,I’llwalkthroughthedailyreviewonthefirstchartandtheorderdecisionsonasecondfive-minutechart.I’veputsampleordersonthecharts;thisdoesn’tnecessarilymeananordershouldhavebeenplaced.It’smerelytooutlinewhatwouldhavehappenedhadanorderbeenplaced.Remember,iftherearen’tgreenflagspresent,ortoomanyredflagsappear,anordershouldnotbeplaced.Also,inseveralofthe“sampleorders,”astop-lossoptionisgivenat$0.01belowthebreakoutlevel.AsIwroteearlier,thisisn’treallyaviableoptionasitgetstakenouttooeasily,butI’velisteditasanoptionbelowtomakeyouawarethatitdoesgettakenoutregularlybeforethepricerunsup.
Chart9-1AMCFopensonahugegapup,whichisaredflag.It’sextendedprettyfarabovethe200and50-daysimplemovingaveragesaswell,whichdoesn’thelpbringinheavybuying.Itopensrightabovesupportatthe$2.50level,whichwouldbegoodiftheotherredflagsweren’tpresent.
Chart9-2Atradenevertriggers;noticethefirstcandlehasaverylongupperwick,indicatingalotofsellingpressure.
Chart9-3APTopenswithaverysmallgapandimmediatelyaboveasignificantsupportlevelat$2.30.Botharegoodsigns,butweseethere’saresistancelevelat$2.50.
Chart9-4Recallingthe$2.50resistanceareaonthedailychart,thefirstfifteen-minutehighisrightatthislevel.Noticethefourthcandleissellingoff,buthassignificantlylessvolumethanthepriorthreebullishcandles.$2.49wouldseemagoodplaceforyourstop-lossorderafterabreakout,butthatisverycloseto
theentry;soyoumaywanttoputitalittlelowerat$2.41.Aftertheordertriggers,weareabletomoveupourstoptobreak-evenshortlyafterthefirstpost-breakoutpullback.OneachsubsequentHighofDaybreakwemoveourstopupagain,lockinginprofits.Ourstopsneverbeingtakenout,wewouldsellpriortotheclosearound$2.70-$2.71,andwouldrealizeagainof$0.17-$0.20pershare.APTclosesthedayat$2.71,upabout15%ontheday.
Chart9-5
AROopensona13%gapup.Itsopenisimmediatelyabove$3.50support,whichisgood.Itbrokeaboveits50-daySMA,whichisgood.$4.00resistanceisthenextlevelwherewecanexpectsellingpressure;weshouldprobablytakeprofitsifitgetsuptothatlevel.
Chart9-6Itbreaksthefifteen-minutehighof$3.68,triggeringanorder,anddoesn’tdipbackunderit.WemoveourstopupafterpullbacksandnewHODbreaks,removingriskandthenlockinginprofits.Asexpectedrightaroundthe$4level,sellingcomesinandpreventsitfromrunninghigher.Weeitherexitorgetstoppedoutinthe$3.90-$4rangewithaprofitof$0.20-$0.30pershare.
Chart9-7BSPMopenswithverylittlegapup.Thisisagoodsign.Ithas$1.25supportbelow,butit’slookingata50-daySMAof$1.38immediatelyaboveitsopen
price,aswellas$1.50resistance.Ifitcangetthroughthat,thereis$1.80resistanceandthe$1.81200-daySMA.
Chart9-8Weknowthere’sresistanceat$1.50,andthisisrightaboutwherethefifteen-minuteopeningrangehighisset($1.49).Ifitbreaksthisresistance,ourorderwilltrigger.
Weknowtoexpectmajorsellingresistanceatthe$1.80level,soitwouldn’tbeunwisetotakeprofitsorplaceanextremelytightstopafteritstartedapproachingthatarea(likeafteritstartsmakingnewhighsinthe$1.70s).Afterseeingthehugevolumeandsellingpressureattheredcandlewiththelongupperwick,ifwehaven’ttakenprofitsyet,weneedtogetreadytoexitandmovethestopatleasttothepointwherewewouldbreakeven.Thistradewouldmostlikelyhaveresultedinamarginalgainorbreak-even.
Chart9-9FOLDopenswithhugerelativevolumeabove$5.00support,andweseewe’relikelytorunintosellingatthe$6level.Inadditiontowhatweseedetailedonthechart,youshouldbeawarewhendoingyourreviewthatthispriceisprettyfarextendedaboveandawayfrombothits200-dayand50-daySMA,notgreenflags.
Chart9-10Thissetupisactuallymuchbettersuitedtoalowentryratherthanabreakoutentry,butagain,that’sforanotherbook.
Ifwehadplacedanentryorderonthissetup,we’dhavebeentakenoutforaloss,unlesswehadourstopat$5.24,rightbelowthatround$5.25number.Asusual,whennewHODsarebroken,wemoveourstopuptominimizeorremoveriskandthentolockinprofits.Expectedly,the$6resistanceisthehighoftheday;thesmartmovewouldbetosellandtaketheprofitsrightbythat$6levelormovetoaverytightstoparoundthatlevel.
Chart9-11GVopensimmediatelyaboveamajorsupportlevel,around$1.67andthe50-daySMA,bothgreenflags.Noticethelong-termresistancelevelsand200-daySMAabove,startingaround$1.90.Dependingonwhatpricethefifteen-minutehighis,thiscouldbeagoodsetupornot.
Chart9-12Itrunsupfrom$1.67tothe$1.90resistanceinthefirsttenminutes,soourbreakoutentrylevelisalreadyatmajorresistance.Itneverbreaks;notradeistriggered.Notradeshouldhavebeenplaced.Aswecanseeonthedailychart,wecouldexpectmoreresistanceatthe$2.10level,evenifitbroke$1.90resistance;sothatdoesn’tleaveuswithmuchroom
forreward.
Chart9-13HGSHopensaround$2.50withamajorpricedrop—redflagrecently;it’sgotaserious$4.00resistancelevel,andthe50-daySMAoverheadat$3.17.Theseareallredflags.
Chart9-14Thefifteen-minutehighofthedayis$4.00,alreadyatmajorresistance.Weshouldn’tbeinthistrade.Ifyouweretogambleonit,youshouldmaintainaverytightstopandbeveryvigilantabouttakingprofits.
Chart9-15HPJopensabove$5support,withasmallgapup,lookingat$6-$6.15resistanceareaoverhead.
Chart9-16Whilethetradenevertriggers,the$5.99stopwouldbeyourbestbet.Knowingthere’sthelong-termresistanceareaaround$6.15,looktomoveuptobreakevenquickly.
Chart9-17HTBXopensat$5.15,around25%higherthanthepreviousday’sclose,whichisabigredflag.It’sgotsupportat$5,whichisgood.$6resistanceisoverhead,aswellasthe200-daysimplemovingaverageat$6.27,andbeyondthat$7resistance.Here’sthefive-Minute:
Chart9-18Ithasamajormoveofmorethan20%inthefirsttenminutesoftheopeningrange.Thiswasatoughoneforabreakoutentryandanotherthat’sbettersuitedtoalowentry.Thebreakoutentrylevelis$6.37,whichdoesn’tofferasignificantreward,knowingthat$7resistanceislurkingabovewaitingtocrushbuyingmomentum.Thereisn’tawholelotwecandotoavoidtakingalossonsomethingthatactslikethis,otherthanstayingoutormaintainingvigilancetotakeprofitsquickly
whenitapproaches$7.
Chart9-19INPHisverysimilartotheHGSHsetupwealreadyreviewed;itopensonhighrelativevolumewithsignificant$3.50resistanceoverheadandamajorpricecrashrecently.
Chart9-20Notradeistriggered;allthegainsareduringtheopeningrange.
Chart9-21LRADopenswitha12%gapupandhasmajorsupportatthe$1.94-$2.10area,duetopricesupportlevels,aswellasboththe50and200-daySMAs.Thereis$2.20resistanceitwillhavetocontendwithforanysignificantgains.
Chart9-22Theopeningfifteen-minuterangesees$2.20resistancebrokenandapullbackto$2.25.Ourentrytriggersonabreakof$2.30.AswemoveourstopupafternewHODbreaks,thistradeendsupwithasmallgain.
Chart9-23SSHopensat$4.78onan8%gapup,whichisnottoolarge.It’sgot$5.40resistanceoverheadaswellasthe$5.22levelatthe50-daysimplemovingaverage.
Chart9-24You’dknowthepricewouldrunintoheavysellinggettingintothe$5.40areaandabove.Whenthere’sabreakofthe$5.37newhigh,weshouldmoveourstopuptolockinprofitsandkeepthestoptightbecausewe’reinmajorresistanceterritory.Hopefully,thesechartsandreviewnoteshelpprepareyouforreal-timeanalysisofthesesetups.Iwilltellyouthat,whileit’seasytolookbackonachartandidentifywhatyoushouldhavedone,itbecomesverydifficultwhenwatchingafive-minutechartinreal-time.Thechartdoesn’tappearasitdoesabove;the
individualbarsfillthechartscreen,andittakespracticetoidentifyunfoldingpatterns.Toidentifytheidealplacesforentries,stops,etc.,youneedtoA)maintainpatienceanddiscipline,B)analyzethevolumeandcandlesastheyunfold,andC)trustwhatyourpriceaction/volumeanalysisistellingyou.Mostimportantly,youneedtobediligentandthoughtfulinyourred/greenflagreview.Thiswillputyouintosuccessfulsetups,warnyouoflevelswhereyouneedtobelookingtotakeprofits,andkeepyououtofthosesetupsthathaveahigherchanceoffailing.
Chapter10–Step-By-StepRecap
We’renearlydone,thischapterservesasanoverviewofthestrategy.StepOne–IdentifyingPotentialHighVolumeRunners:(Chapter5)WearescanningforNYSE,Nasdaq,andAMEXstockspricedbetween$1and$10,withvolumeatleast30timeshigherthanaverageforthetimeofday,tradingat30,000volumeminimum,andpricedatleast4%higherthantheclosingpriceofthepriorday.Wealsohaveasecondary,redundantscanlookingforstocksupaminimumof6%fortheday,withthesamepricerangeandminimumvolume.
Asthestocksarealertedwefirstverifythattheyareliquidenoughtotrade.StepTwo–QualifyingtheSetup:(Chapter6)RedFlagReview:
1)Isthereasignificantpriceresistancelevel(s)overheadbasedontheweeklyand/ordailychart?
2)Arethereanyabruptpricecrashesinthenearbypastwhichcouldmeanformerbuyersholdingthroughthosecrasheswilllooktosellforachancetobreak-even?
3)Isthegapupfromthepriordaylargeenoughthatcurrentholderswillbescramblingtoselltotakeprofits?
4)WherearethemediumtolongtermSimpleMovingAveragelines?Iftheyareabovethecurrentprice,theymayserveasareasofstrongselling.
GreenFlagReview:
1)Isthereasignificantlevelofbuyingsupportimmediatelybelowthecurrentpricelevelbasedontheweeklyand/ordailychart?
2)Isthepriceactionoverthelast3to12monthsinatightrangewithlightvolume?
3)Isthecurrentpriceatorabouttobeatanewlong-termhigh?
4)Isthecurrentpricebreakingabovelongtomediumtermsimplemovingaverages?
StepThree–EnteringtheOrder:(Chapter7)Afterqualifyingapotentialsetupwedetermineourtradesizeeitherbyamentalcalculationorusingthe‘tradesize’exceltool.WethenprepareaOne-Triggers-Allentryorder.TheBuyorderweenterisa‘Stop-Limit’order,withthestoppricesetat$0.01higherthanthehighestpriceofthefirst15Minutes,andtheLimitpurchasepricesetatafewcentshigherthanthestopprice.TheSellorder(ourStop-losslosslimitorder)portionoftheOne-Triggers-Allentryissetasa“StoponQuote“order.TheStoppriceisset,usingyourdiscretion,somewherejustbelowaroundnumberandorthepullbacklowoftheopeningrange.Ifhit,theorderbecomesamarketsellordertoexitthetradeforasmallloss.StepFour–ManagingtheOrder&TakingProfits:(Chapter8)You’veidentifiedlevelsofpotentialresistanceduringyourred/greenqualifyingreviewofthesetup.Yourimmediateconcern,ifyourentryorderhasexecuted,istodetermineifthepriceisquicklyrisingintothisleveloflikelyresistance;ifso,takeprofitsatthislevelormoveyourstopupjustunderthisleveltoprotectyourprofitsandremovetheriskofloss.Monitorthetradeusinga5minutechart.AsnewHighsaresetandpullbacksoccur,incrementallymoveyourstoplossorderupbelowthesenewhighsandpullbackstoremoveriskandlockinprofits.Alwaysbevigilantoftheresistancelevelsyou’veidentifiedandactaccordingly.
Analyzethevolume/priceactioncombinationandtrustwhatthevolumeandcandlesarerevealingtoyouaboutthelikelymovementoftheprice.StepFive–PostTradeAnalysis:Keepatradejournalofeverytradeyouenter,andrun“post-gameanalysis”,likeyou’rewatchinggametapes.Consistentlyanalyzingyourtradeperformanceisthebestwaytoimprove.Youshouldtakeascreenshotoftheweekly&dailychartforyourtrade,andascreenshotofafullday’s5minutechartforyourtrade.Noteyourentryprice,youroriginalstoplevel,anysubsequentmovesinthestop,andyourexitprice.Lookatthedailyandweeklychart,howdidyourred/greenflagreviewholdup?Didyoumissanything?What’dyougetright?Digintotheday’sactivityandnoteanysignificantmomentsofvolume/priceaction.Comparetheactivitytoyouroriginalred/greenreview.Whatdidyoudowell?Whereisthereroomforimprovement?Wherewereyoucorrectinyourvolume/priceactionanalysis?Wherewereyouincorrect?Didyoucapturealargerangeofthemovement?Whyorwhynot?Sometimesastock’spricemovementwillshakeusoutofthetradeandleaveusmissingalargemovement.Attimesit’llhappenandit’sunavoidable,othertimesithappensbecausewereadthepriceactionwrong,orwedidn’tlocateappropriateresistancelevels,etc.Keepadetailedtradejournalandfocusoncontinuousimprovement.Analyzeandimprove,repeat.
FinalRemarks&ContactInfo
Sothereitis—justabouteverythingIhavetogiveyouonthisparticularstrategywithoutlettingthebookgettooboggeddown.Sincethisisthefirstrevision,myplanistotakethequestionsandcommentsIgetfromreaderslikeyouandaddupdatedrevisionsaswellasperhapsvideosandblogstocoverthosequestions.Inordertoreceiveupdatestothisbook,pleasesignupformyfreeblogatwww.langhamtrading.com,oremailyourorderformforthisbooktoOrders@1HourTrade.comforafreemonthofmembershipandaccesstoourlivetradingroomandanalysismaterial.IsincerelyhopeI’vegivenyouthevalueyouwantedandexpectedinthisbookandequippedyouwiththetoolsyouneedtocapitalizeonthissetup.ItriedtocreateabookthatIwouldhavelikedtohavewhenstartingout,andIbelieveI’veaccomplishedthat.Ifyouboughtthisbookandyoudisagree,emailme;we’llworkitout.Idon’twanttoleaveanyofmyreadersfeelingthey’venotreceivedafairexchange.Ifyoulikedthisbook,Iwouldbeverymuchinyourdebtandsupremelygratefulifyouwillpleasetakeoneminuteandprovideareviewforithere.Ifyouhatedthisbook,Iwouldbeverymuchinyourdebtandsupremelygratefulifyouwouldstayawayfromthisbook’sreviewsectionPleasefeelfreetoemailmeanytimewithquestions,comments,concerns,criticism,oranythingelseyou’dlike,[email protected];Iwillreply.
AndpleasejoinourFacebookcommunity/discussiongroupforreaders:https://www.facebook.com/groups/1HourTrade/Wediscussvariationsonstrategy,readerquestions,attimesthereiscommentaryonmylackofagraspofelementarygrammar,etc.PleasetakeamomenttoFollowmeonTwitterandLiketheLanghamFacebookPageInthenearfuture,I’llbeputtingoutafewmorebookscoveringadditionalstrategiesthathaveprovensuccessful,andI’llbebuildingoutthewww.langhamtrading.comsiteasatradercommunity,informationsource,andeducationalplatform.Ihopeyou’llconsiderbecomingamember;makingmoneyasagroupisjustmorefunthandoingitalone,andourtradingchatroomisagreatplacetogetaccesstoreal-timeanalysisofthesehighvolumerunnersetupsaswellasanumberofotherstrategies.Thankyouverymuchforreadingthisbook,truly.Iwishyoumuchsuccess,andIhopethisismerelythestartoftheconnectionwenowshare.
