The Insider Edge: How to Follow the Insiders for Windfall Profits

294 Pages·2012·11.56 MB·English

by  Guy Cohen

Contents
Cover
Series
Title Page
Copyright
Preface
Acknowledgments
Introduction
MARCH 8, 2008
MARCH 2008
MARCH 2009
APRIL 26, 2010
MARCH 2011
SUMMER 2011
SEPTEMBER 7, 2011
“INFORMED TRADING” AND THE OVI
THE INSIDER'S RATIONALE
TRADING BREAKOUTS
Chapter 1: The Most Popular Chart Patterns
PRICE BARS
SUPPORT AND RESISTANCE
TRENDS
FLAG PATTERNS AND CONSOLIDATIONS
HEAD AND SHOULDERS
INDICATORS
LEARNING POINTS
Chapter 2: The OVI: Guide to the Insiders
WHAT IS THE OVI?
WHEN TO USE THE OVI AND WHEN NOT TO USE IT
THE OVI WITH STOCKS
LEARNING POINTS
Chapter 3: Flags and Channel Breakouts in Detail
BULL FLAGS
BEAR FLAGS
FLAGS WITH A STRONG OVI SIGNAL
CHANNEL BREAKOUTS
SETTING THE FIRST PROFIT TARGET
LEARNING POINTS
Chapter 4: The Trading Plan
ORDER TYPES
THE TRADING PLAN
LEARNING POINTS
Chapter 5: Putting It All Together
SUMMARY OF THE OVI TRADING METHOD
A FEW MORE EXAMPLES
ACTION STEPS
SUMMARY OF TOOLS FOR YOU TO USE
TAKE THE NEXT STEP NOW!
About the Author
Index
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Copyright © 2012 by Guy Cohen. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
Cohen, Guy.
The insider edge : how to follow the insiders for windfall profits / Guy Cohen. –
1st ed.
p. cm. – (Wiley trading ; 582)
Includes index.
ISBN 978-1-118-24528-6 (hardcover); ISBN 978-1-118-28484-1 (ebk); ISBN
978-1-118-28434-6 (ebk); ISBN 978-1-118-28255-7 (ebk)
1. Stocks. 2. Profit. I. Title.
HG4661.C595 2012
332.63′–dc23
2012015372
Preface
Between January 1, 2008 and February 28, 2008, Bear Stearns (BSC) shares
traded in a range between $68.18 and $93.09.
On March 3, 2008, Bear Stearns closed at $77.32 (see Figure P.1). At around
this time most commentators (famously including those on CNBC) were
suggesting that BSC could be a takeover target and, as such, were bullish on the
stock's prospects.
FIGURE P.1 BSC March 3, 2008 Chart
Source: OVI Charts. Courtesy of FlagTrader.com. Go to www.theinsideredge.com for more information.
At the same time, an unknown new indicator plummeted to its lowest possible
reading for BSC. In itself that wasn't the key factor. It's the fact that for the next
two weeks the indicator remained at its most negative reading for all but two
days.
Exactly two weeks after the unknown indicator plummeted, BSC went into
free-fall, reaching a low of $2.84. Bear Stearns was indeed taken over, but at $10
per share, a far cry from the heady heights of $77.32 (see Figure P.2).
FIGURE P.2 BSC March 17, 2008 Chart
Source: OVI Charts. Courtesy of FlagTrader.com. Go to www.theinsideredge.com for more information.
This was one of the most dramatic declines in the history of the stock market,
and yet not one commentator saw it coming.
And yet, there were people who DID see it coming—and they made a fortune
from it, too.
How do we know this? Well, the “unknown indicator” measures options
transactions for individual stocks. And in the case of BSC, the indicator went
crazy to the downside two weeks before BSC collapsed!
Someone, somewhere knew something …
In this book you're going to learn how to spot another Bear Stearns, or, more
positively, how to spot a meteoric rise in a stock before it happens. The unknown
indicator is now unveiled.
Whatever your trading experience or proficiency may be, this book is for you,
provided you want to make money in the markets.
That's a pretty bold statement, but the reason this book is for you, regardless of
your prior experience, is because the method within is effective, simple, and easy
to apply.
This is music to the ears of anyone who just wants to make money from the
markets. It doesn't matter what your proficiency is; we all want a time-efficient
way to make money from the markets, and this book delivers exactly that.
I should also emphasize that this is not a book on options! We will refer to