Trading triads : unlocking the secrets of market structure and trading in any market

305 Pages·2010·5.65 MB·English

by  Tudela

Trading Triads
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TRADING TRIADS
Unlocking the Secrets of Market Structure
and Trading in any Market
Felipe Tudela
A John Wiley and Sons, Ltd., Publication
This edition first published 2010.
(cid:1)C Felipe Tudela
Registered office
John Wiley & Sons Ltd, The Atrium, Southern Gate, Chichester, West Sussex, PO19 8SQ,
United Kingdom
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Library of Congress Cataloging-in-Publication Data
Tudela, Felipe.
Trading triads : unlocking the secrets of market structure and trading in any market / Felipe Tudela.
p. cm.
Includes bibliographical references and index.
ISBN 978-0-470-74843-5
1. Investment analysis. 2. Stocks–Charts, diagrams, etc. I. Title.
HG4529.T84 2010
332.63(cid:2)2042–dc22
2010013115
A catalogue record for this book is available from the British Library
ISBN 978-0-470-74843-5
Typeset in 10/12pt Times by Aptara Inc., New Delhi, India
Printed and bound in Great Britain by TJ International Ltd, Padstow, Cornwall
Contents
Acknowledgements ix
Introduction: The Road to a New Level of Mastery xi
The Ageless Science of Trading xi
Why Most Traders Fail xii
The Key to Success in the Market xii
1 The Oscillatory Nature of Markets: Their Component Elements 1
Market Science, the Science of Oscillations 1
The Key Elements of Market Behavior 10
The Fundamental Market Structure 20
2 How to Measure Oscillations 27
The Primordial Market Cycle 27
Measuring the Market 31
The Meaningful Swing 43
3 Market Phases: Learning to Recognize Them Is Your First Step
Towards Success 49
The Origin and Nature of Market Phases 49
The Wheel of Time 54
The Inner Structure of All Patterns 65
4 Market Strength: The Conditions for a Change of Phase 71
The Fundamental Market Structure: The Key to Market Strength 71
The Energy Factor 80
The Time Factor 86
Market Time as Different from Clock Time 89
vi Contents
5 Basic Principles and Strategies for Trading Success 93
Using the Fundamental Market Structure to Trade the Markets 93
A Trading Strategy That is Not Exclusive of Other Trading Methods 96
The Difference Between Patterns and Principles 98
Basic Trading Strategy 104
6 The Key Buying and Selling Patterns 113
Waiting Patterns 113
Buying Patterns 119
Selling Patterns 129
7 The Mastery of Fluctuations: How to Develop Your Sixth
Sense of the Market 139
The Arithmetic Measuring Method 139
Measure Market Swings Before Trading 143
Building up Your Sixth Sense 148
8 How to Trade with Indicators while Avoiding False Signals 153
Why Mathematical Indicators Give So Many False Signals 153
The Power of a Simple Moving Average 157
Trading Triads with Indicators 163
9 Trading Patterns with Triads 171
Trading Tops and Bottoms 171
Trading Triangles 174
Trading Gaps 177
10 The Only Way to Succeed: Control Your Risk 181
Why You Must Never Overtrade 181
Looking for the Right Risk/Reward Ratio 183
11 Money Management Is Easier Than You Think 185
Money Management Is the Secret 185
The Logic of Money Management 186
Complex Mathematics Versus Intuitive Simplicity: The Tools of Money
Management 189
12 How to Find a Trading System or Method That Really Works 193
What Works: Its Key Element 193
The Secret About Secret Methods 194
The Logic of Boundaries and Money Management 197
Contents vii
13 How to Create a Trading Plan 201
Find an Idea 201
Develop and Test Your Ideas 202
Put Everything Into Writing: Create an Operating Manual 204
14 Now Try This Simple Experiment 207
Build Your Trading Laboratory 207
Create Your First Trading System 208
Now Do It 209
Conclusion 211
Appendix I Triad Formulas in Metastock Language 213
Formula 1:Descending Triad 213
Formula 2:Ascending Triad 213
Appendix II Chart Examples and Charts 215
Notes 273
Bibliography 279
Index 281