Applications are offered with over 20
Table of Contents
Foreword xi
Preface xiii
What You Will Find in the Book xv
What You Will Find on the Web Site xvi
Disclaimer xvii
As You Begin xvii
Acknowledgments xix
CHAPTER 1 The Search for a Universal Market Law: The Rise of Able Trend 1
Complete Chaos or Hidden Order? 1
When My Interest in Trading Began 5
A Scientific Antidote to Arbitrary Market Predictions 6
First Steps: Becoming an EasyLanguage System Developer 7
The Trend: Foe or Friend? 7
The Fundamental Approach 8
The Dream of a Universal Early-Trend Indicator 9
Could the Laws of Natural Sciences Also Govern the Financial Markets? 10
The Birth of AbleTrend 10
CHAPTER 2 Advances in Market Trend Analysis 13
What Is a Trend? 14
The Setup of a Trend 16
Maturity of a Trend 18
Drawing Trendlines 24
Support and Resistance 29
The Market Defines Support and Resistance 30
How Common Methods Define Support/Resistance Levels 30
How AbleTrend Defines Support and Resistance Levels 32
AbleTrend Indicators 37
Other Trend-Following Indicators 40
Market Indications 46
Three Rules for Following Trends 49
The Golden Region of Entry: The Sweet Spot 50
Time, Price, Forecasts, Predictions, and Targets 54
Cycles and Waves 57
Summary 59
CHAPTER 3 Four Elements of Trading Success 61
Profitable Trading Systems and Methods 62
Adequate Capitalization 67
Money Management Strategy 70
Discipline or a Winning Trading Psychology 80
Conclusion 85
CHAPTER 4 Essential Philosophy of Trend Trading 87
Wisdom of the Tao 87
Trading Is a Business 98
Only Trend Following Works 100
Don’t Trade Against the Market 105
Which Market Is the Most Tradable and Why? 107
Why Voting Systems Do Not Work 110
Why $500 or 5 Percent Stops Do Not Work 110
Why the Winning Rate Is Not Important 111
Why You Cannot Pick a Top or Bottom 112
How to Let Profits Run 113
How to Cut Losses Short 113
Go the Opposite Way of the Majority 115
Trade Only the Risk Capital that You Can Afford to Lose 118
If You Want to Win, Think About Loss 118
Place Yourself beyond the Possibility of Defeat 119
Trading Is the Most Difficult Thing in the World 120
Conclusion 121
CHAPTER 5 The Applications 123
What Is the “Winning Framework” for a Trading System? 123
STM Method—Buy on Blue and Sell on Red 128
Evaluate a Trading System: Back-Testing 134
Four Important Issues for Parameter Settings 140
AbleTrend2 Stops 144
The Sweet Spot—Golden Region of Entry 147
Finding the Character of a Particular Market 150
Trend Time Frames 151
Avoid Choppy Markets 154
Breakout or Retracement 162
Day Trading versus Swing Trading 166
In Conclusion: The Five F’s of Designing a Trading System 166
CHAPTER 6 Examples of Trend Analysis 169
Stocks 169
Commodities 178
The E-Minis 189
Forex 199
Bonds 205
Conclusion 210
CHAPTER 7 Advanced AbleTrend Tools 211
Virtual Paper Trading (VPT) 211
Historical Forward Testing 213
AutoScan 216
The Percent Charts 218
The Guidance Charts 219
Stock Search Engine—Stock Picks 220
Visual or Chart Trading 222
Automated Trading Orders 224
Options Trading 224
Spread Trading 226
Portfolio Trading 227
Summary 237
APPENDIX A Interviews with AbleTrend Users 239
John Meyer 239
Bob Seifert 242
Harvey Saff 244
Gerry Wollert 245
Mike Weingart 246
Alex Kuan 247
Remco Eenink 249
Chris Anthony 251
Jim Kane 253
David Fawkes 254
APPENDIX B Quick Reference for STM 257
STM Trading Method 257
References 261
About the Authors 263
Index 265
