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This tutorial was originally titled “The Four Steps to 80% Day Trading Success” and was recorded at the Online Trading Expo
Pinpointing Entry & Exit Points
This tutorial was originally titled “The Four Steps to 80% Day Trading Success” and was recorded at the Online Trading Expo
Pinpointing Entry & Exit Points
Dr. John F. ClayburgDr. John F. ClayburgEmail Email -- clayburg@pionet.netclayburg@pionet.net
Copywrite 2000 Traders’ LibraryCopywrite 2000 Traders’ Library
22
The Four StepsTo 80% Day Trading Success
The Four StepsTo 80% Day Trading Success
? 1. Define the major trend? of the day.
22
The Four StepsTo 80% Day Trading Success
The Four StepsTo 80% Day Trading Success
? 1. Define the major trend? of the day. ? 2. Define the minor trend within the
major trend.
22
The Four StepsTo 80% Day Trading Success
The Four StepsTo 80% Day Trading Success
? 1. Define the major trend? of the day. ? 2. Define the minor trend within the
major trend.? 3. Define a specific entry point
22
The Four StepsTo 80% Day Trading Success
The Four StepsTo 80% Day Trading Success
? 1. Define the major trend? of the day. ? 2. Define the minor trend within the
major trend.? 3. Define a specific entry point? 4. Define a specific exit point
33
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??One hour into the session, determine that either One hour into the session, determine that either the high or the low of the day has been set.the high or the low of the day has been set.
??Thus the trend of the day has been defined.Thus the trend of the day has been defined.?? If the low is in place, the trend is up for the rest If the low is in place, the trend is up for the rest
of the day.of the day.?? If the high is in place, the trend is lower for the If the high is in place, the trend is lower for the
rest of the day.rest of the day.
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Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Trend Definition based on Range ExpansionTrend Definition based on Range Expansion
44
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Trend Definition based on Range ExpansionTrend Definition based on Range Expansion?? Probability that the entire range of the day Probability that the entire range of the day
has been established one hour into the has been established one hour into the market is remote.market is remote.
44
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Trend Definition based on Range ExpansionTrend Definition based on Range Expansion?? Probability that the entire range of the day Probability that the entire range of the day
has been established one hour into the has been established one hour into the market is remote.market is remote.
??Any range expansion will occur on the high Any range expansion will occur on the high side of the range on an up day and on the side of the range on an up day and on the low side on a down day.low side on a down day.
55
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Why is this Important?Why is this Important?
55
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Why is this Important?Why is this Important???Trade with the trend.Trade with the trend.
55
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Why is this Important?Why is this Important???Trade with the trend.Trade with the trend.??Traders are constantly looking to pick tops Traders are constantly looking to pick tops
and bottoms, thus trading against the trend.and bottoms, thus trading against the trend.
55
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Why is this Important?Why is this Important???Trade with the trend.Trade with the trend.??Traders are constantly looking to pick tops Traders are constantly looking to pick tops
and bottoms, thus trading against the trend.and bottoms, thus trading against the trend.?? Profits are more likely trading in the Profits are more likely trading in the
direction of the current daily trend.direction of the current daily trend.
66
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Take Trades only in the Direction of the Take Trades only in the Direction of the Major TrendMajor Trend
66
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Take Trades only in the Direction of the Take Trades only in the Direction of the Major TrendMajor Trend
??Take only buy signals on an up day.Take only buy signals on an up day.
66
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Take Trades only in the Direction of the Take Trades only in the Direction of the Major TrendMajor Trend
??Take only buy signals on an up day.Take only buy signals on an up day.??Take only sell signals during a down day.Take only sell signals during a down day.
66
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??Take Trades only in the Direction of the Take Trades only in the Direction of the Major TrendMajor Trend
??Take only buy signals on an up day.Take only buy signals on an up day.??Take only sell signals during a down day.Take only sell signals during a down day.??Use opposite side signals as exits, but not Use opposite side signals as exits, but not
for entry.for entry.
77
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??How do we determine the trend?How do we determine the trend?
77
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??How do we determine the trend?How do we determine the trend??? 1. CD Market Direction Indicator1. CD Market Direction Indicator
77
Step OneDefine the major trend of the day.
Step OneDefine the major trend of the day.
??How do we determine the trend?How do we determine the trend??? 1. CD Market Direction Indicator1. CD Market Direction Indicator?? 2. CD Median Line Indicator2. CD Median Line Indicator
88
CD Market Direction IndicatorCD Market Direction Indicator
99
CD Market Direction IndicatorCD Market Direction Indicator
1010
CD Median Line IndicatorCD Median Line Indicator
1111
CD Median Line IndicatorCD Market Direction Indicator
CD Median Line IndicatorCD Market Direction Indicator
1212
CD Median Line IndicatorCD Market Direction Indicator
CD Median Line IndicatorCD Market Direction Indicator
1313
CD Median Line IndicatorCD Market Direction Indicator
CD Median Line IndicatorCD Market Direction Indicator
??
1414
CD Median Line IndicatorCD Market Direction Indicator
CD Median Line IndicatorCD Market Direction Indicator
1515
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??Exhaustion of Corrective MoveExhaustion of Corrective Move
1616
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??Use Four Indicators to Identify ExhaustionUse Four Indicators to Identify Exhaustion
1616
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??Use Four Indicators to Identify ExhaustionUse Four Indicators to Identify Exhaustion??All are looking for exhaustion of a All are looking for exhaustion of a
correctioncorrection
1616
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??Use Four Indicators to Identify ExhaustionUse Four Indicators to Identify Exhaustion??All are looking for exhaustion of a All are looking for exhaustion of a
correctioncorrection??All do so in their own methodAll do so in their own method
1616
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??Use Four Indicators to Identify ExhaustionUse Four Indicators to Identify Exhaustion??All are looking for exhaustion of a All are looking for exhaustion of a
correctioncorrection??All do so in their own methodAll do so in their own method??Mathematical AlgorithmMathematical Algorithm
1616
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??Use Four Indicators to Identify ExhaustionUse Four Indicators to Identify Exhaustion??All are looking for exhaustion of a All are looking for exhaustion of a
correctioncorrection??All do so in their own methodAll do so in their own method??Mathematical AlgorithmMathematical Algorithm?? Pattern RecognitionPattern Recognition
1717
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??One Indicator One Indicator -- SignificantSignificant
1717
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??One Indicator One Indicator -- SignificantSignificant??Two Signals Two Signals -- Significance IncreasesSignificance Increases
1717
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??One Indicator One Indicator -- SignificantSignificant??Two Signals Two Signals -- Significance IncreasesSignificance Increases??Three Signs of Exhastion Three Signs of Exhastion -- Higher Higher
ConfidenceConfidence
1717
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
??One Indicator One Indicator -- SignificantSignificant??Two Signals Two Signals -- Significance IncreasesSignificance Increases??Three Signs of Exhastion Three Signs of Exhastion -- Higher Higher
ConfidenceConfidence??All Four All Four -- Maximum Confidence of an Maximum Confidence of an
Exhausted Correction Exhausted Correction
1818
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
?? Four IndicatorsFour Indicators
1818
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
?? Four IndicatorsFour Indicators?? 1.1. CD ReversalCD Reversal
1818
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
?? Four IndicatorsFour Indicators?? 1.1. CD ReversalCD Reversal?? 2.2. CD Real Time PivotCD Real Time Pivot
1818
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
?? Four IndicatorsFour Indicators?? 1.1. CD ReversalCD Reversal?? 2.2. CD Real Time PivotCD Real Time Pivot?? 3.3. CD ExhaustionCD Exhaustion
1818
Step TwoDetermine the Short Term Trend
Step TwoDetermine the Short Term TrendDetermine the Short Term Trend
?? Four IndicatorsFour Indicators?? 1.1. CD ReversalCD Reversal?? 2.2. CD Real Time PivotCD Real Time Pivot?? 3.3. CD ExhaustionCD Exhaustion?? 4.4. CD ClusterCD Cluster
1919
Step TwoCD Reversal Indicator
Step TwoCD Reversal IndicatorCD Reversal Indicator
??Appear as cyan squares below the bars or Appear as cyan squares below the bars or magenta squares above the barmagenta squares above the bar
1919
Step TwoCD Reversal Indicator
Step TwoCD Reversal IndicatorCD Reversal Indicator
??Appear as cyan squares below the bars or Appear as cyan squares below the bars or magenta squares above the barmagenta squares above the bar
?? First appearance is indicative of a trend First appearance is indicative of a trend which is experiencing early signs of which is experiencing early signs of exhaustion.exhaustion.
1919
Step TwoCD Reversal Indicator
Step TwoCD Reversal IndicatorCD Reversal Indicator
??Appear as cyan squares below the bars or Appear as cyan squares below the bars or magenta squares above the barmagenta squares above the bar
?? First appearance is indicative of a trend First appearance is indicative of a trend which is experiencing early signs of which is experiencing early signs of exhaustion.exhaustion.
??When the indicator stops plotting the When the indicator stops plotting the exhaustion phase is completedexhaustion phase is completed
1919
Step TwoCD Reversal Indicator
Step TwoCD Reversal IndicatorCD Reversal Indicator
??Appear as cyan squares below the bars or Appear as cyan squares below the bars or magenta squares above the barmagenta squares above the bar
?? First appearance is indicative of a trend First appearance is indicative of a trend which is experiencing early signs of which is experiencing early signs of exhaustion.exhaustion.
??When the indicator stops plotting the When the indicator stops plotting the exhaustion phase is completedexhaustion phase is completed
??A trend change is now expectedA trend change is now expected
2020
Step TwoCD Reversal Indicator
Step TwoCD Reversal IndicatorCD Reversal Indicator
2121
Step TwoCD Reversal Indicator
Step TwoCD Reversal IndicatorCD Reversal Indicator
2222
Step TwoCD Real Time Pivot Indicator
Step TwoCD Real Time Pivot IndicatorCD Real Time Pivot Indicator
??Buy Signals are plotted as blue dots below Buy Signals are plotted as blue dots below the barthe bar
2222
Step TwoCD Real Time Pivot Indicator
Step TwoCD Real Time Pivot IndicatorCD Real Time Pivot Indicator
??Buy Signals are plotted as blue dots below Buy Signals are plotted as blue dots below the barthe bar
?? Sell Signals are plotted as red dots above Sell Signals are plotted as red dots above the barsthe bars
2222
Step TwoCD Real Time Pivot Indicator
Step TwoCD Real Time Pivot IndicatorCD Real Time Pivot Indicator
??Buy Signals are plotted as blue dots below Buy Signals are plotted as blue dots below the barthe bar
?? Sell Signals are plotted as red dots above Sell Signals are plotted as red dots above the barsthe bars
?? Plots do appear in real time, as the name Plots do appear in real time, as the name suggests.suggests.
2222
Step TwoCD Real Time Pivot Indicator
Step TwoCD Real Time Pivot IndicatorCD Real Time Pivot Indicator
??Buy Signals are plotted as blue dots below Buy Signals are plotted as blue dots below the barthe bar
?? Sell Signals are plotted as red dots above Sell Signals are plotted as red dots above the barsthe bars
?? Plots do appear in real time, as the name Plots do appear in real time, as the name suggests.suggests.
??Dots are printed when the bar closes.Dots are printed when the bar closes.
2323
Step TwoCD Real Time Pivot Indicator
Step TwoCD Real Time Pivot IndicatorCD Real Time Pivot Indicator
2424
Step TwoCD Real Time Pivot Indicator
Step TwoCD Real Time Pivot IndicatorCD Real Time Pivot Indicator
2525
Step TwoCD Real Time Pivot Indicator
Step TwoCD Real Time Pivot IndicatorCD Real Time Pivot Indicator
2626
Step TwoCD Real Time Pivot Indicator
Step TwoCD Real Time Pivot IndicatorCD Real Time Pivot Indicator
2727
Step TwoCD Exaustion Indicator
Step TwoCD Exaustion IndicatorCD Exaustion Indicator
??Consists of four plotted linesConsists of four plotted lines
2727
Step TwoCD Exaustion Indicator
Step TwoCD Exaustion IndicatorCD Exaustion Indicator
??Consists of four plotted linesConsists of four plotted lines??Market tries to stay in a “comfort zone” Market tries to stay in a “comfort zone”
between the two yellow bandsbetween the two yellow bands
2727
Step TwoCD Exaustion Indicator
Step TwoCD Exaustion IndicatorCD Exaustion Indicator
??Consists of four plotted linesConsists of four plotted lines??Market tries to stay in a “comfort zone” Market tries to stay in a “comfort zone”
between the two yellow bandsbetween the two yellow bands??When the market strays outside these bands When the market strays outside these bands
a trading signal is set upa trading signal is set up
2828
Step TwoCD Exaustion Indicator
Step TwoCD Exaustion IndicatorCD Exaustion Indicator
2929
Step TwoCD Exaustion Indicator
Step TwoCD Exaustion IndicatorCD Exaustion Indicator
3030
Step TwoCD Exaustion Indicator
Step TwoCD Exaustion IndicatorCD Exaustion Indicator
3131
Step TwoCD Exaustion 2 Indicator
Step TwoCD Exaustion 2 IndicatorCD Exaustion 2 Indicator
3232
Step TwoCD Cluster Indicator
Step TwoCD Cluster IndicatorCD Cluster Indicator
??Most complicated of the short term groupMost complicated of the short term group
3232
Step TwoCD Cluster Indicator
Step TwoCD Cluster IndicatorCD Cluster Indicator
??Most complicated of the short term groupMost complicated of the short term group??Usually the last to appearUsually the last to appear
3232
Step TwoCD Cluster Indicator
Step TwoCD Cluster IndicatorCD Cluster Indicator
??Most complicated of the short term groupMost complicated of the short term group??Usually the last to appearUsually the last to appear??Can be used as the final confirmation of Can be used as the final confirmation of
exhaustionexhaustion
3333
Step TwoCD Cluster Indicator
Step TwoCD Cluster IndicatorCD Cluster Indicator
3434
Step TwoCD Cluster Indicator
Step TwoCD Cluster IndicatorCD Cluster Indicator
?Step TwoCD Cluster IndicatorCD Cluster Indicator
3535
Step TwoCD Cluster Indicator
Step TwoCD Cluster IndicatorCD Cluster Indicator
3636
All FourAll Four
3737
Trade SequenceTrade Sequence
3838
Trade SequenceTrade Sequence
3939
Trade SequenceTrade Sequence
4040
Trade SequenceTrade Sequence
4141
Trade SequenceTrade Sequence
4242
Step ThreeEntry
Step ThreeEntry
??CD Entry Point IndicatorCD Entry Point Indicator
4242
Step ThreeEntry
Step ThreeEntry
??CD Entry Point IndicatorCD Entry Point Indicator??Measures Short Term Support and Measures Short Term Support and
ResistanceResistance
4242
Step ThreeEntry
Step ThreeEntry
??CD Entry Point IndicatorCD Entry Point Indicator??Measures Short Term Support and Measures Short Term Support and
ResistanceResistance?? Place buy stops and sell stopsPlace buy stops and sell stops
4343
Step ThreeCD Entry Point
Step ThreeCD Entry Point
4444
Step ThreeCD Entry Point
Step ThreeCD Entry Point
4545
Step FourExit
Step FourExit
??Trailing StopTrailing Stop
4545
Step FourExit
Step FourExit
??Trailing StopTrailing Stop??CD Entry PointCD Entry Point
4545
Step FourExit
Step FourExit
??Trailing StopTrailing Stop??CD Entry PointCD Entry Point??CD Volatility StopCD Volatility Stop
4545
Step FourExit
Step FourExit
??Trailing StopTrailing Stop??CD Entry PointCD Entry Point??CD Volatility StopCD Volatility Stop??CD Cluster Volatility StopCD Cluster Volatility Stop
4545
Step FourExit
Step FourExit
??Trailing StopTrailing Stop??CD Entry PointCD Entry Point??CD Volatility StopCD Volatility Stop??CD Cluster Volatility StopCD Cluster Volatility Stop??CD Real Time TargetCD Real Time Target
4646
Step FourExit - Trailing Stop
Step FourExit - Trailing Stop
4747
Step FourExit - Volatility Stop
Step FourExit - Volatility Stop
4848
Step FourExit - Cluster Volatility Stop
Step FourExit - Cluster Volatility Stop
4949
Step FourCD Real Time Target Exit
Step FourCD Real Time Target Exit
5050
Step FourCD Real Time Target
Step FourCD Real Time Target
5151
Step FourCD Real Time Target
Step FourCD Real Time Target
5252
Step FourCD Real Time Target
Step FourCD Real Time Target
5353
Step FourCD Real Time Target
Step FourCD Real Time Target
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