Technical Analysis , Central banking, and the foundations of successful trading

1. Technical Analysis, Central banking, and the foundations of successful trading Adam Gabriel L.A. Conference 2012

2. Introduction andSharing My Trading History

3. History of BTST • 1. FINRA’s Pattern Day Trading Violations • 2. Overnight Profits vs Day Trading

4. BTST Entry Points: • What your Bias? Bear or Bull? • Conduct Technical Analysis • Study MA’s and Momentum Oscillators • Confirm Your Bias By Studying The Broad Market Averages

5. EXC BTST Signal Initiated Momentum indicators turn bullish

6. BTST Exit Points: • Check Momentum Indicators • Identify Pivot Points & %’s • Double Check With Major Market Averages • Where is the VIX Trading? • Where Is the Dollar-Euro Trading?

7. BTST Stop Loss Pre-requisites • Stops Are In And Emotions Are Out!!!!! • Define Your Risk Management System • Know When You Have Entered A Bad Trade • Set A Mental Stop? • Where is the VIX Trading? • Where Is the Dollar Trading?

8. Foundation of BTST • Our trading system analyzes the three critical issues that confuse traders the most. These include:1. How and when to enter the market.2. How to exit the trade if it becomes unprofitable.3. How to exit the trade if it becomes profitable.

9. BTST Member Question: • "What is more important? Capturing 100% of the market's upside 100% of the time, or even beating the market 100% of the time? • OR • Capturing a respectable return when risks are higher, protecting your net worth when needed, and not having to live through losses in excess of 50% during the next bear market/crisis?

10. BTST Answer: • If you want to capture 100% of the market's upside 100% of the time, you must also be willing to accept 100% of the market's risk 100% of the time. • That may be the right strategy for some people, but it is not our approach to growing and protecting capital.

11. Philosophy Of Technical Analysis Technical analysis is the study of market performance through time; primarily through the use of charts, for the purpose of forecasting future price trends.

13. CRM Details (A) the market pulled back, (B) we invested some cash near the red down candle, (C) the market reversed, and (D) we began to implement the incremental approach by stepping away from risk as the market continued to drop.

14. Technical Analysis Helps Manage Risk

15. Trading Methods Bull or Bear? Buy Or Sell? What do you expect it to be during the life of your trade? What is the Current Market Environment?

16. Trading with the Trend Trends Have Three Directions Drawing a Trend Line How to Use the Trend Line

17. Typical Trendline

18. Support is a level or area on the chart where buying interest is strong enough to overcome selling pressure.

19. Resistance is the opposite of support and represents a price level or area over the market where selling pressure overcomes buy­ing pressure and a price advance is turned back.

20. Support and Resistance

21. A Moving Averagestudies a certain body of data I.E.-the last 50 days are added up and the total is divided by 50.

22. CIEN Above 50 day-Below 200 day

23. Momentum Oscillators Measures the velocity and magnitude of directional price movements. Momentum is the rate of the rise or fall in price. Oscillators Include: RSI,OBV, Williams %, etc.

24. LVS-Oscillator Chart

25. Establish Your Trading Plan • 1. Set-up • 2. Keep it simple • 3.Number of Trades per week? • 4. $25k required for PDT’ers

26. Trade Responsibly • Manage Exposure • Set Targets-(Entry, Exit, and Stops) • Trade The Plan • Plan The Trade

27. Every Day, The Market Changes • Past performance is not indicative of future results. As such, no system is perfect. Trading involves risk.

28. The Ability to Raise Cash • Is the biggest difference between seasoned professionals and the typical investor. • You want to raise cash early in a corrective process.

29. Answer This Question Without Any Hesitation: • If we head into the next crisis which leads to losses approaching 50% or greater again, how would you protect capital?

30. What is Trading Really About? • Its About Making Money and Protecting Capital! • Be extremely flexible, agile, and open-minded. • accept normal "give backs" • Don’t let losses run out of control • Live to fight another day

31. Adam’s Trading Rules • 1. Capital Preservation is key! • 2. Risk Management: Know your risk before you trade. • 3. Set Proper Position Sizing • 4. Set Ideal Entry Point, Profit Target and Stop Loss.

32. Adam’s Trading Rules 5. Cut Losing Trades Short And Let Winning Trades Run! 6. Do Not Modify Your Stop Loss Target. 7.Trade What You See-Not What You Might Think.

33. Adam’s Trading Rules • 8. Don’t trade on emotions • 9. Market tops and bottoms are a process not an event. • 10. Accept full responsibility for your trades at all times-win, lose, or draw.

34. Pre-Market Daily Routine • 1.Check the FOREX Market • 2.Listen to Bloomberg & CNBC for comedy relief  • 3. Check trading account • 4. Watch Pre-Market winners and losers. Place bids-or sell?

35. Aftermarket Daily Routine • 1. Review daily trades • 2.Listen to more Bloomberg & CNBC for comedy relief  • 3. Any aftermarket movers? • 4. If so, place a bid or sell into aftermarket news.

36. Final Thoughts On Investing • Review Your Trades • Was Your Trade A Success? Why? • Did Your Trade Go bad? Why? • Primary Trends versus your Actual Trade

37. Underground Knowledge • Who runs the stock market? • Why the bankers almost always win. Is the game rigged?

38. Central Banks of Issuance • Founding Fathers view of central bankers. • They called them “Money-changers.”

39. Jefferson Quote: The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.

40. Abraham Lincoln Quote: • "The government should create, issue and circulate all the currency and credit needed to satisfy the spending power of the government and the buying power of consumers..... The privilege of creating and issuing money is not only the supreme prerogative of Government, but it is the Government's greatest creative opportunity. By the adoption of these principles, the long-felt want for a uniform medium will be satisfied. The taxpayers will be saved immense sums of interest, discounts and exchanges. The financing of all public enterprises, the maintenance of stable government and ordered progress, and the conduct of the Treasury will become matters of practical administration. The people can and will be furnished with a currency as safe as their own government. Money will cease to be the master and become the servant of humanity.

41. Lincoln Quote: • The money powers prey upon the nation in times of peace, and conspire against it in times of adversity. The banking powers are more despotic than a monarchy, more insolent than autocracy, more selfish than bureaucracy. They denounce as public enemies, all who question their methods or throw light upon their crimes.

42. History Of Central banks in USA • 1. First bank of the United States. • 2. Second bank of the United States.

43. History Of Central banks in USA • 3. Federal Reserve Act Of 1913. • Congress authorizes a Central bank even though Article 1, Section 8, of the U.S. Constitution stipulates Money and Credit should be regulated by Congress alone!

44. History Of Central Banking • What does all of this mean in real terms? • Interest Bearing versus Non-Interest bearing currency • What is Fractional Reserve banking? • What is POMO? Federal Reserve is helping to boost equity prices without creating an equally positive change in SUSTAINABLE economic growth. Result: This affects stock prices!!!!!!

45. Federal Reserve Reads • 1. The Creature from Jekyll Island from G Edward Griffin • More Info on the “FED” can be found @ http://www.newyorkfed.org/markets/tot_operation_schedule.html • Hope you enjoyed my presentation!