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Trader's Tip
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Great traders agree: trading with the market direction is the easiest way to get consistent profits. Know which way the market is moving and position yourself to take advantage of this knowledge.
- John Novak | |
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This short lesson will keep you on the right side of the market and will give new traders a very simple plan of how to determine where the key areas to trade from while learning to trade specific setups.
This is not everything you need to trade using the support and resistance but the fundamental strength of all great traders is determining when and where you have the highest advantage for a large winners and very small losers and that is what this lesson will teach.
The Rules are simple -- and can be used on ANY timeframe from smallest tick charts to daily bars.
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The market must hit a key area of support or resistance -- this can be determined by prior high or low pivots or floor trader pivots or in this case we are using our own program the T-3 Fibs ProTrader that automatically generates multiple timeframe Fibonacci support and resistance.
- The market must make a strong move off of that area accompanied by a strong move in the Macd BB lines. You can use a regular Macd indicator if you do not own the T-3 software.
- During the pullback towards your area if the Macd makes a weak retracement you should look for long or short setups.
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Below is an example of the ER2 (Russell 2000 Futures Contract) with rules written on the chart and the high probability turning point highlighted in magenta.
If you cannot view the ER2 example chart,
go here.
This same setup can be used to determine if the current market's trend will continue. In the example below you will see weak pullbacks signaling continuation to the downside. If your trend trading then this is where you look to get in or add to your positions.
The second example on this chart is the first signal to go long from Key Fibonacci support areas. Just learning this one setup will keep your eye trained in on areas that should hold that would give you the highest chances of winning during your education.
To view the ER2 example chart 2, go here. | |
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This same principle will hold true on stocks or any other market. In this example you will see Apple Stock (AAPL) daily chart with T-3 Fibonacci support and resistance. You will see when there is a strong move from a key support or resistance area it will give you a very low risk entry area with a high reward potential.
To view the APPL example chart,
go here.
This lesson is the base from which we teach traders to read the market and put themselves in great trading situations. If you can master this one element you will be on the right side of the market more than 70% of the time with a 4:1 reward to risk ratio. | |
About the Author
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John Novak is President of Nexgen Software Services Inc. John is the developer of the T-3 Fibs ProTrader indicator package. He has been involved in the marketing and distribution of Technical analysis software for the last 9 years. He has devoted the last 6 years to the automation of a popular discretionary methodology that he taught in seminars for over 2 years to many successful traders that was centered on Fibonacci analysis of both time and price. With the help of his software programmers they have automated this entire Fibonacci process into a fully automatic program. He spends his day's educational work on analysis in predictive indicators for traders.
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