|
Welcome all Safety in the Market traders to this month’s dedicated newsletter. Well the last month since speaking with you has been basically nothing but up with only short time duration reactions, indicating a strong trend. I spoke last month about AMP and I’ll review that this month. I also spoke about the overall market and can quote from last month’s article...
“I’m on record in the Platinum Newsletters espousing a low of significance by (or near) the end of the 1st quarter 2009 for the ASX200 and it looks like it may have come sooner rather than later.”
That was written on 16 March and Chart 1 below of the SPI200 shows the story since that time. It looks like quite likely we are seeing the first leg out of a new bull cycle. Just remember it is most likely a smaller bull cycle in an overall bigger bear market. Time will tell. I’ve got a Road Map going forward in mind, which for now I’ll save for the Platinum Fast-Track Traders Newsletters and live workshops should we all get along just right!
Chart 1 - SPI200 (ASX200 Futures, AAI-SpotV) Snapshots since 16 March 2009
click chart to enlarge
As you can see in Chart 1, we are up over 10% (at the day of writing, 15 April) from the close of March 16, 2009. In fact, March 13 confirmed a 9 Day Island bottom pattern, very reminiscent of the 13 March 2003 low. This is a great bounce in such a short time and easily identified by an experienced Gann trader/student. I’m sure a number of our more advanced traders would have spotted the set-up and profited handsomely. We would love to hear about it if you did. There will also be an end to this ‘first leg out’ and an opportunity to lock in profits and trade the potential ‘second leg out’.
Let’s get back to the follow-up on AMP from last month.
In last month’s article we discussed the 5-Day Island confirmed on March 13, likely future price direction and possible ways to trade the set-up. Chart 2 is a daily bar chart of AMP from last month’s article, which was prepared at the end of trading on March 16. Quoting from the article...
“At the time of writing AMP is yet to confirm a first higher swing bottom on a 1, 2 or 3 day swing chart and represents a perfect time for Advanced Safety in the Market Traders to start to consider the entry signals given under the rules of ‘Type 2’ trades for a trend reversal.”
Chart 2 – AMP Daily Bar Chart – Snapshot taken March 16, 2009
click chart to enlarge
Chart 3 is the follow-up daily bar chart. What I’d like to cover with you is as promised, how might we have traded this ‘Set-up’ using Advanced Swing Trader rules. What eventually occurred was almost pure Advanced Swing Trading theory and something I’m excited to share. Take a quick look at the chart and read on.
Chart 3 – AMP Daily Bar Chart – 5-Day Island Low Follow-Up
click chart to enlarge
It was only the next day (a shame sometimes articles can’t simply come straight from our desks to your P.C.’s) that we had the ‘advanced’ entry trigger given. It has also been a very profitable one, that has become greatly more profitable, for those using Advanced Stop Strategies, again for the more experienced trader.
On 17 March, we had the perfect example of an Outside Continuation Day entry used in a ‘Type 2’ advanced trade situation. The market opened lower on March 17 and pushed lower still early, taking out the low of the previous day. After a few days up, this gave us our first lower bottom on the daily bar chart since March 10 and the ‘earliest indication’ a pending down swing was confirmed. One might have been thinking, watching this intraday, ‘Have I got my first potential Point C to go long forming today’. Watching an outside day Point C forming in a strong trend (in this case first higher swing bottom) is the essence of this style of trade entry.
The trigger was given also on 17 March as the AMP share price traded back up above the high of March 16, getting us in within 33% as you can see in Chart 3. David Bowden refers to his basic method for trading Outside Continuation Day trades as his ‘Training Wheels Rule’ which would have a lesser experience trader entering on March 18, the day after the outside day. This of course in this situation, would have put the entry price outside 33% and therefore no trade.
T initial stop position was under the low of March 17. Using the most basic advanced stop strategy, moving stops under each higher swing bottom, has us still in this trade, yielding far greater profits than just a traditional ABC trade. An opportunity to add also came a few days later. It is like I could not have scripted it better.
I really enjoy being able to contribute to this newsletter and our monthly Platinum Traders Newsletter, especially in my position here on the Sunshine Coast (which hasn’t be such an ‘apt’ location name lately). What would make it better and does when we do, is to hear from you about how have managed to turn some of the information into real dollar profits. If you have over your time as a dedicated Safety in the Market student, always be sure to let us know as it is why we are here and what we do.
Until next time...
Noel Campbell
Gann Full-time Derivates Trader
|