Noel Campbell
Noel Campbell 		One of the challenges for an ABC Trader who is focussing on just a couple of markets, as opposed to running scans across larger groups of stocks, is waiting for the standard ABC set-up. Trades can come three in a month and then nothing for a month. As your experience grows you will find an increased desire to have the skills to identify additional opportunities to profit from movements in the market.
This is where Advanced ABC Trading comes into play. One of the most well received sessions of the Interactive Trading Workshop is the lesson on Advanced ABC Trading. By the time the new traders have been through this lesson there is a buzz of excitement with the realisation a lot of new tricks have been added to the bag. In other words, the trading plan has moved up a level in sophistication and potential profitability.

Over the last couple of weeks the SPI200 presented us with a good trade on the short side. The initial Point C for the trade put the entry stop outside both the 25% and 33% limits. I remember receiving an email from a client commenting how he was keen to go short, but the entry limit was keeping him from taking the next trade. I could see just what he was talking about, however I knew an inside day following that bar would potentially put the trade back on the cards. The trading gods were kind this time around and an inside day followed, giving the green light for going short. You can see in Chart 1, where I have highlighted this trade.


Chart 1

click chart for more detail

The market made a fairly staggered run down from Point C. Without using Advanced Stop Strategies (once again taught at the Interactive Trading Workshops) you were stopped out 10 points above the 75% milestone on an intra-day basis. The market eventually made it’s way down to just beyond the 100% milestone. During the run down we saw an outside day form on Friday, July 23. Using traditional swing chart rules, this puts a small up swing in the chart. This small up swing has interrupted the chance of finding a more lucrative swing down, suitable for another ABC short trade.

This is where Advanced ABC Trading comes into play. I have chosen to ignore that small swing caused by the outside day and use the previous swing top and subsequent swing bottom as Points A and B. This gives a larger reference range and the opportunity for another short trade following on from the success of the first.

Referring back to Chart 1, I have labelled the potential A, B and C points for this Advanced ABC Trade. By necessity, the figures I have for Point C only represent the market action up until about lunchtime on July 28 (the labelled Point C). At this point the entry stop falls within the 33% limit. By the time Trading Tutors goes to ‘print’ this trade could be underway. With the plans for this trade drawn, all that is left now, is for the market to do, what the market wants to do.

If you are keen to book in or find out more about the Interactive Trading Workshops call the team, seats are limited and you will be guaranteed of a value packed seminar that will take you to the next level.

Until next week......

Noel Campbell