PristineTrading
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Good Morning All:
The Pristine Method is an incredible way to trade. It is the only way to trade as far as I am concerned. It is what I learned years ago. It was the first and only method I learned. I looked at others, and have studied others since, but nothing comes close. In a sense, you can argue that most of the components individually are not unique. With all the authors on technical analysis, it is hard to find something that has not been discussed. However, between our unique look at many old concepts, and the way the Pristine Method puts it all together, it becomes a method for true professionals, as long as you truly learn the method. This is the first of three articles in which I am going to look at a few of the common problems that traders have by not fully learning or understanding the method. By understanding these issues, it will help you to better use the Pristine Method. If you have not taken any of our courses, you will still find these concepts useful.
The Pristine Method Part 1 of 3 - It is not any ONE thing…
The first problem many trader have it to put too much emphasis on one technical component. One example comes when discussing support and resistance. Many traders want to make things ‘too’ easy and look to only one concept. They take resistance for example, and assume that no stock will ever trade above resistance. They favor only ‘high of the day’ plays, and feel if they do not do that, any prior resistance area on the chart is as far as the stock will go. The Pristine Method looks at several technical components. Trends, retracements, consolidations, transfer of supply and demand, relative strength or weakness, multiple time frames, just to mention a few. It is the total picture that determines what happens. Sometime resistance areas stop a stock cold. Sometimes they are traded through like butter. Why? It depends on those other components that are occurring on the chart. Take a look below.
On day one, this stock moved higher but encountered a very heavy resistance area for the fist time from a couple days back. This type of pattern may have many thinking ‘short’ just due to the congested area. However, the Pristine Method looks at more that ‘one’ thing. This was a pro gap, it had cleared other areas of supply, there was relative strength, a pattern on the bigger time frame and the pattern when encountering resistance tended to show it was being absorbed.
So, the stock was able to pause briefly, and continue higher. ‘Why’ the stock moved up this day is not relevant. The same move, on a different chart, with a different pattern leading into this bar, and this wide bar could have ended the buying and driven the stock lower. You need to know the whole technical pattern.
Closing Comments:
The moral of this first lesson is not to look at any ONE technical part of the Pristine Method in a vacuum. Any one thing will be treated differently from chart to chart, depending on all the components on the chart. We will look at another issue next week, to help traders work through some misconceptions about trading.
Paul Lange
Vice President of Services
Pristine Capital Holdings, Inc.
Day Trader School
The Pristine Method is an incredible way to trade. It is the only way to trade as far as I am concerned. It is what I learned years ago. It was the first and only method I learned. I looked at others, and have studied others since, but nothing comes close. In a sense, you can argue that most of the components individually are not unique. With all the authors on technical analysis, it is hard to find something that has not been discussed. However, between our unique look at many old concepts, and the way the Pristine Method puts it all together, it becomes a method for true professionals, as long as you truly learn the method. This is the first of three articles in which I am going to look at a few of the common problems that traders have by not fully learning or understanding the method. By understanding these issues, it will help you to better use the Pristine Method. If you have not taken any of our courses, you will still find these concepts useful.
The Pristine Method Part 1 of 3 - It is not any ONE thing…
The first problem many trader have it to put too much emphasis on one technical component. One example comes when discussing support and resistance. Many traders want to make things ‘too’ easy and look to only one concept. They take resistance for example, and assume that no stock will ever trade above resistance. They favor only ‘high of the day’ plays, and feel if they do not do that, any prior resistance area on the chart is as far as the stock will go. The Pristine Method looks at several technical components. Trends, retracements, consolidations, transfer of supply and demand, relative strength or weakness, multiple time frames, just to mention a few. It is the total picture that determines what happens. Sometime resistance areas stop a stock cold. Sometimes they are traded through like butter. Why? It depends on those other components that are occurring on the chart. Take a look below.
On day one, this stock moved higher but encountered a very heavy resistance area for the fist time from a couple days back. This type of pattern may have many thinking ‘short’ just due to the congested area. However, the Pristine Method looks at more that ‘one’ thing. This was a pro gap, it had cleared other areas of supply, there was relative strength, a pattern on the bigger time frame and the pattern when encountering resistance tended to show it was being absorbed.
So, the stock was able to pause briefly, and continue higher. ‘Why’ the stock moved up this day is not relevant. The same move, on a different chart, with a different pattern leading into this bar, and this wide bar could have ended the buying and driven the stock lower. You need to know the whole technical pattern.
Closing Comments:
The moral of this first lesson is not to look at any ONE technical part of the Pristine Method in a vacuum. Any one thing will be treated differently from chart to chart, depending on all the components on the chart. We will look at another issue next week, to help traders work through some misconceptions about trading.
Paul Lange
Vice President of Services
Pristine Capital Holdings, Inc.
Day Trader School
