THT's Methods that WIN

[THT]

Some big picture stuff for you to digest

I doubt many people look at monthly chart - this post will cover cycles, using Indicators, moving averages etc

If you have a method and it works, it works! end of story - stick with it, humans are very critical and jealous people - its why I don't tolerate people and its the reason why I will never get involved in the Industry, sell anything or write courses/books - I can just imagine the interactions!

Right, We want to read a market - some markets are just hard to read, so guess what? We just avoid trying to do so and look for something easier

LSE:WPP - MONTHLY chart

What do you see?

• Well we see the history of the stock
• We can see how the moving averages worked
• We can see price v Indicators
• We can see the times when price surged and when it didn't do much
• Double bottoms?
• When things are bullish is price generally above or below the 12 simple moving average? I only use 12 as its a year look back on this chart
• When things are bad where's price in relation to a moving average?
• Look at the ANGLE/SLOPE of the moving averages - notice what they do in tepid moves, steep moves etc
• Also notice that once these moving averages get into PERFECT ORDER on a MONTHLY - they tend to remain in perfect order for MONTHS/YEARS! This allows you to BUY the DIP or SELL the RALLY pretty damn effectively or the BREAKOUT
• Can you start to see why I use them?
• Last few years? What a mess!!!! That usually means you can SHORT the stock and it hasn't failed
• What about the 12RSI?
• Well Notice the levels it typically finds during the UP trends (tends to be 50%+ finding support around that level) and during the DOWN trends it struggles to regain the 50% level, remaining under it and finds bear market LOWS under 30%) - don't worry about bounce from such support you can trade the lower time-frames to catch those - the Important thing is you can SEE with visual evidence that the 12RSI does as I am saying
• What about right now - what do you see?
• BEAR market - Indicators are in the zone for a REVERSAL - that does not mean its going to happen tomorrow!
• We have price right now broken a key level, this could be a Gann Lost Motion over-run from which we will get a bounce OR
• price could descend further to create a TRIPLE BOTTOM (this is my preferred option) from which we'll get a bounce
• I'm not sure on what any bounce will do, the mechanics of this market could for the next few years just form a trading range, or it could bounce up back to the £12 or higher level or it might not do any of that
• You then drop down to the weekly and daily to time any such possible low - I'm not showing that here
• This is why I "clutter" my charts - They ALL have a use, that I want to SEE (I'm a visual person) as soon as I bring up the chart
• It takes me about 10 seconds to be able to read a chart position and history

Anything else?

Well we can use TIMING and CYCLES

We can see that roughly every 4.5-6 YEARS this stock has a significant LOW and from that LOW, price advances for 2-8 years, so you'll have to monitor and adjust accordingly you can see you can't just buy and hold

We are right now in that ZONE

Will it work? we do not know for certain - BUT what we DO know is that a huge amount of TECHNICAL ANALYSIS is alerting us to this market being at or near a possible low point at some point in the next few months - one for the old watchlist I think!

So what you do is reverse engineer what this market HAS AND NEEDS to DO in order to CONFIRM the thinking - and you do that by going back to the past few instances and SEEING what price did on the WEEKLY, DAILY and HOURLY charts at those reversal points - if this market does similar then its a ultra high probability signal to which you can trade/INVEST

Is it guaranteed to work? - HELL NO, its ultra high probability, but that's not a 100% - We don't know for certain the CYCLE low is happening now, it could be happening in a few months time!

We will KNOW that the cycle low is in once PRICE regains the 12SMA on the monthly chart - that MEANS on the daily and weekly prices WILL HAVE TO BOUNCE and if it works out, then if we can get in at £3-4 range, we can see that any such bounce could quite easily get to £6+ which gives us a nice potential % return

If its NOT clear within 1 minute of looking at a chart - move on until you find one that is clear, then work out a plan of action

 

[THT]

Rest day on the tour today, so we've driven to Thursday's stage and parked up - Tonight's tea is going to be a sausage & egg baguette, brown sauce, a bottle of Pinot Noir and a cheese board washed down with some fine English ale

There's a lot of down time at the tour and some say I'm mad for doing this just to see the race for 10 mins each day - thank god for TV and the Internet, we can record it, watch it live etc so we keep up to date with the race and entertained

I've skipped tomorrows stage - I'll watch it on the TV as it won't be that exciting - I've replenished supplies, topped up the wine rack, filled up the water tanks, recharged the batteries and cleaned out the sewage! Tonight I am parked right at the TOP of this - at altitude! Thursday's stage is the 1st day in the Pyrenees and what a stage it should be - https://en.wikipedia.org/wiki/Hautacam - This is what I love about cycling, the mountains are killers, if you've every tried to climb a French, Italian or Spanish mountain, you'll know! Its hard enough in a motorhome, let alone a bike!

So I'll do some exploring tomorrow of the area, work out the best viewing spot - the crowds will be in the 10,000's - hence why I'm here a day early, seems like a few others have the exact same idea, Then we are still in the mountains until Sunday, then a rest day Monday, then we will be on the side of the road somewhere up Mount Ventoux - what a mountain that is, I'll be paying my respects to Tommy Simpson who died of a heart attack on that very tour de France stage back in the late 1960's, the only English rider to grace the great race back in those times

Few days in the Alps then home England bound

Anyway, back to the reason of the post:

I want to impress this upon you as a trader if you are struggling or need clarity

You cannot just pick up a chart and trade! You HAVE to WAIT for picture perfect set-ups to COME TO YOU - you might have to wait ALL DAY for such things! and you ONLY GET what the market GIVES to you

Now this is the COMPLETE AFTER the FACT picture - you have to use your brain to see the build up

So you look at this chart at say 8am at the open - The picture on the 30 min and 10 min is bearish, price under the SMA's, SMA's in perfect downtrend order BUT, Price just moves SIDEWAYS in a range - how frustrating! - You have had to wait until 2-3pm for this thing to do something

Remember if you are going to short something, the ideal scenario is for the stochs to be BEARISH AND PRICE UNDER the SMA's

That all happened around 3pm on the chart

Notice on the 3 min chart how price was "Hugged" by the SMA's before the start of the waterfall - that is a common feature

Then notice how the 1 min chart reacts all the way down and all the other time-frames

The 1 min chart does NOT break a prior swing high all the way down - same for the 3 min - this is the tell-tale signs of LOWER prices

If you look around 15:15 on the 1 or 3 min charts - as soon as you get a CLOSE below the 10SMA AND BREAK of the LOWEST LOW of the consolidation zone = SHORT, stop would be just above the high of consolidation range

When the STEEPNESS of the SMA's are as they are in the 3 min chart, you can trail a stop @ the 20 SMA and it won't get touched UNTIL the trend stalls and ends = notice on a theoretical clock face the angle of the SMA's and the 10SMA were heading down towards 5 O'Clock, this angle generates these types of moves and they happen LOTS per week on various markets

I bet loads of people were LONG due to the FTSE100 hitting 9000

anyway when a market turns down, this PICTURE happens ALOT and you can easily see it would have made more than 2R because ALL the relevant TIME-FRAMES were ALIGNED to the DOWNSIDE

As research, go look what happened last FRIDAY 11th July that you can see on the 30 min chart and drill down to the relevant time-frames

Use the HIGHER time-frames to filter and set-up, then use the lower time-frames to TRIGGER and ENTER