How This Method Works

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This is a complete methodology for day trading and short-term swing trading the major futures markets: stock index futures (S&P, Nasdaq, Dow, Russell), Treasury bonds and notes, gold, crude oil, natural gas, grains, and currencies. It was developed and refined over decades of professional trading, and it rests on one governing idea:

KEY RULE

Know your levels before the market opens. Then trade the price action at those levels — never the levels themselves.

Every technique in this book exists to answer one of three questions in advance:

WHERE is price likely to travel to, stall at, or reverse from? (Parts I and II — the bands and the measured targets.)
DOES the market have the energy to get there? (Part III — momentum, divergence, and intermarket context.)
HOW do you act on the answer without destroying yourself in the process? (Part IV — execution and risk.)

A level produced by these tools is never a trade signal by itself. It is an appointment — a price where you show up, watch how the market behaves, and act on the behavior. Rejection at a measured target is information. Acceleration through it is different information. The level tells you where to pay attention; the price action tells you what to do.

What you need

A charting platform that supports multiple timeframes, tick-based charts, custom moving averages (including triangular averages), Fibonacci extension and retracement tools, and — ideally — the ability to displace an indicator left or right by a set number of bars.
Real-time futures data for the markets you trade, plus the NYSE TICK if you trade stock index futures.
A spreadsheet or notebook for your daily levels. This method involves homework. The homework is the edge.

How to work through this book

Read Part I first and build the charts exactly as specified — the rest of the book assumes they exist. Then add one tool at a time from Parts II and III, and paper trade each tool for at least several sessions before risking money on it. Watch any new tool live for at least one full session before trading it at all. Parts IV and V are the operating manual and the lookup tables you will return to daily.

Throughout the book, shaded KEY RULE boxes mark the principles that carry the most weight. If you remember nothing but the key rules, you will still avoid most of the expensive mistakes.

PART I

THE FRAMEWORK