Charting and Studies User Guide - CQG.com

SMR Studies
Page 557
Momentum trading can accurately anticipate the direction and duration of “breaking” price
moves by closely analyzing how quickly (or how slowly) a price is changing in a market. Used
properly, momentum trading will not only protect against the two biggest market stimulants,
fear and greed, but will actually capitalize on them.
This section is a step-by-step momentum-trading guide for anyone trading stocks or
commodities. Whether you are an individual speculator, a broker, a CTA (Commodity Trading
Advisor), or a fund manager, this analysis will be beneficial to you.
The following pages contain an analysis of the price behavior and movement of different
markets. The CQG charts in this manual have been analyzed using the SMR method of trading,
and it is our hope that you will spend the time necessary to learn the SMR trading rules
presented in this manual. The SMR Trading System will give you a totally new perspective on
how to trade using momentum oscillators.
“Charts are records of past market movements. The future is but a repetition of the past; there
is nothing new. History repeats, and with charts and rules we determine when and how it is
going to repeat.” ⎯W. D. Gann
The SMR trading philosophy is centered on the 49-Day Moving Average as the Main Trend
Indicator and the SMR Timing Oscillators.
These components provide you with the tools necessary to time and plan your trades using the
SMR trading rules. To trade a particular market, we feel that the best odds occur when a
market is STRONGLY TRENDING, either up or down. Once the trend has been established, you
should use the SMR Timing Oscillators as a timing device to time your trades into the market.
Studies include:
• Cluster
• DL Turning Point, MA Turning Point, and SL Turning Point
• Lines
• Take Profit
• Timing Oscillators A
• Timing Oscillators BC
• Timing Oscillators DEF
Trend Direction
The trend of a market is an illustration of the dominant buying and selling forces of traders all
over the world. It is a very reliable measure of supply and demand; the relationship between
supply and demand is shown by the ups and downs of the market. When supply exceeds
demand, prices will decline to a level where supply and demand are approximately equal. And
conversely, when demand exceeds supply, prices will rise to a level at which supply and
demand reach equilibrium. When a market is in an equilibrium stage, the daily price ranges
become narrow, which we call “congestion” or “chop,” and it may take weeks or months to
determine in which direction the next trend will be.
The SMR 49-Day Moving Average is used to identify trend direction and/or market
congestion. The 49-Day Moving Average stems from one of the master traders of our time,
Charting and Studies User Guide