The 3Dimensional Trading Breakthrough

The 3 Dimensional Trading Breakthrough
Example #2 (Gap open to the downside when short a market):
Short market from 110.00 on 25 April
Market closes at 103.50 on April (Low for the day was 103.45)
Each Market tick is .05 points
On 01 May the market opens at 103.00 (Now we have an Ooops “buy” potential)
Now for a buy signal:
Formula
Yesterday’s low + 3 market ticks = Price to act or react with position.
103.45 + .15 = 103.60
103.60 is the price I will take profit/hedge position.
That’s it! We’ll be referring to Ooops buys and sells throughout this material. This
is the official formula for both the buy signals and the sells.
Intra-day Retracements
I remember from my broker days that often a market would just take off, one
way or another, after some type of report had just been released. All the brokers
would hoot, holler, and yell at the excitement of the market’s reaction as viewed
on our computer screens. I think I was one of the few brokers sitting down figuring
out the math should the market abruptly reverse direction on my clients.
How many times have you witnessed a market explode, which you thought would
be to the moon, only to have the market retrace and reverse itself by the close
that very same day? If you have never witnessed this phenomenon before, let
me forewarn you of this ordeal – it will happen, but it doesn’t have to take you
by surprise. Just as I originally wrote this, I recalled an incident where I was long
a whole bunch of 10-year T-Notes (my favorite market) one morning going into a
major report. The report was positive for the notes and the market shot up. As
I was patting myself on the back, I then watched in dismay as the market ran its
course to the upside, stopped, and began slowly ticking down against me! I am
not sure if I offset my position or not at that time, but let me assure you this is how
I do it years later, with experience.
Once the market opens, I immediately look for a gap-reversal / “Ooops” signal,
and then I calculate my volatility expansion price from the day-session open. I will
then await the report (I will not put in a protective stop because I have the option
working as a hedge – more on this later). If the market soars in my direction, I will
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