Candlestick and Pivot Point Trading Triggers, + Website (2^nd Ed.)
Setups for Stock, Forex, and Futures Markets
Wiley Trading Series

Candlestick and Pivot Point Trading Triggers +Website makes Pivot Point analysis relevant for today's market, with up-to-date data and new techniques that reflect the current trading environment. Tried-and-true tactics are modernized with new tools and approaches, and novel methodologies are introduced to help you make smarter trades while minimizing risk. Directional options strategies draw on analysis from Thinkorswim, TradeStation and Genesis Software, and are integrated with PPS Indicator and Persons Pivots. Quarterly pivots are introduced for long-term trading opportunities and option strategists, and leveraged and inverse-leveraged ETFs are brought into the detailed discussion on trading vehicles. The author's own proprietary setups have been updated to align with the new trading realities, and the new chapter on volume analysis covers the techniques used in his book Mastering the Stock Market. Combined with the tools and resources featured on the companion website, this book gives you the tools and techniques you need to boost your portfolio's performance.

Technical analysis offers more profit opportunities than ever before, but the tools of the trade have changed. This book brings you up to date with the latest, so you can start getting even more out of your trades.

• Utilize leveraged and inverse-leveraged ETFs
• Integrate directional options strategies
• Apply new techniques for volume analysis
• Implement quarterly pivots for longer-term opportunities

The 2006 publications of this book's first edition brought pivot point and candlestick charting into the limelight. The market has undergone massive changes in the past ten years, and many of the most effective techniques have been adjusted and integrated with new tools to become even more effective in today's market. This new second edition of Candlestick and Pivot Point Trading Triggers +Website brings clarity to the current market, and strength to your investment strategy.

Acknowledgments xi

About the Author xiii

Introduction 1

Things Change 1

The Conundrum 2

History Should Repeat Itself 2

Delayed Reaction 3

Trading for a Living 3

The New Age Technician 4

Chapter 1 Trading Vehicles, Stock, ETFs, Futures, and Forex 5

Importance of a Rule-Based Approach 7

Start Trading as a Business 8

Education is the Key to Success 9

Traders Need to Ask More Questions 11

Risk Per Trade 14

Number One Trading Focus—Risk Management 14

Diversification is the Key to Success 15

Habitual Winners Follow Trading Plans 15

Investment Vehicles 19

FX—Forex 19

Stock Trading Opportunities 20

Spread Trading Tips 23

Become the Next Warren Buffett 27

Long-Term Investing or Short-Term Trading 28

Exchange-Traded Funds 28

Personalized Mini-Mutual Fund 29

Hot Sectors, Hot Stocks 30

Currency ETFs 31

Commodity ETFs 31

The Hot Stock 32

Futures Markets: Leverage System 35

Futures Contracts 36

Tandem Trading Techniques 39

Stocks Influenced by Commodities 42

Forex, the Currency Cash Machine 42

Margin and Leverage 43

Long and Short 44

Benefits of Futures and Forex 44

Insider Trading Information 49

Summary 53

Study the “Macro” Issues 53

Chapter 2 Determining Market Condition 57

Bullish, Bearish, or Neutral 57

What Defines Momentum? 59

What Makes a Successful Trader? 59

Where’s the Catch? 61

Find the Clues! 62

Be on Guard for Changes 65

Forex Markets Fall Prey to Reversals 67

Moving Averages Help! 68

Filling in the Gap 70

Chapter 3 How to Read Oscillators to Spot Overbought or Oversold Conditions 75

Stochastics 76

Rules to Trade By 77

Stochastics Confirms the Turn 81

Tips and Tricks to Help 82

Stochastics Patterns 82

Rules to Trade By 84

MACD 86

Summary 93

Chapter 4 Momentum Changes: How to Spot a Trend’s Strength or Weakness 95

Volume as a Trend Indicator 96

Overbought Market Condition—A Dead Giveaway 102

Blow-Off Tops on Volume Spikes 103

Volatility ETN ($XVV) versus SPY or E-mini S&P Futures 105

Actionable Trade Concepts 106

Chapter 5 Pivot Points: Determine Key Price Support and Resistance Areas and the Importance of Confluence 111

Support and Resistance in Disguise 112

Mathematical Calculations 114

The Leading Indicator 114

Possible Outcomes When Prices are Near Pivot Area 118

Determine the Range 121

Multiple Time Frame Analysis 121

Filter Out Information Overload 124

Predicting Highs and Lows Using the Calculations 124

Filtering the Numbers 124

Lining Up the Numbers 126

Pivots Combined with Candles 128

The Importance of Confluence 137

Time and Price 137

Volatility is Good—To a Degree 139

Confluences Work at Tops 141

Option Covered Call Strategy 147

Summary 152

Chapter 6 Pivot Point Moving Average System 153

Determining Trend Direction 154

Beat the Street 154

The Simple Moving Average 154

Trading Trigger Strategy 165

Conditional Optimized Moving Average System 166

PPS Indicator 167

Trading Tips 169

How Do I Start? 175

Chapter 7 Candle Charts and Top Reversal Patterns 183

Candlestick Charting 183

Candle Formations 186

The Doji 187

Other Important Candle Patterns 189

Candlestick Trading Strategies 202

Chapter 8 Set-ups and Triggers: Combining Candles and Pivots 213

High Close Doji 216

Characteristics 217

Triggers on Futures Markets 227

Low Close Doji 231

Characteristics 232

Trading Rules 232

Triggers on Futures Markets 239

Triggers on Stocks 241

The Best Predictive Indicator 242

Summary 244

Chapter 9 Risk and Trade Management: Setting Stops and Profit Targets 247

Placing Stop Orders 249

General Uses of Stop Orders 249

Rising SAR calculation 257

Falling SAR Calculation 257

The Bottom Line 263

Chapter 10 Projecting Entry and Exit Points: Learn to Scale Out 265

Steps to Success 268

Last Conditional Change 270

Do Something Great 273

Scale and Trail 274

Integrate Pivot Points to Help Time Your Entries and Exits 275

Buy Support, Sell Resistance 277

Chapter 11 The Sample Analysis: The Proof is in the Back-Testing 281

Seasonal Stock System 285

History Lessons 286

Which Strategy to Select? 288

What About the MACD? 289

What is the Best Day Trading Confirmation Trigger to Program? 296

Show Me the Proof 298

Money Management is the Key to Success 304

What and When is the Best Time to Trade? 305

Chapter 12 Confidence to Pull the Trigger Comes from Within 313

Wait for the Trade Signals 316

The Right Frame of Mind 320

Track and Chart Your Trades 320

Changes Since the 1st Edition 322

Change Your Brain 323

Simulated Trading 324

Live by the Rules 326

Index 327

JOHN L. PERSON is the co-founder of J. Person Asset Management, the Algo system creator, and a respected member of the American Association of Professional Technical Analysts (AAPTA). His previous books were bestselling works on Amazon, which have created a loyal following and have popularized Candle and Pivot Point trading tactics. He is a favorite among the featured speakers at many of the premier Trading Conferences around the globe including Money Show and Traders Expo.