Welcome to the Introduction to Shortterm Breakout Trading Seminar

Copyright 2008 by Power Charting, Inc. All Rights Reserved

Legal Notice Important disclaimer and reminder for all Traders and Investors! This seminar is for educational purposes only and not a recommendation to buy or sell any particular financial instrument. Equities, Futures, Options, and Currency Trading have large potential rewards, but also large potential risk. You must be aware of the risks and be willing to accept them in order to invest in the futures and options markets. Absolutely do not trade with money you can't afford to lose. This website is neither a solicitation nor an offer to Buy/Sell equities, futures or options. No representation is being made that any account will or is likely to achieve profits or losses similar to any discussed here. The past performance of any trading system or methodology is not necessarily indicative of future results. Absolutely consult your Registered Financial Advisor and your Risk Trading Plan before ever investing or trading any financial instrument!

Legal Notices All Video Files, Video Output and their corresponding Slide Presentations resulting from this webinar are copyright 2008 and 2009 by Power Charting, Inc. The contents of the Video Output, Video Files and Slide Presentations may not be altered in whole or in part. The Video Output and Video Files may not be decoded from their current binary form or encoded into another form. The Video Output, Video Files and Slide Presentations may not be copied or rebroadcast in whole or in part using any media, including, but not limited to, websites, email, computer files, raw or encoded binary data, television, print, photography, radio, or analog or digital audio or video. Limited exceptions to this copyright notice can only be obtained through the express written permission of Power Charting, Inc.

Agenda
Introductions Conservative setup explained Strategy behind the setup No Trade Rules with the setup Aggressive variations of the setup Entry, and aggressive scaling techniques Stop and exit techniques More learning opportunities

Concept of the Conservative Setup

The conservative setup consists of three bars, a key s/r level, and a trend (Note: 15 minute timeframe for all examples) Bar 1 Rising volume and break through s/r level

Bar 2 Additional rising volume over bar 1 and a close beyond bar 1
Bar 3 Pullback to a s/r level in the direction of the trend youre trading on lighter volume than 2nd bar The 20 period moving average is trending the direction of the proposed trade

Examples of the Setup

1 3 2

Examples of the Setup

Examples of the Setup

Strategy of the Setup

Two bar break helps avoid the false breakout syndrome that many traders and investors get sucked into (next slide provides a classic example)

The strategy allows for a pause to refresh and a reduction of the chance of a stop out pullback before the trend resumes
Focuses on trading with the trend

False Breakouts Before Move

No Trade Rules with the Setup

Times not to use: Before 3:00a.m. ET Near economic data releases The opening bell Noteworthy speaking engagements For all traders: If either of the two thrust bars close at or near the 50% level of their high or low For the conservative trader: Volume not met

Examples of No Trade Rules

Examples of No Trade Rules

Dont Forget!

Aggressive Variations of the Setup

Highly volatile markets such as the current environment reduce the number of conservative setups Experienced traders and capitalized investors have additional options with variations of the trade such as: Trading after the close of 2nd bar Trading setup even if 1st or 2nd bar volumes are lower

Examples of Aggressive Setups

Examples of Aggressive Setups

Entry Techniques
Conservative: On the 4th bar, enter on the pass back through the open after a short-term counter trend fake out Normal: Enter on the close of the 3rd bar

Aggressive: Enter on the close of the second bar

Entries

Normal Conservative Aggressive

Aggressive Scaling Entry Techniques

1 or 2 entered at close of bar 2 1 or 2 entered at the 50% level of close of bar 2 and the 20MA or at the speed lines 1 or 2 entered at the rising 20MA
Note: This technique assumes the usage of the average number of six e-mini contracts traded by the members in the PowerCharting.com chat room communities.

Aggressive Scale in Technique

3 2 1

Stops
Stops first and foremost should be placed against the parameters you and your registered financial representative have set forth Additionally, from a technical perspective, if your trade moves against you and closes below the 20MA that is also indicative of a stop point for the purposes of this lesson

Stops

Close below here

Exit Techniques
Conservative: Exit on the close of 4th bar Normal: Exit in full at/near the next resistance level Aggressive: Exit at least half of your position at the first resistance level, move your stop up, and let the remainder run to the next level

Exits
A

N
C

More Learning Opportunities

Go to PowerCharting.com for instructions on how to get to the Live Trading Room with hundreds of other traders throughout the day. Subscribe to the YouTube Videos: Either search for SnP500Trader or www.youtube.com/snp500trader

See you soon and thank you for attending the Introduction to Shortterm Breakout Trading Seminar!!!

Copyright 2008 by Power Charting, Inc. All Rights Reserved