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Some 30 years ago, an enthusiastic stock trading colleague at work initiated what has become a lifelong pursuit for me. I can still remember the first technical analysis program running on my first homemade IBM PC. I manually entered the hexadecimal machine code in Read Only Memory for the startup of the machine. This was code that IBM was nice enough to publish in the first IBM PC technical manual.
A couple of years later after the European Options Exchange (EOE), Europe’s
first option and futures exchange, was founded in Amsterdam, my
friend convinced me that this was the place to make a lot of money with only
a little starting capital. And so, with a group of colleagues we gathered some
400,000 Belgian Francs (some 10,000 dollars) to start an options investment
club. I was going to make the trades based on technical analysis, and everybody would become rich in no time!
A few months later, the money was gone. Luckily, we continued our meetings at the nearby Chinese restaurant, so it wasn’t all sad. Since hitting that bottom, I have been on what seems to be a never-ending quest to find the ideal way of trading the stock market using technical analysis. After first completing an investment and credit advisor course, I have since conducted many courses and presentations about technical analysis and options. The best thing about presenting a course is that as a teacher you learn even more than your students; so thank you very much to all who have attended my courses!
There are a lot of books about investing and technical analysis. Most of them concentrate on a very specific item, exploring that particular concept in great detail. A book with a real trading system, including all the required basic knowledge, is much more difficult to find.
This trading book is a complete reference on how to apply technical analysis for
profits. It explains my own trading style—the whole complete story from
start to finish. I learned from my mistakes and wrote down some rules to help
you avoid making these same mistakes over and over again. You will actually
find specific answers to the all-important “where to open” and “when to
close” questions in this book. And, to spare your precious time and to speedup
the learning process, I am limiting the text to the bare essentials—what you really need to know. The best part—all of the techniques discussed will be illustrated with an application example.
If you are disappointed with buy-and-hold investing, then medium-term trading
based on technical analysis is for you. These days technical analysis is quite
extensive and a book with everything you should know about—from the basic
bar chart to candlestick patterns and Elliott wave analysis—is not easy to find.
Add trading rules, money management, and risk management and you have a
book that is virtually impossible to find…. Until now! The goal of my book is
to give you all of that information plus my own proprietary indicator SVAPO,
a “Short Term Volume And Price Oscillator.”
All the basics and all the advanced ideas in technical analysis are not worth much if you don’t know how to combine and apply them. That is the goal of this book. With the LOCKIT methodology, you can apply the most effective trading techniques to capture consistent results in the markets. This book will teach you to look at the “Long” term trend, when to “Open” a trade, when to “Close” a trade, to look at the “K-factor” for risk and money management, and finally to make sure that you use an “Initial” and a “Trailing” stop—in short, “LOCKIT.” What you have in these pages is a step-by-step trading system using technical analysis, including tips on good money and risk management.
You already understand that some trade setups are better than others. That is why you will find trade setups that offer a better chance for success in LOCKIT.
Now and then, I notice advertisements about learning technical analysis in a
couple of evenings or a weekend. Do you believe that this is possible? No, of course it’s not; you need to invest more time and you must practice as much
as possible. The best way to learn technical analysis is to use past price data,
advancing day by day to make buy and sell decisions. Only if you are capable
of making a profit, should you switch to real time; however, you should still
be paper trading. If you are capable of making money at this stage, you can
start with real money, but make absolutely sure that by then you have a good set of rules that you will follow without any hesitation. The LOCKIT rules will definitely help you to start off on the right foot.
Now and then I notice advertisements about learning technical analysis in a couple of evenings or a weekend. Do you believe that this is possible? No, of course it is not; you need to invest more time and you must practice as much as possible. The best way to learn technical analysis is to use past price data, advancing day by day to make buy and sell decisions. Only if you are capable of making a profit, should you switch to real time; however, you should still only be paper trading. If again you are capable of making money at this stage, you can start with real money, but make absolutely sure that by then you have a good set of rules that you will follow without any hesitation. The LOCKIT rules will definitely help you to start with a good set.
While applying LOCKIT, you will make practical use of all aspects of technical analysis. For that reason, I wrote the part “Technical Analysis Basics,” which will give you a detailed description, including examples, of all the technical analysis techniques used by LOCKIT. For most of the techniques, we will show their application within LOCKIT.
LOCKIT introduces you to a number of special indicators and techniques
for a more successful application of technical analysis like: zero-lagging moving
averages, a Heikin-ashi Bollinger Bands %b indicator, SVAPO “Short
term Volume and Price Oscillator,” trailing stop methods, and more. And
let’s not forget, I’ve also included a very good money management method
and a number of examples for good risk management.
I am fully convinced that trading based upon technical analysis (as proposed in this book) and following the LOCKIT rules will help you to make better and more profitable trading decisions.
To simplify the decision-making process, there is a set of LOCKIT trading rules for a number of different circumstances: long and short trading with a trend reversal or after a correction in an ongoing trend.
Please note that I will continue to contribute articles about technical analysis in Technical Analysis of Stocks & Commodities magazine. Here, my new ideas and findings (as well as other writers) will keep you up-to-date.
I am sure that this book with all the technical analysis techniques, money management, risk management, and high probability entries will be a turning point for your own technical trading.
I wish you lots of success and happy trading!
Special indicators in the book are written in MetaStock formula programming language. Next you will find a list of other technical analysis programs of which I know most of the formulas are available in their application.
Contact your program provider to find the available formulas.
These providers have most of the special LOCKIT formulas available.
Tradestation securities Inc
Interactive Data Corp.
Ward Systems Group
TD Ameritrade Holding Corp.
Worden Brothers Inc.
Avarin Systems Inc.
Aspen Research Group Ltd.
Nirvana Systems Inc.
Ninja Trader LLC
Risk Disclosure: Futures and forex trading contains substantial risk and is not for every investor. An investor could potentially lose all or more than the initial investment. Risk capital is money that can be lost without jeopardizing ones’ financial security or life style. Only risk capital should be used for trading and only those with sufficient risk capital should consider trading. Past performance is not necessarily indicative of future results.
Hypothetical Performance Disclosure: Hypothetical performance results have many inherent limitations, some of which are described below. no representation is being made that any account will or is likely to achieve profits or losses similar to those shown; in fact, there are frequently sharp differences between hypothetical performance results and the actual results subsequently achieved by any particular trading program. One of the limitations of hypothetical performance results is that they are generally prepared with the benefit of hindsight. In addition, hypothetical trading does not involve financial risk, and no hypothetical trading record can completely account for the impact of financial risk of actual trading. for example, the ability to withstand losses or to adhere to a particular trading program in spite of trading losses are material points which can also adversely affect actual trading results. There are numerous other factors related to the markets in general or to the implementation of any specific trading program which cannot be fully accounted for in the preparation of hypothetical performance results and all which can adversely affect trading results.
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