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Hypothetical Risk Disclaimer U.S. Government Required Disclaimer - Commodity Futures Trading Commission Futures and Options trading has 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. Don't trade with money you can't afford to lose. This is neither a solicitation nor an offer to Buy/Sell futures, stocks or options on the same. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results. CFTC RULE 4.41 - HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED WITHIN THIS SITE, SUPPORT AND TEXTS. OUR COURSE(S), PRODUCTS AND SERVICES SHOULD BE USED AS LEARNING AIDS ONLY AND SHOULD NOT BE USED TO INVEST REAL MONEY. IF YOU DECIDE TO INVEST REAL MONEY, ALL TRADING DECISIONS SHOULD BE YOUR OWN.

Background ● Private trader since 1989 with Stocks, Futures, FOREX, and Options. ● Professional Hedge Fund Manager for almost 20 years ● Author of “Dynamic Trading Indicators” ● Top New CTAs 1998 Futures Magazine ● Two Time Managed Funds Star Search (2003 & 2008) ● Developed Patented ValueCharts® Mark Helweg

1. Psychology 2. Trading Framework 3. Filters for ORBs Market Theory www.smartsetups.com

Market Theory Psychology

Common Types of Traders Market Theory Common Types of Traders

Casual Trader – Avoids the Hard Work “This trader wants to experience the thrill of making money in the markets without the hard work and commitment that professional traders rely on to succeed.” www.smartsetups.com

Codependent Trader – Lacks confidence “This trader is tends to second-guess their own judgment and often depends on other traders to make trading decisions for them. If they speak to another trader who holds an opposite position in the markets, they often exit their trade.” www.smartsetups.com

Holy Grail Trader – Searching for the Perfect Strategy “This trader seeks to find the perfect strategy that always makes money. They jump from one strategy to the next and are often lured by too good to be true performance results.” www.smartsetups.com

Obsessed Trader – Unbalanced Life “This trader eat and drinks trading 24/7. They lack balance in their lives as they work toward a future payday when they can begin to live life on their terms.” www.smartsetups.com

Perfectionist Trader – Has difficulty with Losing “This trader does not see losing trades in the proper perspective. They view losing trades as a failure of their strategy or a failure of their efforts.” www.smartsetups.com

Sympathy Trader – Likes to Talk about Losing “This trader establishes their identity as the person who just can’t win. They like to tell others about their losing war stories.” www.smartsetups.com

Market Theory Cognitive Biases

“Way of the Turtle” by Curtis Faith

Cognitive Biases Loss Aversion: The tendency for people to have a strong preference for avoiding losses over acquiring gains.

Cognitive Biases Sunk Cost Effect: The tendency to treat money that has already been committed or spent as more valuable than money that may be spent or acquired.

Cognitive Biases Disposition Effect: The tendency for people to lock in gains and ride losses.

Cognitive Biases Outcome Bias: The tendency to judge a decision by its outcome rather than by the quality of the decision at the time it was made.

Cognitive Biases Recovery Bias: The tendency to weigh recent data or experience more than earlier data or experience ("it is different this time").

Cognitive Biases Anchoring: The tendency to rely heavily or "anchor" on easily available information.

Cognitive Biases Bandwagon: Believing something because many others believe the same thing.

Cognitive Biases Believe in the Law of Small Numbers: Drawing unjustified conclusions from too little information.

Cognitive Biases Gains versus Losses: Research suggests that losses impact emotions at a much greater level than their positive counterpart, that being gains.

Market Theory Keys to Success

Keys to Success Self-Awareness: Understand your own strengths, weaknesses, habits, and biases.

Keys to Success Humility: “Stay humble or the markets will do it for you.”

Keys to Success Be Teachable: Great traders are lifelong students.

Keys to Success Framework: Develop a framework to make effective and consistent trading decisions.

Keys to Success Risk Management: Don’t put too much bait on your hook.

Keys to Success Consistency: You must have discipline and consistency to achieve results over time.

Keys to Success Gut Feel: “In general, trading is as much art is it is science. This only comes with hard work!”

Keys to Success Persistence: Success is partly a function of who wants it the most.

Experience: “Clues abound in the markets.” Keys to Success Experience: “Clues abound in the markets.” Steven Shobin

Keys to Success Anticipate: Analyze potential scenarios and believe the market can follow through.

Market Theory Framework

Framework 1: Outlook (longer term) 2: Setups (Higher Probability Entry Points) 3: Signals (Manage Trading Positions)

Outlook (“The direction of the main current”) ● Fundamental Analysis ● Technical Analysis ● Trend Following Indicators ● Trend Following Strategies ● Cycle Analysis ● Long-Term Momentum

Setups (“Improve your odds for success”) ● Bullish Divergences ● Bearish Divergences ● ValueCandlestickSM Patterns ● ValueBarsSM Patterns ● Support or Resistance ● Trendlines ● Momentum Patterns

Signals (“Manage you trades with logic”) ● Rule-Based ● Discretionary ● Value Range Trading ● Pattern Recognition ● Support and Resistance ● Trendlines ● Momentum

Market Theory Filters for ORBs

Guppy MMA The Guppy Multiple Moving Average (MMA) was developed by Daryl Guppy and is fully described in the book Trend Trading. The GMMA was introduced in Trading Tactics in 1997. Source: www.GuppyTraders.com

Daryl Guppy The market is complex, but solutions for breaking into it need not be. Simple tools give us access to good profits in the markets. Source: www.GuppyTraders.com

Daryl Guppy One of the most incorrect common misconception about market success suggests we need exclusive information, or exclusive systems, or exclusive techniques for success. Daryl Guppy Source: www.GuppyTraders.com

Guppy MMA Strengths Effective analysis of the Trend Environment Better understanding of Trend Strength Evaluation of uncommon price movements, such as Dips and Spikes Identification of Trading Activity and Price Behavior   Weaknesses Not good when applied to  Non-Trending Markets Not suitable for all Markets Not a Moving Average Crossover Alert Source: www.GuppyTraders.com

Reading the Guppy MMA ● Trend Strength or Weakness defined by Degree and Nature of separation in the long term group ● Nature of Trading Activity defined by Degree and nature of separation in the short term group ● Character of the Trend defined by Degree and Nature of Separation between the Two Groups of Moving Averages ● Compression communicates agreement on Price and Value ● Compression of both groups indicate Major Revaluation of Market and potential for Trend Change ● Trade in the direction of the Long Term Moving Average Group ● Relationships between the groups provide information about Nature and Character of the Trend ● Do not use as Moving Average Crossover System Source: www.GuppyTraders.com

ORBs Review ● Buy Entry ● Sell Entry ● Stop Loss ● Stop Loss ● Buy Target #1 ● Buy Target #2 ● Sell Entry ● Stop Loss ● Sell Target #1 ● Sell Target #2

Guppy Setups ① Long-Term Guppy MMA ② Short-Term Guppy MMA ③ Wait for trade setups in the direction of the Guppy MMAs ④ Use ORBs levels for Entries & Exits

Guppy MMA Entry after Trend break Confirmation Rally in Downtrend Trend Strength Compression Agreement on Price and Value Trend Strength Rally in Downtrend Frequent Trading Activity

Questions & Answers

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