Genesis Revealed April 22, 2004 Welcome to Presented by Jerry Lipscomb, CTO dbwest, inc.

Why Futures Futures are real, equities are emotion First Horizon and why I don’t trade equities anymore.

Why Genesis Because it was the first trading system I ever designed Genesis equity curve June 2002-Oct 2003 Mkt Profit #Trds $/Trd Days S&P $ 44,837 700 $ 60.74 160 Dow $ 55,415 961 $ 58.06 221

Books Mark Douglas’s Linda Rasche’s Tom Bierovic “Trading in the Zone” Linda Rasche’s Street Smarts Tom Bierovic Playing for Keeps in Stocks and Futures: Three Top Trading Strategies that Consistently Beat the Markets Tobin Smith & Bryan Perry Changewave.com TradersPress.com or Amazon.com

Issue vs. Opportunity Trading is an “Issue Amplifier” It has nothing to do with the system you use It is about “YOU” and how you deal with your issues “THERE WILL ALWAYS BE ANOTHER TRADE”

Other Stuff Base Hits Live to play another day Quit or better yet don’t start if your head is not in it. Distraction and Anger are the trading account “Killer”

Trading Plan Write it down Not just the trading rules Goal, objectives, expenses Track it

Indicators KISCIS (Keep it Simple Cause I’m Stupid) Elliott 101 No “Delayed indicators” Elliott 101 1 2 3 4 5

Significant Candle Stick Patterns Doji, Stars (morning and evening)

More Patterns Hammers and Engulfing

Other major Patterns Pennant, Ascending / Descending Triangle Double & Triple Bottom Head and Shoulders Rising Falling Wedge

More Flag Pole Calculating the MPO Minimum Price Objective or Target

My Intraday Trading Rules Intraday vs. Swing ES, NQ, YM Time Frames How much will you risk?

The Rules Establish lines for the overnight high and low Decide which direction is the trend Channel tool across previous day or until a trend for the day is established Use of 100 MA on a larger time frame No new trades during Lunch Hour 12:00 to 1:30 EST

More General Rules Always use a Trailing Stop Stop is 1-2 ticks above breakout, HH/LL or previous bar Can be reversal depending on situation and aggressiveness Know where your stop is BEFORE you place the trade Do you know your Risk Before you place a trade? Establish a target or MPO (minimum price objective) Use a small time frame to help determine direction Don’t get sucked into moving to the shorter time frame

Trend Rules vs. Counter Trend Rules Trends are subjective like Elliott Waves Trailing stop is not as tight in a trend trade Move as the Lower High/ Higher low progress Very tight in a counter trend trade Move bar by bar, often with a reverse as part of the exit

Gap Rules Gap trading 80% of the time gaps are covered the same day 90% of gaps that fail to cover will cover within 3 days 100% gaps will cover

Gap Rules (continued) All Gap trades are treated as counter trend trades If the market moves toward the gap on the first bar trade the gap as a counter trend trade If gap to new high, trade the gap 4/13 ES M4 If the gap is against the previous day’s ending trend 4/21 ES M4

Gap Rules (continued) If the gap is in the direction of the trend Tread carefully until a reversal is signaled 3 push through the 20HH/LL is warranted 4/12 ES M4

The secret of the 20 Bar HH/LL A 20 Bar HH/LL is the base indicator Enter on Breakouts and reversals The market will usually give you a second chance Three hits with and ready the reversal or exit Look at the wave you are in to decide

20 Bar HH/LL Rules Prepare for reversal on wave 2, 3, 4, 5 On 3-5 min and Daily Charts 3 pushes with a small retrace 10-30 min 3 pushes of the HH/LL Wave 2 and 4 are counter trend trades Often will only push HH/LL once Watch for significant patterns between the HH/LL Bars Use 20 HH/LL Breakout as an entry (Primary or 2nd)

Other Tricks Andrews Pitch Forks Erogotic TSI 4/21 from open w/ first HH then LL Erogotic TSI MA- simple 4/21/2004 YM M4 20 and 50 are Primary 200 and 500 next most important 100 and 1000 are next Bond US #F

Other Markets Other Futures on a Swing trade Basis Equities