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PART 1 Selecting a Market

Comparing Markets  Stocks  Commodities  EMini Futures  Forex  Options  Spread Betting (UK)

Stocks - PDT Rule An NASD & SEC rule which states that in order to engage in pattern daytrading (buying & selling a security in the same trading day 4 or more times in 5 consecutive business days) must maintain an equity balance of at least $25,000 in a margin account.

Commodities  Grains  Gold  Beef  Crude oil  Natural gas…  Currencies and Indices

Futures Virtually 24 hour market – 18:00 ET Sunday – 16:15 ET Friday. Breaks from 16:15-16:30 ET and 17:30-18:00 ET. Unlike stocks, futures positions are settled in cash on a daily basis.

Futures Margin requirements: Overnight = $4500 initial & $3600 maintenance. Individual brokers will vary on intraday margin, but $500-$2000 is typical.

Forex The most active market in the world. Traded 24 hours a day, 5 ½ days a week. Cost to trade is the spread, measured in pips.

Forex The most traded are the U.S. dollar (USD), Canadian dollar (CAD), the euro (EUR), the British pound (GBP), the Swiss franc (CHF), the New Zealand dollar (NZD), the Australian dollar (AUD) and the Japanese yen (JPY)

Options Give you the right, but not the obligation to buy or sell an underlying asset at a specific prices on or before a certain date. A call gives the holder the right to buy an asset at a certain price within a specific period of time, while a put give the holder the right to sell that asset at a certain price within a specific period of time.

Spread Betting Allows a trader to participate in the financial markets without ever taking physical ownership of the underlying instrument. No capital gains tax or stamp taxes, but less protection. Cost is the spread.

PART 2 Focusing on a Time Frame

Time Frame Styles  Scalping  Intraday Trading / Daytrading  Swingtrading  Position Trading

Correction Periods  ~9:35 AM  15 & 45 minutes past the hour in the AM  11:00 AM  11:15 AM  30 min. past & on the hour in the PM

Times to Watch in FX  3:00 AM London opens  4:00 AM Tokyo closes  8:00 AM New York opens  12:00 PM London closes  5:00 PM New York closes  7:00 PM Tokyo opens

Utilizing Time Frames When trading a setup on any time frame, it is imperative that you study both the larger and smaller time frames and not merely the one on which you located your setup.

PART 3 Focusing on a Strategy

Comparing Strategies  Continuation Strategies (aka Trend-following)  Reversal Strategies  Either/Or Strategies

Continuation Strategies  Breakouts  Flags

2-Wave Continuations

2-Wave Continuation Chart © 2008 Townsend Analytics

Breakouts & Triangles

#1 & #4 Continuations Chart © 2008 Townsend Analytics

#3 Continuation Chart © 2008 Townsend Analytics

Reversal Strategies  Momentum Reversals  2T / 2B

Momentum Reversal

Chart © 2008 IBFX

2T & 2B Reversals

2T Reversal Chart © 2008 Townsend Analytics

Either/Or Strategies  Phoenixes & Avalanches  Triangles

Phoenix & Avalanche

Phoenix - Buy Chart © 2008 Townsend Analytics

Triangle Reversal

Chart © 2008 IBFX

PART 4 Incorporating the Different Aspects of Your Plan

Intraday/Swing Strategy Utilizing gaps can be a great way to improve your accuracy and reward potential on both daytrades as well as swingtrades in equities.

Breakaway Gaps These types of gaps will break a security out of its previous trend and begin a reversal or correction to that trend. These can include breakouts from a base, flag, triangle, etc. Trading Range Breakaway

Breakaway Gaps Chart © 2008 Townsend Analytics

2-Wave Pullback Chart © 2008 Townsend Analytics

Trading Made Simple Series Toni’s CD bundle:  5 Technical Signals You Cannot Trade Without (7 hours on 4 CDs, 238 page pdf)  Trading Made Simple: No Indicators Necessary (3 hours on 2 CDs, 100 page pdf)  Toni’s Guide to Successful Market Timing (76 pdf manual) All three products: $279* (*plus shipping. $497 when sold separately.) Toni’s interactive video courses and manuscripts detailing her trading and investment strategies