1.  Technical Analysis Implementation

2. Things to think about…  Technical Analysts do not invest they trade  Focus on price and volume  Flaw in fundamentals

3. What next?  Choose your investment vehicle  Create a time horizon  Establish your style of trading  Form an entry and exit strategy  Determine what indicators you will use  Trade, trade, trade!

4. What to trade?  Many different types of investment vehicles  Does not matter which type of investment vehicle you trade  One exception

5. Time Horizon  Traders typically do not have a “concrete” time horizon Scalper Day-Trader Intra-Week≤ 1 year≥ 5 year 5  100 Trades per day Several trades per day – never hold overnight Trade on multi-hour charts several times during week Several trades within the year – generally look at weekly charts Buy and Hold style of trading – falls into the category of investing Technical Analysis Fundamental Analysis Trading Investing

6. Trading Style  Trend Trading  Oscillation Trading  Swing Trading

7. Trend Trading  Seeks to capture the majority of a trend (up or down)  Is the price moving in an uptrend, downtrend, or sideways?  Trends often arise from a flat market  “Foot in the water”

10. Oscillation Trading  Profitable in sideways markets  Trade until channel breach  Power of the boundary

12. Swing Trading  Anticipation of most probable future direction of price movement  Looks at relative length of price swings  Projections based on percentages

14. Fibonacci Ratios  0, 1, 1, 2, 3, 5, 8, 13, 21, 34, 55, 89, 144, 233, 377, 610  Ratio of the consecutive number (1, 0.5, 0.618, 1.0, 1.382, 1.5, 1.618, etc.)  Statistical probability of thrusts and pullbacks  Valid retracement between 38.2% & 61.8% of previous swing  Self-fulfilling prophecy  Generate support and resistance levels

16. Entry and Exit Strategies  Process of buying and selling  Maximize profits, minimize losses  Cut your losses  “Bulls, Bears make money, Pigs get slaughtered” – Jim Cramer

17. Types of Trades  Market Order  Limit Order  Market-If-Touched Order  Stop Order  Stop Limit Order

18. Market Order  Execute your trade at the best available price  At the earliest opportunity  Will always be filled ASAP  Generally go to head of the line

19. Limit Order  Designates the specific price at which you are willing to buy or sell  Buy limit  Sell limit  Limit order paradox*  Most common nowadays

20. Market-If-Touched  Buy order below the market or sell order above the market  Order will be filled at or near  Unlike limit order where proximity does not equate to a filled order

21. Stop Order  Buy or sell stop*  Sell stops used to exit long positions  Buy stops used to exit short positions

22. Stop Limit Orders  Combines stop order and limit order  It requires the entry of both a stop price and limit price  Stop price hit, limit designates*

23. Making the trade  How do you enter?  Technicians use a variety of different methods  Most common is limit order  Many swear by other techniques  Don’t speculate

24. Importance of Stop Orders  Minimize potential loss on a long or short position*  Risk deviation Important note: If you have a stop order in place but you exit the position manually, make sure to cancel the stop order or else you may be entered into a position in the direction of the stop

25. Trailing Stops

27. Indicators  Section that is highly subjective  Can pick and choose your indicators  Make sure you have support  Do not chart your own future  Efficient Market Hypothesis

28. Moving Averages and Crossovers  Simple  Exponential  Adaptive

29. Simple Moving Average  Standard 200-Bar moving average  Each point represents average closing of past 200 bars  Crossover is significant (Most technicians use the crossover of the 20 and 40 bar simple moving average)

30. SMA Crossover (Bull)

31. SMA Crossover (Bear)

32. SMA Trends

33. Slope Analysis  The slope of the moving average can indicate a buy or sell position

34. Upward Trend Slope Analysis (SMA)

36. Downward Trend Slope Analysis (SMA)

38. EMA and AMA  Similar analysis with other moving averages  Should not be only indicator

39. Using Oscillators  Different types of oscillators  What is an oscillator and what does it look like?  Using it in conjunction with other indicators  They are price leaders  Oscillate between upper overbought and lower oversold zones

40. Example of Oscillator

41. Example of Use

42. Oscillator Trend Lines

43. MACD Oscillator  Shows convergence/divergence of short and long moving averages  Signal line  Signal line intersection  What length moving averages should be used in MACD?

44. The Williams %R Oscillator  Highest Price – Today’s Price / Highest High – Lowest Low  The highest high and lowest low pertain to last ten days*  In uptrend values below -75 represent oversold  In a downtrend values above -20 represent overbought

45. Example of %R Implementation

46. Volume  So far we have discussed price  Technicians use both price and volume to make trading decisions

47. Climaxes and Blowoffs  Climax occurs near market bottom  Blowoff occurs near market peak  Large price moves accompanied by greater than average volume  Volume tends to peak out ahead of price in both up and downtrends

49. Trading Volume Breakouts  Identifying volume breakouts  Compare current volume bar against moving average  Different ways of defining a breakout  Rule of thumb  Uptrend (Expanding volume on updays and contracting volume on downdays)  Warning Signs

50. Volume Analysis

51. Bollinger Bands  Bands plotted above and below SMA  Measured in Standard Deviation  Standard Deviation measure of market volatility  Distance to upper and lower band shows overbought or oversold

52. Bollinger Bands

53. Bollinger Band Squeeze  Typical Technical Analysis Strategy  Occurs when volatility falls to low levels  Lower volatility often followed by high volatility  Contraction can represent significant upward or downward movement

54. The Arps Radar / Fear-Greed Index  Relative Strength of Bulls and Bears  Volume to move equal amount in either direction  If it takes twice the volume to move up on point as it does down one point…  Boulder example*

55. Plotting Arps Ratio  Plots imbalance  Shows it as histogram subset

56. Tied assets  Natural gas and oil, if they move in tandem can make money off of deviations from a certain pattern