Coming This Week

Coming This Week -- February 10 to February 17

Goran the Executioner

Improving your results as a trader involves a simple process of figuring out what works. Then you just execute over and over again.

Shorei Goju black belt and fellow blues guitarist Goran Yordanoff has a few trading strategies that work for him. This week he'd like to teach you one of them in his lesson "The Power of Gaps." To illustrate how his strategy can help you, let me show you two stocks Goran recently alerted you to in his daily column.

Did you read Goran's column titled "Split Personality" on Dec. 22? On that date, Juniper (JNPR | Quote | Chart | News | PowerRating) went onto Goran's "fave" list. To the trader using run-of-the-mill technical tools, this opportunity went unnoticed. But the clues that allowed Goran to enter at that point are shown in this chart.

On Dec. 27 in his column "Drug Free," Goran was bearish on Merck (MRK | Quote | Chart | News | PowerRating). Moreover, he identified where he expected support to come in after the anticipated plunge. Again, the evidence that Goran needed was in this chart. 

I asked Goran this week to give me a taste of what you will learn in his trading lesson. He said:

During rallies and sell-offs, most traders concentrate on trendlines, channels and moving averages to identify potential support and resistance. They get frustrated when a stock either blows right through it or hits a wall where there is no visible support or resistance. There doesn't seem to be any rhyme or reason to it. But I'm going to show you something they may be missing. They don't see the support and resistance that is created by "ungapping windows" and "downgapping windows." From these you can tell how strong an area is by evaluating how a stock handles the window as it moves into it. 

The market markers and specialists take a stock to these levels arbitrarily. You have go back in history to see where these windows appear. When you stay aware of them, you will see how they have an influence on where support or resistance comes in today.

There are few tools as critical to the intermediate-term trader as relative strength (RS). In his new trading lesson "Calculating and Using RS Lines for Intermediate-Term Trades," Loren Fleckenstein will show you how to create and use RS lines, a tool which few intermediate traders are aware of--let alone understand. You'll learn how to benefit from the unique advantages of RS lines that allow you to quickly identify both the best buy and sell candidates for your watch list. If you're not already using this tool, you can be up and running this week--as Loren will show you how to calculate and plot RS lines in your own charts. 

Get a free ride off euphoria. Last week Tsutae Kamada explained in his lesson "Follow The Money--Trade Where the Action Is" how to take advantage of opportunities on momentum-driven days. Dave Landry now follows up on this theme, but with the spotlight on opening gaps. The common assumption is that gaps will be filled, and therefore, the opportunity is to counter the direction of the gap. But Dave says in his new lesson: "The Open: Trade, Fade, or Forget" you should view an opening gap up (if in the direction of the trend) more as a sign of strength. In Dave's lesson, you'll learn the patterns:

• that suggest it's better to wait for a pullback off the gap before entering
• that warn you when the risks are too high for you to participate
• and you'll see when the odds are highest that a stock will move like a rocket with little or no pullback. 

In true Landry style, all of the above and more is laid out through chart examples and profuse details. 

I'm thinking-- With Dave's new lesson, Goran's piece and Gary Kaltbaum's gap lesson from a few weeks ago--we ought to issue diplomas on all this gap education you've been getting from us lately. 

Nearly two years ago when I first started working with Mark, I quickly realized that he is one brilliant trader. So if you ask me why you should attend Mark's workshop "The Hedge Fund Edge" March 7-9, 2001, in San Francisco--here are reasons that stand out in my mind: 

• Mark will teach you what most traders need desperately, but never get: Steady and consistent results. Steering clear of  "the cowboy approach to trading" (as Tony Saliba puts it), Mark has earned steady and consistent returns over many years of trading. Mark will show you how you can achieve the same though a combination of technical patterns, macroeconomics and company fundamentals on a foundation of rock solid money money management 
• Mark will give you the deep level of understanding you need for long-term trading success. Even though Mark is the first to point out that there's no Holy Grail, his results make me think he's found it. After two years of working with Mark, I've found that his secret is not a black box, but rather an understanding of the markets that has been built through many years of research. In March, you will have the opportunity to learn what has taken Mark over 20 years to learn. 
• Mark will equip you with the specific money-management tools that have been instrumental in his own success. When I attended Mark's two-hour talk in Las Vegas at TradingMarkets2000 last year, I had a taste of his obsession with controlling losses. It was unforgettable. Loss control is so deeply ingrained in Mark's psyche that he not only taught the strategies--but the power and raw emotion of his presentation transferred his heartfelt convictions to you. You couldn't help but come away with something resembling his trading discipline, as though you'd been living it all along. 

Now imagine getting two full days of this.

Ideas You Can Take Immediate Action On...Now Available At TradingSubscriptions.com

Over the last couple of years, we've gotten a number of requests to provide specific ideas. 

As you know, our emphasis at TradingMarkets.com has been to provide you with the best education and daily market insights for professional traders so that you can easily come up with your own specific trading ideas. And then act on them. 

• But what if...you simply don't have the time or resources to study and do homework?
• Is there a way in which you can benefit from the fantastic opportunities in the markets with less time committed to learning our strategies and analyzing the markets every day? 
• Is there a way in which we can help you? 

Help is now available at a new site from TradingMarkets Financial Group: TradingSubscriptions.com.

Through TradingSubscriptions.com you'll have access to trading services from the best traders in the country. Visit the site and get a detailed description of various services on stocks, futures and options--all designed to help you get better results. Also included will be an opportunity to subscribe to two new database services from TradingMarkets Financial Group. 

Know someone who'd like to learn the first steps toward becoming a successful and confident trader? Would you yourself like to brush up on the basics? BeginningTrader.com is now live. Come in and get an education worth thousands of dollars and lay a strong foundation for your future trading success--all free of charge. 

In addition to the Trading Lessons described above, please see our latest Trading Advisor.  As always, if you'd like your trading questions answered, please send them to questions@tradingmarkets.com. Send any suggestions, recommendations and other input to suggestions@tradingmarkets.com.

Have a great weekend,

Eddie Kwong
Editor-in-Chief
TradingMarkets.com