STS - The Teaching Manual

Oct.
3, 2012
STS THE TEACHING MANUAL
DISCLAIMER: Online trading involves substantial risk of loss and is not suitable for everyone. The valuation of the contracts does fluctuate, and, as a result, you may lose more than your original investment. The impact of seasonal and geopolitical events is already factored into market prices. The highly leveraged nature of online trading means that small market movements will have a great impact on your trading account and this can work against you, leading to large losses or can work for you, leading to large gains. If the market moves against you, you may sustain a total loss greater than the amount you deposited into your account. You are responsible for all the risks and financial resources you use and for the trading systems you are using. You should not engage in live trading unless you fully understand the nature of the transactions you are entering into and the extent of your exposure to loss. If you do not fully understand these risks you must seek independent advice from your financial advisor. All trading strategies are used at your own risk. This mentoring should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades to make. Trade only with risk capital; that is, trade with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations. Past results are no indication of future performance. In no event should the content of this correspondence and coaching be construed as an express or implied promise, guarantee or implication from Children of the Journey that you will profit or that losses can or will be limited in any manner whatsoever. Children of the Journey is not responsible for any losses incurred as a result of using any of our trading strategies and mentoring. The Trading software should never be left unattended due to the possibility of events out of your control, such as computer or data failure, power outages, position mismatches, and/or network problems. Loss-limiting strategies such as stop loss orders may not be effective because market conditions or technological issues may make it impossible to execute such orders. Likewise, strategies using combinations of trading positions such as spread or straddle trades may be just as risky as simple long and short positions. Information provided in this correspondence and coaching is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. 1 of 41 STS The Teaching Manual
All Rights Reserved; The Children of the Journey Sangha of the East Coast. Copyright, 2011-2012
Oct. 3, 2012
Revision Log: 20121003.0900 A.Penaloza added back the DELTA and the new STS Stacking Theory. 20120822.1545 A.Penaloza added JERK and Rate Cycles and Renko Charts. 20120716.1500 A.Penaloza added Recognizing PULLs and SUPPORT and re-org order of teaching. 20120704.1200 A.Penaloza added Suggested Training Program, Bruces PRIME Strategy, re-org order of teaching. 20120614.1700 A.Penaloza created initial document. Related Documents: Web: http://childrenofthejourneysangha.blogspot.com/
2 of 41
STS The Teaching Manual
Oct. 3, 2012
Contents
Mission Statement............................................................................................................................................................6 Mastery......................................................................................................................................................................6 PLAIN LANGUAGE DISCLAIMER:...........................................................................................................................................7 The Sangha Principles.....................................................................................................................................................7 The STS Teaching Manual....................................................................................................................................................8 Purpose:.....................................................................................................................................................................8 Methods:....................................................................................................................................................................8 SAFETY:...................................................................................................................................................................8 SURETY:..................................................................................................................................................................9 PROFITABILITY:..........................................................................................................................................................9 Trading Strategies:........................................................................................................................................................9 Option to use "Set it and Watch it" Strategy.......................................................................................................................10 The PRIME Window concept:.........................................................................................................................................13 The PRIME Bias (pressure gauge): ..................................................................................................................................14 The Three Market Cycles:............................................................................................................................................15 The PRIME-JERK-DELTA lines:........................................................................................................................................17 Learnings on the DELTA line:........................................................................................................................................18 3 of 41 STS The Teaching Manual
Oct. 3, 2012
DELTA is Pivotal........................................................................................................................................................20 The COMBO line:.......................................................................................................................................................21 ........................................................................................................................................................................21 Recognizing PULL and SUPPORT:....................................................................................................................................23 Recognizing a PULL UP:............................................................................................................................................24 Recognizing a PULL DOWN:........................................................................................................................................25 Recognizing a SUPPORT UP:.......................................................................................................................................26 Recognizing a SUPPORT DOWN:...................................................................................................................................27 How Trend Starts from Sideways:...................................................................................................................................28 The Jerk Cycle:........................................................................................................................................................29 The Rate Cycle:........................................................................................................................................................30 The STS Stacking Theory..............................................................................................................................................31 Additions to the STS Stacking Theory...............................................................................................................................33 Taming your mind... with DELTA!...................................................................................................................................34 The DELTA Secret!.....................................................................................................................................................35 The Renko Chart:......................................................................................................................................................37
4 of 41
Oct. 3, 2012
This page intentionally blank.
5 of 41
Oct. 3, 2012
Purpose This is the collective Wisdom our Spiritual Community of Traders had been gratefully made privy to by the Universal Intelligence of Love. This manual is a compendium of knowledge we as individuals and as a community continue to learn with appreciation and gratitude. Mission Statement We believe in the Divine and the Universe. We are eternally Grateful and ever Thankful for the Gift given. We are continually given the most amazing insights about this Gift; which allowed us to create a business that takes little of our time to run during the day. This Gift enables us to spend quality time helping others as the Divine wishes. This is the reason we teach this Gift to others. We depend on the Divine and the Love of the Universe to lead others to us. Mastery
It is what "is", you are seeing what you see. It is ALL in the technique and your efficiencies. You cant predict the future trends of the market, you are but a mere follower, so act like it! You must only develop the ability to see what is before your eyes. The Universe is asking for little more in this endeavor. Practice being efficient! Points per trade, get it up. Like Dirk Nowitzki in the NBA at 2.5 points per hoop. (The best average near him is 1.3). Not like Monica Lewinsky, who swallowed many a shot, but didnt get credit for one. Using the least time and effort, a skilled performance = EFFICIENT! We will become Madly skilled in this area. Kurt Duerod
6 of 41
Oct. 3, 2012
PLAIN LANGUAGE DISCLAIMER: 1. The Sangha will never ask you for money. 2. The info IS PROVIDED FREELY with "no strings attached". 3. The Sangha will provided answers and guidance pertinent only to The Sangha Trading System. 4. The Sangha WILL NOT provide proof of effectiveness nor ANY guarantee of FITNESS of use. Prove it to yourself! 5. You are FREE to profit from The Sangha Trading System in any way you choose, with only ONE RESTRICTION Give credit to The Children of the Journey Sangha as the original creator. The Sangha Principles 1. Those that have the passion and perseverance, on their own volition, will prove the merits of "The Gift" to themselves and acquire the necessary skills by their own effort. 2. As "The Gift" was freely given to the Sangha, we FREELY give the gift from our heart to those who ask us. The Sangha will freely answer questions and provide the foundational knowledge to those who seek. 3. The Gift of "The Sangha Trading System" is Open Source and will adhere to the "7 Guiding Principles" of Open Source.
7 of 41
Oct. 3, 2012
The STS Teaching Manual

Purpose:
This document is the Sangha Trading System Team's latest understanding on how to use the PRIME-DELTA-COMBO-JERK STS tools profitably using the "Set it and Watch it" strategy with the STS Stacking theory. We include all the Tactics and Strategy, we currently know of, for Safe and Sure - PULL profitability. When you have your first-look at the STS tools used in the Sangha Awesome Layout, please do NOT be overwhelmed by all the lines. There are ONLY 3 indicator lines you need to be concerned with, the PRIME, DELTA, JERK. However, the NARROWS are foundational; without them you would not see clearly the rhythm of the market dance. The COMBO_A and B and the Rates only play minor roles.
Methods:
SAFETY:
To protect our trading account, we employ the following Tactics... 1. Use a trailing Stop and let the trailing Stop work for you. 2. Make our profit early and stop trading early. We trade for a maximum of 2 hours.
3. Use the PRIME-DELTA-COMBO-JERK (PDCJ) tools to identify Trends and only enter on the "PULLs", when you have a CLEAN Stacking of STS lines.
4. Use only ONE contract.
WARNING: Doing business with the Market is "inherently" DANGEROUS! Market price action may sharply go up or down, PREVENTING your trailing Stop from activating in a timely manner. Please realize you will LOSE money when this happens and this is a "normal" behavior of the market.
8 of 41 STS The Teaching Manual
Oct. 3, 2012
As a new STS practitioner, you are encouraged to just use one contract at a time, to minimize this possible loss.
SURETY:
1. Use the PRIME-DELTA-COMBO and JERK to know when a "Safe and Sure - PULL" Trend has begun, as you see a CLEAN Stack.
2. Use the COMBO-JERK crossing to time your ENTRIES and EXITS.
3. Use the DELTA to know where the market is.
PROFITABILITY:
1. Make your profit early and stop trading early. 2. Only work the "Safe and Sure - PULL" Trends.
3. BEWARE and stay away when the market is pivoting and going sideways (when JERK is in the Quarter NARROWS - DANGER ZONE).
4. BEWARE of entering positions when the JERK is NOT following the price action (JERK DIVERGENT with price action).
Trading Strategies:
We "DANCE" with the market; we DO NOT PREDICT where it is going. We realize HOPE will not move the price action where we want! We accept the fact that we will make wrong decisions on the direction of the market!
Our STS tools allow us to know the two types of market Dance Behavior... 1. Sustained Trends - market doing the FOXTROT (PRIME and COMBO doing PULL, SUPPORT phases of a trend). 2. Sideways and Pivoting - market doing the JITTERBUG (COMBO and PRIME together and/or moving alike and JERK is in the Quarter NARROWS)
9 of 41
Oct. 3, 2012
Our Basic Strategy is... 1. For Discipline, only work the "Safe and Sure - PULL". 2. We only take a position when the market is doing the FOXTROT. 3. We STAY AWAY while the market is doing the JITTERBUG and the JERK is DIVERGENT with the price action.
Option to use "Set it and Watch it" Strategy...

1. Set Trailing Stop to 2 points. 2. Enter a position when the STS Stacking Theory says you have a CLEAN Stack and a "PULL" to take, then leave the mouse alone (complete detachment). The Key is knowing when a PULL begins and staying away from SUPPORT starts. We ONLY work the PULLs! Benefits of SiWi:
This is the Buddhist way to trade because of the detachment to outcome. You do not feed your FEAR nor your GREED. You underscore the importance of serenity and simplicity in your trading, while minimizing your number of trades. You let the Market "WORK" for you.
Caveats to SiWi: You MUST be able to identify the DANGER ZONES (pivoting-sideways) and avoid taking positions until we see the PULL and a CLEAN Stack of STS lines.
10 of 41
Oct. 3, 2012
Suggested Training Program:

The Quick and Rough Training program:
1. Do your Historical Chart studies from SUPPORT and work them back, so you spot the PULL that began the SUPPORT. Pay close attention to what the DELTA is doing! 2. Then, do Market Replays to take ONLY the "Safe and Sure - PULL" trends, when you get a CLEAN Stacking of lines. 3. Let the Universe teach you the details as you do your 90 Day countdown to LIVE.
The more Formal Training program:

1. Learn the movement of the price-action (Higher Lows - Lower Highs). 2. Learn the PRIME (Window, Bias, price action moves once PRIME crosses the Zero). 3. Learn the JERK (above zero - UP, below zero - DOWN). 4. Learn the DELTA (PULL opposite JERK, Above Zero - SUPPORT DOWN, Below Zero - SUPPORT UP). 5. Learn to look for CLEAN Stacking of STS lines at PULL starts and SUPPORT ends. 6. Learn to use the RENKO chart to spot patterns for entries and to know when to stay away or when to take a position. Begin your 90 Day Countdown to Live. 1. Catch at least two "Safe and Sure - PULL" trends per day, as you see CLEAN Stacking of lines. 2. Use only 1 contract at first, as your weeks go by profitably, double your contracts. When not profitable, go back to 1. 3. Use "Set it and Watch it". Always watch and be mindful, so you may exit before the price action goes against you (as the PULL ends or SUPPORT ends). 4. Only "Dance" from 9am to 11am. 5. Maintain a trade journal and video recap your daily countdown. Why video; because you record your thinking on why you did that action. 6. After taking a long Break, do your Historical Studies of recognizing CLEAN Stacks at PULL starts and SUPPORT ends and Market Replay catching at least two PULL trends profitably. Keep replaying the same PULL trends until you maximize your profit for the trends you catch. 11 of 41 STS The Teaching Manual
Oct. 3, 2012
We encourage you to share your insights with other STS practitioners. It is through freely sharing our discoveries that we have made such wonderful progress! Most importantly, realize that there will be losing days and there will be immensely profitable days. Be extremely grateful and joyful for wins AND losses. It is when we lose that the UNIVERSE cares enough to teach us something new we have not yet grasped! Be thankful that the UNIVERSE cares enough to teach you.
Teachings:
There is a Reason why we call the PRIME "The PRIME":
1. The Market is Cyclic in Nature! The PRIME, which is the Rate of change of Macd_1 (Fast constant: 5 Slow constant: 10 Length: 3), told us that. The PRIME must always complete its cycle when above the Zero and when Below the Zero. 2. Nothing significant happens to the price action, until the PRIME crosses through the Zero! 3. How well the PRIME moves the price action as The PRIME goes through the Zero is very important. When the price action moves well as the PRIME moves in the same direction, then we have a STRONG or positive BIAS for the PRIME to move the price action. The PRIME behavior is the foundation we must fully understand to be profitable when "Dancing" with the market! ~o~
12 of 41
Oct. 3, 2012
The PRIME Window concept:

As the PRIME cycles up and down through the Zero, PRIME creates an UP Window - when BELOW the Zero and a DOWN Window - when ABOVE the Zero.
You do not want to take a SHORT when an UP window is being made! You do not want to take a LONG when a DOWN window is being made!
Here is a picture to make the concept clear...
~o~ 13 of 41 STS The Teaching Manual

Oct. 3, 2012
The PRIME Bias (pressure gauge):

The PRIME BIAS has 3 values; NO Bias UP Bias DOWN bias PRIME is NO Bias; when PRIME moves up or down - price action also moves equally up or down. PRIME is UP Bias; when PRIME moves up - price action moves up nicely, but when PRIME moves down - price action hardly moves down. Up is the STRONG side of the market and Down the WEAK side. PRIME is DOWN Bias; when PRIME moves down - price action moves down nicely, but when PRIME moves up - price action hardly moves up. Down is the STRONG side of the market and Up the WEAK side. You MUST KNOW the PRIME BIAS at all times! Generally, when JERK is Above Zero, the PRIME BIAS is UP (UP is the STRONG side) and when JERK is Below Zero, the PRIME BIAS is DOWN (DOWN is the STRONG side). But this JERK rule does NOT HOLD, when a trend change has occurred, a Pivoting Market or when JERK stays in the Mid-NARROWS. Do Not enter a position on the WEAK side of the market! (you are counter-trending)
~o~
14 of 41
Oct. 3, 2012
The Three Market Cycles:

ALL the STS tools are lines that represent the inherent cycles in the market. So far, we know of Three Market Cycles exhibited by the JERK-PRIME behaviors. Short-term cycle (Pivoting Market) - PRIME - Useful when the PRIME just goes from Upper NARROWS to Lower NARROWS or when JERK is in MidNARROWS, then use the PRIME to take positions on the STRONG side of the market. Long-term cycle (Trending Market) - JERK - Useful when the market is in a trend. Exit the trend when the JERK crosses through the Zero and re-enter a sustained trend when JERK crosses back again. Extreme Trend cycle (Sustained Trending Market) DELTA (PRIME - JERK) - Useful when you want to maximize your profitability (PULL and SUPPORT phases). ALL these lines cycle up and down through the zero as the market "Dances along". Let us take the PRIME as an example... As the PRIME cycles up and down through the Zero, PRIME creates an UP Window - when BELOW the Zero and a DOWN Window - when ABOVE the Zero. You do not want to take a SHORT when an UP window is being made! You do not want to take a LONG when a DOWN window is being made!
15 of 41
Oct. 3, 2012
Here is a picture to make the concept clear...
Use this inherent NATURE of market cycles to your trading advantage. ~o~
16 of 41
Oct. 3, 2012
The PRIME-JERK-DELTA lines:

The Universe let us know, with utmost certainty, that The PRIME, Jerk and The DELTA are the ONLY 3 lines needed to "Dance" with the market Safely and profitably! The picture below shows you why...
~o~ 17 of 41 STS The Teaching Manual
Oct. 3, 2012
Learnings on the DELTA line:

The DELTA line is... DELTA = PRIME - JERK The DELTA gives us the phases of the Sustained Trend. DELTA goes through the PULL and SUPPORT phases of a Sustained trend cycle. When DELTA is Beyond the Upper or Lower NARROWS, the trend continues until the DELTA drops back into the NARROWS and/or Mid-NARROWS, with the Combo crossing thru the JERK. The DELTA also tells us the rhythm of the market. Are we in FOXTROT or JITTERBUG? FOXTROT is when the market is doing a Sustained trend - DELTA goes through its phases of PULL and SUPPORT. The DELTA is far from the PRIME, in other words, the PRIME and JERK contribute to the price action. JITTERBUG is when the market is Sideways or Pivoting - DELTA is right next to PRIME or is copying PRIME with some separation. PRIME is the only one moving the price action, generally while the JERK is flat or stays in the DANGER ZONE (Quarter-NARROWS). Make your profit doing the FOXTROT and stay away from the JITTERBUG!
18 of 41
Oct. 3, 2012
Here is a picture to help explain:
19 of 41
Oct. 3, 2012
DELTA is Pivotal...
When taking trends, only watch DELTA crossings at 3 areas of the NARROWS... Uptrends: 1. Starts - DELTA crosses UP thru the Zero or LOWER NARROWS. 2. Ends - DELTA crosses DOWN thru the Zero or DOWN thru the LOWER NARROWS. Downtrends: 1. Starts - DELTA crosses DOWN thru the Zero or LOWER NARROWS. 2. Ends - DELTA crosses UP thru the Zero or UP thru the UPPER NARROWS. For Safety... make sure to coordinate with the price action, any divergences, location of the JERK and the COMBO-JERK crossing. Please see this video for clarity. What a tremendous gift we have been given! Now it is possible to load up more contracts on these SAFE and SURE trends! Why is this so important? 1. Easier to teach for new practitioners - more mechanical. 2. Likelihood of consistent profitability encourages confidence. 3. Easier to create a disciplined trading habit, which we always do.
20 of 41
Oct. 3, 2012
The COMBO line:

The COMBO line is... COMBO = PRIME + JERK with an offset of 5 (current PRIME + JERK 5 bars back). COMBO gives us the PULL and SUPPORT phases of the Extreme-Trend cycle that the DELTA also gives us. How the COMBO line helps... Using the COMBO lines brings a measure of certainty and confidence into knowing how the market is "Dancing". The COMBO line lets us know when to enter a position (PULL) and when to keep a position on a sustained trend (SUPPORT). When the COMBO line crosses the JERK or creates a "V" or inverted "V" on or by the JERK, see if it is a good place to take a position. COMBO Characteristics: 1. Gives us timing for Entries/Exits of PULLs, when COMBO crosses the JERK. 2. Shows when in a Sustained Trend (SUPPORT); COMBO above Zero - UP trend, below Zero - DOWN trend.
21 of 41
Oct. 3, 2012
Here is a Picture to explain further...
Please see this video of the PCJ.
~o~
22 of 41
Oct. 3, 2012
Recognizing PULL and SUPPORT:

Your job as a Sangha Trading System (STS) Practitioner is to be able to recognize PULLS for ups and downs early enough to get a favorable fill price and then be able to recognize SUPPORT for the trend, in order to hold the position for maximum profit. PULLS may begin from a PRIME INVISIBLE CROSSING (when PRIME and COMBO are separated) or with PRIME and COMBO crossing the JERK together. SUPPORT always begins with PRIME crossing the JERK.
Who is who... PRIME RED line, COMBO BLACK line, JERK GREEN Stairsteps ~o~
23 of 41
Oct. 3, 2012
Recognizing a PULL UP:

When PRIME and COMBO creates a W pattern or an INVISIBLE CROSSING with PRIME or COMBO crossing UP through the JERK, while PRIME and COMBO creates BULL Flags before and/or after crossing UP through the JERK. See #4 and #6 below. You can also see the BULL flags in the PULL up after #2. "W" pattern at #6. INVISIBLE CROSSING at #4.
Recognizing a PULL UP (in simple words): 1. PRIME or COMBO are doing a W pattern or INVISIBLE CROSSING below JERK. 2. PRIME and COMBO are doing BULL FLAGS above JERK. 3. JERK is going up BELOW PRIME and COMBO. 4. ~o~
24 of 41
Oct. 3, 2012
Recognizing a PULL DOWN:

When PRIME and COMBO creates a M pattern or an INVISIBLE CROSSING with PRIME or COMBO both Outside the UPPER-NARROWS and above the JERK, while PRIME and COMBO creates BEAR Flags, before and/or after crossing DOWN through the JERK. See numbers 1, 4, 6, 8 and 10 below. You can see clearly the BEAR flags in the PULL downs between #1 and #2. "M" patterns are #1 and #6. INVISIBLE CROSSINGS are #4 and #8.
Recognizing a PULL DOWN (in simple words): 1. PRIME or COMBO are doing an M pattern or INVISIBLE CROSSING above JERK. 2. PRIME or COMBO are doing BEAR Flags as it comes down through the JERK from ABOVE. 3. JERK is going down, while PRIME and COMBO are BELOW the JERK.
~o~
25 of 41 STS The Teaching Manual
Oct. 3, 2012
Recognizing a SUPPORT UP:

When PRIME and COMBO cross DOWN through the JERK, while the JERK is going UP, DOWN or SIDEWAYS. The COMBO will remain ABOVE the PRIME and the PRIME will remain BELOW COMBO and the JERK. See #1 through #4 and #5 through #7 below. You see SUPPORT starts and ends when PRIME crosses DOWN, then UP through the JERK.
Recognizing a SUPPORT UP (in simple words): 1. 2. 3. 4. PRIME and COMBO crosses DOWN through the JERK. JERK is going SIDEWAYS, UP or DOWN, ABOVE Zero. COMBO is ABOVE the PRIME and ABOVE the Lower Quarter-NARROWS. PRIME is BELOW COMBO and the JERK.
~o~
26 of 41
Oct. 3, 2012
Recognizing a SUPPORT DOWN:

When PRIME and COMBO cross UP through the JERK, while the JERK is going DOWN, UP or SIDEWAYS. The PRIME will remain ABOVE the COMBO and the COMBO will remain BELOW the PRIME. See #4 to #5, #6 to #7 and #10 to #11 below. You see SUPPORT starts and ends when PRIME crosses UP and then DOWN through the JERK.
Recognizing a SUPPORT DOWN (in simple words): 1. 2. 3. 4. PRIME and COMBO crosses UP through the JERK. JERK is going SIDEWAYS, DOWN or UP, BELOW Zero. COMBO is BELOW the PRIME and BELOW the Upper Quarter-NARROWS. PRIME is ABOVE COMBO and the JERK.
~o~
That is ALL Study, Do Market Replays and Be Profitable! 27 of 41 STS The Teaching Manual
Oct. 3, 2012
How Trend Starts from Sideways:

1. 68% of trends start with either a "W" pattern for UP or a "M" pattern for DOWN. 2. Rate_6 is 72% accurate in predicting the trend direction that will be after the sideways. 3. 96% of downtrends starts with a "M" pattern.
~o~
28 of 41
Oct. 3, 2012
The Jerk Cycle:

The JERK cycle begins and ends as it crosses the ZERO... 1. If the Jerk is running FLAT, use the Rule of Threes starting your count from the Lowest JERK Valley or from the Highest JERK Peak. The PULL begins at the 3rd. 2. If the JERK only creates Two Valleys ("W"s - Fesses) or Two Peaks ("M"s - Tetons), the PULL begins after the second. 3. If the JERK has many peaks - you have a sustained trend UP; find the Highest Peak and the 2nd or 3rd peak after that will start a PULL DOWN. Use the PRIME and how it approaches the Zero with strength and how the PRIME is close to the Zero as your clue to take a LONG. 4. If the JERK has many valleys - you have a sustained trend DOWN; find the Lowest Valley and the 2nd or 3rd valley after that will start a PULL UP. Use the PRIME and how it approaches the Zero with strength and how the PRIME is close to the Zero as your clue to take a SHORT. 5. If ever the COMBO or PRIME creates a "CHECKMARK" pattern as it crosses or after it crossed the JERK or the PRIME bounces off the Zero, DO NOT HESITATE -- go take a position, just be on guard that on LOW VOLUME - slow market days, the PULL will be less than 2 points. Please see this video for the details.
With the JERK SECRETS above, you will never be at a loss when the market may turn in its "DANCE"! Also remember the RATEs have their cycle also, which goes from the TOP-TOP (TT) to go to the BOTTOM-BOTTOM (BB) and back again to the TOP-TOP (TT). As with all STS lines, the RATEs MUST also complete their cycle!
29 of 41
Oct. 3, 2012
The Rate Cycle:

Use the Rule of Three, when ALL the Rates are together! This is because the JERK may also be running flat - sideways... 1. Count as #1 the first Lowest Valley of the JERK - for a BOTTOM-BOTTOM (BBs) or the first Highest Peak of the JERK - for TOP-TOP (TTs). 2. Count as #2 and #3 the next Higher Valleys (for BBs) of the next Lower Peaks (TTs) of the JERK. 3. The Third Valley or Peak is when you take a position for the coming Profitable PULL. NOTE: When you see a "CHECKMARK" pattern as any Valley or Peak of the JERK is formed or a Zero Bounce of the PRIME, DO NOT HESITATE take a position for a strong PULL to come. Just be on guard that on LOW VOLUME - slow market days, the PULL will be less than 2 points.
Here is another viewpoint of Rates and JERK cycles from Jorge Gomez. Thank you Jorge!
30 of 41
Oct. 3, 2012
The STS Stacking Theory...

The UNIVERSE may have given us a means to TAME the MIND and be profitable! HOW? Through the use of a weakening DELTA and the STACKING of the STS lines, we may now know, with confidence, the turns in the "Dance of the Market". WHY? Our lack of profitability was mostly due to the UNCERTAINTY of whether a pivot will be a Trend Change or just a retrace going to Trend Continuation. WHAT? The STS Stacking Theory may make trading even simpler and easier on the mind! All we do is when the DELTA weakens or "cools" (with angle-based gradient the color lightens) or you have a pivot in the price action, start looking for an orderly stacking of STS lines. If you have ALL the lines stacked well, except for the JERK, then take a position or reverse, if you are already in a position. WHO? We use only the PRIME, JERK, DELTA and COMBO_A and B when employing the STS Stacking Theory. WHERE? The STS Stacking theory is used whenever a PULL starts and ends. We also use it when SUPPORT finally ends. WHEN? Use the STS Stacking theory as you trade. Look for "L", "7" or "Checkmark" patterns on any of the STS lines at pivots. When you see these patterns immediately enter or reverse your position. When you see an Orderly Stacking of STS lines with a "V" or "Cup" pattern on ALL the lines except JERK, then enter a position or reverse.
31 of 41
Oct. 3, 2012
Please see the picture below for clarity...
32 of 41
Oct. 3, 2012
Additions to the STS Stacking Theory...

More on the STS Stacking Theory: 1. We made the STS lines more jagged by turning down the smoothing. This will allow us to easily see "Orderly" stacking much more easily. We went from 13 to 9 for smoothing on MacdRateSmooth_1 and to 5 for MacdRateSmooth_6. 2. When you get a "BOWL" pattern - it is continuation of trend, similar to "SAWTOOTH" patterns of "V"s or inverted "V"'s, when in SUPPORT. 3. Open"V"'s stacking can be taken as an early entry of trend change, otherwise, just wait for an "Orderly" stack. Please see this picture for clarity...
33 of 41
Oct. 3, 2012
Taming your mind... with DELTA!

Use the DELTA to "Tame your Mind" and ease trading anxiety!
HOW? By only looking for a clean STS stacking of lines when DELTA is opposite the JERK on the other side of the Zero. WHY? Because PULLs (Trend Changes) 80% of the time occur when the DELTA is on the other side of the Zero opposite from the JERK. WHEN? Before looking for a clean stacking of STS lines, which indicates a new Trend Change... 1. wait until PULL end or SUPPORT start, as the DELTA crosses to the opposite side of the Zero. 2. wait until DELTA reaches towards and beyond the UPPER or LOWER NARROWS at SUPPORT end. Please see the picture below for clarity...
34 of 41
Oct. 3, 2012
The DELTA Secret!

Thank you Gary for noticing what Kurt and I obviously did not see about the DELTA.
Trading the STS lines became simpler still... Begin looking for a CLEAN Stacking of STS lines as the DELTA is about to be rejoined by the other STS lines. Known Facts about the DELTA: 1. When DELTA is sideways ABOVE Zero, sustained DOWN Trend. 2. When DELTA is sideways BELOW Zero, sustained UP Trend. 3. When DELTA crosses ABOVE the UPPER NARROWS, it signals END of DOWN SUPPORT. 4. When DELTA crosses BELOW the LOWER NARROWS, it signals END of UP SUPPORT. 5. When DELTA is ABOVE (DELTA CEILING) ALL the STS lines, we have SUPPORT for DOWN until the STS lines meet with the DELTA again ABOVE the Zero, signaling end of DOWN SUPPORT and UP Trend begins. 6. When DELTA is BELOW (DELTA FLOOR) ALL the STS lines, we have SUPPORT for UP until theSTS lines meet with the DELTA again BELOW the Zero, signaling end of UP SUPPORT andDOWN Trend begins. Points 5 and 6 gives our minds the utmost peace, because we know we stay in position until DELTA meets ALL the STS lines again after a PULL had been taken! As Kurt said, "We just sit back on our Lazy Boy, while in the Lion's Den, watching the Lion clean his teeth and saying 'You missed a spot!'".
35 of 41
Oct. 3, 2012
Please see the picture below for clarity...
Please do your Market Replays at a fast speed to prove out the DELTA secret of points 5 and 6 above. You also do not need to use COMBO_B. PRIME-DELTA-JERK and COMBO_A are enough STS lines.
NOTE WHERE the DELTA meets the other STS lines within the NARROWS...
1. DELTA meets the lines at the UPPER or LOWER NARROWS, the trend reversal runs a very short distance or is nonexistent. 2. DELTA meets at the MID-NARROWS or near Zero, the trend reversal runs a long distance!
What an AWESOME GIFT of SERENITY from the UNIVERSE!
36 of 41
Oct. 3, 2012
The Renko Chart:

Dharmesh Nagrecha, STS Point of Contact for India, clued us in on using RENKO Charts for STS. Please see this LINK for an explanation of Renko charts and this youtube video. Here is a picture of NO Renko Chart...
37 of 41
Oct. 3, 2012
38 of 41
Oct. 3, 2012
Here is a picture of Renko Charts...
Notice that the Renko Chart, which does not draw a BRICK until so many ticks have passed, has tamed our STS tools! 39 of 41 STS The Teaching Manual
Oct. 3, 2012
Why are Renko Charts good for STS?
1. PULLs and patterns are much easier to see. 2. You may choose to trade the PRIME, COMBO, DELTA or best of all JERK inflections much more easily. 3. Renko charts "removes" some of the noise and sideways (chop). 4. Renko charts show trends, reversals, ceilings and floors. 5. Renko charts show price action channels that staircase up or staircase down. 6. Renko charts are only based on price action, it pays no heed to time. Therefore, it is quite appropriate for our STS Tools, since our tools work best when PULLs or pivots happen.
40 of 41
Oct. 3, 2012 End of Teachings...
Results:
This paragraph will be updated with how well our trading strategy does for our profitability.
Conclusion:
There is no Holy Grail of technical indicators. The best an STS practitioner can do is to "Dance" with the market and know when the market is doing the FOXTROT (PULL sure profitability) or the JITTERBUG (destroyer of trading account).
Stay away when the market does the JITTERBUG or JERK in DIVERGENCE with price action!
The STS Tools given to us by the Universe is a MIRACLE!
When we are NOT Profitable... it is because of our LACK of Trust in the tools and our LACK of Discipline.
41 of 41

STS - The Teaching Manual

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

STS - The Teaching Manual

Загружено:

Авторское право:

Доступные форматы

Oct.

STS THE TEACHING MANUAL

STS THE TEACHING MANUAL

STS The Teaching Manual

STS THE TEACHING MANUAL

STS THE TEACHING MANUAL

STS The Teaching Manual

STS THE TEACHING MANUAL

This page intentionally blank.

STS The Teaching Manual

STS THE TEACHING MANUAL

STS The Teaching Manual

STS THE TEACHING MANUAL

STS The Teaching Manual

STS THE TEACHING MANUAL

The STS Teaching Manual

STS THE TEACHING MANUAL

3. Use the DELTA to know where the market is.

STS The Teaching Manual

STS THE TEACHING MANUAL

Option to use "Set it and Watch it" Strategy...

STS The Teaching Manual

STS THE TEACHING MANUAL

Suggested Training Program:

The more Formal Training program:

STS THE TEACHING MANUAL

STS The Teaching Manual

STS THE TEACHING MANUAL

The PRIME Window concept:

~o~ 13 of 41 STS The Teaching Manual

STS THE TEACHING MANUAL

The PRIME Bias (pressure gauge):

STS The Teaching Manual

STS THE TEACHING MANUAL

The Three Market Cycles:

STS The Teaching Manual

STS THE TEACHING MANUAL

Here is a picture to make the concept clear...

STS The Teaching Manual

STS THE TEACHING MANUAL

The PRIME-JERK-DELTA lines:

~o~ 17 of 41 STS The Teaching Manual

STS THE TEACHING MANUAL

Learnings on the DELTA line:

STS The Teaching Manual

STS THE TEACHING MANUAL

Here is a picture to help explain:

STS The Teaching Manual

STS THE TEACHING MANUAL

STS The Teaching Manual

STS THE TEACHING MANUAL

The COMBO line:

STS The Teaching Manual

STS THE TEACHING MANUAL

Here is a Picture to explain further...

Please see this video of the PCJ.

STS The Teaching Manual

STS THE TEACHING MANUAL

Recognizing PULL and SUPPORT:

STS The Teaching Manual

STS THE TEACHING MANUAL

Recognizing a PULL UP:

STS The Teaching Manual

STS THE TEACHING MANUAL