Super Structure Trading

SuperStructureTrading ™
How to Pick Highs and Lows

Accurately, Safely, and Profitably
Using 3 Proven Steps
Ken W. Chow
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Disclaimer
Futures and options trading have great potential rewards, but also great potential losses and may not be suit-
able for everyone. Users should be aware of the risks before investing real money. Past performance of this
or any other trading system is no guarantee of future results. Hypothetical or simulated performance results
have certain inherent limitations. Unlike an actual performance record, simulated results do not represent
actual trading. Also, since the trades have not actually been executed, the results may have under- or over-
compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading
programs in general are also subject to the fact that they are designed with the benefit of hindsight. No
representation is being made that any account or trades mentioned on this book will or is likely to achieve
profits or losses similar to those shown here. The methodology uses data and information for learning pur-
poses and there are no specific recommendations or offers to buy or sell any futures, options or stocks. No
specific trading or day trading advice or tips are given, nor is warranty of any kind is expressed or implied.
Readers are solely responsible for how they use this information. This book is designed to help students
understand one special application of technical analysis of the freely traded markets. As such, this book is
an aid for learners to develop their own styles of trading. Students seeking investment advice should seek a
licensed or registered investment advisor.
SuperStructureTrading ™ • Ken W. Chow

© 2012 Ken W. Chow All rights Reserved • www.superstructuretrading.com/webinars 2
Table of Contents
Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Chapter 1: Trend Strength Structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

1. The Measured Move – the basic foundation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
a. The Retracement of Point C – counter forces. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
b. The Skewing of Point C – how’s it leaning? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2. Double Top/Double Bottom – good, even when ugly. . . . . . . . . . . . . . . . . . . . . . . . . . 15
Chapter 2: Structures Working Together . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

1. Dominant and Supporting Structures – teamwork . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
2. Higher-High-Lower-Low – make up your mind. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
3. The TimeRange™ – how wide?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
4. Redrawing Structures – getting knocked out. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Chapter 3: Fibonacci Ratios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

1. Fibonacci Retracements – standard stuff. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
2. Fibonacci Extensions – a more powerful way. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45

Chapter 4: SuperStructureTrading™ . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
1. Where to Start – look here first. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2. Fibonacci Combinations – unlocking consistent profits!. . . . . . . . . . . . . . . . . . . . . . . . . 52
3. Weakening Trend Strength – I see brake lights. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
4. Stacking on Supporting 461.8% Extensions – gang tackling. . . . . . . . . . . . . . . . . . . . 58
5. Entering the Trade – okay, I’m going in!. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
6. Managing the Trade – babysitting. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
7. Day Trading – hit and run. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
8. Government Reports and News – shock?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Chapter 5: Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

1. Comex Silver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
2. British Pound . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
3. Emini Russell. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Chapter 6: Partial Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

1. MM Strategy #1 – the slingshot. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
2. MM Strategy #2 – coming on strong . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
3. Countertrend trading – grabbing some. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
Conclusion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
Continuing Education. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96

Introduction
Do you want simplicity and clarity in your trading?
Did you know that reading trend strength properly helps you make consistent profits with
safety? Do you realize that most markets turn on a hidden “cycle”?
You’re about to discover a powerful trading methodology I developed called

SuperStructureTrading™.
After reading this eBook, you’ll literally have the secret combinations to unlock the safe to win-
ning trades in any market. You’ll learn how to combine trend strength patterns with specific
Fibonacci combos to generate huge profits. It is easier than you think.
You’ll know how to evaluate the quality of any trade set-up by simply looking at a price chart.
By using practical rules and confirmation tools, you’ll be able to safely trade market turns.
You’ll also learn how to avoid getting caught in false breakouts.
These patterns work in all freely-traded markets including: index futures, stocks, commodities,
and FOREX…going long or short. Although ideal for the day trader, this approach also works
consistently for the swing trader and the position trader.
I wrote this eBook for traders who are tired of mediocre trading systems based on fancy look-
ing lagging indicators. It’s time to take back control and trade with common sense. Focus on
the source itself: pure price action.

I’ve included over 90 charts and diagrams in this eBook. No pattern is left unaddressed. No
stone left unturned.
After reading this eBook, you’ll learn what every twist, jab, and wiggle on a price chart really
tells you. You’ll know how to use them to make profits consistently in your trading. You’ll know
how to pick highs and lows accurately and safely! Using 3 proven steps.
Now, let’s get started.

Chapter 1:
Trend Strength Structures
Individual structures build a SuperStructure, so, what are the structures used in this trading meth-
odology and how do they work? There are two main structures. The most important one is…
1. The Measured Move – the basic foundation
Have you ever noticed everything has a foundation that other things are built on? A house has
a concrete foundation. An athlete’s foundation is good footwork.
The foundation of SuperStructureTrading™ is the Measured Move, which is a basic zigzag.

This is the simplest element of structure.
This classic chart pattern shows you trend direction, laying the foundation. Simply put, you
need to know whether the market is going up or down.
Figure 1 below shows an uptrend, which is technically defined as a higher low (C higher than
A) with a higher high (price trading above B). Figure 2 shows a downtrend which has a lower
high (C lower than A) with a lower low (price dropping below B). Common sense, isn’t it?

Here’s the key point to remember: The bullish Measured Move confirms only when a higher
high gets made after establishing a higher low. A bearish Measured Move confirms only after
a lower low forms following a lower high. No official Measured Move exists until confirmation
per this definition.
The general rule says the C-D leg should equal to A-B. Although a good starting point, it’s not
always true in reality, as you’ll see later.
You may be thinking: the Measured Move looks so basic and simple, what’s so special about it?
You would be surprised. Read on.
a. The Retracement of Point C – counter forces
There’s an old saying: “Trade with the trend; the trend is your friend.” Let me introduce a better
saying: “Trade with a strong trend; it is a better friend.”

As mentioned earlier, the Measured Move shows trend direction; but more importantly, it also
allows you to evaluate trend strength.
The location of point C of the Measured Move defines trend strength in

SuperStructureTrading™. This is a very crucial point to remember. It’s the very foundation
of this approach.
The pullback from B to C is known as the retracement against the initial A-B thrust. The depth
of this retracement reveals the counter forces to the trend. If the retracement of point C is
deep (much more 50%), the trend is weak. If it’s shallow (less than 50%), the trend is strong.
Figures 3 and 4 both show bullish Measured Moves. The dotted line shows the probable move
to point D. Again, you can use the general rule where the C-to-D move should equal to the
A-to-B thrust to determine how far it should run.

Figure 3 illustrates a deep retracement at point C. Therefore, point D should only trade to
slightly above point B. In figure 4, the Measured Move needs to rally much higher before C-D
equals A-B, due to the shallow nature of its point C.
This is simple geometry. The retracement addresses the location of point C in the vertical plane:
up and down.
Figures 5 and 6 illustrate trend strength in a bearish market.
Retracements much shallower or much deeper than 50% shout out trend strength or weakness.
Later, I’ll elaborate on how to handle the borderline situations.
Tip: Trend strength plays a major role in SuperStructureTrading™.
Focus on the depth of the retracement at point C whenever you see any Measured Move on a
chart. It’s the main feature for identifying trend strength.

Next, I’ll reveal something you’ve probably seen time and again, but never fully understood.
You’ll see how the horizontal location of point C (called skewing) also influences trend strength.
b. The Skewing of Point C – how’s it leaning?
Have you ever leaned toward people you like and away from those you don’t like? The skewing
concept is a bit like that.
The skewing of point C displays the time element of trend strength. Skewing addresses the
horizontal location as retracement addresses the vertical location of point C. Skewing works in
all time-interval charts.
Tip: Use skewing as the secondary way of addressing trend strength.
Figures 7 to 10 illustrate point C skewing in both bullish and bearish scenarios.

I use the simple bar chart in my own trading. Candlestick charts can certainly be helpful, as
they use colors. Just remember to use the entire bar and not just the “body” of the candle.
To determine skewing, locate the pivot at point B as bar zero, the starting point. If several bars
have the same high (or low), use the first one as bar zero. This usually appears in very small
time-interval charts.
Count the number of bars from point B to point C. If several bars have the same low (or high)
at C, count to the first bar. Make a note of the B to C move in bars.
Next, you count the number of bars from point C to the bar that breaks above (or below) point
B. If there are several bars at the same low (or high) at point C, use the first one as bar zero.
Compare the B-C retracement move to the recovery move from point C to the bar that trades
through B at confirmation of the Measured Move. Which move contains fewer bars? Which
move took less time? Is it the retracement or the recovery move?

When point C is skewed to the left, the countertrend move (retracement) is quick and strong
while the recovery move (trend move) coming off point C is slow and lazy. See figures 11 and
12 above for examples of significant left skewing.
When point C is skewed to the right, the pullback is weak and slow, while the thrust in the
trend direction is strong and enthusiastic by comparison. See figures 13 and 14 for significant
skewing to the right.
Regardless of trend direction, when point C is skewed to the left, the trend is weak; when it’s
skewed to the right, it’s strong. This theory applies to all time intervals from the monthly chart
down to the 1- minute chart.
Pay attention to severity of the skew. A ratio of at least 2 to 1 skewing to the right, or 1 to 2
skewing to the left, jumps out at you and would likely impact trend strength. Consider any-
thing less extreme to be neutral skewing without much impact on trend strength.
The skew should always be used in conjunction with other components. Retracement of point
C signals trend strength more effectively than skewing. In choppy markets or borderline re-
tracement scenarios, extreme skewing influences trend strength.
Tip: To summarize, the Measured Move gives two dimensions of trend strength: retracement
and skewing.
I know you’re familiar with the next structure - the Double Top/Double Bottom. However, do
you know when it’s valid or how to properly put it to good use?
2. Double Top/Double Bottom – good, even when ugly
What patterns qualify as a Double Top or Double Bottom?
How ugly can it be and still be legitimate and useful? The answers may surprise you. The
Double Top/Double Bottom is the second structure in SuperStructureTrading™.

I’ll first talk about what makes a legitimate Double Top/Double Bottom pattern. Then, I’ll
show you how to apply it in your trading.
When point C retraces 100% of the A-B range in a Measured Move, a perfect Double Top or
a Double Bottom develops - if confirmed.
A perfect Double Top develops when two pivot highs are at the exact price. A perfect Double
Bottom appears when two pivot lows form at the exact price. See figures 15 and 16 below. Keep
in mind that they are rare, usually found in smaller time-interval charts.

A Double Top/Double Bottom confirms once price penetrates the low/high pivot in be-
tween. Treat this pivot as the confirmation point, similar to point B of the Measured Move.
Just like the Measured Move, until confirmation, there is no valid Double Top or Double
Bottom structure.
When the second high is higher than the first high, the structure still functions as a Double
Top. The second high can be considerably higher and still be a valid ugly Double Top. Similar
rules hold true for double bottoms: a much lower second low forms in an ugly Double Bottom.
Figure 17 shows the confirmation points of an ugly Double Top (DT) and an ugly Double
Bottom (DB).
Analyze the second high/low for its skewing in the same manner as you would point C of a
Measured Move.

The perfect Double Top or Double Bottom has the deepest possible retracement at 100%. But
once price action exceeds 100% of the previous range, it is no longer considered a retracement.
Therefore, any analysis for depth does not apply to an ugly Double Top/Double Bottom as it
would a Measured Move.
The Double Top and Double Bottom don’t contribute any major information regarding trend
strength. They are useful for one main thing - to provide Fibonacci extensions for averaging as
you’ll see later.
The Double Top/Double Bottom, by itself, does not conform to the definition of trend. They
do give minor trend strength clues from their skewing.
Tip: The two main structures are the Measured Move and the Double Top/Bottom.
Tip: Remember, only the Measured Move provides reliable trend strength information from
the depth of its point C retracement.
Next, you’ll learn how to read what these structures tell you as they link together.

Chapter 2:
Structures Working Together
Any single person or item by itself is really meaningless. Nothing’s effective in a vacuum. How
things and people relate and work together systematically is the key. In a similar way, trend
strength structures need to work together to be effective.
1. Dominant and Supporting Structures – teamwork
Are you aware of the dominant theme, thing, or idea in any system or situation? In sports, the
dominant player is always the team leader. In the animal kingdom, most species have an alpha
male in the group.
Pay attention to the Dominant Structure in SuperStructureTrading™. It generally controls

everything that follows.
The true Dominant Structure is the first pattern off of a true high or low.
The Dominant Structure is usually a Measured Move but it can also be a Double Top or
Double Bottom.
The end of an old trend starts a new structure (Measured Move or a Double Top/Double

Bottom) in the opposite direction. This new structure initially gets labeled as dominant because
it gets established first. At first, it sets the tone for trend strength with its retracement. (See
figure 18).
Later, you’ll see how it may lose its Dominant status when a bigger structure knocks it out.

Naturally, only one true Dominant Structure exists at the actual high and one at the actual low.
Therefore, your analysis usually begins with the local Dominant Structure that starts from an
intermediate high or low.
See figures 19 and 20.
I’ll be using the term “Dominant Structure” for the local Dominant Structure in this eBook. For
all intents and purposes, it is dominant locally at the time of its confirmation. Later, it can get
demoted to a supporting-structure role.
Tip: Think of the Dominant Structure as the team leader.
A supporting structure follows the Dominant Structure, supporting it. The Dominant
Measured Moves’ point C starts the first-level supporting structure. If the Dominant structure
is a Double Top or Double Bottom, the second high or low starts the first-level supporting
structure.
Point C of the first-level supporting Measured Move starts the second- level supporting struc-
ture as its point A. Point C of the second-level supporting Measured Move starts the third-level
supporting structure and so on.
There are two ways a supporting structure follows the preceding Dominant Structure.
First, structures can form in a series. Here, the structures confirm in a sequential manner. That
is, the Dominant gets confirmed first, followed by the first-, then the second-level supporting
structure, and so on. See figures 21 and 23.
Tip: The five waves of the Elliot Wave Theory are just two back-to-back Measured Moves in
a series. In a strong trend, there may be more than five waves, with many Measured Moves
forming in a series.

Secondly, a supporting structure may form within a Dominant Structure. This relationship
can be between any two structures on a chart. See figures 22 and 24 for examples. This is known
as a Measured-Move-Within-A-Measured-Move pattern.
A fast way to recognize this scenario is to look for a structure confirming before getting encap-
sulated later by a bigger preceding structure. In the interim, this “inner” pattern starts off as a
local Dominant Structure. Once the “outer” pattern confirms, the previously Dominant inner
structure immediately becomes its supporting structure.

Figures 25 to 28 show the two ways structures relate and work as a team.
Usually, a Measured-Move-Within-A-Measured-Move pattern would create left skewing of

the outer Measured Move. See the Dominant Red Measured Move (MM) in figure 28. The
inner Measured Move’s point B does not trade below point B (in this particular example) of
the outer Measured Move. Therefore, this set-up is a weaker trending pattern than Measured
Moves in a series.
Supporting structures play a critical role in adjusting the zone for a probable reversal. They can
also add in layers of confirmation to strengthen the set-up. Back-to-back left skewing supporting
Measured Moves coming off deep retracements generally show a very weak trend about to reverse.
Always strive to add as many valid supporting structures as possible for added confidence in
trading a market turn. It’s like all the players doing great teamwork to win for the team. (More
details coming).

Tip: Remember, a Measured-Move-Within-A-Measured-Move pattern indicates weaker
trend strength than Measured Moves in a series.
What if things don’t behave normally between structures? See next section.
2. Higher-High-Lower-Low – make up your mind
Sometimes things can get ugly in a choppy market. Ugly means patterns not conforming to the
basic definition of trend. What pattern am I talking about?
The structure that doesn’t fit into our definition is the Higher-High-Lower-Low pattern.
Think of it as a rogue cousin of two Measured Moves in a series. It also can be seen as a failed
ugly Double Top or Double Bottom.
Trend strength is compromised and made weaker when a Measured Move gets the Higher-
High-Lower-Low (HHLL) treatment as seen in figures 30 and 32. This pattern normally
appears in choppy and low-volume periods of the market.

The Higher-High-Lower-Low pattern at a market reversal is really two consecutive ugly
Double Tops or Double Bottoms. See figures 33 and 34. The first ugly Double Top or Double
Bottom pattern fails to follow through in the new direction. Instead, it makes an extra pivot
due to residual trend strength and eventually confirms a second ugly Double Top or Double
Bottom.
The Higher-High-Lower-Low pattern indicates decreasing trend strength as it chops around

to shake off residual trend energy. Its trend strength is normally weaker than that of a deep
retracing Measured Move.
Tip: The Higher-High-Lower-Low pattern is also known as a “broadening” top or bottom.
Does size matter in SuperStructureTrading™? Size of what? You’ll see in the next section.

3. The TimeRange™ – how wide?
Being dominant and being big go hand in hand. Things that are too small by comparison are
unimportant and powerless. This applies to structures as well.
First of all, what is a TimeRange™? Secondly, how do you use it?
Whenever any Measured Move, Double Top/Double Bottom, or Higher-High-Lower-

Low pattern gets confirmed, a TimeRange™ always gets created in the process. Therefore,
every structure has a TimeRange™. It measures the size of any structure…relative size that is.
For a Measured Move, first locate point B. Count the number of bars from point B to the bar
that eventually breaks through it - coming off point C. If there are several bars with identical
highs/lows at B, use the first one as bar zero. The width, in number of bars, is the TimeRange™
of the particular Measured Move.
See figures 35 and 36 for the TimeRanges™ of Measured Moves.

For a Double Top/Double Bottom, locate the low/high in between the tops/bottoms. Go from
this point to the bar that breaks through it. See figures 37 and 38.
Never stay fixated on any particular time-interval chart when trading. “Zoom out” to see the
big picture and “zoom in” to see smaller confirming patterns.
Tip: Anytime you look at any price chart on whatever time frame, always locate the
TimeRanges™, because they identify the structures.
You may be wondering, “What time interval charts should I use to determine the TimeRange™?”
Like all patterns used in this methodology, it is applicable to all time-interval charts.
Larger chart patterns dominate and control the smaller ones. The proper application of the
TimeRange™ theory determines which structures are valid and which should be thrown out.
How? Read on.

4. Redrawing Structures – getting knocked out
What should you do with the TimeRange™ of a structure? There’s only one thing: you com-
pare it to the TimeRanges™ of previous structures already established.
Why? To determine which structures are still valid.
Once the first-level supporting structure is confirmed, compare its TimeRange™ to that of the
Dominant.
If a supporting structure forms approximately 2.75 times (or more) wider than any previous-
ly Dominant Structures, you need to “redraw”. When this happens, the supporting structure
overwhelms and overtakes the narrower one and becomes the redrawn Dominant Structure.
Going forward, the previously dominant structure becomes invalid.
This rule applies to any types of structures in a series and not just between the Dominant and
first-level supporting structures. A wider TimeRange™ may knock out one or more existing
TimeRanges™ several patterns ago but leaves the preceding one intact.
The redrawing of Measured Moves due to a much wider TimeRange™ is one of the important
keys to our trading approach. This process filters out invalid structures by just comparing the widths.
The actual width of any particular TimeRange™ is not important in and of itself.
Redrawing is like cutting players to rearrange the team.
A structure within a structure can never have a TimeRange™ wider than that of the outer
structure. See the supporting 4-bar wide TimeRange™ within the 7-bar Measured Move in
figure 35. Also see the 3-bar wide TimeRange™ within the 11-bar one in figure 36.
In figure 39, the 5-bar wide TimeRange™ of the Red Dominant Measured Move is still valid
over the wider 8-bar TimeRange™ of supporting Double Top confirmed later. Even though
the supporting structure is wider, it’s not wide enough to knock out the 5-bar structure. The Red
Measured Move also gets the Higher-High-Lower-Low treatment but still remains dominant.

How does a wider TimeRange™ knock out existing ones? Why are knocked out structures
invalid? How do you “redraw” a Measured Move?
With most charting software, the narrower TimeRanges™ disappear, collapsing into a bar-to-
bar formation, while the structures with much wider TimeRanges™ remain visible when you
convert to a higher time-interval chart. This happens when a TimeRange™ gets approximately
2.75 times wider than a narrower one.
The redrawing of a Measured Move due to a 2.75 times wider TimeRange™ results in the re-
location of its point A.
After the redraw, point A of the wider Measured Move is farther back to the previous (now
invalid) Measured Move’s point A. Trend strength usually increases after a redraw due to the
shallower depth of the redrawn Measured Move’s point C, thanks to the relocation of its point A.

This redraw rule allows you to be on any time-interval chart and know which patterns are valid
and which to ignore without having to visually check for collapsed TimeRanges™.

Figure 40 shows many bullish Measured Moves and their TimeRanges™ on a 5 minute Emini
S&P chart. The Dominant and the first-level supporting Measured Moves start out with deep
retracements.
Figure 41 shows the same market on a 15 minute chart. Notice how trend strength gets stron-
ger when the redrawn Dominant Measured Move now has a shallow point C, resulting from
the formation of its 12-bar TimeRange™ (TR). It knocks out previous narrow TimeRanges™
to give a redrawn point A at the low.
The 12-bar TimeRange™ on the 5 minute chart now becomes 4 bars wide on the 15 minute
chart. The 10-bar TimeRange™ now becomes 3 bars wide. The once-deep Dominant and first-
level supporting Measured Moves (seen in figure 40) are now invalid as they disappear on the
15 minute chart (figure 41).
These two charts illustrate the concept of redrawing a Measured Move due to a much wider
TimeRange™.
An existing structure can never knock out any narrower supporting structures going forward.
Future structures can have narrower TimeRanges™ and still function as supporting structures.
In other words, apply the 2.75 times rule to structures to the left but not to the right.
The 4-bar wide TimeRange™ seen in figure 40 disappears in figure 41, but it still supports the
previous wider structures.
Figure 43 shows the same market as figure 42, but on a larger time- interval chart. Do you see
how the narrower Measured Moves have collapsed?

In figure 44, the Dominant Blue Measured Move (MM) remains valid as the Dominant
Structure because subsequent TimeRanges™ don’t knock it out. It gets the Higher-High-
Lower-Low treatment from the Green supporting Measured Move, but the width of its
TimeRange™ makes it still valid.

Figure 45 displays all the valid TimeRanges™ (TRs) leading up to a high. Note the 3-bar su-
pershallow Measured Move getting the Higher-High-Lower-Low treatment, weakening the
uptrend for the eventual drop.
Figure 46 shows the TimeRanges™ (TRs) of the two ugly bearish Double Tops formed after
the Higher-High-Lower-Low structure pivots down.
Once you‘ve identified all the remaining valid TimeRanges™, their associated structures will
be used for Fibonacci extensions.
Tip: Remember, the Dominant Structure doesn’t need to have the widest TimeRange™, but
it must not get knocked out by any supporting structures to remain dominant. The dominant
player never gets cut from the team.
You’ve now learned all the possible structures on a price chart. What to do next to arrive at a
great trade set-up? Answer: Apply a powerful mathematical phenomenon. It’s very simple, and
it is next.

Chapter 3:
Fibonacci Ratios
Have you ever tried trading with Fibonacci ratios and gotten confused? Not sure if they are
really accurate? You may be wondering why use them at all in your trading?
The Fibonacci ratios are found in all natural phenomena in the universe. There aren’t many
practical applications to these mysterious numbers except in trading. They really do work
shockingly well here. Why?
Here’s my personal theory: The Fibonacci ratios are found in our physical bodies, namely in our
bone structures. For example, if you compare the length of your shin bone to your thigh bone,
you’ll find a Fibonacci ratio. That leads me to believe these ratios are also found in our mental
bodies, as we are physical, mental, emotional, and spiritual beings.
But, how do you mathematically measure people’s emotions?
If you were to take a large group of people and watch them trade a market, they will show their
emotions through their trading. That’s what a market really is - a group of people expressing
their fear and greed! When you look at a price chart, you’re really seeing a graphic depiction of
the emotions of all the traders expressed as a group.

1. Fibonacci Retracements – standard stuff
You may have used Fibonacci retracements before. If so, bear with me. I’ll just review here.
In a Measured Move, the Fibonacci retracement at point C is the B-C move as a percentage
of the A-B range.
The three major Fibonacci retracement levels are 38.6%, 61.8%, and 78.6%. Among them, the
78.6% is the most reliable retracement for entering trades because it’s the deepest and most
extreme.
Many charting software packages have the Fibonacci drawing tool as a standard feature. They
may differ slightly as to where to click and drag. However, their calculations should give the
same results.
Usually, you click onto point A and drag to point B. The retracement percentages will be auto-
matically calculated.
The diagrams in figures 47 and 48 show the three major retracement levels.

Use Fibonacci ratios to evaluate point C of a confirmed Measured Move. A shallow 38.2% re-
tracement conveys a strong trend. A retracement of less than 38.2% is deemed supershallow,
indicating a very strong trend. See figure 49.
Figure 50 illustrates the 78% retest of the high that becomes a deep point C of the Dominant
Measured Move going down.
A retracement of 78% or more is considered very deep. The 61.8% level is the medium deep
level. Point C, at approximately 50%, would still show strong trending tendencies from my
experience.
Tip: Use retracements as guides only for determining a preliminary zone to enter or exit a
trade. The strongest is the 78% level.
Fibonacci retracements are overrated for determining a possible market reversal in advance.
Want to know what is underrated? You’ll see that next.

2. Fibonacci Extensions – a more powerful way
How are Fibonacci numbers used in SuperStructureTrading™ for entering trades? Answer:
Extensions. Use extensions on Measured Moves - even compromised ones with the Higher-
High-Lower-Low treatment. Extend Double Tops and Double Bottoms - even ugly ones.
Fibonacci extensions are more reliable for picking highs and lows than retracements.
Retracements don’t offer much stopping power on their own. Let’s say you were anticipating
the market to reverse at the 38% retracement level. How would you know it won’t trade to the
61.8% level instead, or even continue trading to the 78% level?
How price action trades to these retracement levels provides the clues. Again, think trend
strength, as price approaches these various retracement zones.
It’s like watching amateurs run a marathon. If you were to guess who would finish, it would be
hard to tell at the start. However, halfway into the race, you’d begin to see some runners huffing
and puffing while others are still maintaining good running form. How strong a runner com-
pletes part of the race determines how much farther he or she may eventually go.
The market will show either deceleration or acceleration with trend strength patterns when the
market approaches the reversal zones.
These reversal zones are controlled by extreme Fibonacci extensions.
Anytime a retracement exceeds 100%, it becomes an extension, technically speaking.
SuperStructureTrading™ uses only the 261.8% and the extreme 461.8% extensions for pick-
ing highs and lows.
A Fibonacci extension of a Measured Move is the difference between point B and point C
multiplied by the extension percentage and added to, or subtracted from, point C, depending
on trend direction.
Double check by doing long-hand calculations to make sure you’re using your charting soft-
ware to apply these ratios properly as outlined in this eBook.

Tip: Most charting services and software have the Fibonacci extensions under the “retrace-
ment” icon. Normally, you would click onto point B and drag to point C to extend.
See figure 51 for calculations of the 261.8% extension of a Measured Move.

Figure 52 shows two valid compromised Measured Moves extending to their 461.8 extensions
after both get the Higher-High-Lower-Low treatment.
Here’s how the extension of a Double Top is calculated: Take the difference between the sec-
ond high and low in between the highs, multiply by the extension percentage, and subtract
from the second high.
The extension of a Double Bottom is the difference between the second low and the high be-
tween the lows, multiplied by the extension percentage, added to the second low.
You’ll need to work with very few Fibonacci numbers using this trading approach. However,
since you’ll be using only the strongest Fibonacci ratios, you’ll get incredible reliability when
combined properly.
Tip: Never use any single Fibonacci number by itself to trade a high or low. However, if you
were to use on only one, it would be the extreme 461.8% extension - preferably coming from a
deep retracing Measured Move.
In SuperStructureTrading™, the extreme 461.8% Fibonacci extensions of supporting

structures play a critical role in providing accuracy and safety.
Now, it’s time to put everything together to start trading profitably.

Chapter 4:
SuperStructureTrading™
You now understand every structure as well as the application rules for the Fibonacci ratios.
Let’s put all the pieces together to arrive at a winning trade set-up.
The classic SuperStructure set-up is the main pattern for picking a high or low.
Starting with step 1…
1. Where to Start – look here first
As you turn on your computer and pull up a price chart, one question comes to mind…which
time-interval chart to analyze first? That all depends on what kind of trader you are.
If you are a swing or position trader, start with the weekly chart. If you are a day trader (like
I am), start with the daily chart. However, check the weekly chart every couple of months for
each market you trade.
What do you check for specifically for?
Identify the Dominant Structure, then the first-level and second-level supporting structures.

(This is Step 1). Apply the 2.75-times TimeRange™ rule for filtering. The relationship between
these three structures results in a preliminary SuperStructure set-up.
First identify the Dominant structure (usually a Measured Move).
If you only see overlapping bars on your starting chart, zoom in by going down progressively in
time intervals until a chart shows the Dominant Structure with a TimeRange™ of least a few
bars wide. I’ll use a Crude Oil trade I did recently to illustrate. See figure 53.
The general progression of charts to use is: weekly, daily, 60-minute, 30-minute, 15-minute,
5-minute, and 1-minute. However, there’s nothing unique or special about any of these time
intervals. Any other time charts are valid, including the 23-minute and 7-minute charts, for
example. They are simply various shades of gray.
Once you see the three structures on as big a time chart as possible, start your analysis. If the
Dominant Structure is a very deep retracing Measured Move (about two thirds or more), it’s
a high-quality pattern setting up. A deep Dominant Measured Move can “pull” the market
better than a shallow one, resulting in a large profit.

If the Dominant Structure confirms as a Measured Move with a shallow point C, that indicates
strong trend developing - making it riskier to trade against. It may not yield a move big enough
to justify the risk. Wider redrawn TimeRanges™ may also develop later to sustain the strong
trend further. Be careful when fighting a strong trend. It may run over you.
Next, identify the first-level supporting structure, which follows the Dominant. It can form
in a series or within the Dominant Structure. If it’s also a deep Measured Move supporting
a deep Dominant Measured Move, it’s the highest quality starting SuperStructure set-up for
picking highs and lows.
See figure 54. The supporting structure shown is not deep. However, it is a Measured-Move-
Within-A-Measured-Move formation, making it weaker, which is a good sign when trading
a market turn.
The second-level supporting structure (which is the third structure) follows the first-level
supporting structure. See figure 55.

This particular supporting Measured Move has a deeper point C than the preceding one in a
series. Having a deeper retracement structure is a convincing sign of weakening trend strength,
which is good pattern to have when looking to fade the market.
There may be an assortment of Measured Moves, Double Tops and Double Bottoms and
Higher-High-Lower-Low patterns among the first three structures. They may develop as
structures in a series or as structures within structures. Use the wider TimeRange™ rule to
filter out irrelevant structures and redraw if necessary.
Now that you’ve identified the first three main structures (Dominant, first-level and second-
level supporting structures), let’s calculate the reversal zone mathematically!

2. Fibonacci Combinations – unlocking consistent profits!
Have you ever wondered if some secret code exists for picking highs and lows in the market -
accurately and safely? Well, you’ve found it here, at last! (This is Step 2)
When price structures stretch out to their Fibonacci extensions, they give you SuperStructure
entry zones. The following are the three possible scenarios with their corresponding
Fibonacci combinations (combos):
• Combo (a): The Dominant, first-level, and second-level supporting structures all have
deep retracements. Average the 261.8%, 261.8% and 461.8% extensions, respectively.
If trend strength remains strong as the market approaches this zone, consider using
Combo (b) instead.
• Combo (b): One or more of the three main structures are shallow. Average the 261.8%,
461.8%, and 461.8% extensions, respectively. If trend strength remains strong as the
market approaches this zone, consider using Combo (c) instead.
*The most common scenario.
• Combo (c): All three main structures show shallow retracements. Average the 461.8%,
461.8%, and 461.8% extensions.
The above three combo averages are considered raw. As starting points, they indicate general
zones for a possible market reversal. You’ll later see how fine tuning will add tremendously to
their accuracy and reliability.
If the three extensions end up scattered far from one another, you can interchange the 261.8%
extension of one structure with a 461.8% of another to get them to cluster closer. In other
words, any two 461.8% extensions with a 261.8% extension in any combination will still work
for combo (b) for example.
*From my experience, the most common set-up is combo (b). That’s because there’s usually a
mixture of deep and shallow retracements among the first three structures.

Only a very weak trend (combo (a) scenario) will have all three displaying deep retracements,
suggesting a great pattern to trade against. However, you may need to back off and consider
entering the market at combo (b) or even combo (c) depending on what local trend strength
tells you.
Combo (c) scenario, with all shallow retracements, indicates a very strong trend. Avoid trading
against a series of shallow retracing Measured Moves, even when they reach extreme exten-
sions. Wait until the trend decelerates with a deeper retracement before fighting it. I’ll go into
details in the next section.
The highest quality SuperStructure setup must have a deep Dominant Measured Move, or a
deep supporting Measured Move following a Dominant Double Top or Double Bottom. The
pattern becomes even better with deep supporting Measured Moves.
Why insist on a deep Dominant point C? Because a large profit normally results when you
pick highs and lows with a deep Dominant Measured Move in the setup. I’ll elaborate later
in Section 6: Managing the trade.
To continue with the 30-minute Crude Oil example, see figure 56 for the preliminary raw aver-
age of combo (b) extensions.

When you’re focusing on combo (b), also calculate combo (c) as shown in figure 57. As price
action gets closer to the raw combo (b) average (in figure 56), additional supporting patterns
will appear to help you.
They fine tune your entry around combo (b) (figure 58), or nudge you to consider trading the
next zone at combo (c) instead, if residual trend strength remains.

3. Weakening Trend Strength – I see brake lights
When you drive, you hit the brakes before making a turn, right? That’s one way the market is
similar. Weakening trend patterns indicate a probable change in trend direction, especially near
a Fibonacci combo.
By comparing a Measured Move’s depth (and secondarily skewing) to that of the preceding
one in a series, you’ll know when the trend is:
• Strong and staying strong – shallow then shallow
• Strong and getting weaker – shallow then deep
• Weak and getting stronger – deep then shallow
• Weak and staying weak – deep then deep

Naturally, you want to see clues of weakening trend strength coming into a zone before enter-
ing to fade the move. It’s like watching for brake lights on a car to indicate the driver’s slowing
down before making a U-turn.
*Tip: When picking a high or low, a very powerful weakening trend strength pattern I al-
ways want to have is a “local” deep supporting Measured-Move-Within-A-Measured-Move…
stretched to its 261.8% or 461.8% extension.
The above tip is especially crucial if you’re picking a high or low when the Dominant Measured
Move has a shallow point C. In order to trade this scenario safely in the first place, wait until
you have at least a couple of deep retracing supporting MMs to neutralize trend strength. And
have their 461.8% extensions averaged in. Or avoid it altogether.
Tip: A Dominant Measured Move, having a point C, is more useful than a Dominant ugly
Double Top or Double Bottom. Its retracement depth reveals its “pulling power”. The deeper
the retracement, the stronger the pulling power to yield a larger profit.
SuperStructureTrading™ takes the holistic approach to a trade entry. Even when you day
trade, never isolate any particular intraday pattern while ignoring those that precede it on
higher time-interval charts.
Smaller patterns are part and parcel of the bigger structures. The directional bias of the larger
structures normally influences that of the smaller ones and must be taken into account. The
bigger chart patterns control and bully the smaller ones, generally speaking.
The market is said to be fractal. Tiny patterns will look and behave the same way as bigger ones.
However, the smaller the initial three structures, the smaller the trade in both magnitude and
duration.
Let’s continue with the Crude Oil trade. There’s still more confirmation needed before entering
to short. Zoom in to see what the market is telling you.
Figure 59 shows the 10-minute chart for further analysis of the patterns around combo (b).
Drilling down to smaller charts gives local clues for fine tuning the entry. Notice how the green
shallow Measured Move still indicates bullish energy - not a good sign for shorting yet.

Figure 60 above shows two back-to-back shallow Measured Moves on the 5-minute chart.
You definitely would need some sign of decreasing trend strength before entering to short.
Otherwise, it may reach combo (c) before dropping.

The market then shows weakening trend strength by forming a Higher-High-Lower-Low
pattern. This is an excellent indication that the remaining local bullish energy is dissipating,
which boosts your confidence in shorting. Price drops from combo (b), unable to trade up to
combo (c).
I’ll refer back to this Crude Oil trade when addressing where to take profits.
In day trading, I drill down to the 1-minute chart to check for local confirmation as price ac-
tion approaches a combo, but only after doing my analysis on the bigger charts. Remember, a
tiny 1-minute chart pattern may get run over by a bigger one in the opposite direction when
there’s conflict.
Tip: After the market trades aggressively through the strong portion with shallow retrace-
ments, always insist on having decelerating trend strength before entering to pick a high or low
at a Fibonacci combo.
Next, you’ll see how supporting 461.8% extensions provide valuable assistance.
4. Stacking on Supporting 461.8% Extensions – gang tackling
When you add more supporting extreme Fibonacci extensions to a raw combo, they tighten the
zone, and boost your confidence in trading a SuperStructure set-up.
First decide on which of the three raw Fibonacci combos to focus on. Have the next one cal-
culated and ready. Always look for validating clues as price approaches before entering the
market.
Along with weakening local trend patterns, additional supporting 461.8% extensions help fine
tune the entry further. They reinforce the zone when averaged in. As more of them are avail-
able, the confirmation gets stronger. They collaborate. It’s like gang tackling to stop the run.
Here’s the other exciting part. When many supporting 461.8% extensions are available, the
recalculated refined averages of two adjacent Fibonacci combos will end up closer to one another.

This mathematical phenomenon allows you to absorb any minor “heat” when managing the
trade.
In this example, even if the market slips to refined combo (c) after you’ve entered at combo (b),
the pain will be minimal because it will not be too far away.
Tip: Use a spreadsheet to average the numbers quickly since you may have many numbers.
Recalculate by replacing the Dominant 261.8% extension with its 461.8% extension when
shifting averages from combo (b) to combo (c).
See below for the “before” chart I sent real time to a student recently. He asked where he should
buy the Emini S&P. I averaged the extensions for combo (b). I also told him to calculate combo
(c) because he may need to absorb some heat.

Figure 61 shows the “after” chart of what really transpired. See how the 461.8% extension re-
placed the 261.8% extension to produce combo (c). The market never hit combo (c). The Emini
S&P jumped over 50 points a few days later, justifying the minor heat taken.
Note that I didn’t average in the 78% retracement. Retracements simply suggest the general zone.
Tip: When a refined combo unfolds into a 78% retracement zone, the set-up is ideal.
Even though the 461.8% extension is considered the most extreme, any individual struc-
ture can trade beyond its actual 461.8% calculation. However, by averaging a cluster of many
461.8% extensions, some will be “blown” while others will be “shortchanged”. The average ac-
commodates all the numbers simultaneously.
As you search for supporting 461.8% extensions, don’t abruptly skip too far down in time in-
terval. Instead, move progressively as follows: 60-minute, 15-minute, 5-minute, and finally the
1-minute charts.
Tip: A raw Fibonacci combo gets refined by local weakening trend patterns and/or many
supporting 461.8 extensions. You should always look for these confirmation signs before en-
tering the trade. (This is Step 3).

Now that you’ve done your calculations, it’s time to take action!
5. Entering the Trade – okay, I’m going in!
Basically, there are only two types of entries in directional trading: picking highs/lows and break-
outs. Buying or selling on pullback is really picking minor highs and lows. Most of your entries
will be of this type – also known as “fading the market”.
Use a limit order as your primary entry as price approaches your calculated zone. Add one or
two ticks to the average when buying a low, and subtract when selling a high to ensure you get
filled. There have been times when I placed a limit order at the exact mathematical Fibonacci
average… only to have price hit the very tick and not fill me!
I’ll use the Crude Oil example earlier in figure 60. Short the combo (b) zone with a limit order
one or two ticks above the high labeled red “H”. You’re entering to short the market at the
Higher High as the Higher-High-Lower-Low pattern gets made.
Tip: Always monitor trend strength as the supporting structures unfold, especially when the
market gets closer to your entry zone.
Do you feel uncomfortable with the primary entry? Did you miss getting filled by a tick or two?
In either situation, you can still enter the trade using a secondary entry.
Wait for the market to tip its hand by forming an initial small Dominant Measured Move in
the new direction as evidence of the expected turn. Then, enter on a pullback which is usually a
78% retest of the high or low. However, it may retest as a shallower retracement before taking
off in the new direction.
Later, I’ll discuss two other secondary entry techniques.
Once you’re in a trade what do you do?

6. Managing the Trade – babysitting
Always use protection! I mean use a stop loss, of course.
The sensible area to place a protective stop loss after you have entered around combo (b) would
be a few ticks beyond combo (c). If the Dominant is deep, price usually will reverse before
reaching this extreme zone. Again, observe local trend strength structures for clues as price
action approaches.
As an Army general once said, you need an exit strategy. Every SuperStructure trade has a
preliminary target zone for taking profits.
The depth of point C of the Dominant Measured Move acts as a guide. Your winning trade
will usually retrace the same depth on the A-D leg. This is why you want a deep Dominant
Measured Move! The deeper, the better. This is the “pulling power” I mentioned earlier.
For example, if the Dominant C is 75% deep, the size of the move off point D will be roughly
75% of the A-D move. If it’s only 38%, expect only a 38% move. Of course, this is just a general
guide to give you a rough estimate. See figure 62.

In reality, how the patterns extend as the trade unfolds will indicate how far it’ll eventually run.
Think extreme extensions again.
See figure 63 above for a close up view of why crude oil stops dropping. Note there are two
461.8% extensions averaging, with one of them coming off of a deep Measured Move and
stretched beyond its 461% calculation. The market is screaming “exit your short trade now!”
That’s the power of the extreme 461.8% extensions.
Once a true SuperStructure trade unfolds, another SuperStructure pattern will usually com-
plete in the opposite direction. In other words, your entry of a SuperStructure trade ends one
“cycle” and starts another.
You can use the Fibonacci combos extending the other way as the true target for taking profits.
However, be conservative when exiting. The ride may be bumpy near the end of a trade. If it
chops with deeps or Higher-High-Lower-Low patterns, those are definite signs to exit.
Normally, I don’t exit a trade at the opposite signal. Some of my students have. Some would
even reverse their position.

Many times the size of the actual winning move will exceed the preliminary target as suggested
by the depth of the Dominant Measured Move. If a shallow Dominant Measured Move forms
in the new direction, this may indicate a strong move in the making. Here, you’re in luck! Get
ready for some huge profits.
So there you have it! SuperStructureTrading™ tells you where to get in, where to place a stop
loss, and how much profit to expect.
I love day trading SuperStructure set-ups. You’ll know why in the next section.
7. Day Trading – hit and run
Why is SuperStructureTrading™ so powerful for day trading, and what’s so great about trad-
ing shorter term? Many confirming clues, that’s what!
The first three main structures need many bars to produce a viable pattern, as well as many
more bars to create additional supporting structures.
There are only 20 daily price bars available each month. As seen on the daily chart, only a few
good SuperStructure patterns set up every year for each market. By slicing the daily bars into
many intraday bars, you’ll see many beautiful patterns setting up more often.
Traders ask if I use the overnight Globex data or just the day-session charts when trading
shorter term. I use both although I lean more on the all-sessions when day trading the Emini
S&P, Gold, and Crude Oil futures. Even though gaps appear on the day-session charts, all the
same rules in this eBook apply.
Many times, one version will show more compelling patterns than the other. Looking at both the
day-session and the all-sessions charts yields two independent sets of patterns for comparison.
When you’re analyzing smaller time-interval structures, there may be tiny SuperStructures
setting up while the larger one is in the process of completing. In these situations, be aware of
any conflict.

The larger pattern may allow the tiny ones to play out in a limited capacity but eventually it takes
over. However, these patterns still yield a relatively decent profit from the perspective of day trad-
ing. Always be aware of the larger patterns by zooming out from time to time to get a broader view.
Tip: Average in any additional 461.8% extensions visible on the current chart first before drill-
ing down to smaller charts. As you progress lower, don’t immediately skip down too far in time
intervals as you search for supporting 461.8% extensions. Go down level by level.
Let’s say price action is closing in on a 261.8% zone on a 60-minute chart. You’re looking to
confirm the turn there and want evidence of it not slipping away to its 461.8% extension.
If there are no supporting structures’ 461.8% extensions visible on the current-level chart, go
down first to a 15-minute or 10-minute charts to check. If there’s a 461.8% extension found
only on a tiny 1-minute chart to help a 60-minute pattern, the reversal move may be limited.
8. Government Reports and News – shock?
How should you handle scheduled news announcements or government reports due out?
Should you wait on the sidelines until after the announcement before trading? Many large
traders usually sit on their hands as they wait to interpret what the reports say. The FED’s deci-
sion on interest rates and the monthly jobs reports affect the markets most.
Once an important news report hits the wires, the volume would spike dramatically, delivering
a shock to the market. However, this would normally cause an exaggerated move in your favor
if the set-up calls for a turn.
Sunny and Darrel from Las Vegas trade all the major FOREX pairs, trading all hours of the
day and night. They only trade good set-ups right before major scheduled news announcements
from around the globe, in all time zones.
They tell me they typically make over 100 pips per contract doing this. One day, they made over
$4,700 trading several major FOREX pairs. Before learning my trading methodology, they
have never heard of Fibonacci ratios before.
Now let’s look at some high-quality SuperStructure trades…

Chapter 5:
Case Studies
In each of the following three case studies, the Dominant Measured Move has a deep retrace-
ment at point C, which indicates strong pulling power- a sign of a high-quality set-up that you
want to see when buying a low or selling a high.
Combo (b) gets the initial focus as the probable zone for trading. Then, additional supporting
461.8% extensions and local patterns fine tune the set-up by adjusting and confirming the entry.
1. Comex Silver
The deep Dominant point C on the 30-minute Comex Silver chart (shown in figure 64a) also
has a deep first-level supporting Measured Move, indicating a big bounce to come.
Calculate both raw combo (b) and combo (c) as shown in figures 64a and 64b. Focus on combo
(b) first. As price unfolds downwards, additional supporting Measured Moves show up. Layer
them in by including their 461.8% extensions in the average to adjust and refine each of the
two raw combo averages.
Figures 65a and 65b show these two refined averages. Notice when combo (b) gets modified,
it’s closer to the eventual low. Refined combo (c) gets shifted higher with the same three ad-
ditional supporting 461.8% extensions averaged in.

You can see how this helps decrease the amount of risk by allowing you to use a smaller stop loss.

2. British Pound
In figure 66a, raw combo (b) gives the preliminary average that misses the actual low by a few
pips. The possibility of a further drop to combo (c) still exists. How far away is it? How much
heat would you be taking if you were to ride it down there? Figure 66b shows the extensions
for the combo (c) average.
Raw Combo (c) is 68 pips lower than raw combo (b). The risk is still somewhat big compared
to the size of the probable bounce.
Figures 67a and 67b show how three additional supporting structures lend their 461.8% exten-
sions to fine tune the two raw averages. Now, the difference between refined combos (b) and (c)
is only 34 pips - a reasonable amount of risk.
Even a conservative 50% bounce would yield over 120 pips! That’s a great reward-to-risk ratio.
It also offers a high probability of success thanks to the deep Dominant Measured Move and
the many deep supporting Measured Moves.

3. Emini Russell
The Emini Russell futures chart shown in figure 68 tests your knowledge of the TimeRanges™.
Can you indentify them? If you were to start with a time-interval chart any bigger than 10
minutes in this set-up, the TimeRanges™ of the Dominant and two supporting structures
would not be so easy to recognize.
Start with the 10-minute chart. Start from the bottom. Locate the Dominant Structure’s
TimeRange™ by finding a pivot high and go horizontally to the bar that eventually trades
above it. Use the 2.75-times-wider rule to eliminate smaller TimeRanges™.
Figure 69 shows the first three TimeRanges™ (TRs) properly identified. No future
TimeRanges™ knock out the narrowest of these three. See figure 70 for the three starting
Measured Moves.

.

Apply combo (b) and (c) extensions to the three Measured Moves as shown in figures 71 and
72 to get raw averages. See how they are 2.3 points apart.
Now, analyze the next few following structures (as shown in figure 73). Determine if focusing
on selling short around combo (b) makes sense after evaluating these supporting structures’
trend strength.
The fourth (somewhat shallow) Measured Move gets the green Higher-High-Lower-Low
(HHLL) treatment and with a very deep Lower Low (LL). Yet another Higher-High-Lower-
Low pattern in blue follows it, indicating trend weakness as the market continues up. Think
short.
Combo (b) zone now gets some validation as the probable top. Combo (c) may not likely get
reached.
Figure 74 shows five additional supporting 461.8% extensions ganging up on the zone. The
extensions of the weak structures are not used in this illustration.
Figure 75 shows the deep MM’s 461.8% extension (blue arrow) included in the average, just to
have handy. Notice the minor difference of only 7 ticks between these two averages.

Replace the Dominant 261.8% extension with its 461.8% extension to calculate combo (c)
average as shown in figure 76. All other 461.8% extensions stay unchanged. Notice how this
extreme refined average of all nine 461.8% extensions is only slightly higher!
As price action gets closer, smaller local patterns shine a light on which combo to side with.
Figure 77 shows local weakening trend strength unfolding into the refined combo (b) average,
a clear confirmation sign of a top.
Use a limit order to short around the average (shown in figure 74) in order to not miss enter-
ing the trade. Place the protective buy stop above refined combo (c) in figure 76. The deep
Dominant (suggesting a large profitable drop) justifies any possible minor heat that you may
need to absorb.
Notice how refined combo (c) is only 1.5 points higher, down from 2.3 points in the initial
raw form. Again, refinement, using additional 461.8% extensions and local confirming price
structures, reduces your risk.

The power of SuperStructureTrading™ is not just from having a simple mathematical formula
to produce accurate turning points in the market. It comes from employing local weakening
trend patterns for confirmation and the averaging of many 461.8% Fibonacci extensions to tighten
the zone.
Why is this so important? The refined combo, reinforced tightly by the averaging of many ex-
tensions, would change very little if you accidentally left off a supporting 461.8% extension, or
threw in one too many.
This approach to holding the zone steady by stacking on many Fibonacci extensions provides
you peace of mind when entering trades. It gives you accuracy and safety in trading tops and
bottoms.
Tip: Never leave out any of the first three structures’ Fibonacci extensions when averaging for
a pure SuperStructure set-up.

Chapter 6:
Partial Patterns
Wouldn’t it be great if you see a perfect set-up waiting for you every time you start trading? In re-
ality, many times a move will be in progress already, with the combo entry formed before the open.
What should you do now?
Either you look for a pure set-up in another market or trade with partial patterns.
A big SuperStructure set-up on a large chart can take a while to play out from cycle to cycle.
Fortunately, there are many tradable intermediate set-ups along the way, especially if you’re
looking at smaller time-interval charts. These partial patterns are usually secondary entries of
the bigger cycle in progress. I’ll introduce them here.
Tip: These may not be as reliable as pure SuperStructure patterns. However, they are still worth
trading with proper confirmation.
1. MM Strategy #1 – the slingshot
Remember the phrase “buy (or sell) on pullback”? MM Strategy #1 says “trade the pullback
when the trend is strong”.

This partial pattern sets up when a Dominant Measured Move has a shallow retracement at
point C, indicating trend strength. Then, a pullback occurs before its C-D leg stretches out to
equal A-B. Look to buy or sell on pullback.
Two assumptions are made in this scenario…
First, any Measured Move should have its C-D leg unfold to the same length as its A-B leg. If
a pullback comes before this happens, the market should eventually resume in the trend direc-
tion to fulfill this scenario.
Second, another Measured Move should develop following the strong-trending Dominant
one. Trade the second Measured Move as it makes its point C. Price should then trade to com-
plete the first assumption. See figure 78.
Tip: In figure 78, both diagrams’ points A would normally be true Fibonacci combo cycle
entries.

The zone to trade is the average of: the 38% retracement of the A-D range of the Dominant
Measured Move, and the 78% retracement of its C-D range. Lean on the 78% retracement
more, since it is the extreme retracement.
See figures 79 and 80 for examples.

To increase the probability of success, this pullback to the 38% and the 78% average should be
analyzed as a series of extensions unfolding into it. Look to the smaller time-interval charts
for decreasing energy with deep retracements and left skewing to increase the odds of having
a turn there.
Conservative target for profit taking should be at new highs for longs and new lows for shorts.
This generally is around point D of the second Measured Move where C-D = A-B, depending
on how it extends there.
The aggressive play would be to hold the position through the formation of yet another
Measured Move (I call this “riding out a pivot”) and hoping for its point C to be shallow.
If the C-D leg of the second Measured Move (first level supporting Measured Move) keeps
trading bar-to-bar without forming a pivot, then exit at Fibonacci extensions. Adjust stop loss
to break-even after the second Measured Move forms.
Although we rely on the deep 78% retracement to hold, price action may slip into a Higher-
High-Lower-Low pattern before turning around.
(See figures 30 and 32, shown again below.)

Therefore, the protective stop should be several ticks below the shallow Dominant’s point C in
a bullish scenario and above point C in a bearish scenario. If this happens, manage the trade
tightly and look to exit conservatively as trend energy is now compromised.
The MM Strategy #1 pattern may also appear in the middle of strong moves. The market may
alternate between forming deep and shallow Measured Moves as it unfolds. These set-ups are
somewhat riskier as Higher-High-Lower-Low patterns may develop.
Tip: Always be aware of 461.8% extensions from larger structures when entering in the middle
of a trend. Zoom out to check.
What if the new trend starts off weak with a deep MM? It can still accelerate if the following
Measured Move is much shallower. See next section.
2. MM Strategy #2 – coming on strong
Do you trade breakouts? Do you know how to avoid getting caught in a false breakout? Answer:
Be in a strong trend! This partial pattern gets you in the market only when there’re clues show-
ing strong momentum.

When a very shallow supporting structure follows a deep Dominant Measured Move, the mar-
ket is indicating an increase in trend strength. It’s coming on strong! If the Dominant is also
shallow, so much the better.
MM Strategy #2 calls for trading the breakout at point B of the very shallow supporting
Measured Move at its confirmation. Usually, the Dominant and supporting Measured Moves
will be in a series, but they can also be a Measured-Move-Within-A-Measured-Move pattern.
Use a stop order 1 tick beyond point B to get filled as price trades through it. See figure 81.
Breakouts may be riskier than picking highs and lows. There needs to be lots of trend strength
remaining at the breakout point of entry. Otherwise, it may form an ugly Double Top or
Double Bottom resulting in a false breakout.

Having a very shallow and right-skewing point C on the supporting Measured Move along
with a shallow Dominant Measured Move increases the likelihood of a successful follow
through of the breakout. See figures 82 and 83.
The preliminary zone to take profits conservatively is at the average of the 261.8% extensions.
Always manage a trade by observing developing patterns as it unfolds in your favor. As you ride
out a pivot, continue to monitor trend strength by analyzing the new point C.
Place a protective stop a few ticks below the shallow point C in a bullish situation and above
the shallow point C in a bearish one. Obviously, having a supershallow retracement (that’s less
than 38%) at point C on the breakout Measured Move would increase the chance of a strong
follow through. The size of the risk is also reduced as you use a smaller stop loss.
However, if a retracement is way too shallow on a Measured Move, around 20% or less, it may
form a Higher-High-Lower-Low pattern in an attempt to achieve the 38% retracement. A
very tiny retracement of this nature may be only “noise” and the market may need to “scratch
the 38% itch” before resuming the trend. But if it does not, a super strong trend may be in
progress.
Just like MM Strategy #1, the MM Strategy #2 pattern does not always need to appear at a
new high or low. A market may increase trend strength in the middle of a move after a tem-
porary slowdown.
Always be aware of the “cycle” ending prematurely. I’m always looking to exit conservatively
around combo (a) or near 261.8% extensions. Sometimes, the market may shortchange the
combo average and you’ll end up giving back most of your open profits if you insist on getting
the entire cycle move. Again, watch local trend strength.
3. Countertrend trading – grabbing some
Can you pick highs and lows before the market reaches a full blown Fibonacci combo? Yes!
Always remember the gist of this eBook…trend strength (or weakness).

As you wait for a cycle to complete, you can grab some profits trading the intermediate patterns
when the cycle is large enough. You’ll see lots of these set-ups on any intraday chart.
Unlike pure SuperStructures, these set-ups can be tricky. You may not recognize them as easily.
Yet, they still work well with enough local confirmation.
These are considered countertrend trades because the Fibonacci combos have not been reached
yet, which makes them riskier trades. Insist on having deep local Measured Moves and 461.8%
extensions from a Measured-Move-Within-A-Measured-Move, especially on smaller charts.
That’s what makes these partial countertrend patterns work - local trend weakness and local
extreme extensions.
These partial patterns may not always play out to a Fibonacci combo cycle after they reverse,
but they sometimes do. They normally yield smaller moves. Monitor trend strength when man-
aging these types of trades. Grab profits conservatively.
Trading against a deep Dominant Measured Move on the larger unfinished pattern helps, of
course. Look for a sensible entry at a baby 461.8% extension or wait for a local secondary MM
Strategy #1 or MM Strategy #2 set-up.
It’s always safest to have at least one supporting 461.8% extension when trading these inter-
mediate countertrend set-ups. See the 461.8% extension of a deep Measured Move as your
security blanket! Remember: the more of them there are to average, the more reinforcement
the reversal zone gets, the safer the set-up.
See figure 84 for the Euro/Dollar FOREX pair. The three main structures have been identified
by locating their TimeRanges™.

With the Dominant not being very deep, you naturally want the market to reach combo (b)
before shorting any highs. However, analyze the market at each of the three Measured Moves’
individual 261.8% extensions.
Individually, any one of them (as seen in figure 85) may cause a reaction, which is why the
261.8% extension is one of the Fibonacci ratios used in your combos.

After witnessing a minor drop at the lower 261.8% level, could there also be another minor
drop near the middle 261.8% extension around 1.2609?
But there’s always this dilemma - how can you tell if the market would react to this 261.8%
extension and not continue trading higher to the 461.8% extension instead?
Are there any good clues to suggest a possible drop from this middle 261.8% level?
Figure 86 shows one such clue: a deep local Measured Move having its extreme 461.8% ex-
tending near the middle 261.8% extension. It also happens to be the next-level supporting
structure. Lean on this extreme extension if you consider shorting.
As price extends there “kicking and screaming” (with yet another deep supporting Measured
Move) the market will be exhausted and probably wants to drop.
However, this zone is not even at combo (a) yet, let alone combo (b) from the perspective of
the three main structures from the low. You definitely need additional local confirmation before
shorting.

Now focus in on the local patterns shown in the boxed area of figure 87 for more local clues.
In figure 88, notice how the two local Dominant Measured Moves show deep retracements. If
these smaller structures were to go all out to their own 461.8% extensions, you can safely sell
short.
The bigger 261.8% extension and the 461.8% extension from the bigger structures are suggest-
ing a possible reaction around this zone, as mentioned earlier. They’re “holding the space” for a
potential drop here.
In this particular situation, these smaller local MMs do not extend to their 461.8% extensions
(green arrows). Therefore, you don’t get filled trying to pick the top using them. However, think-
ing short makes sense as you see a local deep Measured-Move-Within-A-Measured-Move.
You may want to short a local 261.8% extension instead (not shown) and take any minor heat
to the 461.8% extension if the size of the potential drop justifies it. The difference between the
261.8% and the 461.8% extensions will not be too far apart given the small size of these local
structures.

The uptrend continues to experience local weakness as more deep retracements form. Look for
a safe secondary short entry.

After some choppiness, a bearish MM Strategy #2 appears. See figure 89. How far will it drop
to? Where to take profits? Ride out pivots and monitor trend strength for clues as it drops in
your favor.
As bearish patterns continue with more shallow Measured Moves, price action approaches a
pure SuperStructure buy set-up thanks to the Dominant Measured Move having a deep re-
tracement off the top.
Figure 90 shows the combo (b) buy in sight but without deeper local Measured Moves appear-
ing as it approaches, no brake lights are seen yet. Shift lower to combo (c) for the buy instead.
Exit your short here if you have not done so yet.
The combo (c) buy zone gets reached with two deep Measured Moves. There are six 461.8%
extensions averaging. See figure 91. This indicates the end of the drop! Now think long.
Note how the refined averages of combo (b) and (c) are only 23 pips apart. You can use the
same amount, 23 pips, for the size of the stop loss when you buy to go long at refined combo (c).
Price quickly rallies over 200 pips, popping to new highs. You can thank the deep Dominant
and first-level supporting Measured Moves for that.

Wow! A partial countertrend sell pattern drops the market to a true SuperStructure buy set-up
at refined combo (c). The eventual move reaches new highs, rallying to reach the big combo as
a target much higher.
You can make money coming and going trading this way!

Conclusion
Congratulations! You’re now armed with a powerful trading methodology to produce consis-
tent winning trades. If you follow the rules as outlined in this eBook, trading will feed you for
life.
The power of SuperStructureTrading™ to pick highs and lows stems from the following 3
proven steps:
1. Start with a high quality set-up – a deep Dominant Measured Move for a sizable po-
tential profit.
2. Apply Fibonacci combinations – usually combo (b), while looking to accommodate

combo (c) if needed.
3. Use local confirmation – Employ additional supporting structures’ 461.8% extensions

and/or local deceleration of trend strength to fine tune the entry for accuracy and safety.
Use the following on any Measured Move to monitor trend strength:
• Depth of point C – main trend strength indicator.
• Skewing of point C – secondary trend strength indicator.
• Width of the TimeRange™ – to check if it’s still useable.

The four trading set-ups in descending order of quality are:
1. Completed cycle: Pure SuperStructureTrading™ set-up
2. Partial pattern: MM Strategy #1
3. Partial pattern: MM Strategy #2
4. Intermediate counter trend set-ups
Once you apply all the tools in this eBook in the manner outlined, you will be amazed at how
you can consistently call market turns in advance with astounding accuracy and minimal risk.
In fact, you may be reading the market like a roadmap in no time!

Continuing Education
You’ll probably need to see many set-ups playing out in different markets to gain confidence
in using SuperStructureTrading™. Learn the basics first, then develop and hone your skills
through practice by trading a simulated account.
I highly recommend attending the regularly scheduled webinars I personally hold three times
a week. Many times, I outline actual SuperStructure trades setting up currently in various
markets.
You’ll learn at your own pace when you attend. They’ve helped many students turn their trading
around when they gain confidence from seeing these patterns work over and over again.
For those who want to learn faster, click here to sign up for the ongoing webinar trading
classes: www.superstructuretrading.com/webinars.
Please don’t hesitate to contact me if you have questions or comments. You can email me at
ken@superstructuretrading.com.
Great trading to you,
Ken

SuperStructureTrading ™
How to Pick Highs and Lows

Accurately, Safely, and Profitably
Using 3 Proven Steps
560 W. Main Street Suite C812

Alhambra, CA 91801

Super Structure Trading

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SuperStructureTrading ™

How to Pick Highs and Lows

Trademarks and Service Marks

SuperStructureTrading ™ • Ken W. Chow

Chapter 1: Trend Strength Structures. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7

Chapter 2: Structures Working Together . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19

Chapter 3: Fibonacci Ratios. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41

SuperStructureTrading ™ • Ken W. Chow

Chapter 5: Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66

Chapter 6: Partial Patterns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79

SuperStructureTrading ™ • Ken W. Chow

Do you want simplicity and clarity in your trading?

You’re about to discover a powerful trading methodology I developed called

SuperStructureTrading ™ • Ken W. Chow

Now, let’s get started.

SuperStructureTrading ™ • Ken W. Chow

1. The Measured Move – the basic foundation

The foundation of SuperStructureTrading™ is the Measured Move, which is a basic zigzag.

SuperStructureTrading ™ • Ken W. Chow

a. The Retracement of Point C – counter forces

SuperStructureTrading ™ • Ken W. Chow

The location of point C of the Measured Move defines trend strength in

SuperStructureTrading ™ • Ken W. Chow

Figures 5 and 6 illustrate trend strength in a bearish market.

Tip: Trend strength plays a major role in SuperStructureTrading™.

SuperStructureTrading ™ • Ken W. Chow

b. The Skewing of Point C – how’s it leaning?

Tip: Use skewing as the secondary way of addressing trend strength.

Figures 7 to 10 illustrate point C skewing in both bullish and bearish scenarios.

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

2. Double Top/Double Bottom – good, even when ugly

What patterns qualify as a Double Top or Double Bottom?

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

1. Dominant and Supporting Structures – teamwork

Pay attention to the Dominant Structure in SuperStructureTrading™. It generally controls

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

See figures 19 and 20.

Tip: Think of the Dominant Structure as the team leader.

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

Usually, a Measured-Move-Within-A-Measured-Move pattern would create left skewing of

SuperStructureTrading ™ • Ken W. Chow

2. Higher-High-Lower-Low – make up your mind

SuperStructureTrading ™ • Ken W. Chow

The Higher-High-Lower-Low pattern indicates decreasing trend strength as it chops around

Tip: The Higher-High-Lower-Low pattern is also known as a “broadening” top or bottom.

SuperStructureTrading ™ • Ken W. Chow

First of all, what is a TimeRange™? Secondly, how do you use it?

Whenever any Measured Move, Double Top/Double Bottom, or Higher-High-Lower-

See figures 35 and 36 for the TimeRanges™ of Measured Moves.

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

Why? To determine which structures are still valid.

Redrawing is like cutting players to rearrange the team.

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow

SuperStructureTrading ™ • Ken W. Chow