Actio et Reactio is the name I have used over the past nine years to document my stock and futures trading commentaries. The name is Latin and derives from Newton's third law of motion, for every action there is a reaction. The idea transfers well to not only the dynamics of the trade, ie, buying and selling, but also the inner dialog of the trader.
Even though the templates I provide are compatible only with Ensign Software, the methods I've used can be implemented with a variety of trading software programs. I hope the discussions will be of use to those learning the techniques presented.
Alan Kelland's Box Trading
The famous "$1,000,000 Manual" that uses an intraday "box" for trading opportunities, protection, and targets. Includes user templates. For years traders at "the Coffee House" enjoyed daily lessons, repartee, and trading camaraderie with Alan. Light hearted in tone, "da Manual" compiles these ad hoc conversations into the deadly serious trading methodology he has used for years.
|Alan Robinson's X-Swing
Among the many clever approaches to "trapping" price, Alan's X-Swing captures in a highly visual way trend change potential well before the event. Using multi-time averages and a triple screen approach, the trader can anticipate high probability setups across any time fram. Includes an Ensign template.
Whether you call them median lines, pitchforks, or Andrews trendlines, the core of the method is a bisect of time and space, action-reaction. This summary is more background than lesson and to that end, has been completely revamped with an extended discussion of Roger Babson and more charts.
|Mark Fisher's ACD Method
An interpretation of Mark Fisher's opening range approach on a single instrument, versus Fisher's multi-market method, yet incorporates his Average True Range, the opening balance period, and range multiplier ideas.
|Gaps: Types, Strategies, Examples
Japanese candle traders call gaps "windows" as the sudden jump in price leaves an opening. Gaps reflect a collective quickening where demand outpaces supply in that time frame. Wyckoff's principles - also based on actio-et-reactio - reveal future price potential that the trader can exploit.
|Opening Range Methods
I present a condensed summary of some popular opening range methods used by traders. Also called "Initial Balance", the concept exploited is that trading decisions are made after the close of the prior day and accumulate overnight as "On Open" orders. The trader then creates setups using, among other variables, price ranges from the chaotic first minutes up to one hour of trading. See also, Initial Balance, a Quick Way to Mark It.
| Chick Goslin's SMR & IFT Method:
My implementation of the popular "SMR & IFT" approach based on Chick's on-line materials. His book elaborates a number of strategies, which I do not discuss. However, his core ideas are straightforward and, according to Chick's analysis, have shown success in the daily charting time frame.