ELLIOTT WAVE PATTERN

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Dynamic Trader Trading Course Dynamic Price Analysis Section Table of Contents

End-of-Wave Price Projection Templates Custom Price Projections Price Rhythm Zones

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Dynamic Price Analysis

End-Of-Wave (EOW) Price Projections The EOW (End-Of-Wave) price projection routine in Dynamic Trader allows the trader to quickly make all of the typical price projections for a given Elliott wave position. By using the EOW routine, the user does not have to make each individual projection, one at a time with the Fib-P routine. The EOW routine requires a swing file on the chart. It is quick and easy to build and edit a swing file. When a projection is made, the EOW routine makes assumptions as to the wave position of the prior pivots. If the EOW-3 projection is made from a swing low, the EOW routine assumes the most recent swing down is a W.2 and the swing before a W.1. It will use these two swings to make the projections. If necessary, edit the swings so they have the form you assume is the most probable wave structure. The EOW price projection routine assumes you have an opinion of the probable Elliott wave position of the market. This may not always be the case. When it is, the EOW routine often allows you to make all of the price projections you want more quickly than marking them off one at a time on the chart from the Fib-P projections. Another advantage of using the EOW projections is each projection on the chart is labeled according to the wave it is projecting. The chart below assumes we believe Oct. 7 is a W.2 low. I usually choose the short-list projections from the EOW menu. Right clicking on the EOW label on the Fib-P menu chooses what projections will be used for each swing comparison. The projections for EOW-3 were made from the Oct. 7 low. The projections included where W.3 would equal 100% W.1, 162% W.1 and 262% W.2.

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The first signal that wheat may be in a W.3 is if wheat rallies above where W.3 = 100% APP W.1. Wheat did this in one wide range up-day signaling a W.3 was probably being made. Two price projections fell within less than one cent of each other – W.3 = 162% APP W.1 and 262% APP W.4. This zone would be a typical price target for W.3. If wheat reached this zone, the trader should be alert for signals wheat is making a minor W.3 high. Wave-3 made a top just above this price zone as shown in the chart below. The next price analysis objective is to project the high probability target for W.4. The short-list EOW-4 price projections include where W.4 = 38.2% and 50% Ret. W.3, 38.2%, 50% and 61.8% Ret. W.1-3 and 100% APP of W.1. Those projections are shown on the chart below.

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Dynamic Price Analysis

Wave-4 should not decline below the high of W.3 so we should eliminate the 61.8% retracement of W.1-3 (374.0) from consideration. Four projections are grouped fairly close together. See the chart above. The ideal price zone to complete a W.4 low would be 378.6-375.6. On Oct. 20, wheat made the W.4 low at 376.0, right within the ideal price zone. Our next objective is to project the high probability price target for W.5. The short-list for the EOW-5 price projections include the three typical targets for a W.5 – W.5 = 100% APP W.1, 61.8% APP W.1-3 and 162% Ret. W.4. The projection is made from the W.4 pivot low and the EOW-5 projections are shown on the chart below. W.1 was relatively short and the W.5 = 100% APP W.1 projection falls just above the W.3 high. The other two projections are grouped very close together at 389.5-390.4. Wheat trades in quarters and could not trade at 389.5, but Dynamic Trader will make the projections in eighths because the data vendor supplies the data in 1/8ths. Years ago grains traded in eighths. The ideal price target for W.5 would be at 389.4-390.4. Wheat made a widerange reversal day with a high at 391.4, just one cent above the ideal W.5 price projection zone.

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The Steps To Make An EOW Price Projection 1. Bring up a swing file on the chart or build a file just for the current purpose. If necessary, edit the file so the swing pivot highs and lows will be where you want them. 2. Right click on the EOW label in the Fib P menu. Choose which ratios you want to use for each wave comparison. In most cases, begin with the short-list ratios. 3. Click on the pivot low or high on the chart where you want the projections made from. Click again on the chart and the projections will be made and labeled on the chart. 4. The high probability support or resistance zones will be where several projections are grouped relatively close together. Every market, every time will not complete the wave at the exact price zone, but these price zones provide you with high probability targets and a frame work from where to develop trading strategies and make trading decisions.

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Dynamic Price Analysis

EOW-C Price Projections The chart of bonds below shows the typical W.c price projections. Once bonds rallied above the W.a high, the W.c price projections may be made. Two sets of projections are made. 1. The retracements of the Jan. 12-Jan. 26 decline that is labeled Wave-A on the chart below. The EOW-2 label was chosen in the EOW routine. The EOW-2 only uses price retracements. It may be used in any circumstance when only retracements are to be made. While I have labeled the Jan. 6 low as a wave-A, it may be a wave1. It makes no difference what wave it is for our purposes. We simply want to make the price retracement projections from the Jan. 26 low so we choose the EOW-2 projections. 2. EOW-C projections are made from the Feb. 6 low. The short-list projections are where W.C = 100% and 162% APP W.A and 127% and 162% Ret. W.B.

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The 50% retracement falls below the high of W.A, so it is ignored. The 162% APP (W.C = 162% APP W.A) is far above the other projections, so it is also ignored for now. The 100% APP (W.C = 100% W.A) and 127% Ret. (W.C = 127% W.B) are only a few ticks apart and not far above the 61.8% retracement. The most typical price relationship between waves A and C is 100%. That is always the first place I look to see if other price projections fall nearby, especially one of the Fib retracements. The most probable price zone for the W.c high should fall at 122.15-123.05 which includes the 61.8% retracement and where W.c = 100% APP W.1 and 127% Ret. W.b. How did it turn out?

Wave-c made a reversal day high right within the ideal price zone for the W.c high. It would be nice if all of the EOW price projections clustered within just a few ticks of each other. While this sometimes happens, more than likely the zone will be relative broad. In the bond case above, the ideal price zone for the W.c high was a 21-tick range (122.15-123.05). If the market rallies into a projected target zone, look for reversal signals and be alert to the smaller degree pattern and time position.

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Dynamic Price Analysis

Combining Multiple Degrees of Price Projections The highest probability price targets are where the smaller degree price projections fall within the price target zone of the larger degree price projections. If the smaller degree price pattern is evident, we can make the price projections from the smaller degree to see if we can narrow the price range target of the larger degree projection. The bond chart below is a close-up of the same period as the charts above where we were projecting the price target for W.c. The swing file has been edited to show the smaller degree swings that make up W.c. A W.c should usually make a five-wave pattern. This appeared to be the case with bonds from the Feb. 6 low (W.b).

When a swing chart is built or edited in Dynamic Trader, each swing must be a minimum of one bar. You cannot edit a swing file to make one bar both a high and low. In some cases with very minor degree swings, one bar may be both a wave high and low when using daily data. Viewing only daily data, this was probably the case for the minor swings in bonds. The W.1 high bar was probably also the W.2 low bar. The same for W.3 and W.4. Why do we suspect this? The W.1 bar

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opened up, continued higher and closed below the open. The intraday data may show the highs and lows in a slightly different position, but if we are only using daily data and want to use the EOW routine to make projections, we have to edit the swing file as best as possible with the bars we have. We have already made the W.c projections from the Feb. 6 low (W.b) as described in the commentary and charts in the previous section. The 61.8% retracement and W.c projections are shown on the chart above. Also shown are the W.5:c projections made from the W.4:c low. These projections include where W.5 = 100% APP W.1, 61.8% APP W.1-3 and 162% W.4. Wave-1:c was very short and the 100% APP (W.5=100% W.1) falls below the 61.8% retracement and the W.3 high. This projection is ignored. The other two minor projections cluster very close together just below where W.c = 127% Ret. W.b. These two minor projections for W.5:c fall right within the larger degree projected zone for W.c. The W.5:c high was made at 122.26, just one tick below the minor degree projections at 122.27-122.29! Do you see how the smaller degree projections help to focus in on the highest probability price zone to complete the larger degree pattern? If we have intraday data available, we can better focus in on the wave structure. The chart below is 30-minute data for bonds for the period of W.c. With the daily data, we considered Feb. 6 as the W.b low. The 30-minute data shows just one wide range bar that was the first bar of the day of Feb. 6 which spiked down to make the new low. An examination of the 5-minute data, the shortest period I had for intraday data for bonds, showed that it was only the 5-minute bar that also traded this low. More than likely there was just one or two trades that were made at the lower price level before the market spiked back up and completed the decline on Feb. 9 just above the low of Feb. 6. I have begun the intraday wave count from the Feb. 9 low instead of the Feb. 6 low as Feb. 9 obviously appears to be the real beginning of the W.c advance. Since the Feb. 9 low is only a few ticks above the Feb. 6 low, there will not be a great deal of difference in the price projections. This example illustrates how the intraday data may provide more accurate minor degree projections than if we only have daily data available.

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Dynamic Price Analysis

The EOW-5 projections are made from the W.4 low made on the afternoon of Feb. 12 on the 15:00 bar (3 PM, EST). Wave-1 was very short in price and the 100% APP (W.5 = 100% W.1) projection falls below the W.3 high. This projection is ignored. The projections where W.5 = 61.8% APP W.1-3 (122.22) and 162% Ret. W.4 (122.31) provide the high probability target zone for W.5. The W.5 high was made at 122.26, right within this zone? The daily data and swing chart shown previously showed this same projection at 122.27-122.29, which was slightly above the beginning of the 122.22-122.31 projections made with the intraday data. Why? The minor swing highs and lows are slightly different on the daily data chart than on the 30-minute data chart. Are you ready to take the price projections even one degree smaller? The chart below is 5-minute data for just the five trading day period (Feb. 12-18) of W.5:5:c. Wave-5 price projections were made from the W.4 low made on Feb. 17 on the 14:05 bar. Two of the price projections at 123.04 and 123.08 fall above the price zone projected for the larger degree W.5:c shown on the 30-minute data on the chart above. They should probably be ignored. Our purpose of projecting from the smaller degree waves is to see if the smaller degree projections fall within the price zone of the larger degree.

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One projection, where W.5 = 162% Ret. W.4 at 122.26, falls within the price zone of the next larger degree at 122.22-122.31. The W.5:5 high was made at 122.26, the exact 162% Ret. projection! Bonds confirmed the final top was probably complete on the decline below the minor degree W.4 low on the 5-minute data.

Waves Within Waves Within Waves The EOW routine was used to make three degrees of price projections. The first price target was projected for W.c:B. Retracements of W.A and projections for EOW-C were used for a target zone of 122.15-123.05. Then the smaller degree projections using the daily data were made to project the target for W.5:c:B. These smaller degree projections added the 122.27-122.29 target that fell within the larger degree projection of 122.15-123.05. If we had intraday data available, we made a 30-minute chart and again made the W.5:c projections. The intraday data allowed us to more accurately identify the wave highs and lows than we were able to do on the daily data chart. The new target for W.5:c on the 30-minute data fell at 122.22-122.31, again right within the

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Dynamic Price Analysis

122.15-123.05, W.c target zone. We then went one degree smaller to project the target for W.5:5:c. Only one projection fell within the larger degree target at 122.26. The three degrees of price projections gave us an ideal price target for W.c at 122.22-122.31. This was the price zone that included all three degrees of projections. The high tick was made at 122.26, right within the price zone! Intraday data is not necessary to make two or more degrees of price projections, but it can be helpful. If you have intraday data, use it when appropriate to fine-tune the projections. There is often a lot of “noise” with intraday data and you run the risk of loosing track of the larger degree perspective which is evident on the daily charts. If a useful and obvious pattern is not developing on the intraday data, do not try to force a pattern just for the sake of making smaller degree price projections. I collect tick data at the end of the day from my data service and do all of my analysis outside of trading hours. I suggest you do the same. You would be surprised (maybe not!) how your idea of the market position can change as you watch the market real-time. If you have real-time or delayed data on your monitor during the day, be careful and don’t loose track of the larger degree position.

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EOW Summary 1. In many cases, the EOW price projection routine makes it quicker and easier to make multiple price projections than marking them off one at a time from the Fib-P menu. 2. The EOW routine assumes you have an opinion of the Elliott wave position of the market. If you don’t have an opinion of the Elliott wave position and only want to make a few price projections, it may be quicker and easier to just mark them off one at a time from the Fib-P menu. 3. The EOW routines require a swing chart. If you already have swing charts saved for that data file, bring up the swing chart that is the closes degree to the one you are going to make projections for. Edit the swing chart if necessary so the pivot highs and lows are marked off that you want to project from. When you close the scenario or unload the swing file, you will be asked if you want to save the changes to the swing file. If you made temporary changes just to make these price projections, choose no, and the swing file will remain the same. 4. When the projections have been made, look for those projections that seem to fit within the structure of the market. In most cases, ignore the “outliers.” The highest probability price targets will be where projections are clustered together. 5. Never expect the market to reach or make a reversal precisely at the ideal cluster of projections. Consider the projected range as a high probability price target for end of the wave projected. Always consider the price target zone within the context of the other market factors such as time and pattern. 6. If a market substantially exceeds a projected price zone, reconsider the wave structure and make projections for the next higher or lower zone by considering a different wave structure or using more than the shortlist of ratios.

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Dynamic Price Analysis

Custom Price Projections The Custom Price Projection (CPP) report is another way to make price projections and display them on the chart. How is the Custom Price Projection report different from the Fib-P routine and the EOW routine? The Custom Price Projection report uses the same menu as the Fib-P routine that includes the EOW projections. The way the price projections are made with the CPP is exactly the same as with the other two routines. The CPP has several added features that make it advantageous to use at times. Unique Features of the Custom Price Projection Report 1. The CPP places a horizontal bar against the price scale for each projection. If individual projections fall near each other, the height and the width of the bar increases. The larger bars represent the greatest cluster of price projections. The CPP provides a visual representation of the price clusters on the chart. 2. The CPP may be saved. If the CPP is saved, the user may choose at any time whether he or she wants to display it on the chart. 3. A detail table of each individual projection represented by any CPP bar may be brought up by clicking on the CPP bar. 4. Price projections may be added to any saved CPP report at any time. This is particularly useful as a market progresses and the user wants to add the most recent minor degree projections to a saved CPP of larger degree projections. Let’s take a look at the bond example we just examined in the EOW section above and see how the CPP report may be used. The bond chart below shows the same period when the projections for Wave-C were made in the EOW section above. This time the projections were made from the Custom Price Projection report. As you can see, the menu where the projections are chosen is the same as the Fib-P menu. EOW-2 projections were made from the Jan. 26 low (labeled W.A) and EOWC projections were made from the Feb. 6 low (labeled W.b). The horizontal lines represent each projection. The bars against the price scale represent where the projections are made. The bar at 123.00 is larger than the other bars because two projections fell close together.

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The CPP bar-height scale may be adjusted to make the width of each individual bar taller or shorter. In the chart above, the scale is set at .10. The height of each individual projected bar will be the projected price plus and minus 1/10 of 1%. If the projected price is 122.00, the CPP bar will be 122.00 plus and minus 1/10 of 1% or 121.28-122.04. 122.00 x .001 = .122. We must translate to 32nds. 32 x .122 = 4 (3.9). Add and subtract 4/32nds from 122.00 for a range of 121.28122.04. You may want to adjust the bar-height scale while the CPP is being made to make the projections overlap with one another and create a larger bar. We can save this CPP report and bring it up on the chart at any time. Use a logical system for naming each report. I usually include in the name the date projected from and the wave label I am projecting. In this case, we may name the report “W.C Fr. 1/6/98.” We can add new projections to a saved report at any time. Let’s add the minor degree projections for Wave-5:c to the saved report. The chart below has added the minor degree EOW-5 projections. These projections fell very near the larger degree projections that had already created the largest bar when the report was first made. The bar is now even relatively larger compared to the other bars that only represent one projection each. We now have a very visual representation of

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Dynamic Price Analysis

the high probability price target that includes four price projections of various degrees.

Note that neither the 50% retracement of W.A or the 100% APP projection (W.5 = 100% W.1) is included on the CPP above. After first making each price projection in the CPP report, you are asked if you want to add the projection to the report. If a projection is not relevant, you can choose “no” and then re-choose which ratios you want to use. When the EOW-2 projections were made, bonds had already advanced above the 50% retracement. Rather than save the retracements to the report with the 50% retracement, I checked off the 50% retracement and made the EOW-2 projections with just the 61.8% retracement. I did the same with the W.5 = 100% APP W.1 projection when making the EOW-5 projection. The CPP report was initially created and saved with the projections shown on the first chart. Later, the minor W.5:c projections were added. Projections of more than one degree may be made at the same time when the report is initially created. The swing chart may be edited while the report is being created. You are not limited to the swings that are initially brought up on the chart. Just remember when you close the chart, you will be asked if you want to save the edits made to the

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swing file. Be sure and click “no” if you do not want to save the edits. If you click “yes”, the current swing file will be over written with the changes. If you want to keep the old swing file and a swing file with the new changes, choose “save swing file as” from the Swings Menu. The chart below shows the CPP after it has been saved. Right click anywhere on a chart and one of the menu choices is to “show custom price projection.”

If the CPP bars are shown on a chart, you can view the details of all of the projections by clicking on a bar that will bring up the CPP detail table. The projections that make up the bar that was clicked on will be highlighted in yellow.

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Dynamic Price Analysis

The Custom Price Projection report is a convenient way to save multiple price projections and have a visual representation of the price target zones without having a lot of overlapping horizontal lines on the chart. A CPP report may be made with any time period data file – intraday, daily, weekly or monthly. The CPP report is another unique feature of Dynamic Trader.

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Dynamic Price Analysis

Price Rhythm Zones Price Rhythm Zones (PRZ) are a statistically derived measure of the price rhythm of a market. Price Rhythm Zones measure where a trend or counter-trend has the greatest probability of terminating based on the historical swings of similar degree. The Price Rhythm Zone projection is made in essentially the same manner as the Time Rhythm Zone projection. The PRZ projection is made from two price projections of the chosen historical swings - the Alternate Price Projections and the Retracements. The PRZ projection report in Dynamic Trader requires a primary and reference swing file. The primary file swings are used to make the historical calculations and projections. The larger degree reference file swings represent the bull or bear trends and are used to determine which of the primary swings are in bull markets and which are in bear markets.

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In the weekly chart of bonds below, each of the primary swings are 5% price change or greater. They represent the intermediate degree swings that are obvious on the weekly chart. The reference swings (thick lines) represent the obvious major bull and bear trends. Once a change in trend is confirmed by making the minimum price percentage change (in this case 5%), a Price Rhythm Zone may be projected. First, let's look at the end result of a PRZ and then see how it was derived. The bond chart below shows the PRZ projection from the April 1993 low. The PRZ projection on the chart below only uses swings from the current bull trend to keep the illustration simple. In most cases, you will want to use primary degree swings from more than one bull or bear trend.

Each of the swings in the primary file made at least a 5% percentage change in price. The objective is to calculate the high probability price zone where the bull swing from the April 1993 low should terminate based on swings of similar degree from current and prior bull markets. The PRZ is made from two types of price projections – Alternate Price Projections and Retracements.

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Dynamic Price Analysis

Alternate Price Projections (APP) Alternate Price Projections may be made by price range or by percentage change in price. When making intermediate degree projections within major bull and bear markets, it is best to use percentage change. Between the Sept. 1990 low and the April 1993 low, there were four rally swings as shown in the chart above. The rallies were between 11.47% (Sept. 1992 high) and 14.50% (Jan. 1992 high). All four Alternate Price Projections (APP) will be made for the PRZ. The APP zone that will be part of the PRZ projections will be bounded by the shortest and longest APP which in this case is 11.47% and 14.50%. The price target range based on the Alternate Price Projections is 119.06121.13 or an 11.47% to 14.50% rally from the April 1993 low. The APP projected price range is represented by the thick vertical bar show on the right of the PRZ in the chart above. Retracements Retracements of past swings of similar degree are also calculated and the equivalent price objectives are projected from the current pivot. In this case for bonds, we are projecting the potential price target of a rally swing in a bull market. Since the up-swings in a bull market should always be greater than the corrective, down-swings that preceded the up swings, the up swings will always be an External Retracement (greater than 100%) of the prior down swing. The Jan. 1992 high completed a rally of 14.50% (see the chart above). The prior decline into the June 1991 low was 6.61%. The up swing from the June 1991 low to the Jan. 1992 high was a 219% retracement of the prior decline (14.5%/6.61%=219%). Each External Retracement is made in this way. The range of the external retracements is represented by the thick vertical bar on the left of the PRZ.

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PRZ Overlap Range The PRZ overlap range is where the APP projections overlap with the Ret. projections. The PRZ is shown as the grayed area between the two thick vertical bars. By right clicking on the PRZ projection, the detail table will be shown on the chart. Below is the detail table for the PRZ projected from the April 2, 1993 low.

The Price Overlap zone is 120.13-121.05. Based on the most recent advances in a bull market, the ideal target for a high from the April 2 low is this range. Notice that under the “Type” column, both the Ret (retracements) and Alt (alternate price projections) are followed by the “%” sign. This shows that the price ranges were measured by percentage change rather than price range. The Sept. 1993 high was made just above the ideal PRZ overlap zone. The PRZ prepared the trader for the broad price with the greatest probability of making the next intermediate or greater degree top.

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Dynamic Price Analysis

Another PRZ Projection The chart below shows the PRZ projection from the April 11, 1997 low in bonds. In this example, we are using the primary swings from the three most recent bull markets to make the PRZ projection. The PRZ overlap range is 120.08-128.22. Based on all intermediate-term swings in the three bull markets since the Sept. 1990 low, the rally from the April 1997 low should not make a 5% or greater decline prior to reaching at least 120.08 and should not exceed 128.22 While this is a relatively broad price target, it provides the high probability minimum and maximum price targets for the trend from the April 1997 low which began at 106.12. As of when this section was prepared, bonds have continued to rally from the April 1997 low right into the center of the PRZ. This PRZ could have been made as early as June 20, 1997 when bonds had made a rally greater than 5% from the April low. Bonds were at 112.24 at this time and the PRZ called for a rally to 120.08 or higher. How valuable do you think this information would be to you?

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The Price Rhythm Zone Detail table below shows the minimum and maximum projections made from both the Retracements (RetR) and Alternate Price Projections (AltR) as well as the Price Overlap Zone of 120.08-128.22.

Let’s review just what this PRZ projection is telling us for the projection above. 1. As of June 20, 1997 bonds had rallied over 5% from the April 11 low. A new swing low is recorded and we can project the PRZ which should be reached based on historical swings of similar degree. 2. Based on the 5% or greater swing chart, the PRZ is the target for which the bull trend should reach without having made a 5% decline or greater against the bull trend. 3. The PRZ is 120.13-126.17 which is the overlap zone of the APP and External Retracements based on past rally swings of similar degree in bull markets. The minimum price target is 120.13 and the maximum price target is 126.17. While this is a broad range, consider that this target range was projected from a low at 106.12. 4. If bonds approach this intermediate degree PRZ, we can then project the smaller degree PRZ which will focus in on a narrower price zone for the termination of the larger degree trend. Price Rhythm Zones are simple statistical projections made from historical measured swings. If the swings of similar degree in the primary swing file used to make the PRZ have been fairly symmetrical, the projected PRZ will be relatively narrow like in the first bond example above which used only a limited number of swings that all very similar in price range. If the swings had not been so regular, the PRZ will be relatively broad as we saw in the second bond example above.

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Dynamic Price Analysis

Even though the PRZ was very broad, it still provided useful, statistical information that prepared the trader for the price zone the trend would reach. Price Rhythm Zone projections may be made on any time period bar chart and any degree of change.

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Dynamic Time Projection (DTP) Report If we want to do several Time Cycle Ratio projections and Time Counts on the bar chart using the Fib-T and Time-C routines in Dynamic Trader, the chart may become very cluttered and it may be difficult to distinguish where the time projections cluster even with the “no label” option set. The Dynamic Time Projection Report provides a quick and easy way to do a wide variety of time projections all at once and avoid the chart clutter. The bond chart below shows just three time projections which include a 55-CD count from the Jan. 12 high, the 38.2% Time Retracement of the most recent bull swing prior to the Jan. 12 high (8/26L-1/12H) and the 200% Alternate Time Projection. If we wanted to include more Time Cycle Ratio and Time Count projections on the chart from other pivots, the chart would soon be cluttered, projections would visually overlap each other and it would be difficult to distinguish where the target dates fell. If the projections extend beyond the last bar of the file, we would have to scroll the bar chart far to the left before the future projected dates would come into view. The Fib-T and Time-C bar-chart routines are convenient to do a few projections, but cumbersome if the user wants to make a comprehensive time analysis with many projections. One solution that avoids the chart clutter and confusion is to use the Dynamic Time Projection Report.

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Dynamic Time Analysis (DTP)

The Dynamic Time Projection report provides a variety of templates that allow all of the Time Cycle Ratio, Calendar Day and Trading Day counts to be made at once. Which ratios and counts will be included and which swings will be compared will depend on which template is chosen. Dynamic Trader includes templates for the typical Elliott Wave positions. If no Elliott Wave position is evident, there is a default and trading range template. For this bond example, we will look to project from the Jan. 12 high (top of wave-3) the time periods with a high probability of making a wave-4 low. Just as there are typical price relationships to project the high probability price targets for a wave-4, there are also typical time relationships and counts that will help us project the high probability time targets to complete wave-four. The Dynamic Time Projection Set-up menu below shows that we are projecting from the Jan. 12, 1998 high, the report will be for projections from 1580 bars (TDs) from Jan. 12 (approximately three weeks to almost four months), and we have chosen the wave-4 sets to make the projections.

If we click on the TCR Sets button, a table which looks like a spread sheet comes up to show us exactly which ratios, counts and swings are used for that set. The table also shows how the projections are distributed and weighted. If you are

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not clear exactly what is involved in the distribution or weighting of a time projection template, review the User’s Guide which describes in detail how this works. The material earlier in this chapter described and illustrated what the abbreviations represent for the nine swing relationships such as TR.1 and ATP.1.

What the DTP report is doing is very simple. It is making all of the Time Cycle Ratio and Time Count projections at once that have been chosen in the template. Instead of marking them all off one at a time on a bar chart and having the bar chart hopelessly cluttered with dozens of projections, they are all made in the DTP report and saved as a histogram that may be brought up in an indicator window. Let’s take a look at how these projections would be made on a chart if we did not have the Dynamic Time Projections report. First, let’s have a quick review of the swing comparisons that are made. The bar chart below has been marked off to show the swing comparisons that are made when projecting a Wave-4.

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Dynamic Time Analysis (DTP)

Look’s confusing when we look at it from this perspective, doesn’t it? Now let’s take a look at the bar chart if we did all of the Time Cycle Ratio projections for a wave-4 right on the chart with the Fib-T routine.

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The chart above only includes the TCR projections and no Calendar or Trading Day count projections. Now you can see how the DTP templates offer a much quicker way to do a wide variety of projections. The DTP templates also offer the user the opportunity to weigh each individual projection by importance on a scale of 1-3. Weights of Each Projection The templates allow the user to choose what relative value or weight to give any one individual projection. Each projection may be weighted from 0 to 3. The Wave-4, TCR template is shown again below. The projections that are considered the most important are given a weight of three. They have been outlined below. Because this is a projection for a Wave-4, no TR.5 projections are included. Note that none of the ATP.2 or cycle projections are given a weight of three as they are not as important as the TR.1, TR.3 and ATP.1 projections for a Wavefour.

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Dynamic Time Analysis (DTP)

The table below shows the histogram and table of the DTPs made from the Jan. 12, 1998 high for a potential wave-four low. There were three time periods during the period of the report (Feb. 3-May7) that had the relatively highest scores (those over 31). The time periods were March 5-6, March 21-22 and April 5-12. I have chosen to only show those bars on the histogram with the relatively high scoring hits (over 31). The table below the histogram lists evey one of the individual hits in a spread sheet format so the user may examine exactly which time factors fell on any one day.

The April 5-12 period not only included the highest score but the broadest period with the most hits. Without considering any factors other than number of hits, we would anticipate the April period should have the greatest probability of making a Wave-4 low. It is important to examine the table of hits to see what time factors fell in each period. It is also important that the user is familiar with the Time Cycle Ratios and Time Counts as described previously in this section of the Trading Course. Occasionally, we find that a relatively high scoring period is a result of the cluster of a large number of minor time factors and the cluster does

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not include the more important Time Retracements and Alternate Time Projections described in the earlier part of the course and the Dynamic Trading book. The table below shows the detail of the April 5-12 period. Consider the time factors in the April period and how they were distributed so you will understand why this period had the relatively high score.

The April 5-12 period includes at least one of each of the three time factors – Time Retracement, Alternate Time Projection and Calendar Day count. Within any projected time zone, the most important dates are usually those dates that include a time retracement or a most recent alternate time projection (ATP.1). In the April 5-12 period shown above, the highest scoring day is on April 11. It received the highest score of the period because two important calendar day counts made a direct hit on April 11. However, it was the earlier part of the period that included the alternate price projection and time retracement, so the earlier part of the period should be considered just as important as the later part.

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Dynamic Time Analysis (DTP)

Let's digress a bit from our specific example and review exactly what information a Dynamic Time Projection provides. 1. DTPs are periods where several time factors cluster within a relatively narrow date range. 2. If the projections are made from a high, the projections are relevant for a low. If the projections are made from a high, the market must be either testing the extreme lows or making new lows for the time period to be considered valid as a potential trend reversal period. Vice Versa if the projections are made from a low. 3. DTPs should be considered in the same manner as Dynamic Price Projections (DPP). They are time support and resistance zones just as DPPs are price support and resistance zones. 4. Most trend reversals are made at a DTP. DTPs are not projecting that a market will continue to trend into any one particular DTP, only that a trend will usually continue until a DTP is reached. If a DTP is exceeded, the odds are high that the trend will continue at least into the next DTP. There are other time analysis routines including Time Rhythm Zones and Fib Time Blitz projections that help to project which DTP has the greatest probability of terminating the trend. 5. It is critical to be alert to the price and pattern position of a market at the DTP. Dynamic Time Projections are “directional.” That is, a DTP made from a high is relevant as a potential time period for a trend reversal low, not for a high. The chart below shows a DTP histogram in the indicator window below the bar chart that projects the period of Jan. 15-16 from the Dec. 3 high. If bonds are declining to test a low that has been made since the Dec. 3 high or if they are making a new low going into the Jan. 15-16 period, the Jan. 15-16 DTP is valid and should be considered as “time support.” In this case, bonds made a low on Jan. 10 followed by a minor corrective rally. Bonds were advancing off of the Jan. 10 low going into the Jan. 15-16 DTP. This period is no longer relevant as a potential trend change period because it was projected from a high and was only valid as a potential low. If bonds are not declining into this period, it is not relevant as a potential trend change. We will see in a later section that Fib Time Blitz projections are “non-directional.” They may be a low or a high.

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It was just coincidence that a minor corrective high was made in the Jan. 15-16 period. Since the Jan. 10 low was made outside of a Dynamic Time Projection, the odds are bonds will continue lower at least until the next DTP period. This is a very important time analysis concept. If most trend reversals are made at or at least very near DTPs, what seems like a trend reversal that is made outside a DTP will probably only result in a minor reaction followed by the continuation of the prior trend into the next DTP, just as occurred for bonds in the above situation. Now, back to our excample of the DTPs from the Jan. 12 high. How did the Dynamic Time Projections from the Jan. 12, 1998 high turn out? Recall that there were three DTPs for a potential low: March 5-6, March 21-22 and April 5-12. The April 5-12 period included the largest cluster of projections.

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Dynamic Time Analysis (DTP)

Bonds were making a new low from the Jan. 12 high going into the first DTP of March 5-6. Bonds were approaching a price target which included the 127% External Price Retracement where W.C=127% W.B. Wave-C appeared to have subdivided into five waves of lesser degree. The lesser degree 100% Alternate Time Projection fell on March 4, just one day prior to the larger degree March 5-6 period. On March 6, precisely within the March 5-6 period, bonds made a keyreversal-day. Time, price, pattern and daily reversal signal all coincided and a low was made. While the April 5-12 DTP appeared to be the more important time period for a potential Wave-4 low during the months of March and April, all of the factors of time, price and pattern coincided in the March 5-6 period and a low was made. We have only looked at one Dynamic Time Projection example in detail, but the concepts and the procedures are the same for all situations. Every low and high will not be made precisely within a DTP, but most will be made at or within a few days of a DTP. The Dynamic Time Projection report is a quick and easy way to streamline the time analysis procedure. A little practice making and analyzing these reports will go a long way to preparing you days and weeks in advance for high probability periods for trend change.

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Users should spend time to become familiar with each of the templates included with the program. Users should also spend time building their own custom templates. Dynamic Time Projection Templates Each of the three time sets (TCR, TD and CD) include the following templates: Default: Use this set if the conditions are not appropriate to use any of the other specialized sets. Waves 1-5 and C: To project the end of each of these waves. Use these templates if the market clearly appears to be in the position of one of these Elliott wave counts. The Wave-1 set may also be used for Wave-B projections. TR (Trading Range): Use this template for consolidation or trading range projections when the market is not in a clearly defined Elliott wave position. None: Choose the none-set if you do not want any projections made from one of the sets. Fib (TD set): Includes the Fib series of numbers for Trading Day counts. Fib-Anv (CD set): Includes the Fib series of numbers and anniversary or annual counts for up to 12 years. The CD and TD templates are easy to understand and visualize. They are simply number counts from previous pivot highs and lows. The user has the opportunity to choose what numbers to include, the number of days to distribute the score on either side of the hit as well as what weight to give each hit. The TCR projections may seem a little more confusing at first. There are 9 potential swing comparisons that may be made with several TCR projections of each possible comparison. A template is included for each of the major wave positions. Let’s take a look at the TCR templates and descriptive bar charts. Each bar chart will show the major TCR comparisons that are made for each template. I have not included the C:C, DC:C or C:DC on the charts in order to avoid the chart getting cluttered and difficult to distinguish the time ranges for each comparison. Each of the templates includes these three projections as well as those shown on the bar charts. The vertical marker on each chart is the confirmed pivot from where the projection for the next high or low is to be made. The structure of the market prior to where the marker is shown will not necessarily be the same each time. However, the templates are designed for the most typical structure for that wave position and will usually work just as well if the preceding structure was not in exactly the same shape as shown in the charts below.

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Dynamic Time Analysis (DTP)

Wave-1 TCR Template

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Wave-2 TCR Template

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Dynamic Time Analysis (DTP)

Wave-3 TCR Template

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Wave-4 TCR Template

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Dynamic Time Analysis (DTP)

Wave-5 TCR Template

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Wave-C TCR Template

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Dynamic Time Analysis (DTP)

Trading Range (TR) Template

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Default TCR Template The default template may be used when ever the market is not clearly in an identifiable wave position. The default template includes all nine swing comparisons with the greatest weight given to the prime Fib numbers.

None Template (not shown) Each set includes a “none” template. You may choose to not include one of the three templates when making a DTP report. For instance, if you only want to make TCR and CD projections and no TD projections, choose the “none.td” set and no trading day counts will be made. The “none.td” set is shown below. No numbers are included. Even if the template included a series of numbers in the count column, if the Distribution column was all zeros, no projections would be made.

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Dynamic Time Analysis (DTP)

CD Templates The following pages include the Calendar Day (CD) templates included with the Dynamic Time Projection report. The CD count templates allow the user to choose to make counts from any of the most recent seven pivots. Each projection may be distributed up to four days either side of the target date. Each projection may be weighted from 1-3. Each template is preceded by a chart that shows a typical market position for the wave in question. The seven recent pivots are labeled so you will be able to visualize which pivots counts are being made from in the respective template. I have not included the Trading Day (TD) count templates as they will look the same as the CD templates except the counts are made in Trading Days.

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Wave-1 CD Template

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Dynamic Time Analysis (DTP)

Wave-2 CD Template

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Wave-3 CD Template

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Dynamic Time Analysis (DTP)

Wave-4 CD Template

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Wave-5 CD Template

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Dynamic Time Analysis (DTP)

Wave-C CD Template

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Trading Range CD Template (not shown) The Trading Range and Fib-Anniversary Templates are the same. Build Your Own Custom Dynamic Time Projection Templates There are three templates that may be used for each DTP report – TCR (Time Cycle Ratio), CD (Calendar Day Counts) and TD (Trading Day Counts). Many Dynamic Trader users create and save their own templates. As an example, you may want to create a very simple TCR template that only includes a few ratios and swing comparisons. How about a TCR template that only includes TR.1 and ATP.1 projections? This simple TCR template may only include the time retracements of the most recent swing (TR.1) with only the three ratios of 50%, 61.8% and 100% plus the 61.8%, 100% and 162% ratios for the most recent Alternate Time Projection (ATP.1). The user may create any TCR, CD or TD template that suits his or her purpose. The Dynamic Time Projection report is unique to Dynamic Trader. No other software program includes a time analysis routine anything like this comprehensive report. It will be well worth your time to become very familiar with this time analysis approach and exactly what is accomplished with this unique report.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Practical Elliott Wave Trading Strategies Part 1 Robert Miner, Dynamic Traders Group, Inc.

This tutorial begins a series of how to apply Elliott wave analysis for practical trading strategies. All subscribers have some Elliott wave background from my Dynamic Trading book. Because that book goes through the pattern structures in detail, there is no need to repeat that information in this tutorial series. It is assumed for this series, that subscribers are familiar with Chapter 3 of Dynamic Trading and how the most frequent pattern subdivide. Besides teaching you the practical application of Elliott wave trading strategies, an objective of this series will also be to dispel some Elliott wave myths and bad practices fostered by Elliott wave academics. Everything taught in this tutorial series will apply to any actively traded market included futures, stocks, indexes and mutual funds and any time frame whether five-minute or monthly.

What You Should Know Before Beginning This Tutorial Series From your study of Elliott wave in Chapter 3 of Dynamic Trading, you should be familiar with these concepts. Impulse Trend – Usually unfolds in five-waves. Five-wave impulse trends are usually made in the direction of the larger degree trend. Counter-Trend – Usually unfolds in three-waves. A counter-trend is a correction to the prior impulse trend. Waves of Similar Degree – Also called swings of similar degree. Waves of similar degree represent the subdivisions that make up a completed structure. In an impulse trend, waves one-five are the waves of similar degree. The subdivisions of each wave are waves of a smaller degree. Subdivisions of a Wave – Any given wave may subdivide into smaller degree waves to complete the structure of the wave. For instance, Wave-1 of a five-wave impulse trend usually subdivides into five waves of lesser

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degree. You should be familiar with how each wave of a trend or countertrend usually subdivides. Multiple Time Frames - Multiple Time Frames has become a buzzphrase recently. It is nothing more than R.N. Elliott’s approach to considering multiple degrees of wave structure. When the subdivisions of a wave are complete, the larger degree wave is compelte.

Trend or Counter-Trend? What is Elliott Wave Analysis? Elliott’s Wave Principle is a catalogue of defined chart patterns. These patterns are helpful to indicate if the market is in a trend or counter-trend. Knowing the trend or counter-trend position, we also know the main trend direction. Each pattern has implications regarding the position of the market and the most likely outcome of the current position. Most pattern positions will have an outcome that will validate or invalidate the assumed pattern position. This is extremely important. It also helps us to determine the maximum distance away from the market to place the protective stop-loss. Elliott Wave Pattern Basics – 5’s and 3’s The basis of Elliott’s Wave Principle is that most trends unfold in five waves in the direction of the trend and three waves or combinations of three waves in the direction counter to the main trend. It’s that simple. Markets usually unfold in three’s and five’s. Five wave patterns are impulsive or trend structures. Three wave patterns are corrective or counter-trend structures. A five-wave impulse trend and three wave or more complex countertrend each has a characteristic structure which we will talk about continually throughout this tutorial series. One important objective of Elliott wave analysis is to recognize in the early stages of the wave structure whether it is more likely to be an impulse or a counter-trend.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

The Three Elliott Wave Rules These three rules are most relevant to daily closing data. 1. Wave-2 should not exceed the beginning of Wave-1. In other words, Wave-2 should not make greater than a 100% retracement of Wave-1. 2. Wave-3 should not be the shortest of the three impulse waves in a five-wave impulse trend (waves 1, 3 and 5). 3. Wave-4 should not make a daily close into the closing range of the Wave-1. These rules are extremely helpful to confirm or invalidate a potential pattern. Even when using intraday data, be aware of the pattern and guidelines relative to the daily closing data. Why is pattern analysis an important part of the Dynamic Trading approach to technical analysis? 1. Pattern analysis helps us to determine if a market is in a trend or counter-trend. 2. Pattern analysis helps us to determine the position of the market within a trend or counter-trend. 3. Pattern analysis helps us to project the time and price objectives of the current trend or counter-trend.

Think Pattern Below we will go through several pattern examples. The objective is to learn to think in terms of pattern position and what a market must do to confirm or invalidate a particular pattern structure. Every potential pattern position cannot be illustrated, but if you keep the basic pattern concepts and guidelines in mind, you will be able to identify the potential pattern position for most market situations. Here is a quick review of what we are trying to accomplish with pattern analysis.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

The Three Pattern Questions 1. What is the most probable pattern position? Why? The answer to this question may only be “impulsive” or “corrective.” The answer may also be, “don’t know.” 2. What market activity will confirm the assumed pattern position? What is the pattern guideline that is relevant? 3. What market activity will invalidate the assumed pattern position? What is the pattern guideline that is relevant?

The Three Important Pattern Considerations 1. Be quick to admit when there is no discernable or relevant pattern! Do not force an Elliott Wave count when there is no count that meets the guidelines or a clearly defined five or three wave structure. 2. If there is no discernable wave count, does the pattern appear to be in an impulse or corrective structure? 3. As new data is made, the market will continually confirm or invalidate the pattern position assumption. Trade the market, not the forecast. Be quick to change your assumption of the pattern position if the market activity invalidates the current assumption.

Continued on the next page.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

What’s Next? If a five-wave trend is complete as shown below, what is the minimum pattern we should expect?

Regardless of how this five-wave pattern fits into the larger degree pattern position, at least a three wave decline should be expected. The minimum expectation is for a three-wave ABC correction. This may not unfold but if pattern is to be useful, we must begun with a high-probability assumption and let the market confirm or invalidate that assumption. If this five-wave trend completed a larger degree five-wave trend, a five-wave decline may follow but the minimum expectation would still be a three-wave. We always assume a correction will be a three-wave, ABC even though it may take many shapes.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Trend or Counter-Trend? What should we anticipate after the low in mid-March below – a countertrend rally or an impulse trend eventually to a new high?

There is not enough data to give a high-probability answer. The decline shown above is clearly an impulse trend. The position of that impulse trend within the larger degree trend will help determine what next to expect. If the decline is a W.1, A or 3, we would expect a counter-trend rally (W.2 or B or 4) followed by the continuation of the bear trend to a new low. If the decline is a W.C, we would expect a continuation of the bull trend to a new high. If the decline is a W.5, we would expect a larger degree counter-trend rally. The first rally would typically subdivide into five-waves since a W.A is typically five-waves. Whether the rally is a trend or a counter-trend, we would anticipate at least a three-wave rally (ABC or 123). The position within the larger degree trend will help to determine what to ultimately expect.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Count Backwards What’s the pattern of this advance? It definitely doesn’t fit a typical five or three wave pattern. To help determine what a pattern may be, it is helpful to have a firm idea of what is the pattern position of the last major pivot.

If the low in March is a Wave 1 or A, then the rally should be a correction. We initially assume any correction is going to be an ABC until proven otherwise. This data is up through the date of this tutorial. Nowhere along the way of this correction did it unfold as a typical ABC. Just today, bonds declined below the prior swing low which signaled the impulsive part of the rally from the late March low (labeled W.B) should be a completed pattern structure, probably a Wave-C that subdivided into five-waves. If that is the case, count backward to see if any wave count will fit. The one above is an acceptable fit within all of the guidelines of Elliott wave.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Wave-A is an impulse. Wave-B is three waves and the W.b:B is also three waves. Wave-C is five-waves. All the subdivisions fit well even though the Wave-C is out-of-balance (much greater in time and price) than Wave-A. Some times the pattern position does not clearly reveal itself until after it has signaled that it should be complete. Then we need to count backwards to see if the pieces seem to fit together within the rules and guidelines. If so, we have a basis to make an informed and highprobability trading decision with well defined and acceptable capital exposure.

Trend or Counter-Trend? Is a 1-2-3 count the best potential for the data below? Why or why not?

The rule that was formed by for the stock indexes is Wave-4 should not make a daily close into the closing range of the Wave-3. For the data

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

above, the potential Wave-4 has made several daily closes into the Wave1 closing range although the decline below the Wave-1 high is small in price. It is acceptable for a Wave-4 to close and trade slightly into the range of Wave-1 for commodities and individual stocks. A better wave count may at first seem to be the high on the chart is a completed five-wave trend as shown below. The main drawback here is the Wave-4 is much shorter in time and price than the Wave-2 – it is outof-balance with Wave-2. While this doesn’t rule out a five-wave count, the alternate wave count shown below where the high is a Wave-3 that cleanly subdivided into five-waves is just as good a count.

At this point in time, neither of the two wave counts is overwhelmingly favored. According to the rules and guidelines, either is acceptable. It will require more data to determine which may be best. The trader must also look to other factors such as the time, price or seasonal position to get a better idea of which wave count may be more probable. If the five-wave count to the March high shown above is correct, beans should continue the bull trend after completing a correction to the fivewave trend.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

If the alternate count is correct, beans should be in the process of completing a Wave-4 low which should be followed by a continued advance to a new high. Which count becomes the most evident as more data is included will help to determine the extent of the next bull trend – A Wave-5 or entirely new five-wave trend.

Lessons Learned The Three Elliott Wave Rules These three rules are most relevant to daily closing data. They should be committed to memory. 1. Wave-2 should not exceed the beginning of Wave-1. In other words, Wave-2 should not make greater than a 100% retracement of Wave-1. 2. Wave-3 should not be the shortest of the three impulse waves in a fivewave impulse trend (waves 1, 3 and 5). 3. Wave-4 should not make a daily close into the closing range of the Wave-1.

The Three Pattern Questions Whenever considering an Elliott wave pattern, you should ask yourself these three questions and not consider an Elliott wave count unless you can answer all three. 1. What is the most probable pattern position? Why? The answer to this question may only be “impulsive” or “corrective.” The answer may also be, “don’t know.” 2. What market activity will confirm the assumed pattern position? What is the pattern guideline that is relevant? 3. What market activity will invalidate the assumed pattern position? What is the pattern guideline that is relevant?

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

The Three Important Pattern Considerations If you are using Elliott wave for practical and logical trading strategies and decisions, these three considerations will always be in mind. 1. Be quick to admit when there is no discernable or relevant pattern! Do not force an Elliott Wave count when there is no count that meets the guidelines or a clearly defined five or three wave structure. 2. If there is no discernable wave count, does the pattern appear to be in an impulse or corrective structure? 3. As new data is made, the market will continually confirm or invalidate the pattern position assumption. Trade the market, not the forecast. Be quick to change your assumption of the pattern position if the market activity invalidates the current assumption.

More To Come Each week, a new tutorial will build on what we have learned. Also, in the regular report, I will expand on the pattern comments to relate to what is being taught in the tutorials. The pattern descriptions in the report will help you to learn how pattern is considered to be part of a trading decision as a market unfolds. Over the next few weeks, I believe you will have had the most comprehensive and practical Elliott wave pattern education available from any source. You will clearly understand how pattern can be an important factor of your trading decisions. You will also understand and how to apply Elliott wave pattern to make the high-probability time and price projections that are a key to trend targets, reversals, continuations and other trading strategies.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Practical Elliott Wave Trading Strategies Part 2 Robert Miner, Dynamic Traders Group, Inc.

Part one of this tutorial series taught the most important question related to Elliott wave analysis – Is It An Impulse Trend Or A Correction? The assumption for this tutorial series is that all subscribers have a basic Elliott wave background as taught in chapter three in the Dynamic Trading book. The next few tutorials will look at the recent and current position of a number of markets to see what we can learn about the trend position and potential reversals based on the pattern position. Each tutorial will dissect just one market and the recent data to see how the pattern position has unfolded in recent weeks and days. The best learn experience is always with current examples as we can then see how the market unfolds related to how we view the current pattern position and what should be the outcome. As you will see, the pattern and trend position is not always clearly defined, but, we can usually use the EW pattern analysis to identify the specific market activity that will confirm or invalidate the probable pattern position.

This Week’s Lesson

It’s Either One or the Other The pattern position is not always clearly defined. Sometimes a market reaches a juncture where the sub-divisions of the pattern position indicate it is either a correction or an impulse. When this is the case, Elliott wave pattern analysis will usually provide the specific market action that will confirm which of the potential patterns is most probable and how the market should follow through.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

What’s Next? From the Nov. high, bonds clearly made an impulsive decline into the Dec. low. From the Dec. low, bonds clearly made a corrective rally into the Feb. high. From the Feb. high, the decline to the March low was clearly impulsive. What type of pattern should the rally from the March 21 low be? It depends. Impulse-correction-impulse could be an ABC correction or part of a more complex correction. It could also be waves 1-2-1:3 of a larger degree bearish impulse trend. It depends on what we would label the Nov. high.

If we considered the Nov. high the end of a multi-year bull trend, March should not be the end of an ABC correction. If we though the Nov. high was only temporary, March could be the completion of an ABC correction.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

If we have no strong opinion one way or the other about the Nov. high, how could the pattern of the advance from the March low help us to identify the larger degree pattern/trend position? If the rally clearly unfolds in an ABC or other more complex corrective pattern, the larger degree trend is probably bearish and will eventually make new lows well below the March low. If the rally clearly unfolds in an impulse trend, March should be the end of an ABC corrective decline from the Nov. high or the impulse may be a Wave-A which is part of a larger degree correction. Let’s take a look at the 60-minute data from the March low into midApril.

Is the pattern of the data above clearly impulsive or corrective? From my point of view, it is not clearly one or the other. Let’s put the most

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

obvious labels on, those that would meet all of the EW rules and guidelines and see what are the potentials.

Once bonds traded below the 99’31 swing low, we could assume the April 15 high completed some section of the trend. If we count backwards from the April 15 high, there is a clear five-wave impulse from the March 28 low. The ABC from the March 19 high to the March 28 low meets all of the guidelines for an ABC. Waves A and C are clearly impulsive as they should be. Wave-B is an ABC itself. What could bonds do to signal if the April 15 high is a Wave 3 or a Wave C? A Wave-4 should not trade into the range of the W.1. If bonds traded below 99’16, the potential W.1 high, we would assume April 15 is a W.C high. If this were to occur, bonds may still trade to a new high but the continued rally would have to be considered a complex correction, not an

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

impulse trend. Waves overlap in corrections, not in impulse trends except in a W.5 diagonal. So far, we have not even considered if March 15 is a Wave-C or W.1:3 low. We have only considered the pattern possibilities of the data from the March 15 low. If we were confident the March 15 low was a W.1:3, we would consider the April 15 high had probably completed an ABC correction (W.2:3) since bonds took out the probable W.4:C low. Let’s add more data. The chart below is the 60-minute data through this morning. I haven’t added any labels. What do you think is the probable pattern position?

Should we now consider the rally from the March 15 low an impulse trend or correction based solely on the pattern?

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

It is clearly an impulse trend. Bonds did not trade into the range of Wave-1 and the rally from the April 18 low is clearly impulsive which should be the Wave-5. The Wave-5 appears to have clearly subdivided into five-waves which is typical of a Wave-5.

A trade below the W.4:5 low at 101’23 signals the W.5:5 high should be complete. What would we anticipated once the W.5 high is complete? At a minimum, a correction that is greater in time and price than any of the corrections within the five-wave trend. Another important question would be – how does the five-wave impulse trend from the March 15 low to the May high fit into the larger pattern/trend position? We will consider that in the next tutorial.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

For now, the most important lesson from a pattern perspective is we have identified the most probable pattern and its alternative as the market progressed and have used pattern to identify the signal that will indicate the end of the trend. From a trading perspective, that is the critical information.

Lessons Learned The pattern position is not always clearly defined. Even when it is not, we can usually identify the market activity that will confirm or invalidate a potential position. We can also look to the larger or smaller degree to help identify the probable position. It is important to be sure that each of the sub-divisions of the pattern meet the basic Elliott Wave rules and guidelines described in lesson one before we consider assume to have a confident opinion of the pattern/trend position.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Practical Elliott Wave Trading Strategies Part 3 Robert Miner, Dynamic Traders Group, Inc.

This Week’s Lesson

What Confirms A Trend Change? In this tutorial, we will look at the recent pattern of the S&P and bonds in detail to see what trading opportunities may be at hand and what the pattern may be revealing about the larger degree trend position. Since both of these markets may be near significant reversals, we will see what the market can do to confirm a reversal is complete.

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Bonds From the March 15 low to the May 1 high, there is only one logical way to view the Elliott wave pattern which is as a five-wave impulse. May 1 may or may not be the completion of a W.5 high. What would be the initial signal W.5 is complete? A trade below the W.4:5 low. This is a reliable and consistent pattern strategy that should be used to make trading entry and protective stop decisions. A wave-5 typically sub-divides into five-waves. This is not always clearly evident but when it is, a trade beyond the W.4 extreme is the signal the W.5 should be complete.

Bonds have made five-distinct sections up since the March 15 low. None of them overlapped (W.4 did not trade into the range of W.1) which implies the five-waves are an impulse trend. What is the pattern signal a W.5 high complete? A trade beyond the W.4:5 extreme. What should we anticipate following the completion of a W.5? It depends on the how the

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five-wave trend fits into the larger degree pattern position. The minimum expectation is for a correction against the five-wave trend greater in time and price than any correction within the five-wave trend. If the W.5 high completed a corrective high of larger degree, a new impulsive trend may begin instead of just a correction to the five-wave trend. Which ever the case may be, the job of the trader is to identify the completion of the five-wave trend and prepare for a trend reversal trade for either a correction or new impulse trend in the opposite direction. The smaller degree data may provide an earlier signal a W.5 high is complete. It depends on how clearly defined is the pattern. Let’s take a look at the 60-minute date from the April 18, W.4 low to see how it breaks down. When we move down to a lower time frame with short-term data, it is usually only necessary to view the data from the last confirmed pivot. In this case, from the probable W.4 low on April 18.

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A five-wave rally from the April 18 low appears fairly distinct. If May 1 is the W.5 high, we can assume May 2-3 completed the initial waves 1-2 down. If this is the case, what would be the signal that confirms W.5 is complete? A trade below the W.1 low. Since the W.1 low is above the W.4:5 low, a trade below the W.1 low would be an earlier signal the W.5 is complete than a trade below the W.4 low. What would be the maximum protective stop against a short position taken one tick below the W.1 low? One tick above the W.2 high. It is that simple and logical. We may be able to break down the data into smaller degrees for even more timely information and potentially a trade strategy with even less capital exposure. The next chart is the bond five-minute data from the May 3 high.

Five-wave trends should be in the direction of the larger degree trend, unless it is the last five-wave subdivision of the larger degree trend such as the W.5 or W.C. Three wave trends should be corrections against the

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larger degree trend which should be followed by the resumption of the larger degree trend in the opposite direction to the correction. Very short-term 5 and 3 wave patterns will often help to identify the direction of the larger degree trend and how the market fits into the immediate position. These very minor subdivisions will often help identify trading strategies with less capital exposure. In the 5-minute chart above, the market appears bearish since the fivewave trends are down and the three wave trends are up. If this is the case, a trade below the potential W.b:2 low signals the W.2 high is complete. Let’s take a look at another current example to see how pattern may help us determine the position of a market. S&P The chart below is the June S&P from the March 19 high to today’s low, May 7. There are five-distinct sections. The fifth may not be complete.

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Is this a five-wave impulse trend? Probably, but by no means clearly defined. Typically the W.3 is the extended wave or the longest of waves 1, 3 and 5. As shown above, the W.3 is shorter than the W.1. If the April 30 low is a W.3 low, what is the rule concerning W.5? Since W.3 cannot be the shortest of waves 1, 3 or 5, the price range of W.5 should be less than the price range of W.3 so W.3 will not be the shortest. If the data so far is not a 1-2-3-4 what may it be? It could be a 1-2-1-2 which is a very bearish potential. I always prefer to stick with the simplest and most obvious potential wave count unless there is compelling evidence it is something more complicated or the market proves otherwise. Let’s see if the intraday data helps the on the 60-minute chart below.

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The intraday data fits the wave count fairly well but not perfectly. The best wave count for the data to date is shown on the chart above. At the very least, the clearly defined ABC correction made into the May 2 high and the probable five-wave decline from the May 2 high is the most recent pattern information to work with. It clearly appears W.5 (of 5) is nearly complete. Now let’s break it down further and just look at the short term 15minute data from the last defined pivot, the May 2, W.4 high.

It appears this is an ideal five-wave trend from the May 2 high. If so, W.5:5 has already traded below the W.3:5 low which indicates the W.5:5 is in a position to be complete. Could this be something other than a fivewave trend? Of course it could. We have to make decisions based on the best available evidence. Unless the market proves otherwise, the

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assumption is the W.4:5 high is complete and a W.5:5 low is close at hand. The completion of a W.5:5 low would also signal the completion of the entire five-wave decline from the March 19 high if May 2 is the W.4 high as shown on the charts above. How would a five-wave decline from the March 19 high fit into the larger degree pattern? That is a subject we will take up in the regular reports this week.

Lessons Learned Elliott wave patterns are not always clearly defined. Only use them as part of your trading strategy if they are clearly defined. One way to help identify if a pattern is correct is if it subdivides as it should. This usually requires a breakdown to the shorter term data. It is most important to identify if there are clearly defined fives and threes and which direction they trend. This will help to identify the larger degree trend. Unless a five-wave trend is the final trend of a larger degree pattern such as a W.5 or W.C, the assumption is it is in the direction of the larger degree trend. If a market appears to be in a Wave-5, a reliable signal the W.5 is complete is a trade beyond the W.4:5 extreme. An entry one tick beyond the W.4:5 extreme would be followed by a protective stop one tick beyond the W.5:5 extreme. If a Wave-5 appears complete, and waves 1 and 2 in the opposite direction appear complete, a trade beyond the W.1 extreme confirms the W.5 should be complete. This signal may be made before the W.4:5 extreme is exceeded. An entry one tick beyond the extreme of W.1 would be followed by a protective stop just one tick beyond the extreme of W.2.

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Practical Elliott Wave Trading Strategies Part 4 Robert Miner, Dynamic Traders Group, Inc.

This Week’s Lesson

Don’t forget the EW rules and guidelines. You must constantly keep in mind the Elliott wave rules and guidelines as a market unfolds in order to be alert to if a pattern is a correction or an impulse and where it should be within the correction or impulse. The rules and guidelines are few and simple. Be alert to the subdivisions (smaller degree) of each wave to help identify when a wave is at or near its termination. The EW rules and guidelines will also give you what pattern structure will confirm and invalidate a wave pattern.

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Identify The Main Divisions Take a look at the data below. For just this data, can we determine if the market is making an impulsive trend or a correction? What would be the definitive signal that would confirm which it is?

Rather than immediately begin to put labels on the chart, the first thing to do is identify different degrees of change. For the bearish period of this data, there are two rallies that stand out as greater in time and/or price than the others. They are probably of the same degree and a larger degree than the minor corrections. Very simply, we have a declining section, sideways correction, another declining section and a rally. Is the last rally that began at the May 22 low a correction or the beginning of a bull trend? Can we tell which it should be from this data alone?

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The next chart includes the obvious labels for the trends and countertrends of similar degree we have identified so far.

The three completed pivots of similar degree should be W.1 or A, W.2 or B and W.3 or C. From just this data, there is no way to tell if it is a 1-2-3 or A-B-C. We may be biased one way or the other depending on how confident we are of the potential wave pattern up to the May 17 high, but lets assume we do not have a confident opinion. What can the market do from a pattern perspective to signal if the May 22 low completed an ABC or if it is just a W.3 in a bear trend? A W.4 should not trade into the range of the W.1. If the S&P traded above 1091.50, the potential W.1 low, it would indicate May 22 is a W.C low, not a W.3. If this should happen, the larger degree trend should be up and the S&P should continue to advance to above the May 17 high.

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If the S&P first traded below 1075.70, the potential W.3 low, we must assume it is making an impulsive five-wave trend and the larger degree trend is down. We could get very creative with labeling the small subdivisions and minor swings on this data. The clear fact is – there is no clearly defined sub-division pattern for the data above. We could make the subdivision labels almost anything we want to fit any one outlook. That is what many Elliott wave analysts do. Force a wave count to fit the forecast. For this data, the 1-2-3 or A-B-C count is the only reliable one at this time. Always Keep In Mind The EW Rules and Guidelines Which pattern is more likely for the data shown on the chart below – A-BC or 1-2-3-4-5? There is enough information from this data to put the odds strongly in favor or one or the other pattern.

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Note the pattern of the first section up from the May 14 low to the May 16 high. Does the first section appear to subdivide into a five or a three? That will be the key to the larger degree pattern position.

The first section has three clearly defined swings of similar degree. If this is the case, it is labeled an ABC. A Wave-A may subdivide into either three or five waves. A Wave-1 should never subdivide into three waves. The three-wave rally from the May 14 low to the May 16 high can only be considered an A-wave. If this is the case, the May 17 low should be the Wave-(B) and bonds should be completing a Wave-(C) and the end of a corrective rally from the May 14 low. Most traders would become very bullish with bonds making a new high on a wide-range outside-day. But EW pattern traders would be alert that the odds are bonds are in the very final stage of a corrective rally from the May 14 low.

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What could bonds do to confirm a W.(C) top is complete? A trade below 101’00, the probable W.(A) high confirms the rally is a correction and the W.(C) high should be complete. A trade below 101’00 confirms May 16 could not be a W.1 high as the W.4 should not trade into the range of a W.1.

Lessons Learned Elliott wave traders often get hung up trying to label every zig and zag on a chart. If the minor swings are not in an obvious structure, the tendency is to force a wave count to fit the prejudice of the forecast. We have all seen this over and over again. Trying to pretend that every bump on an intraday chart always fits into an Elliott wave pattern structure may be very costly. At the least, it is simply foolish. It just doesn’t work that way. Begin a wave count by separating the obvious divisions of similar degree. Place the probable count and the alternate if there is one on these obvious divisions. Then identify what the market can do to confirm or invalidate the most probable count. Two key questions to consider once you have decided on the labels for the obvious divisions – Have the main swings basically sub-divided according to the EW rules and guidelines for the labels I have given it? What pattern structure should unfold from the last confirmed pivot if it is the label I have given it? By working in a relatively simple and logical manner, Elliott wave pattern analysis can be the key to identify the main trend direction and when trends are at or near their reversals.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Practical Elliott Wave Trading Strategies Part 5 Robert Miner, Dynamic Traders Group, Inc.

This Week’s Lesson

Every zip and zag is not a perfect EW. We always begin with the assumption that a market will unfold according to the EW rules and guidelines. However, this is not always the case. Rather than try to fit a convoluted wave count after-the-fact to make the market conform to the rules and guidelines, move on. We are traders, not EW academics. We are interested in making money, not in being right. I can show you lots of examples of five wave corrections that fit all of the rules and guidelines of an impulse wave structure. EW academics will relabel them with all sorts of complex labels with Xs, Ws, Ys and more when the reality is – it was a five wave correction. Prepare for the most probable, but adapt to the improbable.

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Trend or Counter-Trend? From the first low on the left of the chart below, the S&P clearly made an impulsive rally which is labeled a W.1. A sideways flat ABC followed with a gap up to a new high signaling the correction should be over. If we consider the gap up rally a W.1 of a new impulsive trend, what could the market do to void that idea? A trade below the W.C:2 low would signal a larger degree correction was being made, not a new impulse trend, and the bear trend should then decline to a new low.

If the market traded below the W.C:2 low, how would the pattern be relabeled and what would we then anticipate?

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We would then relabel the rally as an ABC and expect the market to decline in an impulse trend to well below the extreme low on the chart. Several bars later, the market declined below what was labeled the W.c:2 low. Now we consider the rally an ABC as shown below and anticipate the continuation of the bear trend to a new low.

We now know which side of the market to trade for some time – short. A trading strategy would be to wait to identify a W.2 correction in order to position short.

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How Long To Be Short? If a correction is complete at the W.C high, we would want to only consider short trades until it appears a five-wave decline is complete. The five-wave decline should be lower than the beginning of the corrective rally which is the low point on the chart below. The market made an almost ideal ABC which probably completed a W.2 high. The trade below the W.1 low signals W.2 should be complete and the market should decline to well below the 875.50 low to complete waves 3-5.

What form should the W.3 take? A W.3 should sub-divide into five waves. Typically, a W.3 is greater in time and price than the W.1 so the market should have a long way to decline before the W.3 is complete.

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As long as the market does not trade above the W.2 high, short trades should be taken with a stop no higher than one tick above the W.2 high. There are a lot of points between where the market is as of the last bar on the chart below and the probable next low well below the 875.50 low and not many points to above the W.2 high, the maximum stop on a short trade. You don’t need to make complicated risk/reward ratios do know this is a great pattern position for a short trade. The market declined sharply. As of the last bar on the chart below, a correction of the same degree as the W.2 or W.2:3 does not appear to have been made which means W.4 is still to come.

The next chart show the market eventually made a rally at least greater in price than any since the W.2 high. The assumption is the W.3 is complete and a W.4 is in progress. The assumption is a W.4 should be at

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least a three wave correction. As of the last bar on the chart below, it appears a W.a of 4 is complete and a W.b and W.c will finish off W.4. A trade below the W.3 low indicates the W.4 is complete.

The market does not make a typical ABC-W.4 correction but declines straight below the W.3 low signaling W.4 is complete. From a trading perspective, we should always anticipate a market will make a typical wave pattern until proven otherwise. The W.4 rally shown below is not a typical correction since it is a single wave up. But, it only fits into the larger degree pattern position as a W.4 so that is how we label it, Elliott wave obsessives not withstanding.

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W.5 appears to be subdividing into five waves as it should. If 814.90 is the W.4:5 high, a trade above it signals the W.5:5 is complete and the entire decline from the W.C high is also complete. The pattern position is now telling us the entire decline from the W.C high is almost complete. The pattern position gives us a tremendous trading advantage. If short, we are aware that the downside is relatively limited and a significant rally is likely to be made soon. We should also prepare to consider a long trade. At a minimum, once the W.5:5 low is complete, we would anticipate a correction of the entire decline shown above. If the low is a larger degree, we would anticipate an even greater advance. The following day, the market gaps lower and later in the day trades above the W.4:5 high signaling a W.5:5 low is complete.

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The pattern position suggests we should now only consider long trades as long as the market does not trade below the W.5:5 low. If the W.5:5 low was not made at the ideal time and price targets for a W.5:5 low, we do not have to buy the bottom for a long trade. One of W. D. Gann’s most useful trading advice was – “The safest trade is to buy (sell) the first correction to the new trend.” In other words, wait to go long on the first correction to the new trend. The Elliott wave pattern position gives us the tools to help identify very early if a new trend is being made. In this case, the pattern position has signaled a W.5:5 low should be complete and the trend should be up for some time. The initial advance should be a Wave 1 or A which typically subdivides into five waves. If a five-wave advance is made, it is often followed by an ABC correction. We would be alert to the pattern of the advance and initial

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decline to help identify if a W.C of 2 or B low is being make to position long. The chart below shows the idealized pattern. The market may or not unfold in the idealized pattern but we do have a framework to work with to prepare for a low risk, high probability long trade.

How Long To Be Long? If the rally is only a correction, the minimum expectation is for an ABC which typically subdivides 5-3-5. As long as the market has not traded below the probable W.5:5 low, we would expect at least a three wave rally that would be a correction to the advance from the W.C high where the five-wave decline began.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Lessons Learned Elliott wave gives us a framework to make a trading decision although it does not guarantee any particular wave structure will unfold. Remember, all trading is probabilities. We use Elliott wave pattern analysis to help put the probabilities on our side. We use the Elliott wave position to help identify the main trend direction, the maximum stop loss and what the market must do to be in a position to complete a trend or counter-trend. If we don’t expect more from Elliott wave analysis than it can provide, it will be one of the most important trading tools you use.

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Practical Elliott Wave Trading Strategies A Special Tutorial Series For Subscribers To The Dynamic Trader Reports

Practical Elliott Wave Trading Strategies Part 6 Robert Miner, Dynamic Traders Group, Inc.

This Week’s Lesson

Always Be Aware of the Big Picture We must continually be aware of the probable larger degree pattern position to keep the short term in perspective.

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S&P – Is a corrective rally over? The current position of the S&P as of the end of today (July 30) is in a position for an important Elliott wave lesson. First, let’s take a look at the 15-minute chart from the July 24 low.

Today’s high appears to have completed a text book three wave advance from the July 24 low. Is it a 1-2-3 or A-B-C? From just the data shown above, there is no way to tell. We don’t have to guess. We can use the simple EW guidelines and let the market let us know. What could the market do to signal which it is? A W.4 should not trade into the range of the W.1. If the S&P declines below 854.50, the W.1 or A high, it signals the high should be a W.C. Does that mean a corrective ABC rally high is complete and the trend should continue to new lows? What do you think? There is an important Elliott wave guideline that will help us answer this question. First, we have to move back and review how this potential ABC fits into the larger degree picture.

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The next chart is the daily SPX from the March high.

The assumption is July 24 completed a W.3 low and the rally is a W.4 correction, not the beginning of a bull trend. Today reached the minimum of the W.4 retracement zone at 902-942 (SPX). Is the W.4 correction over? Today’s high could have completed an ABC, the most typical corrective wave structure, at the ideal W.4 retracement zone. However, today’s high is probably not the end of a W.4. A W.4 will typically last longer in time than the W.2. In this case, W.2 was eight trading days and so far, the W.4 rally off the July 24 low has lasted just four trading days. Let’s consider the short-term pattern on the 15-minute chart again.

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A W.4 should not trade into the range of the W.1. If the S&P declines below 854.50, the W.1 or A high, it signals the high should be a W.C. Even if this were to unfold, it is unlikely the W.4 correction is complete for two important reasons. Firstly, Wave-2 (May 7-17) was a simple ABC (see the daily chart above). If we consider the guideline of alternation, if W.2 is a simple ABC W.4 will typically be something other than a simple ABC. A decline below 854.50 would indicate the decline should be either an X-Wave, or today’s high completed an abc:A of larger degree. A Wave-A may be an ABC itself. In either case, the S&P would continue the correction for at least several more days and probably test or exceed today’s high. The Elliott wave guideline of alternation clearly warns that a Wave-4 high should not be complete today.

Secondly, W.4 should have at least several more days to go to equal or exceed the time range of the W.2. While this is not an Elliott wave “rule” or “guideline” it is a high-probability time relationship with W.4 and W.2. A

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W.4 is rarely shorter in time than a W.2 so we always anticipate it will equal or exceed the time range of W.2. Short term traders should be aware that today’s high appears to have completed a five-wave advance from the July 24 (W.2 or B) low. As long as the S&P has not taken out today’s high, short term traders should be prepared for a day or two of sideways to down trading. If the S&P declines below the potential W.1 or A high at 854.50, it should not signal the end of an ABC.W.4 which should then continue in some form of complex correction.

Lessons Learned The Elliott wave rules and guidelines help us to not only determine the high-probability pattern position of a market, but what the market can do to confirm or invalidate the most probable position. It is very important to keep aware of the big picture and how the shortterm pattern may fit into the big picture. Simple price and time factors will often help to clarify the pattern position. While no thing is for certain in the markets, the pattern position at least gives us the high-probability position and what to anticipated for any potential market activity.

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End of Wave Price Projections How To Make High-Probability Price Targets For Any Market Condition

By Robert Miner Dynamic Traders Group, Inc.

A Special Tutorial Series for Subscribers to the DT Reports Copyright 2002, Dynamic Traders Group, Inc.

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End of Wave Price Projections

Introduction to Dynamic Price Analysis and End-of-Wave Price Projections Lesson One Dynamic Price Analysis: Retracements, Alternate Price Projections and Price Extensions This tutorial will be a review for many subscribers of basic price projection techniques we use in the report, especially those who have taken the time to study my Dynamic Trading book. However, it is important to regularly review the basics to ensure subscribers easily follow along with the method and terminology we use in the DT Reports. Price analysis measures and proportions the range in price of past cycles and projects forward to project the high probability support and resistance target zones. The Fib ratio series of .382, .618, 1.618, etc. are the most typical ratios used. With Dynamic Trading, we include a few additional ratios that are all geometrically related to the Fib series. Pivots on the price chart identify the reference points used in the analysis. All price projections are made in advance. New projections are made as soon as a new swing is confirmed. The three key price projection techniques that make the price target zones are:

1) Retracements (Ret) 2) Alternate Price Projections (APP) 3)

Price Expansions (Exp)

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End of Wave Price Projections

Retracements (Ret) There are internal and external price retracements. Internal retracements are less than 100%. They are calculated between pivot points to help identify the target for a correction. The four most important internal retracements are: 38.2%, 50%, 61.8%, and 78.6%. External retracements are greater than 100%. They extend beyond the extreme of one of the pivot points. The most important external retracements are: 127%, 162%, 262%, and 424%. Let’s look at a chart example:

In the sixty-minute chart of the December Nasdaq 100 above, the first projection is the 162% external retracement of A-B to point near C. It came within a fraction of the Wave-C high on the intra-day chart. A WaveC is often either a 127% or 162% External Retracement of Wave -B.

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End of Wave Price Projections

The second projection on the chart above illustrates the internal retracement of D-E. The high at F tagged the .618 retracement before continuing the bear trend.

Alternate Price Projections (APP) Alternate price projections (APP) project the range of a past swing that was in the same direction as the current swing. The three most important APP ratios are 62%, 100%, 162% followed by 200%, 262%, and 424%. Let’s look at a chart example:

The Nasdaq sixty-minute chart above is for the same period we used for the retracement examples. The two swings measured are the A -B

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End of Wave Price Projections

advance projected from the pivot C-low and the C-D advance projected from the pivot E-low. The pivot-F high was made at the 100% APP of A-B projected from the pivot-C low and the 61.8% APP of C-D projected from the pivot-E low. This price target zone was identified in advance in the Dynamic Trader Futures Report as a target for a counter-trend high.

Price Expansions (Exp) Price expansions expand the price range of a price swing by chosen ratios. Price expansions should be used to help confirm tops or bottoms projected by using retracements or alternate price projections. They do not identify tops or bottoms as often as the other two methods. The most important ratios to use for Price Expansion are: 62%, 100%, 162%, 200%, 262%, and 424%. Let’s look at the chart example:

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The same sixty-minute Nasdaq chart shows that each of the minor lows for this period was very close to a 2.618 expansion of the first minor leg down.

Lessons Learned The three most important price projection techniques are Price Retracements (Ret), Alternate Price Projections (APP) and Price Expansions (Exp). Price retracements and alternate price projections are the most reliable of these three techniques. Price expansion should be used to confirm tops or bottoms that coincide with one of the other methods. All of the price projections are calculated in advance. New projections are made as a new swing is confirmed. The high probability target zones are where two or more of the projections coincide relatively close together. Internal and external retracements, alternate price projection and price expansion projections should be second nature to subscribers as well as the abbreviations we use in the commentary and charts. Each proje ction on a chart in the DT Futures Report is labeled with the ratio and type of projection (APP, Ret, Exp). There are not separate labels for internal or external retracements. Any retracement that is over 1.00 (100%) is an external retracement by definition. The next tutorial in the price series will begin to teach you how to make the high probability End-of-Wave price target projections for each of the common Elliott wave structures. You should know the how the three different types of price projections are made that were taught in this tutorial and there abbreviations.

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Lesson Two End-of-Wave 1 or A Price Projections This tutorial begins a series of weekly tutorials that will usually be included with each Monday or Tuesday Dynamic Trader Futures Reports to teach you how to project the high-probability targets for the end of any trend or counter-trend pattern based on Elliott wave structures. If you are not familiar with the basic impulsive and corrective wave structures and guidelines, refer to chapter three in the Dynamic Trading book, Dynamic Price Projections. While there will be some discussion of wave structure, the main objective is to teach how to identify in advance the price targets zones for all of the typical wave structures. Regarding Elliott wave – don’t get paralysis of analysis. We are interested in tools that help us trade, not in predicting the future or having an academic wave count. A market almost always provides a strong pattern signal if it is in an impulsive-trend structure or one of the many corrective structures. We always assume a correction will be an ABC until proven other wise. Even if it becomes a “complex” correction, at least we are aware that it is more likely a correction and the main impulsive trend will eventually reassert itself. Sometimes the larger or smaller degree (time frame) of change will often help to clarify the wave structure. The purpose of identifying the probable wave structure is we use the pivots to make the typical price targets for the end of tha t wave structure. We will also teach you some basic trade management strategies to use if a market reaches the price targets. Some wave structures allow projections of three target zones – minimum, typical and maximum. Keep in mind that the real advanta ge of the Dynamic Trading approach is to consider all three dimensions of time, price and pattern in the analysis and trading strategies. This series of tutorials focuses on the price factor with a fair amount of discussion of pattern. A future series of tutorials will focus on the time factor. We will use a variety of markets and time frames for the examples. The same principles and procedures apply regardless of the market – futures, stocks or mutual funds – and regardless of the time frame – intraday to monthly.

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Why Project Price Target Zones? We will have a framework to decide which side of the market to trade until the target is reached. We will avoid entering against the trend and have a better idea how long to hold a position to maximize profit unt il the target is reached. We will have a framework how to adjust the stop loss depending on the position of the market relative to the minimum, typical and maximum price targets. We will have a framework whether to consider trend-reversal or trendcontinuation trades depending on where the market is positioned relative to the price targets. Why Wave 1 or A? Why do we usually label an initial trend either a Wave 1 or A and not one or the other? Both Waves 1 and A usually have the same pattern characteristics and price targets. From a practical trading perspective, it doesn’t matter whether it is one or the other. We may have a strong opinion which it may be depending on the larger degree pattern prior to the beginning of the Wave 1 or A, but why prejudice ourselves by choosing one or the other early in the new trend? As the trend or counter-trend progresses, it will usually reveal whether it is a 1 or A. We can then adjust our analysis and trading strategies when the market has provided enough information for an informed opinion. Pattern Wave 1 should subdivide into five-waves. Wave-A usually subdivides into five waves but may subdivide into three waves. The initial assumption is a Wave-A will subdivide into five-waves. Trading Strategies One of the most useful W. D. Gann quotes is “The safest time to enter is on the first reaction against the new trend.” In Elliott wave terms, near the Wave-2 or B low. Why? If a reaction against the old trend is a five -wave structure, it is probably a Wave 1 or A which will signal the larger degree trend has changed and, at the least, a larger degree correction in terms of time and price should be unfolding. Once we have this signal of a trend

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change, we would look to enter on a trend-reversal entry strategy on the first correction against the new trend which is the Wave 2 or B. We should have at least one more swing in the counter-trend direction which will be a Wave 3 or C to trade. Price Targets – The Coincidence of Price Projections The objective of Dynamic Price analysis is to make the typical price projections for each end-of-wave and see if several projections fall near one or more relatively narrow price zones. The price targets are where two or more price projections fall near each other. Some end -of-wave (EOW) targets have one or two projections that are the most typical for that EOW. We will note those for each EOW in the tutorials. As a trend or counter-trend progresses, there are more waves in the pattern structure to use to make price targets. By the time a Wave-4 of a five-wave impulse trend is complete, we have Waves 1-4 to make projections for the EOW-5 plus retracements of the prior trend. There are no internal swings of the wave structure to make projections from with the EOW-1 or A price targets because they are the first wave in a wave structure. In a future tutorial, we will see how to use the subdivisions of a wave to help identify the price target. Without using the subdivisions of Wave 1 or A, we only have the retracements of the prior trend for potential targets.

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Wave 1 or A Price Targets Retracements: 38.2%, 50%, 61.8%, 78.6% Preferably, we make retracements of at least two degrees. The daily S&P chart below shows retracements from the 9/1 and 9/28 highs to the 10/18 low.

Price Target Zones There are two price zones in the chart above that include two or more retracements. 1402.8-1421.3: Includes the 50% and 61.8% Rets. of the 9/28H -10/18L and 38.2% Ret. 9/1H-10/18L. 1440.6-1447.5: Includes the 50% Ret. 9/1H-10/18L and 78.6% Ret. 9/28H-10/18L. In this example, we make no assumption if the advance from the 10/18 low is a Wave 1 or A. We are not using any of the potential smaller degree

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subdivisions of the Wave 1 or A to fine tune the projection. We just have the retracements of the two ranges for potential targets. Wave 1 or A High On Oct. 24, the S&P made an outside reversal day at the first target zone and declined sharply over the next two days. The Wave -1 or A high is complete. Next week’s tutorial will teach how to make the high-probability Wave 2 or B price targets.

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US Dollar Retracements The chart below shows the retracements from the 9/22 and 10/11 lows to the 10/26 high. There are three price zones that include two retracements each. While the Wave 1 or A is likely to make a low in one of the price zones, we have no additional information which zone it will be. In a future tutorial, we will show how we may be able to use the subdivisions of Wave 1 or A (waves of lesser degree) to help identify which target is most likely to the Wave 1 or A low.

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The chart below shows the Wave 1 or A low was made near the last potential target zone.

Wave 1 or A Price Target Summary Retracements from one or more pivots: 38.2%, 50%, 61.8%, 78.6%. The ideal targets are where two or more retracements from different pivots fall near each other. Wave 1 or A usually subdivides into five-waves, although a Wave-A may subdivide into three waves. We usually do not make an assumption if it is a Wave -1 or a Wave-A. However, if it is preceded by a three-wave counter trend (ABC), it should be a Wave-1 of a new impulse trend. If it is preceded by a five -wave trend, it could be either a Wave-1 or A depending on how the preceding fivewave trend fits into the larger degree wave structure. We’ll discuss more of the nuances of wave analysis in future tutorials.

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Lessons Learned We have learned how to make the retracements and identify those price zones where two or more retracements coincide. Without other information such as the projections of the subdivisions of the Wave 1 or A, we cannot make a firm opinion of which target zone is the most probable for the Wave 1 or A.

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Lesson Three End-of-Wave 2 or B Price Projections This week we will take a look at how to make End-of-Wave (EOW) 2 or B price projections. W.2 or B is preceded by W.1 or A which usually subdivides into five waves. Why do we say end of 2 or B? It makes no difference whether it is a Wave-2 or B from a trading perspective, as the each wave should have the same structure and price targets.

Wave 2 or B Pattern: Typically an ABC. Wave-C should exceed the extreme of Wave-A. EOW-2 or B Price Target Zone: 50%, 61.8%, 78.6% retracements of Wave 1 or A, plus the targets for the Wave-c subdivision of Wave 2 or B.

The retracement range for W.2 or B is 50% - 78.6% of W.1 or A. A Wave-2 or B will typically reach at least the 50% retracement but not make a daily close beyond the 78.6% retracement. Wave -2 or B typically subdivides into an ABC. W.A typically subdivides into five-waves but may subdivide into three waves. W.B is usually three waves and W.C should be five waves. Identifying the W.2 or B price target gives the trader the discipline to wait for the high probability trade set-up to enter a trade on the first reaction against the new trend. We should not consider entering a trade until the minimum price objective for W.2 or B is met – the 50% retracement of W1 or A. The daily chart below of the December Euro shows a five -wave sequence from the October 26 low to the November 3 high which we will assume is a Wave 1 or A. The Euro made a low on Nov. 8, just above the 50% retracement. Why would we assume the Nov. 8 low has not completed the Wave-2 or B low? It has not reached the minimu m 50% retracement target. We should consider the Nov. 8 low a Wave-a of Wave2 or B and not a completed Wave -2 or B. A close above the 78.6% retracement of minor W.a at 87.21 would invalidate the count shown and suggest the correction is complete and the bull trend would continue. A Wave-2 or B typically will not close beyond the 78.6% retracement.

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The 50%, 62% and 78.6% retracements of W.1 or A gives the broad price target zone for the end of W.2 or B. Wave-2 or B should not be considered complete until at least the 50% retracement is reached. A close beyond the 78.6% retracement will invalidate the assumption that the market is in a W.2 or B. A Wave-C should exceed the extreme of the Wave-A. The chart below shows W.c traded below the extreme of W.a. W e can now calculate the W.c of 2 or B price projections to fine-tune the end of W.2 or B retracement range. Ideally there will be at least two projections that fall close together. One projection would be from the W.1 or A retracements and one would be from the EOW-C projections.

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The next tutorial in this series will go into more detail on the EOW -C or 3 price targets. For now we will make the basic Wave-C targets which are the 62%, 100% and 162% Alternate Price Projections (APP) of W.a for W.c. The 62% APP of W.c to W.a and the 50% retracement of W.1 or A can be eliminated because they coincide with the W.a low and W.c should exceed the extreme of W.a. The 162% APP of W.c to W.a can be eliminated because it falls well below the 78.6% retracement of W.1 or A. This narrows the ideal W.2 or B target zone to 84.55–84.47 that includes the 62% retracement of W.1 or A and the 100% APP of W.c to W.a. The Wave 2 or B target zone falls as low as 83.69 the 78.6% retracement of W.1 or A.

Price Targets and Trading Strategies The minimum target for EOW-2 or B was reached on Nov. 17 when the Euro declined below the W.a extreme to the 50% retracement. The ideal price target has been identified. The trading strategy is to go long on a daily reversal signal if the Euro reaches within a few ticks of the ideal W.2 or B price target. The final chart below shows that W.2 or B terminated between the ideal and maximum price targets. There were two daily reversal signals

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once the ideal price target was reached. The first trend-reversal trade at the Nov. 22 reversal day would have been stopped out for a small loss as the Euro continued to decline the next day. Trend -reversal long trades should continue to be taken as long as the Euro has not closed below the 78.6% retracement. The second go-long signal on the Nov. 27 reversal-confirmation day close would have led to a profitable trade as the Euro continued to advance to above the Nov. 3 high. The final confirmation that W.C or 3 was in progress was given on the close above the W .1 or A high on December 1.

Lessons Learned We learned how to apply Dynamic Trading analysis to identify W.2 or B price targets from W.1 or A retracements and to fine-tune the targets with price projections from the subdivisions of the Wave-2 or B. Trend-reversal trades should not to be considered until the minimum W.2 or B price target – the 50% retracement level – has been reached. A close beyond the 78.6% retracement signals the market is probably not making a Wave -2 or B correction. We learned to use daily reversal signals to enter positions for the W.3 or C trend once the ideal price target has been reached.

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Lesson Four End-of-Wave 3 or C Price Projections This week we will take a look at how to make End -of-Wave 3 or C price projections. The primary difference between W.3 and W.C is the typical W.3 price projection is greater than the typical W.C price projection. The typical difference between the two lies in the relationship to Wave 1 or A. The typical W.C price projection includes the 100% APP (Alternate Price Projection) of W. A and the typical W.3 price projection includes the 162% APP of W.1. Both W.3 and W.C should subdivide into five -waves. Why do we usually label it W.3 or C and not one or the other? Frequently we do not know for sure which it will be and from a trading perspective, it doesn’t make much difference. Unless the wave pattern that precedes the W.3 or C clearly suggests it is one or the other, we use both labels. Wave-3 or C Price Projections Those shown in BOLD are the most important. W.3 or C = (62%, 100%, 162%, 262%) W.1 or A (Alternate Price Projections) W.3 or C = (127%, 162%, 262%, 424%) W.2 or B (External Retracements) 38%, 50%, 62%, 78.6% Retracements of Prior Trend Minimum W.C Target: 62% APP W.A Typical W.C and Minimum W.3 Target: 100% APP W.1 Maximum W.C and Typical W.3 Target: 162% APP W.1

100% and 162% APP The two key projections are the 100% and 162% APPs. Key target zones will be if other projections fall near one or both of these two targets. We initially assume the market will reach at least near the 100% APP which is the typical W.C and minimum W.3 target. A close above the 100% APP target zone signals the market will usually continue to trend to the target zone near the 162% APP.

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Target Zones The high probability EOW targets are where projections from more than one swing relationship and more than one degree coincide within a relatively narrow range. The ideal price target zone for W.3 or C will include one projection from each swing relationship and one or more of the smaller degree EOW-5 projections for the end of the Wave-5 of 3 or C. Let’s take a look at the recent position of the March Australian Dollar showing each projection in progression on the daily chart. Notice how the projections combine to form price target zones for the End-Of-Wave 3 or C. We will also show how trading strategies for entry and protective stop placement may be integrated with the price target projections.

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Retracements Let’s assume a long position is taken on the daily reversal signal at the W.2 or B low. The trade above the W.1 or A high at .5285 confirms W.3 or C is in progress. The first price projections to make are the 38%, 50% and 62% retracements of the prior trend down from the June 16 high to the November low are shown on the chart above. These retracements are shown in blue. W.3 or C often terminates near one of these retracements. Now let’s add the Alternate Price Projections of Wave 1 or A for W.3 or C to the chart.

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Alternate Price Projections

The 62%, 100%, 162% and 262% Alternate Price Projections of Wave 1 or A are made from the Wave 2 or B low. They are the red projections in the chart above. It is simple to place the four APP’s for W.3 or C on the chart using the Dynamic Trading software. We have now made the retracements of the prior trend and the initial Alternate Price Projections of the prior swing (W.1 or A). What are the best potential target zones for EOW.3 or C? Where do projections from each of these two methods coincide? The .5485-.5491 price zone includes the 38.2% retracement and where W.3 or C is the 162% APP of W.1 or A. Now we will add the External Retracements of Wave-2 or B and see if any of them coincide with other projections already made.

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External Retracements

I have added the 127%, 162%, 262% and 424% external retracements of W.2 or B above. They are the green projections. We have now made all three projections used to make the EOW.3 or C targets (Retracements, Alternate Price Projections and Extern al Retracements). What are the most probable EOW target zones? W. C or 3 Key Price Targets The two key projections for the EOW -3 or C are the 100% and 162% Alternate Price Projections. They are the first place we look for other projections that might fall near these two key projections. While none of the other projections fall right at the 100% APP, the 162% external retracement of W.2 or B falls a bit below it. These two projections form a high-probability minimum target zone for a Wave-3 and typical target for a Wave-C. The 162% APP coincides with the 38% retracement. These projections form the high-probability maximum target zone for a Wave-C and typical target zone for a Wave-3.

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Ideally, a target zone includes one target from each of the three types of projections, but it doesn’t always work out that way so we work with what we have. Minimum Target Zone: .5338-.5380 Includes where W.C or 3 equals 100% W.A or 1 (APP) and 162% W.B or 2 (Ext. Ret). Probable Target Zone: .5485-.5491 Includes where W.C or 3 equals 162% W.A or 1 (APP) and the 38% retracement of the prior trend (Ret.).

If It’s Not One, Then It’s The Other The trading assumption is always if a market closes above one target zone, the assumption is it should continue to trend at least to the n ext target zone.

The above chart shows the daily data through mid-Dec. This chart shows the sub-division labels of W.3 and some of the EOW -5 of 3 or C projections which fall just above the probable W.3 or C target shown earlier. A future tutorial will show how we do the EOW-5 projections.

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Price Targets and Trading Strategies On Dec. 1, the AD gapped up with a high at .5383, just above the minimum target zone at .5338-.5380. Once a minimum target is reached, the stop on the short-term unit is trailed relatively close to the market, often one tick below the one day low. One trading day later, the AD again gapped up with a high at .5490, right in the probable target zone at 5485.5491. The stops on both units are now trailed one tick below the 1DL (one-day-low). Both long units would have been stopped out on the gap down open the following day. The assumption is Dec. 7 is the Wave-3 high at .5500, less than ten ticks above the probable target zone at 5485-.5491

Lessons Learned We learned how to make the W.3 or C price projections and how to identify the probable target zones where individual projections coincide. We learned how to adjust the stop on the short -term unit as soon as the typical W.C target (100% APP of W.1 or A) is reached and to adjust th e stop on the remaining units when the typical W.3 target and maximum W.C target (162% APP of W.1 or A) is reached. Projections and target zones may always be made in advance so you are prepared to adjust your trading strategy including protective stops if a market approaches a target zone.

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Lesson Five End-of-Wave 4 Price Projections This week we will look at how to make End-of-Wave 4 price projections. We start with the assumption that W.4 will be at least a three -wave, ABC but recognize that W.4’s have a tendency to form complex structures. Even though this tutorial is about W.4 price projections, let’s first review some of the typical W.4 characteristics.

1. Wave-4 usually alternates its corrective pattern with Wave-2. For example, if Wave-2 is an ABC correction, Wave-4 will often be a “complex” correction, which is anything other than an ABC, zigzag. If Wave-2 is a complex correction, Wave-4 will probably be an ABC correction. This demonstrates the Principal of Alternation as described by R. N. Elliott and may be used as a guide to help determine the likely structure of Wave -4. 2. Wave-4 should not make a daily close into the daily closing range of Wave-1 and typically will not trade by more than a few ticks into the Wave-1 range. The typical retracement range is 38.2%-50% of Wave-3. 3. Wave-4 is often near equality in price to Wave-2 (W.4 = 100% W.2). If not, Wave-4 will usually be at or near 62% or 162% of Wave-2. 4. The Wave-4 retracement of Wave-3 will almost always be a smaller percentage than the Wave-2 retracement of wave one.

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Wave-4 Price Projections Those shown in bold are the most important. W.4 = (62%, 100%, 162%) W.2 (Alternate Price Projections) W.4 = (38.2%, 50%, 61.8%%) W.3 (Retracements) W.4 = (23.6%, 38.2%, 50%, 61.8%%) W.1-3 (Retracements) Typical W.4 Target Zone includes 100% APP W.2 and 38.2%-50% retracement zone of W.3. Maximum W.4 Target Zone includes 162% APP W.2 and 61.8% retracement W.1-3. Probable Target Zones and Key Projections Copper began a sharp decline from the Dec. 11 high. On Dec. 15, copper completed the initial correction to the decline at the 61.8% retracement (not shown on the chart below) and continued to a new low. We would consider Dec. 15 the W.2 high. Through Dec. 21, copper only made very minor corrections, none similar to the W.2 correction. Following the Dec. 21 low, copper made the largest rally in time and price since the Dec. 15, Wave-2 high which implied it should be making a W.4 correction. The Dec. 21 low was a bit above the typical extreme ta rget for a Wave3 low at the 262% APP of W.1. The 30-minute chart below shows all the typical Wave-4 projections including where: W.4 = 100% and 162% W.2 W.4 = 38.2%, 50% and 61.8% W.3 and W.1-3 W.c:4 = 100% and 162% W.a:4

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With projections evenly spaced over a wide distance, how do we decide what is the probable target zones for a W.4? First, focus in on the typical W.4 projections which include where W.4 = 100% W.2 and the 38%-50% retracements of W.3. 85.80-86.35 (Typical W.4 Target): Includes where W.4 = 100% W.2, 38.2% retracement W.3 and where W.C = 100% W.B. This is the typical W.4 target zone. 86.80-87.15 (Maximum W.4 Target): Includes where W.4 = 162% W.2, W.C = 162% W.A and 50% retracements of W.3 and W.1 -3. Since the 162% APP falls between the two 50% retracements, we make a zone with both of them. The Wave-4 target zones are projected in advance. What trading strategy should we use? Trading Strategy: The trading strategy is also developed in advance and is completely objective. As of Dec. 26, we assume the minor swing low on Dec. 22 is the Wave-b:4 low. If copper reaches a Wave-4 target zone and makes a daily reversal signal, sell on the close of the reversal signal, OR

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sell on a stop one tick below the Wave-b:4 low. A decline below the W.b:4 low signals the Wave-4 should be complete. The chart below shows the data for the next several days. On Dec. 26, copper traded to just above the typical W.4 target zone. The following day copper gapped lower and traded below the W.b:4 low confirming the Wave-4 should be complete and copper should continue to decline to below the Dec. 21, W.3 low.

Keep It Simple Last week’s tutorial about how to make the Wave -3 price projections included the AD as an example. Let’s follow up and see how we would make the Wave-4 projections. If you will recall from last week’s tutorial, the Dec. 7 reversal day high was made at the W.3 price target. What is the ideal W.4 target zone?

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The daily chart below shows just the 100% and 162% APP of W.2 and the 38%, 50% and 62% retracements of W.3. The key 100% APP W.2 does not come close to the 38% W.3 retracement which is usually considered the minimum W.4 target. The 162% APP W.2 falls right in the midpoint of the 38%-50% W.3 retracement zone. The 38%-50% W.3 retracement zone is the typical target for a W.4 and the 162% APP W.2 is usually the maximum target for W.4. What is our W.4 target zone? This is an easy one - 53.84-53.49. What is the trading strategy? If the AD reaches the W.4 target zone, buy on the close of a daily reversal signal or a trend continuation signal on an advance from the W.4 target zone. If the intraday data had shown a nice ABC subdivision of W.4, we would also buy on a stop one tick above the W.b:4 high.

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Price Targets and Trading Strategies On Dec. 13, the AD reached the W.4 target zone. The following day was an inside-day setup for a potential long trade and the next day a gap opening to trigger the trade. The next two potential setups for a long position were on the W.2:5 correction or the break above the W.1:5 high.

Lessons Learned We learned how to make the W.4 price projections and how to identify the probable target zones which include the key W.4 targets. We learned how to prepare a trading strategy in advance how we might enter on a reversal in a W.4 target zone or on a stop on the initial confirmation the W.4 is complete. Projections and target zones should always be made in advance so you may have an objective entry and stop strategy prepared in advance.

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Lesson Six End-of-Wave 5 Price Projections Wave-5 is the last wave in a five-wave structure. It should be followed by the largest correction in price and time of any correction since the beginning of the five-wave trend. Even though this tutorial is about W.5 price projections, let’s first review some of the typical W.5 characteristics.

1. W.5 should exceed the extreme of W.3. While there are “fifth -wavefailures”, they are only evident after-the-fact. The assumption always begins that W.5 will exceed the extreme of W.3. 2. W.5 should sub-divide into a smaller degree five-wave impulse structure. A W.5 may sub-divide into a “fifth-wave-diagonal” where the five-waves overlap similar to an ABCDE correction. See the Dynamic Trading book for descriptions of fifth-wave-diagonals and fifth-wavefailures. 3. In commodity bull markets, W.5 is often the “extended” wave or the longest of the three impulse waves, 1-2-3. In this case, the W.5 will exceed the typical Wave-5 price targets. 4. Wave-5 price targets are the most consistently reliable of any of the end-of-wave price targets. Why? By the time Wave-5 is underway, we have the more prior swings to work with to make projections than with any other end-of-wave target.

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End of Wave Price Projections

Wave-5 Price Projections Those shown in BOLD are the most important. W.5 = (62%, 100%, 162%) W.1 (Alternate Price Projection) W.5 = (38.2%, 61.8%, 100%) W.1-3 (Alternate Price Projection) W.5 = (127%, 162%) W.4 (External Retracements) W.3-5 = (262%, 424%) W.2 (External Retracements)

Probable Target Zones and Key Projections As with all end-of-wave targets, the ideal targets are where projections from each of the two or three key relationships “cluster” in a relatively narrow price zone. If the Wave-5 is clearly sub-dividing into five-waves, the ideal W.5 target zone will overlap with the target for the Wave-5 of 5. The key projections for W.5 are those shown in bold above. Let’s take a look at a recent example from the report. Continued on the next page.

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End of Wave Price Projections

W.5 Target Zone On Jan. 9, it appeared wheat had completed a W ave-4 low and we can make the projections to help identify the target zone for Wave -5. The 60M chart below includes only those projections shown in bold in the Wave -5 projection list above. They appear fairly evenly spaced between 286291’4. Two projections overlap at 266’1. If we only considered this relatively broad range as the Wave-5 target, it would be a very valuable piece of information where we would assume the five -wave advance from the Dec. 15 low should be complete without having made a close abo ve 291’4.

The ideal EOW targets are those relatively narrow zones which include one projection from two or more of the key sets of projections. The 288291’4 zone includes one projection from each of the three key sets of projections including: 288’2: W.5 = 162% W.4 291’0: W.5 = 61.8% W.1-3 291’4: W.5 = 100% W.1

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End of Wave Price Projections

Trading Strategy Trading strategies are always developed in advance. The trade-entry strategy and initial protective stop-loss are always objective. In this case, we would develop a trend-reversal entry strategy as wheat has reached the broad price target to complete a Wave-5 high and is only a couple cents below the ideal target zone. If wheat reaches the W.5 target, sell on a daily reversal signal or other trend-reversal entry strategy and place the initial protective buy-stop one tick above the recent high.

On Jan. 11, wheat exceeded the W.5 target during the day but closed right in the middle of the range of the target. The DT Futures Report gave the recommendation to sell any day on th e close if the close was below the current day’s open and prior day’s close. This is a reversalconfirmation-day as taught in the Dynamic Trading book. Traders could use any of the four daily reversal signals taught in Dynamic Trading for entry.

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End of Wave Price Projections

On Jan. 16, the entry signal was elected for a short position on the close. The initial protective buy-stop is placed one tick above the W.5 high. As of this point in time, we don’t know if Jan. 11 will remain a W.5 high. What we do know is that we identified a high probability reversal target zone and an objective trading strategy to enter with minimal capital exposure. That is what the business of trading is all about. After studying this tutorial, you might want to take a look at the March 2001 wheat chart and see if the W.5 high held. BP and W.5 Target This is another example from a report just last week. On Jan. 18, it appeared the BP had completed a Wave -4 high. If so, the ideal Wave-5 target zone is at 1.4603-1.4542. This price zone includes where W.5 = 38.2% W.1-3, 162% W.4 and 100% W.1. One projection from each of the three key sets is included in the target zone. If Jan. 18 is the W.4 high, Wave-5 would typically not exceed 1.4501 which is the extreme price of all the key projections.

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End of Wave Price Projections

The trading strategy given in the DT Futures Report on Saturday, Jan. 20 was – “If the BP has traded to 1.4603 (beginning of W.5 target zone), buy on the close if the close is above the current day’s open and prior day’s close (reversal confirmation day) and place the initial protective sellstop one tick below the recent low.” As always, the trading strategy is completely objective and set in advance. The long trade was elected on the close on Monday, Jan. 22. Is Monday, Jan. 22 a W.5 low? We don’t know yet. What we do kn ow is a reversal-day low was made at a high probability target zone for a W.5 low and a long trade could be initiated with acceptable capital exposure. Continued on the next page.

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End of Wave Price Projections

The Imperfect World of Technical Analysis In mid Dec., it appeared the AD had completed a Wave -4 low and the W.5 projections were made. The ideal W.5 target was at .5565-.5629 represented by the red box along the price scale. The AD traded to this zone but it appeared W.5 had only completed the Waves 1 -4 subdivisions so the W.5:5 target was made. The Wave 5:5 target was at .5619-.5652 which extended to just above the larger degree W.5 target. It would appear this zone would be the ideal target to complete the W.5:5. On Jan. 3, the AD made an outside-reversalday with a high at .5653 just one tick above the ideal W.5:5 target zone! What a perfect go short signal!

The next day the AD traded higher to above the Jan. 3 high and closed above the extreme of the W.5:5 target zone. Unfortunately, the markets don’t always unfold in the ideal manner. What would be the maximum W.5 target?

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End of Wave Price Projections

The maximum W.5 target is usually where W.5 equals 100% Waves 13. The chart above shows this target for both W.5 and W.5:5 at .5733.5780. At the very least, we would know that this is likely the maximum target for the advance from the Nov. 21 low. If the AD reached this target, we would consider trend-reversal strategies. We would not want to consider a long trade as the AD approached this zone and would want to trail stops close to the market if long. Every trend reversal is not made at an End -of-Wave target, but these targets may still provide us with important information that we can apply to practical trading strategies. Lessons Learned We learned how to make the W.5 price projections and how to identify the ideal W.5 target zone as that zone that includes one projection from each of the three key sets of projections. We learned to consider a trend-reversal trading strategy in advance if the market makes a reversal signal at the W.5 target zone. We also learned that the maximum Wave-5 target is usually where the range of W.5 equals 100% of the range of Waves 1-3. For complete information how to make all of the End -of-Wave targets and the appropriate trading strategies, see the Dynamic Trading book.

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End of Wave Price Projections

End-of-Wave (EOW) Price Projection Summary Table Copyright 2001, Dynamic Traders Group, Inc.

EOW Label and Typical Subdivisions

EOW Price Projections

EOW 1 or A

38.2%, 50%, 61.8%, 78.6% Retracements

W.1: Five-Waves

Do retracements of more than one prior trend (more than the most recent high or low). Best target zones are where retracements of two degrees coincide.

W.A: Usually fivewaves but may be three. EOW 2 or B Usually an ABC correction.

Plus which sub-division projections to include.

Plus W.5 of 1 or A projections. W.2 or B = (50%, 61.8%, 78.6%) Wave-1 or A (Ret.). A daily close past the 78.6% retracement signals it is probably not a corrective Wave-2 or B and the prior trend should continue. Plus W.C of 2 or B projections.

EOW 3 or C Both typically subdivide into fivewaves.

W.3 or C = (62%, 100%, 162%, 262%) W.1 or A (Alternate Price Projections) W.3 or C = (127%, 162%, 262%, 424%) W.2 or B (External Retracements) 38%, 50%, 62%, 78.6% Retracements of Prior Trend Minimum W.C Target: 62% APP W.A Typical W.C and Minimum W.3 Target: 100% APP W.1 Maximum W.C and Typical W.3 Target: 162% APP W.1 Plus W.5 of 3 or C projections.

EOW 4

W.4 = (62%, 100%, 162%) W.2 (APP)

Often ABC but may take the form of any “complex” correction.

W.4 = (38.2%, 50%, 61.8%%) W.3 (Ret) W.4 = (23.6%, 38.2%, 50%, 61.8%%) W.1-3 (Ret) Typical W.4 Target Zone includes 100% APP W.2 and 38.2%-50% retracement zone of W.3. Maximum W.4 Target Zone includes 162% APP W.2 and 61.8% retracement W.1-3. Plus W.C of 4 projections if it appears W.4 will be an ABC.

EOW 5

W.5 = (62%, 100%, 162%) W.1 (APP)

Five-Waves

W.5 = (38.2%, 61.8%, 100%) W.1-3 (APP) W.5 = (127%, 162%) W.4 (Ext Ret) W.3-5 = (262%, 424%) W.2 (Ext Ret) Ideal W.5 Target Zone includes one of the bold projections from each of the first three sets. Plus W.5 of 5 projections.

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Dynamic Time Analysis How To Make High-Probability Time Targets For Any Market Condition

By Robert Miner Dynamic Traders Group, Inc.

A Special Tutorial Series for Subscribers to the DT Reports Copyright 2002, Dynamic Traders Group, Inc.

www.DynamicTraders.com

Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Lesson One Time Cycle Ratios, Time Retracements and Alternate Time Projections This tutorial will be a review for many subscribers of the basic dynamic time projection techniques used in the Dynamic Trader Futures Report, and especially for those who have taken the time to study my Dynamic Trading book. However, it is important to regularly review the basics to ensure subscribers easily follow along with the method and terminology we use in the DT Reports. Plus, as this series progresses, there will be instruction how some additional practical application of dynamic time analysis that is not included in the book. What ever your background, it will be well worth your while to review each tutorial. Time analysis is done in exactly the same manner as the more familiar price analysis except we use units of time rather than units of price. Dynamic time analysis measures and proportions the range in time units of past cycles and projects forward to project the high probability support and resistance time zones. Many of the same dynamic ratios used for price analysis are used for time analysis. The Fib ratio series of .382, .50, .618, 1.00, 1.618 and 2.618 are the most typical ratios used although .50 and 1.00 are not technically a part of the Fib ratio series. Pivots on the price chart identify the reference points used in the analysis. All time projections are made in advance. New projections may be made as soon as a new swing is confirmed. The three key time projection techniques that make the time target zones are: 1) Time Cycle Ratios (TCR) 2) Time Retracements (Ret) 3) Alternate Time Projections (ATP)

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Time Cycle Ratios (TCR) Time Cycle Ratio is a term I coined over 15-years ago when I first began writing about this approach to time analysis to describe any type of time projection that is made by proportioning a time range between any two pivots and projecting forward from either the second pivot or a third pivot. On the charts in the report, you will see the TCR abbreviation by the first pivot date whenever two pivots are used to make a projection. For those with the Dynamic Trader program, these projections are made from the Fib-T (2-pivot) icon. A TCR may be made from any two pivots, they do not have to be a consecutive low-to-high, high-to-high, high-to-low or low-to-low.

Time Retracements (Ret) A Time Retracement is a retracement of time units of the time range of a low-to-high or high-to-low swing. Time retracements will often act as time support, resistance or trend termination in the same manner that price retracements will often as act as price support, resistance or trend termination. Time retracements use two pivots and are one type of Time Cycle Ratio. The typical ratios we use for time retracements are 38.2%, 50%, 61.8%, 100% and 162%. Let’s look at a chart example on the following page.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

The daily bond continuous chart above shows both time retracements from a high to a low and a time-cycle-ratio projection of two consecutive highs. The time retracement is made by measuring the time from the March 22 high to the May 15 low, multiplying the number of time units by the appropriate ratio and projecting forward the resulting number of time units from the second pivot which is the May 15 low. The 38.2% time retracement of the March high to May low is June 5. The time range from the March 22 high to May 15 low is 37 trading days (TD). 38.2% x 37 TDs is 14 TDs. Fourteen TDs forward from the May 15 low is June 5. The high-to-high time cycle ratio projection is made in the same manner. The time range between the two highs are multiplied by the appropriate ratio and the result is projected forward from the second high.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

The 100% TCR of the April 6 high to May 4 high is June 1. The time range from April 6 to May 4 is 19 TDs. Nineteen TDs forward from May 4 is June 1. Time Cycle Ratios including time retracements may be made on data of any time frame. The next chart below shows time retracements for the recent minor decline of the June S&P on the 60-minute data.

Practical Application: A correction to a five-wave trend is usually at least a 38.2% time retracement of the trend.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Alternate Time Projections (ATP) Trends are often proportional to each other. Alternate Time Projections (ATP) measure the range of time of a past swing that was in the same direction as the current trend and project forward from the beginning of the current trend. The three typical ATP ratios are 61.8%, 100% and 162%. In the Dynamic Trader software, alternate time projections are made with the Fib-T (3-pivots icon). Let’s look at a chart example.

The daily Sept. bond chart above shows the 100% alternate time projection of the April 20 low to May 4 high projected from the May 15 low. The 100% ATP falls on May 30. On May 30, the rally from the May 15 low was equal in time to the longest corrective rally since the March 22 high. The 100% ATP is a key time target. A market that exceeds the 100% ATP has “overbalanced” the previous swing which is a signal the larger

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

degree trend has changed. In this case, it is a warning that the rally from the May 15 low is a larger degree correction than any correction since March 22 high. There will be a tutorial on time and price “overbalance” in the future. Alternate Time Projections may be made on any time frame data. The next chart shows alternate time projections on the June S&P 15-minute data.

The second high on the chart on June 4 was made just two bars before the 100% Alternate Time Projection of the prior advance. The first advance on the chart lasted 26 bars. The second advance made a high at 24 bars, two bars before the 100% ATP. The 100% ATP of the second advance is projected from the June 4 low is on the 10:00 AM (EST) bar on June 5. The 162% ATP is on the 13:45 bar on June 5.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Time Target Zones The ideal time target zones that are projected in advance are those relatively narrow time zones that include several time retracements and alternate time projections from different combinations of pivots. As this tutorial series progresses, we will see which combination of dynamic time projections are most helpful to discover in advance if there is a high probability time target zone to anticipated a trend change. Calendar Days Verses Trading Days Should we use calendar days or trading days to make dynamic time projections with daily data? Since we are using a ratio of the time range, it matters little, especially for the shorter term swings. The 61.8% TCR of a 55 calendar day swing is 34 calendar days. Fifty five calendar days is 38 trading days. The 61.8% TCR of 38 trading days is 24 trading days (rounded up). Twenty-four trading days is the same range of time as 34 calendar days. Projecting forward either 34 calendar days or 24 trading days will give the same date, plus or minus one or two days depending on the time of holidays or weekends. For practical purposes, it is easiest to use trading days except for the very long cycles of several months each.

Lessons Learned The three dynamic time projection techniques are Time Cycle Ratios (TCR), Time Retracements (Ret) and Alternate Time Projections (ATP). The time projections are calculated in advance and prepare us for the high probability time targets when a market may find support, resistance or the termination of a trend. Subscribers should be familiar with each of these dynamic time projection techniques and their abbreviations. New projections are made as a new swing is confirmed. The high probability target zones are where two or more of the projections coincide relatively close together. Each projection on a chart in the DT Futures Report is labeled with the ratio and type of projection (TCR or ATP) depending on whether the projection was made with two or three pivots. There are no unique labels for Time Cycle Ratio projections using two pivots such as time retracements, high-high etc. as any two pivots may be used.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Lesson Two Time Target Zones for Support, Resistance and Trend Change By Robert Miner, Dynamic Traders Group, Inc.

In part one of this Dynamic Time Analysis tutorial series, we learned the basic dynamic time analysis methods including Time Retracements, Alternate Time Projections and Time Cycle Ratios. If you are not familiar with these terms and the method they represent, please review part one. This tutorial will assume you are very familiar with each of these three time projection techniques. This week’s lesson will show how we often can project in advance a relatively narrow range of time for support, resistance or trend reversal.

Time Target Zones The most reliable time target zones are those relatively narrow time ranges that include dynamic time projections from several past swings and more than one degree of change. Ideally, the Time Target Zone will include at least one each of a Time Retracement, Alternate Time Projection and either Low-Low or High-High Time Cycle Ratio. The first example below is July soybeans, 60-Minute data from the April 25 low to May 29. Beans made a high on May 18 and had been declining through May 29. The objective is to identify a time zone with the potential for a low. The chart below shows the Time Retracements of the April 25 low to May 18 high, the Alternate Time Projections of the time range of Wave-A projected from the Wave-B high, the most recent Low-Low TCR and the Alternate Time Projections of the May 2-11 decline from the May 18 high.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

May 30 includes one projection from each of the three sets of projections. 100% Low-Low TCR projection of the two recent minor lows. 100% ATP where W.C = 100% W.A 100% ATP of the May 2-11 decline from the May 18 high. May 29 and May 31 is the 38% and 50% Time Retracements of the April 25 low to May 18 high. This time retracement zone brackets the three May 30 time projections. The high probability time target for the next low is from the early afternoon of May 29 through the late morning of May 31 with a focus on May 30 where three of the four key projections are made. The time/price box shown in the next chart bounds the early afternoon May 29 through late morning May 31 Time Target Zone with the 50%-62% price retracement zone for a time/price zone with a high probability of

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

making a low. The low was made precisely in this time/price zone that was projected in advance.

This first example shows how we make the key time projections in advance to see if there is a relatively narrow time range that includes at a projection from each of at least two or three of the sets of projections. Now that you know how it is done on an after-the-fact example, let’s take another look at beans right up through today, June 11, the date this tutorial is prepared and make dynamic time projections for the next potential high. The next chart is daily data of July beans from the Dec. 19, 2000 high through Friday, June 8. Four sets of Dynamic Time Projections have been made.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

From the top down, the Dynamic Time Projection sets are: 1. 38%, 50% and 62% Time Retracements of the Dec. 19 high to April 25 low. 2. 62%, 100% and 162% Time Retracements of the March 7 high to April 25 low. 3. 162% and 262% Time Retracement of May 18 high to May 30 low. 4. 62%, 100% and 162% Alternate Time Projections of April 25 low to May 18 high from the May 30 low. There are two time periods that include one projection from either three or four of the four sets of projections. They are June 12-14 and June 2226. One of these two periods should result in a high of the same degree or larger as the May 18 high which was followed by a 12 CD decline. If beans are advancing into either of these Time Target Zones, we would be alert to the pattern and price position for a potential trend change.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

The next chart is the 60-Minute, July Soybean data from the April 25 low through June 8. It includes the detail of two of the projections shown on the daily chart above plus the minor 100% high-high projection.

We can see here also the June 13-14 and June 21-25 (ThursdayMonday) periods are the next potential time targets. The same projection on the intraday data may show as plus or minus a trading day from the daily data projection depending if the actual high or low the projection was made from was made early or late in the day. If we consider the projections from both charts, June 12-14 and June 21-26 are the two Time Target Zones for a high. Is one more probable than the other? Each has about an equal number of projections. I would give a slight edge to the June 21-26 period because it includes the 100% Alternate Time Projection of the April 25 low to May 18 high (Wave 1 or A) from the May 30 low (Wave 2 or B). Soybean Time Targets for a High June 12-14 and June 21-26

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Let’s make the Dynamic Time Projections for the current position of the S&P. Below is the daily chart through Monday, June 11. What time projections should be made?

Since the S&P is declining from the May 22 high, the objective is to identify the high-probability time target for the next low. The next daily chart shows the three typical sets of projections we would make: Recent Low – Low Time Cycle Ratio projections. Time Retracements of the recent advance. Alternate Time Projections of the recent decline.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

There is one projection from each of the three sets that fall in either the June 14 or June 20-21 Time Target Zones. If the decline from the May 22 high is a correction, the corrective low should be made in one of these zones. Is one more probable than the other? My first choice would be June 13-15 (June 14 +/- one trading day) because it includes the 100% ATP where W.C = 100% W.A.

S&P Time Targets for a Low June 13-15 and June 20-21

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Target Zones and Minimum Time Targets These target zones help to identify the high-probability time targets for trend change. In the same manner, they also identify the minimum time target for a current trend. In the case of soybeans, the first time projection from the May 30 low was the June 12-14 period. In other words, the bull trend should not be complete prior to June 12, a projection almost two weeks following the May 30 low. In the current case of the S&P, from the June 5 high, the minimum projection for the decline is the June 13-15 period, a projection over a week after the June 5 high. Target Zones and Trend Continuation Usually, the assumption is if a market continues to trend past one Time Target Zone, it will continue to trend at least to the next target zone. In the case of the S&P, if the S&P makes a new daily and closing low after June 15, the odds are the decline will continue to June 20 or later. If beans make a new daily and closing high after June 14, the odds are the bull trend will continue to at least June 21, the first day of the next Time Target Zone. Every high and low is not made precisely within the Time Target Zones projected in advance, but most are. Which projections are made is very objective. It is a bit subjective how we choose which group of projections are the most important. Usually we focus on the time around the one or two most important projections. Never forget that time analysis is just one of the three key factors in Dynamic Trading analysis along with pattern and price analysis. The ideal trend-reversal trade set-ups are when a pattern appears near completion within the projected time and price zones for a probable trend reversal. Lessons Learned In this tutorial, we have learned how to make the basic dynamic time projections and how to identify the Time Target Zones that include at least one projection from each set of projections. We know that we can make these projections in advance. The Time Targets will help provide us with the minimum time target for the next trend change as well as the high probability zones when the next trend reversal should be made. We will look at many more examples of making the dynamic time projections and Time Target Zones in advance in many market conditions in this series of tutorials until it becomes second nature to you.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Lesson T hree More Time Target Zones for Support, Resistance and Trend Change By Robert Miner, Dynamic Traders Group, Inc.

In part one of this Dynamic Time Analysis tutorial series, we learned the basic dynamic time analysis methods including Time Retracements, Alternate Time Projections and Time Cycle Ratios. If you are not familiar with these terms and each method they represent, please review part one. This tutorial will assume you are very familiar with each of these three time projection techniques. Part 2 in this series sent last week taught you how to project in advance a relatively narrow range of time for support, resistance or trend reversal that we often call Time Target Zones. The Time Target Zones are projected in advance and have a high probability of being the minimum targets for a trend or counter-trend swing or the end of a larger degree trend. Parts one and two are in the archive section of the Subscribers page. This week’s lesson will use a current example of how to use both the longer and shorter term dynamic time projections to confirm or invalidate the a projected Time Target.

Soybeans – Next High? Part 2 of this series showed how we made the June 12-14 and June 21-26 Time Target Zones for a probable high for beans. As of June 19, the date this tutorial is prepared, the high for beans is June 12, right in the first potential target zone. If beans take out the June 12 high, we found the next potential target for a high is Thursday – Tuesday, June 21-26. Let’s see if we can use the more recent short-term swings from the past week to narrow down that time target and see what the next target may be if beans continue to advance beyond June 26. The daily chart below includes all of the longer term time retracements, alternate time projections and high-high time cycle ratios of the major swings since the May, 2000 high.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Is there a relatively narrow range of time that includes a cluster or group of dynamic time projections that should be considered a Time Target Zone?

These projections are spread out fairly evenly from July 11 to Sept. 7. There might be some emphasis on the early part of this period – July 11 – Aug. 7 – but there is no 2-5 trading day period that includes three or four projections. These projections do not point to a high probability time target zone for a change in trend. Lesson learned – Don’t try to make something out of nothing. While we might want to be alert on some of these dates, they would only be significant if some short-term projections fell on the dates and/or there were some time counts on these dates. A later tutorial in this series will teach you how to use trading and calendar day counts. From

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

the time projections shown above, we cannot come up with a specific narrow-range time target for a trend change. Now let’s move to the short-term data and see if we find more useful information. The next chart is 60-minute data since the April 25 low. Four sets of projections are shown. These projections are valid as long as the June 15 low is not taken out. If beans decline below the June 15 low at 457 before making a new high, the projections are invalidated.

The top set of projections labeled #1 are the 61.8%, 100% and 162% high to high time cycle ratio projections. The second set is the time retracements of the last minor decline. The third set is the 100% and 162% alternate time projections of the most recent swing up, May 30 low to June 12 high, projected from the June 15 low. The fourth set of projections are the 100% and 162% alternate time projections of the

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

second most recent advance, April 25 low to May 18 high, from the June 15 low. The first thing we can do is eliminate the two “out-liers” on July 20 and 25. They don’t coincide with any other projections and are far out from most of the projections. The first coincidental period is the afternoon of June 26 to the morning of June 27 which includes two projections – the 62% high-to-high TCR from set #1 and the 100% time retracement from set #2. The second coincidental period is the afternoon of June 29 which includes the 100% ATP from set #3 and the 162% time retracement from set #2. The July 6 projection from set #1 is out by itself so it shouldn’t be considered. The third coincidental period is the afternoon of July 10 to the morning of July 11 which includes a projection from set #3 and #4. Can one of the three coincidental periods be singled out as more valid than the others? Or, can at least one of the three be eliminated from contention? Recall from last week’s tutorial, #2 is this series, that the recent swing on the daily data projected the relatively broad period of June 21-26 as the most probable Time Target Zone for a high in June. The first period described above in the June 26-27 period begins at the extreme of the daily data projection. The second period, June 29, is three trading days later. We should begin by eliminating the third period, July 10-11 for now. There is nothing about the individual short-term projections in either the June 26-27 or June 29 periods that makes one of those periods stand out. So, we should concentrate on the June 26-27 period because it partially overlaps with the larger degree target for a potential high of June 21-26 shown in last week’s tutorial.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Soybeans - Next Time Target for a High – June 25-27 If beans continue to advance to above the June 12 high which was made right in the June 12-14 Time Target Zone, the next high probability time for a high would be Monday-Wednesday, June 25-27. This period includes both intermediate-term and short-term Dynamic Time Projections. If beans first decline below the June 15 low, this time target is not valid and we would make the Dynamic Time Projections for the next potential low. Since the April 23 low, beans have made a fairly regular series of swings as of June 25. Let’s project the next probable time zone for a high if the recent time rhythm continues. If the next high is made outside the time projection, it will signal if beans are strong or weak. The chart below is Nov. beans, 60-minute data from the April 25 low through the morning of June 28. I have made five sets of time projections labeled 1-5. Take a look at the chart, then we will see what is significant about these projections.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

The daily chart below shows some of the time projections of recent swings shown in last week’s tutorial. The recent high was made on June 12, right in the June 12-14 target. The next target for a high if beans continue to advance is June 25-27 which includes time projections from the daily chart below and the 60-minute data above.

Lessons Learned In the first three tutorials in this series, we have learned how to make the three basic types of dynamic time projections, how to recognize the Time Target Zone clusters of projections and how to update the target zones with the longer and shorter term time frames. In the next week’s tutorial, we will see if there are dynamic time projections that are helpful to project the minimum and maximum time targets for a trend or counter trend.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Lesson Four More Time Target Zones By Robert Miner, Dynamic Traders Group, Inc.

In part one of this Dynamic Time Analysis tutorial series, we learned the basic dynamic time analysis methods including Time Retracements, Alternate Time Projections and Time Cycle Ratios. If you are not familiar with these terms and each method they represent, please review part one. This tutorial will assume you are very familiar with each of these three time projection techniques and their common application. Part 2 in this series taught you how to project in advance a relatively narrow range of time for support, resistance or trend reversal that we often call Time Target Zones. The Time Target Zones are projected in advance and have a high probability of being the minimum targets for a trend or counter-trend swing or the end of a larger degree trend. Part 3 showed examples of projecting the potential time targets in advance for the current position of a market. This week’s lesson will also use a current example of how to use the Time Cycle Ratio, Time Retracements and Alternate Time Projections to identify a critical time zone in advance. Parts one, two and three are in the archive section of the Subscribers Page on our web site.

Critical Time Zones Signal Market Strength or Weakness Last week’s lesson projected the time target of June 25-27 for a potential high in beans if beans continued to immediately advance above the June 13 high. Beans did not advance but declined into a June 25 low. At this point in time, we don’t know if the June 25 low is the end of an ABC correction or if beans are going to continue lower. Let’s use our Dynamic Time Analysis to identify a critical time zone that will help to signal the position of beans. While this approach to time analysis for this example will be a little different than projecting a time target for trend reversal as shown in the prior tutorials, we will use the same three types of time projections – Time Cycle Ratios, Time Retracements and Alternate Time Projections.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Since the April 23 low, beans have made a fairly regular series of swings as of June 25. Let’s project the next probable time zone for a high if the recent time rhythm continues. If the next high is made outside the time projection, it will signal if beans are strong or weak. The chart below is Nov. beans, 60-minute data from the April 25 low through the morning of June 28. I have made five sets of time projections labeled 1-5. Take a look at the chart, then we will see what is significant about these projections.

Time Projections From June 25 Low 1. 100% Time Retracement of the most recent high to low.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

2. 100% alternate high-high TCR projection. 3. 100% high-high TCR projection of the most recent two highs. 4. 100% Alternate Time Projection of the most recent advance projected from the June 25 low. 5. 100% Alternate Time Projection of the May 11-18 advance projected from the June 25 low. The earliest projection is on June 29 and the latest on July 9. This is a very broad period of time, especially considering we are using the relatively short term swings on the 60-minute data. But it does provide us with a critical piece of information. If the recent time rhythm continues, the next high should be made in the broad period of June 29-July 9. If a high is made prior to June 29, it is a sign of a weak market and the probable continuation of the bear trend to new lows. If a high is made after July 9, it is a signal of a strong market and the probable continuation of a bull trend to a new high. We can now go to a lower time frame or smaller degree of swings and see if we may discover a more narrow range time signal that may provide us with an earlier warning of the position of beans. The next chart is 15-minute data from the June 13 high through the morning of June 28. The chart shows the common three sets of projections – 100% H-H, ATP and time retracement. All of these projections fall on June 27. The high through the end of this data is June 27. What is significant about June 27?

(Continued on the next page.)

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

If beans continue to advance above the June 27 high, it is a minor bullish signal and would be the first signal June 25 may have completed an ABC low. This would imply that beans should continue to advance to above the June 13 high. If beans continued to decline from the June 27 high, it would be the initial signal the bear trend will continue to below the June 25 low.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

S&P Time Target for a High The next example is relevant to the current position of the S&P. We are going to make projections as if June 15 completed an ABC correction. It is too soon to know if this is the case, but the exercise is to learn how to make time projections in advance. Generally, there is no need to make new projections until a high or low is confirmed. In the present case, the S&P needs to close over the minor high of June 21 to signal June 15 may have completed an ABC low. The chart below is daily S&P cash. It includes five sets of the typical projections.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Projections from the June 15 Low for a Potential High 1. Most recent high-high TCR projections. 2. ATPs of the April – Sept. rally projected from the March 22 low. 3. Time Retracements of the prior bear trend. 4. ATPs of the March – May rally projected from the June 15 low. 5. Time Retracements of the most recent decline.

These projections appear to be spread out over a very broad period of time. If we look closely, is there a relatively narrow range of time that includes a projection from at least three of four of these sets? July 24-31 includes a projection from four of the five sets. No other period has multiple projections that coincide within a fairly narrow range of time. If the S&P continues to advance from the June 15 low, the first high probability time target for the next high is the July 24-31 period. If the S&P takes out the June 15 low, this Time Target would not be relevant. How does this time target help us with a trading decision? If the S&P continues to advance, we would anticipate the advance would continue to July 24 or later. Unless other factors strongly suggested otherwise between now and July 24, the assumption would be July 24 is the minimum time target for the next high of similar degree to the pivots used to make the time projections. Trades would be oriented to the long side at least until July 24. New Lows in Beans or S&P? What if beans first take out the June 25 low or the S&P first takes out the June 15 low before continuing higher? What would be the high probability time targets for the next low in each market? Now you know how to project the Time Targets. I will leave it up to you for now to make the targets for the next potential low for each of these markets. If either of the markets make new lows in the next few trading days, we will make the time projections for a potential low in next week’s tutorial and see how they compare with your projections.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Lessons Learned You now know how to make the typical Dynamic Time Projections with the Time Retracements, H-H and L-L Time Cycle Ratios and Alternate Time Cycles. You know how to look for the relatively narrow ranges of time where projections from several sets coincide to identify a potential Time Target for the next low or high. You know how to use a smaller degree time frame to help provide an early signal of the trend direction. You also know how to use the projections to identify a relatively broad period of time that should be the minimum and maximum for the next high or low in an essentially trading range market. The next tutorial in this series will once again include Dynamic Time Projection examples from one or two recent markets. We will then move on to how to add calendar and trading day counts and L-L and H-H Time Bands and Time Rhythm Zones to the Dynamic Time Projection Time Targets to further pinpoint the high probability targets for trend change.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Lesson Six Time Target for a Bond Low This week’s lesson will also use a current example of how to use the Time Cycle Ratio, Time Retracements and Alternate Time Projections to identify a critical time zone in advance. Bonds – Monthly The chart below is monthly bond data from the Oct. 1987 low. It shows the major trend and counter-trend swings. If bonds completed a major corrective high in March, what should be the minimum time target before the next major low should be made? What would be the logical time projections to give us the minimum time target for the next comparable low?

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

I first measured the time range from low-low for the major swings shown on the chart above. The low-low time counts are not shown on the chart above. The two shortest low-low cycles were 19 and 25 months. We assume the next comparable low will probably be made in the time range of the prior low-lows. Nineteen months from the Jan. low is Aug. 2001 and 25 months is Feb. 2002. If bonds continue to decline beyond Aug., they will probably not make a low prior to next year based on the recent lowlow time rhythm of the past 13 years. Bonds were in a bull trend from Oct. 1987 to Oct. 1998. What is the range of the momentum cycles, low-high, during that period? These bull cycles were in the direction of the trend. The range was 12-28 months. Twelve months from the March 2001 high is March 2002. Based on the trend swings of the past 13 years, bonds should not make a low of comparable degree to all the trend reversal highs and lows shown on the monthly chart prior to March 2002.

Momentum Trends You may have two questions about the comments above. The first, what are momentum cycles? They are not necessarily obvious price pivot highs and lows. Momentum cycles are the extreme highs and lows of the momentum indicator or when the indicator makes a cross over. The momentum trends represent when a market slows down and speeds up its trend. The momentum cycles usually closely coincide with the price pivots, but not always. Are we just concerned with the price lows and highs in a market are is it just as useful to know when a trend is beginning another cycle up whether it is from an extreme price low or not?

Trend Swings I also measured the range of time of the trend swings of the momentum cycles (low-high) during the 1987-1998 bull market but projected that range from the March high. How can we justify comparing the time ranges of low-high swings with a potential high-low swing? If the major trend is down from the Oct. 1998 high, each bear swing down is a “trend swing.” Each decline is in the direction of the larger

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

degree trend just as each rally between Oct. 1987 to Oct. 1998 was in the direction of the larger degree trend. If we compare the bear swings in a bear market with the bull swings in a bull markets, we are comparing trend swings with trend swings. If we are interested in the potential minimum to maximum range of time of trend swings, it wouldn’t make sense to compare the corrections in a bull trend (high-low swings) with the trend swings in a bear trend (high-low swings) would it? There will be more on momentum trends and trend swings in a future tutorial. So far, we have learned from comparing major low-low ranges and trend ranges, if bonds decline beyond Aug., the decline will probably last to Feb. or later next year. This itself is a very useful piece of information to have, particularly after Aug. if bonds continue lower. These time projections were made from the long-term trends represented on the monthly data. Let’s move to a shorter time frame and see what the next potential Time Target Zone is for bonds on the daily chart.

Time Target for Next Shorter Term Low for Bonds The last four Dynamic Time Analysis Tutorials have taught you how to make the time projections to see if there is a specific probable Time Target for the next high or low in a market. Without even looking at a chart but assuming a high is complete and we want to project the next potential low, what are the first sets of projections we would make and what ratios would we use?

1. Time Retracements of larger degree – 38% , 50%, 62% 2. Time retracements of the immediate swing in the opposite direction as the current trend – 62%, 100%, 162% 3. Alternate Time Projection of most recent comparable trend in the same direction – 62%, 100%, 162%. 4. Most recent low-low Time Cycle Ratio – 62%, 100% , 162%

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

The ratios in bold tend to be the most important for each of these four sets of projections. Once these projections are made, we look to see if there is a relatively narrow range of time that includes one projection from two or three and preferably all four sets of projections. The same procedure and basic set of projections are initially made in almost all situations.

Next Bond Low? Let’s move to the daily chart and see when the next intermediate term low that may last at least a few weeks might be made. If we assume bonds completed a corrective high in June, the four sets of projections described above have been made on the chart below. 1. Low to low Time Cycle Ratios. 2. Alternate Time Projections of last bear swing down projected from the June high. 3. Time Retracements of the most recent rally into the June high. 4. Time Retracements of the larger degree trend from the Jan. 2000 low to the March 2001 high.

Is there a relatively narrow range of time that includes at least one projection from three or even four of these sets?

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Aug. 15-31 includes one projection from each of the four sets. No two other projections are even within two weeks of each other. Next Probable Time Target For Bond Low – Aug. 15-31 If bonds do not take out the June high and continue to decline to below the May low, the next potential Time Target for a low that is comparable to the pivots shown on the daily chart above is Aug. 15-31. This implies any rally between now and mid-Aug. is probably just a minor correction in the bear trend and the corrective rally is likely to only last a few days. However, if bonds first take out the June high, this time target for a low is voided and we will then project the potential time target for the next high.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

What side of the market should a trader favor for the next few weeks based on the potential time target? As long as bonds do not exceed the June high - the short side. The time targets project the targets if a trend continues. If the trend is voided, new targets must be made.

Continued on the next page.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Dynamic Time Analysis Summary Over the past five weeks, I have presented tutorials how to make a highprobability Time Target projection for a change of trend comparable to the pivots used to make the projections. We have used time frames from monthly to 60-minutes. These Time Target Zones have only used the dynamic time projection approach and not included CD or TD counts or other time techniques. Below is a summary of the Dynamic Time Analysis approach including which projections to make, which ratios to use and how to quickly determine if there is a high probability cluster of time projections that prepare the trader for a trend change in the future. The Three Most Common Dynamic Time Projections 1) Time Cycle Ratios (TCR) – 62%, 100%, 162% 2) Time Retracements (Ret) – 38%, 50%, 62%, 100%, 162% 3) Alternate Time Projections (ATP) The most common Time Cycle Ratios are the low-low or high-high projections from the two most recent confirmed pivots. Typically, two Time Retracements are made. One is the time retracements of the larger degree trend. The second is the Time Retracements of the most recent trend in the opposite direction of the current trend. The two most relevant Alternate Time Projections are the immediate alternate trend that was in the same direction of the current trend and the longest alternate trend of the prior larger degree trend. The next chart shows each of these time projections.

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Dynamic Time Analysis By Robert Miner, Dynamic Traders Group, Inc.

Time Target Zone Once each set of projections have been made, we look to see if there is a relatively narrow range of time where a projection from 3 or 4 of the sets coincide. If so, it becomes a Time Target Zone with a high degree of probability of making a trend reversal of similar degree to the reversal pivots used to make the projections.

Time Is Just One Factor Time analysis is just one of the three major factors in Dynamic Trading. The time position of a market should only be considered within the context of the price and pattern position. It is when time, price and pattern all coincide to signal the same trend position that the high probability trades are identified.

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DT Trade Strategies Robert Miner

This tutorial will describe the two main entry and stop strategies I use and recommend. I have written about them many times in tutorials and report comments and will review them here.

Pattern Entries and Stops We often rely on the pattern of the market to identify the trend position – is it impulsive or corrective? What can the market do to confirm or invalidate the position? If we have an opinion of the pattern position, we are able to make the high probability end-of-wave targets which usually point to the minimum, typical and maximum price targets for the trend or counter-trend. Let’s use a recent actual S&P example that was included last Tuesday in the DT Intraday Futures Report. I will be using short-term, 5-minute data but the exact same strategy is applicable to any time frame and any market including futures, stocks, indexes or mutual funds. The assumption mid-morning was a low was made at the 10:15 bar and an impulsive rally would begin. W.1 or A and 2 or B were complete. The recommendation was to buy on the breakout above the W.1 or A high with the initial protective sell-stop one tick below the W.2 or B low. See the 5M chart below. The idea was to be long for a potential W.3 rally.

DT Trade Strategies – Tutorial for DT Report Subscribers – Page 2

At about 11:30, the S&P traded above the W.1 or A high electing a long trade. The recommendation was to place a stop-and-reverse (S&R) to a net short position one tick below the W.2 or B low. A stop-and-reverse is simply a sell order for twice the number of contracts that you are long which will result in a net short position. Why a S&R? If the S&R were elected, the assumption that an impulsive rally was going to be made would be incorrect. The rally should then only be a correction and the bear trend should continue to a new low. We would want to be short. We were using the pattern position to identify the most likely trend direction and the place where the market would confirm or invalidate the potential trend position. Some traders have difficulty reversing a position. It is an important hurdle that you must overcome. One way to get over the reversal phobia is to think of it as an independent trade instead of a reversal of position. If there were no open position, the trade would be initiated. Less than one hour after the breakout above the W.1 or A high, the S&R to a net short was elected when the S&P declined below the W.B low. Copyright 2002, Dynamic Traders Group, Inc., - www.DynamicTraders.com

DT Trade Strategies – Tutorial for DT Report Subscribers – Page 3

The stop on the short position was placed one tick above the W.C high.

What would be the strategy for stop adjustment? Once again we use the pattern position. If the market is declining from an ABC correction, the assumption is the decline will be a five wave impulse trend. Once the W.1 and two are complete, the stop is adjusted to one tick above the W.2 high. About an hour later, the S&P had made a sharp decline and then traded sideways. The initial low was considered the W.1. Once the W.2 was complete by a decline below the W.1 low, the stop was adjusted to one tick above the W.2 high.

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DT Trade Strategies – Tutorial for DT Report Subscribers – Page 4

The S&P eventually declined and the stop was brought down to one tick above the W.C high. How would we look to exit the trade and take profits? Once the market reached a minimum target zone, the stop is trailed close to the market. In this case, 966-961 was the target zone which included the 50% retracement (always a key) and the 100% alternate price projections of the prior two swings which formed a target zone for a potential W.E. Once this target zone is reached and the DTOSC (StoRSI) is in the Stop Zone in a Bear Trend (below 25%), the stop would be trailed one tick above the 1BH (one-bar-high). In mid-afternoon, the S&P reached this target zone and the StoRSI was in the stop zone. The recommendation was then to trail the stop one tick above the 1BH.

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DT Trade Strategies – Tutorial for DT Report Subscribers – Page 5

Why not exit at the price target or the first cross over of the DTOSC instead of trailing the stop? Trailing the stop at the 1BH keeps it very close to the market yet will probably keep you in the market if the trend continues. I almost never recommend taking profits (or entering a trade) at a price target. I always like the market to provide some signal it is going to do what I anticipate by making a reversal, taking out a minor swing high or low or trading above (below) a bar before entering or exiting a trade. That way you have a better probability of staying with the trade if the trend continues. It was about an hour and eight points later before the short trade was stopped out by taking out the 1BH.

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DT Trade Strategies – Tutorial for DT Report Subscribers – Page 6

There was a small loss on the first long trade and a much larger profit on the second short trade for a net profit for the day of the two trades. This is not an after the fact example but exactly as referred to during the day in the Intraday Reports and chat room. It is nothing new or complicated. It is a simple strategy I have referred to many times and used by many traders. The trading strategies responded to the market position and were all made in advance. Strategy Highlights 1. The pattern position of the market will often provide a completely objective entry and initial stop strategy, including if a stop-and-reverse strategy is warranted. 2. The strategy is always prepared in advance. Either the market fulfills the conditions for entry and stop or it does not. 3. The exit strategy is completely objective. Once the conditions are met, the stop is adjusted. 4. The trade is not exited until the market provides a reversal signal.

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DT Trade Strategies – Tutorial for DT Report Subscribers – Page 7

Indicator Entries and Stops Let’s take a look at another example and how we use the DTOSC (StoRSI) or any other indicator to hook us in and out of the trade. If you don’t have DT, use whatever indicator you typically look at. They all show about the same thing. In the middle of the afternoon on Friday, my assumption was the main trend was up from Thursday’s reversal day low and the S&P was making an ABC correction. At the 14:35 bar, the S&P had reached a potential support zone and W.c target which included the 61.8% retracement of the day’s range and the 162% APP of W.a. The StoRSI (DTOSC) was in the Buy-Zone for a Bull Trend and hooking up. A chart was sent to DT Intraday Futures Report subscribers and the comments noted a potential DTOSC double low. The typical trading strategy is to trail an entry stop for a long position one tick above the 1BH.

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DT Trade Strategies – Tutorial for DT Report Subscribers – Page 8

About 30-minutes later, the entry signal was made when the S&P traded above the 1BH. The initial protective sell-stop is placed less than five points away, one tick below the recent low.

What is the exit/profit strategy? Once the indicator reaches the Stop-Zone (above 75%) and crosses down, trail the stop one tick below the 1BL. The exit strategy is prepared in advance and is completely objective. There are no more decisions to be made. About 30 minutes later, the indicator reaches the Stop Zone and hooks down. The S&P has reached a potential resistance zone. The stop is trailed one tick below the 1BL.

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DT Trade Strategies – Tutorial for DT Report Subscribers – Page 9

The stop at the 1BL was elected just a few bars after the DTOSC crossed down from the Stop Zone.

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DT Trade Strategies – Tutorial for DT Report Subscribers – Page 10

The profit was less than three points on this trade. I may end of being complete wrong about the trend position of the market. The S&P may not of made an ABC correction. The bear trend may be resuming. What ever that may be, the trade strategy was made in advance and the entry and exit was completely objective. And, at least a small profit resulted.

Strategy Review 1. If the market is at a support or resistance target zone, ideally an end-ofwave target, once the Osc hooks up, trail the entry one tick above (below) the 1Bh or L. Place the initial protective stop one tick beyond the extreme made prior to entry. This will usually be a very small capital exposure. 2. Once the Osc reaches the Stop Zone and hooks down, trail the stop one tick above/below the 1BL or H.

These strategies are applicable to every time frame and every market. For a complete tutorial on indicators and trading strategies, download and study the 84-page DT Indicators and Trading Strategies manual from the Subscriber Page. This manual along with the time and price manuals and other tutorials are only available to paid subscribers. They do not show on the oneweek Trial Subscribers page. The beauty of these strategies is there is not a lot of guess work during the trading day. The entry and stop strategies are objective. You do have to use your judgment and experience to identify the simple patterns and price targets, but that is easy to learn and is what we constantly teach in our reports and tutorials and what we constantly update in the DT Intraday Reports.

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Dynamic Trader Trading Course

Fib Time Blitz Report Time Cycle Ratios (TCR) and Time Counts are also used for the Fib Time Blitz (FTB) report, but in a way different from the Dynamic Time Projection (DTP) report. The Dynamic Time Projection report uses a specific series of nine swing comparisons to make projections, including TR.1-3-5, ATP.1-2, C, C:C, etc. There are also specific time relationships for particular wave objectives. DTP templates are provided that reflect the most prevalent time factors for each wave condition. DTPs are “directional.” A DTP projection from a high is only relevant as a time period for a potential low. The Fib Time Blitz report projects Time Cycle Ratios but in a different way. FTB makes TCR projections by every ratio chosen of all possible combinations of the most recent 12 pivots including the pivot from where the projection is made. There are typically so many projections made with the FTB, that it is not unusual to have one or more projections fall on virtually every date in the future. It is particularly important to only focus on those dates with the relatively highest score for any period. The most recent 12 pivots beginning with the Jan. 12, 1998 high have been marked off on the chart below. The FTB will make the TCR projections from every possible combination of these 12 pivots. It will make all of the TCR projections of the 11 time ranges between pivots 1-2, 1-3, 1-4, 1-5, etc. It will then make all of the TCR projections of all of 10 time ranges between pivots 2-3, 2-4, 2-5, 2-6, etc. When these are finished it will begin from pivot three and continue to move backward pivot by pivot until every possible combination of the 12 pivots have been compared. Hundreds of calculations will be made!

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Dynamic Time Analysis (FTB)

FTB allows the user to choose which ratios to include and how to distribute and weigh the hits in the same manner as the DTP report. How Is The Fib Time Blitz Report Different From The Dynamic Time Projection Report? I like to consider the FTB report as uncovering future time periods where a “dynamic web of time” or “time crossroads” is made. These will be periods which include both obvious and obscure TCRs and time counts from many perspectives. FTB projections should be considered “non-directional.” A relatively high score on the FTB should be considered a potential period for a high or low regardless of whether the projection was made from a high or low. Both the FTB and DTP reports are made in the same general process using Time Cycle Ratio projections and Time Counts. The Dynamic Time Projections use fewer pivots and fewer ratios and counts to make the projections. DTPs usually use a template set-up that is specific to the market condition. FTB projections should not be considered on their own as high probability time targets. They are best used as time projections to confirm a DTP. When both the

2

Dynamic Trader Trading Course

FTB report and DTP report make projections on or very near the same dates, the probabilities of trend change in that period is great. A trend change that falls on a high score FTB that does not coincide with a DTP will probably only result in a lesser degree trend change pivot than the pivot from where the FTB projection was made. Below is the Fib Time Blitz set-up to make projections from the Jan. 12, 1998 high. The default time sets are chosen. The date range of the report is the same used for the Dynamic Time Projections to project a Wave-4 low.

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Dynamic Time Analysis (FTB)

The default BLR (Blitz Ratio) set is shown below. All of the key ratios are used for the TCRs (Time Cycle Ratios of the past 12 pivots) and only the four key Fib ratios are used for the two recent Alternate Time Projections (ATP.1 and ATP.2).

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The BLC (Blitz Calendar Day) set is shown below. The CD counts are made from all of the most recent 12 pivots. All of the counts are used including many of the anniversary counts that are beyond the first 16 lines. These other counts may be viewed by scrolling the table. Note that some of the more important counts have higher weights and larger distributions than the others.

The BLC counts are only available for daily data files. The BLT (Blitz Trading Day) counts are available for any data file as the counts are by what ever time period bars are shown (trading day, hourly, etc.).

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Dynamic Time Analysis (FTB)

Below is the histogram made from the set-up. It shows all days where a hit was made (scores above “0”). Almost every day had at least one hit. March 3 has the highest score for this period. We can filter out the lower score days by showing only those scores above 50.

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March 3 is the highest scoring day and March 24-28 includes the second highest scoring day.

How did it turn out? A low was made on March 5, two days after the FTB highest score date of March 3. The chart below shows both the FTB and DTP histograms below the daily bond bar chart. The high scoring FTB and DTP dates fell at or very near the same dates.

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Dynamic Time Analysis (FTB)

Fib Time Blitz Templates There are three template sets that may be included in a FTB: BLR (Blitz Ratios), BLC (Blitz Calendar Day counts) and BLT (Blitz Trading Day, bars etc. counts). The sets for each include: BLR (Blitz Ratios) Default, None, Fib and Fibsl (Fib short list). BLC (Blitz Calendar Day counts) Default, None, Fib, Fib-Anv (Fib numbers and annual date projections), Anv (anniversary date projections only), Sq90 and Sq144 (Squares of 90 and 144). BLT (Blitz Trading Day counts) Default, none, Fib, Sq90 and Sq144 (Squares of 90 and 144). Anniversary Counts (Anv set in BLC) This is a calendar day template which will project the future date of the 1 through 12 year anniversaries. Users may use this template by itself if they only want to be aware of annual counts from past highs and lows for a certain period.

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Fib Counts Only(BLC and BLT sets) This template only includes the Fib series of numbers. When a “0” is placed in the distribution column, no date is projected even though there may be a number in the weight column. All the non-Fib numbers in this template have zeros in the distribution column.

Anniversary and Fib Count Combination Template (BLC set) This template includes 12 years of anniversary date projections and the Fib series of counts.

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Dynamic Time Analysis (FTB)

Squares of 144 and 90 (BLC and BLT sets) Gann traders are particularly interested in making counts from past pivots using numbers that are multiples and divisions of 144 and 90. If Gann purists don’t want to pollute their counts with Fib numbers, they can chose one of these templates.

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Dynamic Trader Trading Course

Make Your Own Custom Fib Time Blitz Templates If a TCR, CD or TD set that you would like to use or experiment with is not included with Dynamic Trader, it takes only a few minutes to build and save a template. Many Dynamic Trader users create their own FTB templates for specific purposes.

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Building Swing Files of Trend Change Pivots A Swing File contains the series of pivots of one particular degree of change. A Swing File is constructed of the important trend change pivots for each market that is to be analyzed. What is the purpose of a swing file? One of the objectives of the time and price analysis of Dynamic Trading is to project the extent of a trend in time and price and the high probability targets when and where the next trend change will be made. To do this, time and price projections are made from previous pivots of the same degree of trend. Dynamic Trader allows the user to do this in two ways. One way is to simply click off the high and low pivots on the bar chart to make the time and price projections, one at a time. While this is simple and easy enough to do when we are only making a few projections, it is cumbersome and time consuming to do when we want to do a comprehensive analysis using many past pivots. To speed up this analysis process, Dynamic Trader includes several routines and reports that instantly make all of the required time and price projections from a wide range of past pivots. Each of these routines and reports requires a swing file of past pivot reversals. The most comprehensive Dynamic Trading analysis considers a market from three degrees or three time frames. They are the degree of change that is traded plus the next larger and smaller degree. The next larger degree determines the larger degree trend and suggests which direction we want to consider trading. The next smaller degree will help to identify the lowest risk and capital exposure trade set-up position to enter and place the protective stop. 1. A swing file filters out the “noise” between the pivot reversals and helps us to focus on the underlying trend between the pivots. 2. The swing file represents the statistical, historical information of all relationships of time and price for that particular degree of change. Before we attempt to analyze the present and potential future position of any market, we must have of a thorough understanding of past activity and conditions. We can only view the current and potential future market activity within the context of its own history. 3. All of the time and price projections are projected ratios and counts of past swings.

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Swing Files

The Swing File pivots usually represent the extremes of price reached at the trend change pivots. In other words, the high or low made at the change in trend. If a closing price Swing File is constructed, keep aware that the time and price projections relate to closings only, which can be significantly different than projections from high or low extremes. It is easy to develop the Swing File of trend change pivots, but it must be done properly. It is important to have a series of pivots that relate to the same degree of time and price. Below we will discuss how to initially develop the Swing File of market pivots and how to edit the file in order to have the best representation possible of trend changes of a chosen degree. Once a Swing File is constructed, Dynamic Trader will update it automatically each time it is loaded on a chart. Whenever a new market extreme meets the minimum criteria for a pivot for a particular Swing File, Dynamic Trader will add it to the Swing File database. Swing Files Are Constructed By Percentage Change In Price Swing Files are initially constructed by the percentage change in price of a market. A new market pivot is recorded when the market has reversed direction by a fixed amount of percentage change. Percentage change of price better reflects the degree of change in psychology of the market’s participants than a fixed price amount. Let’s take a look at a comparison of identifying market swings by percentage change and by a fixed price amount. Our percentage change swing rule will be that a new swing is not recognized until a market makes a counter-trend move of at least 10% away from the last pivot. When a market declines or rallies by 10%, a new trend change pivot is recorded. Extreme High Price To Date: 200 10% x 200 =20: If the market declines to 180 or less (200-20) without having exceeded 200, a new pivot at 200 is recorded as the market will have made a change of trend by 10% (20 points) or more. Extreme High Price To Date: 400 10% x 400 = 40: If the market declines to 360 or less (400-40) without having exceeded 400, a new pivot at 400 is recorded as the market will have made a change of trend by 10% (40 points) or more.

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From the lower price level at 200, it took a 20 point counter-trend range to record a pivot while it took a 40 point counter-trend range to record the trend change pivot from the higher price of 400. It will always take a larger price range to record a trend change pivot at a higher price level than at a lower price level as the trend change is beginning from a greater price amount. If the trend change pivot were recorded by a fixed price amount of 20 points, the trend change pivot from the 400 price level would be recorded if price declined to just 380 (400-20). Price percentage change more accurately represents the degree of trend change or the degree of change in the psychology of traders than does a fixed price amount. A 20 point advance or decline from a 400 point price level is not nearly as significant as a 20 point advance or decline from a 200 point price level. A 40point price change from the 400 level is comparable to a 20-point price change from the 200 level. This becomes obvious on charts that have had a wide range of price activity over the years. An example would be the DJIA that traded for years at relatively low price levels compared to the price levels of today. For almost 20 years from the early 1960s through the early 1980s the DJIA traded roughly in the range of 600-1000. A 10% trend change of 60-100 points during this period usually took several weeks or even months to unfold. In the early 1990s, when the DJIA was trading in the 3000-4000 range, it had been fairly common for 60-100 point ranges to unfold in a matter of a few days. We even had many 60-100 point range days in that period. It is not at all accurate to say that a 100-point swing in the 1990s from a price level over 3000 is as significant as a 100-point swing from the 1960s from a price level of less than 1000. A 100 point (10%) counter-trend from the 1000 level is of the same degree and as significant as a 300 point (10%) counter-trend from a 3000 level. Swing Files are only constructed from percentage change of price. For our illustrations, a Swing File will be named by the minimum percentage price change required. A 10% Swing File will be composed of swings of a minimum of 10% change in price from one pivot point to the next. Unless of course, a swing is eliminated or added according to one of the exceptions described below. There is no maximum price change for swings in a 10% Swing File, only a minimum.

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Swing Files

Filtering A Percentage Change Swing File By Time

A Swing File constructed by a fixed percentage price change has two potential problems if our objective is to include a series of market pivots that are related by degree or symmetry of time and price. These two potential problems relate to volatile, short-term, panic swings and prolonged corrections in time but a minimum change in price. Panic Price Swings: Filtering the Percentage Change by a Time Minimum

The first potential problem of constructing a swing file solely by percentage change relates to uncommon volatility. Occasionally, a market will experience a short period of extreme volatility in price, usually due to some unexpected news announcement or report that briefly inspires traders to panic. A market may experience as little as a one or two day panic counter-trend in price followed by a return to the trend prior to the panic. This panic counter-trend may meet the price percentage criteria for a new pivot in our Swing File but be far out of balance of the time range of swings in the file. Let’s look at an example.

10% Swing File Time

Price %

Typical Trend Swing Ranges:

30-45 Days

20%-25%

Typical Counter-trend Swing Ranges:

15-20 Days

10%-15%

2 Days

12%

Panic Counter-trend Swing:

Even though the two-day counter-trend swing related to the counter-trend swings in price, it was much shorter in time, just 2 days verses the prior countertrend swings of 15-20 days. Do we leave this two-day counter-trend swing in our Swing File when all other counter-trend swings in the past have been 15 days or more? No. The swings in any one Swing File should be related by degree of time and price. A two day swing is not of the same degree as a 15-20 day swing. When constructing the Swing File, the percentage change criteria is filtered by a minimum time criteria. In other words, each swing included in the Swing File must be of a minimum amount of time before it is included. The time chosen for the minimum amount of time for a swing to be included is determined by the trader. While this is a subjective decision by the trader, just use common sense. Filter out those swings that are dramatically shorter in time than the vast majority of swings.

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Dynamic Trader Trading Course

The objective of the minimum time filter is to initially filter out the obvious short-term, panic price swings that do not belong in the Swing File. The Swing File will never be a perfect representation of time and price symmetry because markets do not unfold in perfect symmetry. But the swing file should be as accurate a representation as we can make with common sense of the particular degree of change we are interested in for the market. The chart below is four months of daily continuos bonds. A 2% swing file was made. Counter-trend swings typically lasted 2-3 weeks or more. On Oct. 28, bonds made a big gap opening up followed by a collapse of price back to the previous trading area. This one day wide-range day caused a swing of greater than 2%. All other 2% or greater counter-trend swings lasted 2-3 weeks or more. This one-day price panic is out of balance with the vast majority of 2% or greater swings and should be edited out of the swing file.

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Swing Files

Narrow Trading Ranges - Accounting for Prolonged Corrections That Do Not Meet the Price Percentage Change Criteria for a New Swing The second potential problem with constructing our Swing File of trend change pivots has to do with prolonged trading ranges. Often a market will make a minor counter-trend in price but a relatively prolonged trading range in time. While these counter-trend periods may not qualify for the Swing File from a price percentage change perspective, they are usually relevant to the degree of market activity that we are interested in recording for the Swing File. Let’s take a look at an example.

10% Swing File Typical Trend Swing Ranges:

Time

Price %

30-45 Days

20%-25%

Typical Counter-trend Swing Ranges: 15-25 Days Trading Range Correction:

20 Days

10%-15% 5%

If we are constructing a Swing File of 10% or greater price swings, it would not record a 5% counter-trend. Yet, if a market trend stopped and consolidated in a trading range for 20 days or more, wouldn’t it be considered as important as other counter-trends of 15-25 days even though the price change was less than 10%? In most cases it would be as important. Remember that we are recording the change in the psychology of traders. We are going to use these past points of change to project potential future points of trend change. A 20 day halt in the trend with only a 5% counter-trend in price may be just as important to a trader as a 15 day, 10% counter-trend. Time of change is as important as change in price. We must also include a time filter for a minimum length of time to include a swing whether the percentage price change met the minimum percentage criteria or not. In this case, let’s say we include as a swing any counter-trend of 15 days or longer regardless of the percentage change. Dynamic Trader does not include a filter when a swing file is built to include swings that are prolonged in time but narrow in price. The user may easily add those swings with the swing edit routine.

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Dynamic Trader Trading Course

For time analysis, the lowest or highest price is not always the important pivot. The price low of the correction begun from the Dec. 28 high fell on Jan. 6. However, Jan. 25 was only a tick or so higher but appears to be the obvious beginning of the new cycle. The same applies to the “running correction” from the March 16 high. The correction ended April 28, not March 31.

Doesn’t this better represent the minor swings during this phase of the bond rally?

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Swing Files

We now have three simple criteria to initially construct a Swing File of important trend change pivots: 1. Minimum price percentage change. 2. Minimum time period to filter the price swing. 3. Minimum time period to include a swing regardless of price change. Using these three simple filters to initially construct a Swing File, we will have recorded swings that are closely related in degree of time and price. While this may not be the perfect series of swings for our Swing File, it will have eliminated most of the obvious out-of-balance swings that would be included if we used percentage change as the only filter. Over the years, many users of Dynamic Trader have gotten hung-up on swing file construction. Because the swing files are used for several time and price projection routines and reports, they may become obsessed with constructing what they believe must be the “perfect” swing file. It is part of the “paralysis of analysis” syndrome. A syndrome that has been overcome by all successful traders. Relax. Take a common sense approach to swing file construction. Once a swing file is initially constructed, view it on the bar chart. Do the swings all seem to relate to each other in the context of the general form and trend of the market? If not, made the necessary edits. There are usually only a few edits that are made with any swing file. When complete and the swing file is overlaid on the bar chart, it should be obvious to the user that the swing file is “in balance” with the bar chart. I could include a more complex filtering process to create the swing files in Dynamic Trader that would avoid some or maybe all of this editing process. The most important reason I have not done this is it removes the trader from the experience of viewing and considering all of the past market activity. By examining the initial swing file over the bar chart, the trader becomes more familiar with the unusual periods from the past for that market. It is part of the trader’s learning process. While certain judgments are made which unusual pivots to include or exclude, these judgements are usually obvious and take into consideration the objectives of the trader. No trader will become successful until he or she accepts that analysis and trading strategy judgements must be made. That is the nature of all successful business.

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Dynamic Trader Trading Course

There are a few other circumstances where we may want to edit our Swing File to end up with the most representative series of pivots for a particular degree of change. Double Tops or Bottoms What if a market makes an exact double top without an intervening swing that meets the pivot criteria? Our Swing File would only record the first high and ignore the second high. Which high is more important and should be included in the Swing File? In most cases, the second high is more important. The first top represents the point where the rally stopped or the up cycle ended. The second high represents the point where the decline or the down cycle began. What if the second high was just a few ticks lower than the first high? Do we only consider the first high because it was the price extreme? The point where the decline began more closely represents the psychological change of traders and is usually the more important pivot. This is particularly the case if the second high closed higher than the first high even if the first top made a higher extreme price intraday. In most cases, you will edit the swing file at the double top or bottom to include the second high or low as the pivot.

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Swing Files

The 4% swing file registered March 31 as a high. March 31 was a wide range panic day. Price made a secondary high on April 19. All of the price activity from March 31 to April 19 was below the April 19 high and the closing high occurred April 18. The swing should be edited to include the April 19 high rather than the March 31 high.

The April 19 high better reflects the end of the bull swing and the beginning of the bear swing.

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Dynamic Trader Trading Course

Chart Distortions Caused By Continuous Contract Roll-Overs For every method of analysis of futures markets there is the question of what series of data is the most suitable. From the data chosen, a continuous contract is developed that joins together a long series of futures contracts to form a continuous series of data over a long period of time. The two main variables of constructing a continuous data series are the date of roll over to the next contract and whether there is any sort of price adjustment to “smooth” the data. Our objective is to choose the series of continuous data that is the most suitable for developing our Swing Files. There is no need to go into a discussion of all of the various methods of constructing a continuous series of data. All traders should be familiar with the various methods. Each method has its weakness, but only one method is appropriate for time and price analysis. In the case of time and price analysis, the best series of data to use is to roll over contracts on the last trading day of the expiration month to the next most active contract with no price adjustments. While some distortions of data may occur using this method, we can easily adjust our Swing Files to develop the most accurate series of pivots for our work. The drawbacks of all other methods of constructing continuous contracts far outweigh any potential advantages. The type of continuous contract that should be used to construct the swing files is called “nearest futures”, “first month futures” or “spot futures.” I use the term spot futures contract. Many data services call this the “5699” contract. It is the continuous daily data that rolls over on the last trading day to the next most active contract with no price adjustment. A spot futures data series of rolling over on last trading day with no price adjustments is the closest representation of the cash price of any of the methods of constructing a continuous contract. So, you may ask, why not just use the cash price for analysis and projections? For two reasons. One, most traders do not trade the cash markets, they trade the futures markets. Two, many data services do not carry long term cash prices for many markets. Since we are trading on the futures markets and have long-term, futures market data easily and cheaply available, we use the spot futures data series, as it will most closely represent the current position of traders. The two potential problems with using spot futures data to develop the Swing Files for time and price analysis have to do with potential distortions of the time of trend change pivots that occur near contract rollover and price distortions of gaps that occur at roll over. Both of these problems can be easily corrected.

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Swing Files

Roll-Over Time Distortions On Continuous Contracts Distortions of the time of trend reversals may occur in markets where the further out contracts trade at a discount to the nearby contracts and a change in trend occurs near the time of roll over or contract expiration. If the roll over at contract expiration occurs soon after a trend reversal, the new contract price may be at a lower level than the older contract price was at the trend change. If this is the case, the spot futures chart may show a lower low at a later date than when the trend change actually occurred. This may occur in the bond and currency markets as the further out contracts in these markets trade at a discount to the nearby contract. How do we correct this problem? Each of the financial markets such as bonds and currencies have contract roll over every three months in the second half of March, June, Sept. and Dec. Once a swing file is created, examine it to see if there appears to be a trend change in any of these months. Then look at the monthly contract near that period to validate the price activity near the time of the change and when the trend change actually occurred. Let’s take a look at an example of one of these roll-over distortions. Once we determine the proper date of the trend change pivot, we simply edit that date in our Swing File.

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Dynamic Trader Trading Course

This is the 5699 contract data for the DM, which rolls over on last trading day. Dec. 9 is the price low. If rollovers occur near trend changes, the swing file may have to be edited to accurately represent the trend change date. We will want to look at the March contract, which traded throughout this bottoming process and through the roll over period.

A look at the March contract for the same period clearly shows the low was made on Dec. 21, not Dec. 9. The March contract was not distorted by the roll over that occurred between Dec. 9 and Dec. 21 on the continuous data.

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Swing Files

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Dynamic Trader Trading Course

What do we do about the price distortions at the pivots near roll-over that require us to correct the date of roll over? If we edit the date of trend change from the original spot data date to the monthly contract date, do we also change the price to the price on the monthly contract? No. Does that mean that the Swing File will not be an accurate representation of the price swings? Yes. We must simply accept that there is no perfect method of recording both time and price pivots in the same Swing File. Fortunately, having slight distortions of price swings in the Swing File is not critical. The relatively minor price distortions that may occur at roll-over, trend changes are usually not important in our analysis and statistical studies. The price analysis and statistical studies computed from Swing File information provides us with the general parameters of past and potential future price activity. The smaller degree price analysis will focus in on the price zones from where the trading decision is made. The smaller degree price analysis is usually made from the contract that is traded and the smaller degree swing file on this contract will not have the roll over problem. Roll Over Price Distortions On Continuous Contracts With agricultural markets particularly, there can be a large price gap at the roll over of spot futures data from one contract to the next. Many “adjusted” or “normalized” continuous contracts have been developed to “smooth” the data. The drawbacks to these adjusted continuous contracts outweigh any potential advantages. We accept the price gaps of the long-term, spot futures continuous data contracts knowing that they will provide the broad price zones of support and resistance which will be updated and refined by the analysis of the contract month that will be traded. Agricultural market traders should also do the long-term analysis on a single month continuous contract, otherwise known as a Gann style contract. Gann contracts are constructed by using only the data from one monthly contract from each year. When that monthly contract expires, the next data to append to the contract is for the same contract month of the following year. A comprehensive data service will either provide Gann contracts as part of their historical data and updating service or provide data management software that will allow the user to construct Gann continuous contracts. Let’s take soybeans as an example. We would construct a July soybean continuous contract by appending July soybean prices only, year after year. Once the July 1993 contract expires, we begin adding the July 1994 prices to our data file the day after the July 1993 contract expired. We construct this data series for

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Swing Files

each monthly contract that we may want to trade. We than have an accurate representation of price movement for each individual contract month. In constructing our Swing Files from Gann continuous contracts, we have no need to adjust the time of reversals, as we are only dealing with the information from a single contract month. All comprehensive data suppliers the data or the provide software to construct continuous data in the manner described above. Degrees of Swing Files A trader should maintain three Swing Files for each market, one for each degree of change. The normal time and price ranges of each degree may be different for each market. A weekly chart will reveal the obvious intermediate and major trend changes. Intermediate degree trends usually last approximately 30-90 days and may run as long as six months. Don’t make it difficult. Simply examine a weekly chart for the obvious swings. The major highs and lows will also be obvious. The daily chart will reveal the minor swings. To determine the percentage change to initially construct the Swing File, simply measure the percentage change of the smallest swing you want to include in the Swing File. Then build the Swing File by that percentage change including the time filters. When that is complete, do any editing of pivot points that is necessary and you have the completed Swing File. Once the Swing File is complete, it takes very little time each month to keep it updated and edited. Each market is automatically updated by Dynamic Trader by the chosen percentage change and time filters that usually should be the same as the same filter the file was initially constructed. All the trader must do is be aware of contract roll overs each month and validate any new swings that may occur near a roll over period. Swing File Construction Is Easier That It Seems We have looked at how to initially construct a swing file and how and why we may have to edit some of the swings so the swing file accurately represents the trend changes as best as possible within the limitations of any set of continuous data. While there are several conditions we must be aware of to consider edits, they are infrequent and will be obvious once the initial swing file is overlaid on the bar chart. Once a swing file is constructed and the edits are made, very little time is needed to keep the swing file up-to-date. The routines and reports in Dynamic Trader that require swing files help the user to quickly do a thorough analysis of the time and price position of a market.

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Dynamic Trader Trading Course

These routines provide the trader with the information that is necessary to make an informed trading decision. Let’s build a swing file and see how it may be edited. Bonds: 4% Swing File The bond chart below shows an unedited 4% swing file over the bar chart. Except for the Sept. 1993-Nov. 1994 bear market, the swings appear to represent the time rhythm for this period. We may want to edit the swing file for the conditions that are noted on the chart.

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Swing Files

The double top is the first obvious edit. The running correction from the Nov. 23, 1993 low to Jan. 31, 1994 high is the next candidate. Earlier in this chapter, we saw how the lower low between these two dates was caused by the roll-over from the Dec. to March contract. While this running correction did not make a 4% price change in trend, it lasted 69 calendar days (CDs), longer than most of the 4% or greater corrections. It should be included in the swing file in order to make the file an accurate representation of the time rhythm for this period. In March, bonds made a very short-term panic price advance of just 9 CDs (April 19-April 28). There was probably a news event that caused this panic, but bonds quickly returned to the bull trend. This very short term correction should be eliminated from the swing file. From March 11, 1994 to Aug. 2, 1994, bonds made what we may consider an ABC irregular correction (type of running correction). Each of the component swings was greater than 5%. Should we consider this entire period one swing from a time perspective? This is one case where it is a real judgement call. If the purpose of this swing file is primarily for intermediate term time analysis, I would make it one swing. I would keep the swings as shown and save a second swing file that may be used for price analysis. This brings up an important point. Always consider

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Dynamic Trader Trading Course

what is the objective of the analysis the swing file will be used for. I often have different swing files for the same degree and same period of time. One for time analysis and one for price analysis. There are usually only a few differences in each file. Below is the edited 4% swing file which more accurately represents the time rhythm for this period.

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Swing Files

The spot futures continuous data showed the Sept. 1993 high a few ticks above the Oct. 1993 high. Between these two dates, the Sept. contract expired and the data rolled over to the Dec. contract. Let’s look at the Dec. contract data that traded throughout this period for a more accurate representation of the price pattern for that period.

There really wasn’t a double top in this period. The Oct. high was clearly higher. The contract roll over in the continuous data for this period distorted the price pattern. Let’s take another look at the Nov.-Jan. 1994 running correction on the March 1993 contract that traded throughout this period.

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Dynamic Trader Trading Course

We saw earlier that the lower low between the Nov. 23 low ad Jan. 28 high on the continuous chart was caused by the contract roll over in late Dec. from the Dec. to March contract. The continuous data showed only a 3.09% price change for this correction. The price change was also distorted by the contract roll over. The further out contracts in bonds trade at a discount to the nearby contracts. The March 1994 contract chart above shows that the actual price advance from the Nov. low to Jan. high was 4.31%, a swing that fits into the 4%+ swing file. The first chart with the unedited 4% swing file that was shown in this section was for a five year period: 1993-1998. We made just four edits for this five year period. The balance of the swings for this period appears to be justified. After a quick view of the swing file on the bar chart, we noted where we may need to edit the file. It took very little time to view the individual contracts for the questionable periods to see if the continuous data may have distorted the price pattern for those periods. The file was edited and now we have a permanent record of the intermediate term swings we can quickly bring up on a bar chart for further analysis. The necessary edits were simple and logical.

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Swing Files

How much time does it take to maintain the swing file? New 4% swings are only made every few weeks or months. Dynamic Trader will automatically update the file each time it is loaded on a chart. All the user has to do is view the chart with swing file periodically and consider if any edits are necessary. The Many Uses Of Swing Files It is fast and easy to construct and edit swing files with Dynamic Trader. Always consider what is the purpose of the swing file when it is made. The purpose of the swing file determines how it may be edited. Are you primarily interested in time or price projections? Are you looking to project a high or low in time or price? What degree of change is being projected? Below are a few chart examples of how swing files may be quickly edited for a particular purpose. Keep in mind, swing files and all of the time and price analysis routines that use swing files may be done on intraday as well as daily charts. It is so easy to quickly construct and edit swing files that I usually don’t save most of the short-term swing files I construct for a special purpose. Once I’ve made the projections, the results may be saved on the notepad with any scenario.

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Dynamic Trader Trading Course

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Swing Files

These have been just a few examples of the unique uses of swing files in Dynamic Trader. It is well worth your time to explore the many uses of swing files. They are required for many of the time and price routines and reports that are unique to Dynamic Trader which automate the time and price analysis. Take advantage of the unique power of Dynamic Trader. No other technical analysis software program even comes close to the ability of Dynamic Trader to do unique and comprehensive time and price analysis. Dynamic Trader gives you the edge other traders don’t have. Put it to good use by mastering swing file construction and their use with the time and price analysis available in Dynamic Trader.

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Dynamic Trader Trading Course

More Time Report Examples The following pages include many more examples of how to use the time reports in Dynamic Trader. The more familiar you are with the strengths and weaknesses of each report and how to apply them in all market situations, the quicker you will be able to derive the critical and practical time analysis information. Fib Time Blitz The bar chart below is daily Deutsche Mark. There is no distinct pattern. It is difficult to judge whether this period of time is a correction, trading range or choppy trend. This market could best be described as in a trading range with a slight bearish bias. Recall that Fib Time Blitz projections are non-directional. They simply project high probability periods for trend change which may be a high or low. Usually the default templates are used.

Let’s make Fib Time Blitz projections from the May 28, 1996 low using the default templates.

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Dynamic Time Analysis (More Time Examples)

The FTB table below shows the results of the default template projections from the May 28 low. Only the highest scores (above 51) are shown on the histogram and score table. The July 10-15 period includes both the highest score and broadest period of consecutive high score days. The next greatest cluster of time projections falls on Oct. 19-23. The two periods of July 25-26 and Sept. 14 each have relatively scores but the high score period is only one or two days verses the clusters of 4-6 high score dates in the other two periods. One or more of these periods is probable to make a trend change of similar degree to the May 28 low. If we look at the bar chart above, we see that all of the recent rallies have lasted approximately 30-60 calendar days. If the current trading range rhythm continues, the next high after the May 28 low will probably be made at or near one of the July FTB targets – July 10-15 or July 25-26. Fib Time Blitz From The May 28 Low Using The Default Templates

A three week consolidation/correction ended on July 15 and the rally high was made on a wide range spike up on July 16 just one day after the highest probability FTB period for a high of July 10-15.

There are two very important factors to remember when using the FTB:

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(1) The high score (high probability) dates do not project that the market will continue to trend to any one particular period, only that there is a high probability that the time of a trend change will be one of the periods. (2) The time projections must be considered within the context of the other market dimensions of price and pattern. If a market trends into a time projection, you must consider if the market is at a dynamic price support or resistance zone and if the pattern is approaching a trend termination position. Price and pattern position will qualify the time period when reached.

FTB Projections From The May 28 Low July 10-15 was the highest probability FTB for a trend change following the May 28 low. The mark completed a three-week consolidation/correction on the outside up day of July 15 and made the high the following day, July 16. Material later in the course will describe how we use the time projections in the context of the overall trading plan to make trading decisions. The objective in this section is to just examine time projections outside the context of price, pattern and trading strategies.

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Dynamic Time Analysis (More Time Examples)

The table below shows the FTB projections from the July 16 high. The relatively high scores are made on Sept. 9-14 and Oct. 19-20. These dates fall at or very near the high score dates from the May 28 low. Most of the individual projected dates made from the July 16 high will be the same as those from the May 28 low. In the case of the projections from the July 16 high, one new pivot has been added (July 16) and one pivot has been dropped (the 12th pivot back from the May 28 low) to make the projections. The few Alternate Time Projections used in the FTB will now be from the July 16 high rather than the May 28 low. FTB projections made from two consecutive pivots will usually include some of the same relatively high score periods because each projection includes many of the same individual time calculations. If this is not perfectly clear, go back to the section on how the FTB projections are made for a review and take another look at the illustrative charts so you can visualize exactly what is being done each time a report is run. FTB From July 16 High Using Default Templates

The chart below shows that the mark made a short-term low in the Sept. 9-14 period and a major trading range low one trading day prior to the Oct. 19-20 period.

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Trend Changes Made At or Near FTB Projections See the FTB table on the previous page.

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Dynamic Time Analysis (More Time Examples)

Dynamic Time Projections In contrast to Fib Time Projections, Dynamic Time Projections (DTP) are directional. If the projections are made from a low, they are valid for a high. If made from a high, they are valid for a low. The highest probability time projections for trend change will be if a DTP and FTB dates coincide or at least fall very near each other. Let’s make Dynamic Time Projections for the DM from the May 28 low and July 16 high. The best pattern interpretation of the DM for this period is a trading range. We will use the trading range templates in the DTP report to make the projections.

The table below shows the relatively high score (high probability) dates made from the May 28 low. The highest score date is July 16. The two periods with consecutive high score dates are July 1-3 and July 16-18. The next DTP does not fall until Aug. 25-31. Since the prior rallies in the trading range have lasted between 30-60 CDs, the odds are the next high will be made in one of the July DTP periods – July 1-3 or July 16-18. Of these two periods, the FTB projection of July 10-15 fell near the DTP period of July 16-18.

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Dynamic Time Projections From The May 28 Low Using The TR Templates

How did it turn out? The chart below includes the saved DTP report for the trading range projections made from the May 28 low which is shown in the indicator window below the bar chart.

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Dynamic Time Analysis (More Time Examples)

DTPs From The July 16 High Using The TR Templates

The mark was advancing going into the Aug. 25 DTP. Since DTPs made from a high are only valid as a potential low, this DTP would be ignored. The mark was making new lows from the July 16 high going into both the Oct. 2-3 and Oct. 19 DTP. The price, pattern, other time projections and other factors would be considered at each of these times to consider if a trend change was probable. Recall that the FTP projections from the July 16 high included Oct. 19-20, a projection that coincided with the Oct. 19 DTP.

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Wave-5 Dynamic Time Projections Let’s take a look at another DTP using one of the templates in Dynamic Trader. The chart below is DM daily data. Once the mark exceeded the Oct. 9, Wave-3 high, it appeared Oct. 21, 1997 completed a Wave-4 low. Dynamic Time Projections for the potential Wave-5 top can be made using the W.5 templates.

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Dynamic Time Analysis (More Time Examples)

Dynamic Time Projection Wave-5 Template Set-Up

The DTP Table/Histogram page below shows the output of the time projections. All of the scores are shown. Those above 50 are the relatively highest scores. The Nov. 1-4 period stands out as the group with the highest scores for the entire period.

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How did it turn out? The Wave-5 top was made on Nov. 7, three trading days after the Nov. 1-4 DTP. The mark was moving sideways into the Nov. 1-4 period, not making new highs. It would be nice if every high and low was made on a direct hit of a DTP, but they are not. That is why we also use the price and pattern factors. The Wave5 top was made just three days after the highest probability date for a Wave-5 top. The DTP provided us a time framework when to be prepared for the top, even though the top was not made directly in that time.

As shown by the histogram in the indicator window below the chart, the odds for a high after Nov. 4 decreased constantly.

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Dynamic Time Analysis (More Time Examples)

How did the Fib Time Blitz perform for this period? Below is the FTB table showing the projections made from the Oct. 21 (W.4) low. Three periods have the relatively highest score – Nov. 11-13, Nov. 19-20 and Nov. 28-30.

Why might we not want to use FTB projections from the Oct. 21 low? If you will review the bar chart of a couple pages back, you will see that the swings so far are relatively short-term. The trend swings (waves 1 and 3) are just 2-3 weeks in length and the counter-trend swings (waves 2 and 4) are only a few days in range. The FTB templates are designed for intermediate and longer-term swings. The minimum time counts are 21 days. The FTB templates should not be used if most of the typical swings in the file are less than three weeks. If this is the case, we may want to go to a lower time period such as an hourly data file to make the FTB projections. What do we do with the daily data? Make the projections from the most recent pivot of larger degree. In this case, make the FTB projections from the Aug. 6 low where the five-wave count began.

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Below is the set-up page for making the FTB projections from the Aug. 6 low. We only need to show projections after the Oct. 21 low. Note how the projection date range is set for late Oct. through early Dec. Since the recent minor trend swings (waves 1 and 3) were only 2-3 weeks, the projections don’t need to be made beyond late-Nov. to early Dec.

The table below is the output of the FTB projections from the Aug. 6 low for the late Oct. through early Dec. period. Nov. 8 (Sat.) is the highest score date. The nearest trading day would be Friday, Nov. 7.

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Dynamic Time Analysis (More Time Examples)

Now let’s take a look at the daily bar chart with all time reports displayed in the indicator windows below the chart. We will exclude the FTB report made from the Oct. 21 low for the reasons stated earlier and include the DTP for Wave-5 and FTB from the Aug. 6 low. The Wave-5 high was made on Nov. 7, the nearest trading day to the Nov. 8, highest score FTB and three trading days after the Nov. 1-4 DTP for a Wave-5 high. Since these two reports gave dates close to each other, traders would want to be alert to the broad period of Nov. 1-7 for a potential high to complete a fivewave advance from the Aug. 6 low.

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Important Factors With Fib Time and Dynamic Time Projections Let’s review a few important factors to keep in mind when making the FTB and DTP reports. (1) For most market conditions, use the default templates for the FTB reports unless you want to use one of the special Gann or Fib count or anniversary templates. (2) The FTB templates are generally only applicable for swing files that include swings that are typically at least 15-20 bars (3-4 weeks with daily data). This is because the FTB is highly dependent on CD and TD counts. If the swings on the daily swing file are typically much shorter, you must go to a lower time frame with intraday bars to apply the FTB report or only make the FTB report from the higher time frame swing file. (3) Since the DTP templates are primarily dependent on a limited number of Time Cycle Ratio projections, this report is applicable to the shorterterm daily swing files. If the market is not clearly in an identifiable wave structure, use the trading range templates. (4) The highest probability projections will be when the FTB and DTP dates coincide or fall near each other. (5) While every trend change will not be made directly on a FTB or DTP, most will be made at or very near at least one of the two. Pattern and price analysis factors will be critical to identify the trend reversal and validity of the time projections.

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Dynamic Time Analysis (More Time Examples)

Time Projections and Intraday Data The FTB and DTP reports are applicable down to 30-minute data files. While I have tested and used them on shorter time frames, the results are not as consistent. Let’s take a look at a couple of intraday examples. Recall from the examples above that it was not appropriate to make FTB projections from the Oct. 21, Wave-4 low because the recent swings were relatively short-term (less than 3-4 weeks). Let's move to the lower time frame, 60-minute data and do a FTB from the Oct. 21 low. The chart below shows the DM 60-minute data and the Oct. 21 low. While only a short period of time is shown, recent swings were 50-150 bars of hourly data.

Below is the set-up table for the FTB. Note that the BLC set (Blitz CD) is grayed out and not available to choose from. Dynamic Trader recognizes that an intraday chart is up and calendar day counts cannot be made. A trading day count

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is the same as a count of the bars on the chart. Trading day sets are available for any intraday chart.

You may recall that the highest score period using the daily data FTB from the Oct. 21 low was not until Nov. 28-30. Using the 60-minute data, the highest score period is Nov. 3. While the top was not made until Nov. 7, Nov. 3 is a heck of a lot closer to Nov. 7 than is Nov. 28. The FTB with the intraday data helped to focus in on a more accurate time projection for a top.

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Dynamic Time Analysis (More Time Examples)

The Dynamic Time Projection for a Wave-5 high using the daily data gave us the period of Nov. 1-4 with the highest score for a potential Wave-5 high. Let's take a look at the smaller degree swings shown on the 30-minute data to project the high probability time for Wave-5:5. The 30-minute chart below shows that Nov. 3 probably completed Wave 4:5. The DTP report was run from the Nov. 3 low at the 8:50 bar using the Wave-5 templates for TCRs and TDs (trading bars).

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DTP Set-up To Project The High Probability Time For Wave-5

The highest score bar is Nov. 5 at 13:50. Nov. 4 and Nov. 6 also have relatively high score bars. After Nov. 6, a high score bar is not made until Nov. 11. Traders would want to be particularly alert the second half of the trading day of Nov. 5.

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Dynamic Time Analysis (More Time Examples)

The daily data projected Nov. 1-4 and the intraday data Nov. 4-6 for the Wave-5 top. The intraday data signaled at best, the later part of the No. 1-4 period should be the most important if not the days just following this period. The top was complete on the first 30-minute bar of Nov. 7. While the intraday DTP dates did not hit the top precisely, they were closer to the top than the daily dates. Intraday data can be helpful to fine-tune any analysis approach including time analysis. However, don't expect more from it that it can deliver. The procedure for time projections with intraday data is the same as with daily data. The shorter term the data, the more "noise." I have not confirmed that data shorter than 30-minute bars is consistently reliable. These have been only a few examples of using the Fib Time Blitz and Dynamic Time Projections. No matter what the market position, the process of using these two reports will be the same as described in these few examples.

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