The Only Indicator You Will Ever Need
PRESENTED BY: Greg Capra
President and CEO of Pristine Capital Holdings
www.pristine.com
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Indicators are Subjective
Are you currently
trying to make sense
out of something that
looks like this noise?
Without rules that define a plan to trade or
invest our thoughts and trades will be random.
All trades start with determining the trend.
Basing trend analysis on anything other
than price action will be subjective. Lets look!
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Subjective Trend Analysis
Which trendline?
Which moving averages?
Which points to draw Fibonacci?
Do they signal changes in trend?
Are any of them support-resistance?
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The Theory of Self-Fulfillment
Trendlines, Moving Averages and Fibonacci Retracement levels are used to
locate Support or Resistance. Traders ask, Why do prices reverse there?
If enough people believe something, whether factual or not, they can have an
effect when they act on that belief (e.g., buying or selling at a MA, or T-Line).
Price is the only truth in technical analysis
Price Support is where Demand is. Buyers are there
Price Resistance is where Supply is. Sellers are there
These points represent commitment with real money Its what moves the market.
Lets build on this fact to guide our trading decisions!
Lets Define the Criteria for a Pristine setup
We need to define:
What are reference points of support and resistance
The trend and trend changes when they occur
What signals an entry in the direction of the trend
Where those setups will be taken
You can trade anything with this criteria!
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Educating Investors And Traders For Success In Todays
Market!
How To Keep Trading Simple
Buy pullbacks to a reference point in an uptrend.
Short retracements to a reference point in a downtrend.
Key point; make sure there is a trend or trend change!
We are going to break down the analysis
or thought process of a trade into a simple,
easy to follow step-by-step process.
Educating Investors And Traders For Success In Todays
Market!
What is Support?
Its a Reference Point where buyers anticipate overcoming sellers.
1.At a minimum, its a prior bars low within a series of bars making HHs.
2. If there, its overlapping bars directly to the left of current prices.
3. Then look to a prior pivot low (a bar with HLs on both sides).
What is Resistance?
Its a Reference Point where sellers anticipate overcoming buyers.
1. At a minimum, its a prior bars high within a series of bars making LHs.
2. If there, its overlapping bars directly to the left of current prices.
3. Then look to a prior pivot high (a bar with LHs on both sides).
Support and Resistance Reference # 1
A prior bars high
must be overcome to
enter longs or cover
short positions
A prior bars low
must be overcome to
enter shorts or exit
long positions
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Support and Resistance Reference # 2
The area of overlapping
bars will be a reference
point of minor support
Downtrend
mS
Uptrend
mR
The area of overlapping
bars will be a reference
point of minor resistance
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Support and Resistance Reference # 3
A price pivot high (PH) must have
a minimum of 2 lower high bars
adjacent to both sides of the pivot bar.
LHs
LHs
PH
PH
Resistance
has formed
PL
A price pivot low (PL) must have a
minimum of 2 higher low bars
adjacent to both sides of the pivot bar.
HLs
HLs
Support has
formed
PL
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Review of Reference Points
A prior bars low will be our first reference point of
support in a series of upward trending bars.
If there, overlapping price bars to the left will be a
reference point of Minor Support (mS) in an uptrend.
A pivot low must have 2 bars with HLs adjacent to
the left and right at a minimum to be a pivot. This is
Major Support (MS) after a prior high is overcome.
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This Is The Key!
Prices Move Between Support and Resistance
Traders Bid at Support and Offer at prior Resistance, which may create
enough Demand or Supply to form reversals at those Reference Points.
Wait for an entry - in the direction of the trend - at a reference point.
A VOID of reference points increases the odds of prices trending since
traders do not have a reference of support to buy or resistance to sell at.
If there isnt a reference point, wait for one to form and a retracement.
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What is a Void?
Voids are created by gaps, rapid price movement and time
Void
Time
Void
Congestion
Void
Time
VOID
Rapid price movement is
defined as multiple bars moving
in the same direction with little to
no overlap between the bars
Voids are created
by time passing.
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EURO
Ra
pid
Pr
ice
ov
em
e
nt
TIME
The larger the Void, the greater
the potential for a large move.
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EURO
The prior price support
had little effect to stall
the move lower
MS broken!
Sellers
are here!
It does not matter
what you trade, these
concepts are universal!
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Defining the Trend and Trend Change
A downtrend is defined as a series of lower pivot highs and lower
pivot lows; two or more. Vice versa for an uptrend.
A higher pivot low and higher pivot high that does not trade
above MR forms a bear flag and weak support.
An equal pivot low (W-Bottom) within a downtrend setups and
move above the prior pivot high setups a buyable pullback.
A move above the pivot high - prior to a lower low - in a
downtrend is a signal of a changing trend. Buy the retracement.
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Defining the Trend and Trend Change
Lower Highs
Major Resistance (MR) in a downtrend is
defined as the pivot high prior to a new low
MR
Lower Lows
MR
HH
A move above the prior high is not a
break of MR. This is know as a bear flag
Higher Low
MR
Equal Low
A move above the prior high would not
break MR, but would suggest a move to next
resistance and a pullback can be bought
MR
This move is a break of MR
and a signal of a changing trend
Lower Low
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Educating Investors And Traders For Success In Todays
Market!
All prior highs are resistance and lows support.
In an uptrend, odds are that prior resistance can be overcome.
In a downtrend, odds are that prior resistance cannot be overcome.
Offers
Offers
Offers
Bids
Offers
Offers
Offers
Bids
Bids
Bids
Bids
Bids
We want to sell where the offers are in a downtrend
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and buy were the bids are in an uptrend, simple!
Review of Concepts Covered
We have defined reference points of support and resistance
and that traders bid at support and offer at resistance
We have defined that a void is the absence of reference points.
We have defined a trend and what signals a changing trend.
We can now look at basic reversal patterns that provide entry
points to get on board at a reference point.
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Candle Basics and Patterns
Prices in a candlestick format more clearly display the
relationship between a bars open, high, low and close.
Candles will form recognizable patterns that suggest the
future movement of prices.
We are looking for candles that signal slowing momentum
and/or a reversal - at a reference point - within a trend, simple!
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Candlestick Analysis
Giving a pattern a bearish name does not make it so, but it does produce those thoughts
Narrow Body
Trending Higher
Bearish Doji Star
Topping Tail
Changing of Guard
Bearish Shooting Star
Bearish Harami
Narrow Range Bar
Bearish Star
Bottom Tail
Bearish Hangman
Changing of Guard Changing of Guard Changing of Guard
Bearish Thrust
Bearish Piercing
Bearish Engulfing
All setups must be put in the context of the trend and prior resistance.
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Educating Investors And Traders For Success In Todays
Market!
Now that we have setup a
systematic method of defining
Why, When and Where to
trade lets look at how it works
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Educating Investors And Traders For Success In Todays
Market!
Sellers are at pivots or overlapping bars
Offers to sell will be here.
Short under a bars low
Breakdown,
Think Sell!
Money Bar
This drop creates a void above.
Once a pivot high is created, you
have a reference point to sell at.
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Educating Investors And Traders For Success In Todays
Market!
HH
Overlapping
bars are mR
VOID
Short under
a bars low
Change
Change
Buy above a
bars high
VOID
After a bullish change, we look to buy
when prices retrace to a reference point.
After a bearish change, we look to short
when prices retrace to a reference point.
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Educating Investors And Traders For Success In Todays
Market!
This was a buy called in the
Pristines E-mini Trading Room
(ETR) on 6-12-08 @ 10:50am
Offers are
here
BT
Bids are
here
Trend is up
The pullback creates a pivot
Retest of a reference point are
where the bids are. A Bottoming
Tail (BT) bar sets up the entry
above that bars high
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Educating Investors And Traders For Success In Todays
Market!
The strongest uptrends in
a Void may not pullback.
New high bar
High prior to
lower low
Change,
think buy!
Correction bar.
Buy above its high
Buy the pullback
after a break above MR
New low
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Educating Investors And Traders For Success In Todays
Market!
The trend is up,
dont think short!
PH
PH
Overlapping
bars are mS
PL
PL
Bids are here
Price and Trend Analysis is a continuous
process of updating information as it forms
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Educating Investors And Traders For Success In Todays
Market!
It does not matter what you
trade. These concepts work in
all markets and time frames!
Offers
Has the trend changed?
Where are the offers?
Does momentum slow there?
Take trades on the direction of
the trend were the offers are!
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Educating Investors And Traders For Success In Todays
Market!
Market internals
became bearish here!
S&P 500
At A, prices close above MR
for the first time, think buy!
MS is broken,
think sell!
LH
LH
B
LL
LL
At B, I alerted the PMTR it was time to buy!
You dont need indicators,
only the right education!
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Educating Investors And Traders For Success In Todays
Market!
Indicators and trend tools are subjective, can mislead
and typically confuse.
The guidelines covered will provide you a continuous,
systematic method of price and trend and analysis.
Of course, there is much more to learn about the Pristine
Method, but you have a great start!
Counselors are at the Pristine Booth or call
800- 340-6477 for show specials.
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Thank you for your trust in
allowing us to help you reach your
financial goals!
www.pristine.com
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