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DISCLAIMER: Online trading involves substantial risk of loss and is not suitable for everyone. The valuation of the contracts does fluctuate, and, as a result, you may lose more than your original investment. The impact of seasonal and geopolitical events is already factored into market prices. The highly leveraged nature of online trading means that small market movements will have a great impact on your trading account and this can work against you, leading to large losses or can work for you, leading to large gains. If the market moves against you, you may sustain a total loss greater than the amount you deposited into your account. You are responsible for all the risks and financial resources you use and for the trading systems you are using. You should not engage in live trading unless you fully understand the nature of the transactions you are entering into and the extent of your exposure to loss. If you do not fully understand these risks you must seek independent advice from your financial advisor. All trading strategies are used at your own risk. This mentoring should not be relied upon as advice or construed as providing recommendations of any kind. It is your responsibility to confirm and decide which trades to make. Trade only with risk capital; that is, trade with money that, if lost, will not adversely impact your lifestyle and your ability to meet your financial obligations. Past results are no indication of future performance. In no event should the content of this correspondence and coaching be construed as an express or implied promise, guarantee or implication from Children of the Journey that you will profit or that losses can or will be limited in any manner whatsoever. Children of the Journey is not responsible for any losses incurred as a result of using any of our trading strategies and mentoring. The Trading software should never be left unattended due to the possibility of events out of your control, such as computer or data failure, power outages, position mismatches, and/or network problems. Loss-limiting strategies such as stop loss orders may not be effective because market conditions or technological issues may make it impossible to execute such orders. Likewise, strategies using combinations of trading positions such as spread or straddle trades may be just as risky as simple long and short positions. Information provided in this correspondence and coaching is intended solely for informational purposes and is obtained from sources believed to be reliable. Information is in no way guaranteed. No guarantee of any kind is implied or possible where projections of future conditions are attempted. 1 of 41 STS The Teaching Manual
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Revision Log: 20121003.0900 A.Penaloza added back the DELTA and the new STS Stacking Theory. 20120822.1545 A.Penaloza added JERK and Rate Cycles and Renko Charts. 20120716.1500 A.Penaloza added Recognizing PULLs and SUPPORT and re-org order of teaching. 20120704.1200 A.Penaloza added Suggested Training Program, Bruces PRIME Strategy, re-org order of teaching. 20120614.1700 A.Penaloza created initial document. Related Documents: Web: http://childrenofthejourneysangha.blogspot.com/
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Contents
Mission Statement............................................................................................................................................................6 Mastery......................................................................................................................................................................6 PLAIN LANGUAGE DISCLAIMER:...........................................................................................................................................7 The Sangha Principles.....................................................................................................................................................7 The STS Teaching Manual....................................................................................................................................................8 Purpose:.....................................................................................................................................................................8 Methods:....................................................................................................................................................................8 SAFETY:...................................................................................................................................................................8 SURETY:..................................................................................................................................................................9 PROFITABILITY:..........................................................................................................................................................9 Trading Strategies:........................................................................................................................................................9 Option to use "Set it and Watch it" Strategy.......................................................................................................................10 The PRIME Window concept:.........................................................................................................................................13 The PRIME Bias (pressure gauge): ..................................................................................................................................14 The Three Market Cycles:............................................................................................................................................15 The PRIME-JERK-DELTA lines:........................................................................................................................................17 Learnings on the DELTA line:........................................................................................................................................18 3 of 41 STS The Teaching Manual
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DELTA is Pivotal........................................................................................................................................................20 The COMBO line:.......................................................................................................................................................21 ........................................................................................................................................................................21 Recognizing PULL and SUPPORT:....................................................................................................................................23 Recognizing a PULL UP:............................................................................................................................................24 Recognizing a PULL DOWN:........................................................................................................................................25 Recognizing a SUPPORT UP:.......................................................................................................................................26 Recognizing a SUPPORT DOWN:...................................................................................................................................27 How Trend Starts from Sideways:...................................................................................................................................28 The Jerk Cycle:........................................................................................................................................................29 The Rate Cycle:........................................................................................................................................................30 The STS Stacking Theory..............................................................................................................................................31 Additions to the STS Stacking Theory...............................................................................................................................33 Taming your mind... with DELTA!...................................................................................................................................34 The DELTA Secret!.....................................................................................................................................................35 The Renko Chart:......................................................................................................................................................37
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Purpose This is the collective Wisdom our Spiritual Community of Traders had been gratefully made privy to by the Universal Intelligence of Love. This manual is a compendium of knowledge we as individuals and as a community continue to learn with appreciation and gratitude. Mission Statement We believe in the Divine and the Universe. We are eternally Grateful and ever Thankful for the Gift given. We are continually given the most amazing insights about this Gift; which allowed us to create a business that takes little of our time to run during the day. This Gift enables us to spend quality time helping others as the Divine wishes. This is the reason we teach this Gift to others. We depend on the Divine and the Love of the Universe to lead others to us. Mastery
It is what "is", you are seeing what you see. It is ALL in the technique and your efficiencies. You cant predict the future trends of the market, you are but a mere follower, so act like it! You must only develop the ability to see what is before your eyes. The Universe is asking for little more in this endeavor. Practice being efficient! Points per trade, get it up. Like Dirk Nowitzki in the NBA at 2.5 points per hoop. (The best average near him is 1.3). Not like Monica Lewinsky, who swallowed many a shot, but didnt get credit for one. Using the least time and effort, a skilled performance = EFFICIENT! We will become Madly skilled in this area. Kurt Duerod
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PLAIN LANGUAGE DISCLAIMER: 1. The Sangha will never ask you for money. 2. The info IS PROVIDED FREELY with "no strings attached". 3. The Sangha will provided answers and guidance pertinent only to The Sangha Trading System. 4. The Sangha WILL NOT provide proof of effectiveness nor ANY guarantee of FITNESS of use. Prove it to yourself! 5. You are FREE to profit from The Sangha Trading System in any way you choose, with only ONE RESTRICTION Give credit to The Children of the Journey Sangha as the original creator. The Sangha Principles 1. Those that have the passion and perseverance, on their own volition, will prove the merits of "The Gift" to themselves and acquire the necessary skills by their own effort. 2. As "The Gift" was freely given to the Sangha, we FREELY give the gift from our heart to those who ask us. The Sangha will freely answer questions and provide the foundational knowledge to those who seek. 3. The Gift of "The Sangha Trading System" is Open Source and will adhere to the "7 Guiding Principles" of Open Source.
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Methods:
SAFETY:
To protect our trading account, we employ the following Tactics... 1. Use a trailing Stop and let the trailing Stop work for you. 2. Make our profit early and stop trading early. We trade for a maximum of 2 hours.
3. Use the PRIME-DELTA-COMBO-JERK (PDCJ) tools to identify Trends and only enter on the "PULLs", when you have a CLEAN Stacking of STS lines.
4. Use only ONE contract.
WARNING: Doing business with the Market is "inherently" DANGEROUS! Market price action may sharply go up or down, PREVENTING your trailing Stop from activating in a timely manner. Please realize you will LOSE money when this happens and this is a "normal" behavior of the market.
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As a new STS practitioner, you are encouraged to just use one contract at a time, to minimize this possible loss.
SURETY:
1. Use the PRIME-DELTA-COMBO and JERK to know when a "Safe and Sure - PULL" Trend has begun, as you see a CLEAN Stack.
2. Use the COMBO-JERK crossing to time your ENTRIES and EXITS.
PROFITABILITY:
1. Make your profit early and stop trading early. 2. Only work the "Safe and Sure - PULL" Trends.
3. BEWARE and stay away when the market is pivoting and going sideways (when JERK is in the Quarter NARROWS - DANGER ZONE).
4. BEWARE of entering positions when the JERK is NOT following the price action (JERK DIVERGENT with price action).
Trading Strategies:
We "DANCE" with the market; we DO NOT PREDICT where it is going. We realize HOPE will not move the price action where we want! We accept the fact that we will make wrong decisions on the direction of the market!
Our STS tools allow us to know the two types of market Dance Behavior... 1. Sustained Trends - market doing the FOXTROT (PRIME and COMBO doing PULL, SUPPORT phases of a trend). 2. Sideways and Pivoting - market doing the JITTERBUG (COMBO and PRIME together and/or moving alike and JERK is in the Quarter NARROWS)
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Our Basic Strategy is... 1. For Discipline, only work the "Safe and Sure - PULL". 2. We only take a position when the market is doing the FOXTROT. 3. We STAY AWAY while the market is doing the JITTERBUG and the JERK is DIVERGENT with the price action.
Caveats to SiWi: You MUST be able to identify the DANGER ZONES (pivoting-sideways) and avoid taking positions until we see the PULL and a CLEAN Stack of STS lines.
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We encourage you to share your insights with other STS practitioners. It is through freely sharing our discoveries that we have made such wonderful progress! Most importantly, realize that there will be losing days and there will be immensely profitable days. Be extremely grateful and joyful for wins AND losses. It is when we lose that the UNIVERSE cares enough to teach us something new we have not yet grasped! Be thankful that the UNIVERSE cares enough to teach you.
Teachings:
There is a Reason why we call the PRIME "The PRIME":
1. The Market is Cyclic in Nature! The PRIME, which is the Rate of change of Macd_1 (Fast constant: 5 Slow constant: 10 Length: 3), told us that. The PRIME must always complete its cycle when above the Zero and when Below the Zero. 2. Nothing significant happens to the price action, until the PRIME crosses through the Zero! 3. How well the PRIME moves the price action as The PRIME goes through the Zero is very important. When the price action moves well as the PRIME moves in the same direction, then we have a STRONG or positive BIAS for the PRIME to move the price action. The PRIME behavior is the foundation we must fully understand to be profitable when "Dancing" with the market! ~o~
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You do not want to take a SHORT when an UP window is being made! You do not want to take a LONG when a DOWN window is being made!
Here is a picture to make the concept clear...
Oct. 3, 2012
~o~
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Use this inherent NATURE of market cycles to your trading advantage. ~o~
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DELTA is Pivotal...
When taking trends, only watch DELTA crossings at 3 areas of the NARROWS... Uptrends: 1. Starts - DELTA crosses UP thru the Zero or LOWER NARROWS. 2. Ends - DELTA crosses DOWN thru the Zero or DOWN thru the LOWER NARROWS. Downtrends: 1. Starts - DELTA crosses DOWN thru the Zero or LOWER NARROWS. 2. Ends - DELTA crosses UP thru the Zero or UP thru the UPPER NARROWS. For Safety... make sure to coordinate with the price action, any divergences, location of the JERK and the COMBO-JERK crossing. Please see this video for clarity. What a tremendous gift we have been given! Now it is possible to load up more contracts on these SAFE and SURE trends! Why is this so important? 1. Easier to teach for new practitioners - more mechanical. 2. Likelihood of consistent profitability encourages confidence. 3. Easier to create a disciplined trading habit, which we always do.
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~o~
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Who is who... PRIME RED line, COMBO BLACK line, JERK GREEN Stairsteps ~o~
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Recognizing a PULL UP (in simple words): 1. PRIME or COMBO are doing a W pattern or INVISIBLE CROSSING below JERK. 2. PRIME and COMBO are doing BULL FLAGS above JERK. 3. JERK is going up BELOW PRIME and COMBO. 4. ~o~
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Recognizing a PULL DOWN (in simple words): 1. PRIME or COMBO are doing an M pattern or INVISIBLE CROSSING above JERK. 2. PRIME or COMBO are doing BEAR Flags as it comes down through the JERK from ABOVE. 3. JERK is going down, while PRIME and COMBO are BELOW the JERK.
~o~
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Recognizing a SUPPORT UP (in simple words): 1. 2. 3. 4. PRIME and COMBO crosses DOWN through the JERK. JERK is going SIDEWAYS, UP or DOWN, ABOVE Zero. COMBO is ABOVE the PRIME and ABOVE the Lower Quarter-NARROWS. PRIME is BELOW COMBO and the JERK.
~o~
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Recognizing a SUPPORT DOWN (in simple words): 1. 2. 3. 4. PRIME and COMBO crosses UP through the JERK. JERK is going SIDEWAYS, DOWN or UP, BELOW Zero. COMBO is BELOW the PRIME and BELOW the Upper Quarter-NARROWS. PRIME is ABOVE COMBO and the JERK.
~o~
That is ALL Study, Do Market Replays and Be Profitable! 27 of 41 STS The Teaching Manual
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~o~
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With the JERK SECRETS above, you will never be at a loss when the market may turn in its "DANCE"! Also remember the RATEs have their cycle also, which goes from the TOP-TOP (TT) to go to the BOTTOM-BOTTOM (BB) and back again to the TOP-TOP (TT). As with all STS lines, the RATEs MUST also complete their cycle!
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Here is another viewpoint of Rates and JERK cycles from Jorge Gomez. Thank you Jorge!
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Please do your Market Replays at a fast speed to prove out the DELTA secret of points 5 and 6 above. You also do not need to use COMBO_B. PRIME-DELTA-JERK and COMBO_A are enough STS lines.
NOTE WHERE the DELTA meets the other STS lines within the NARROWS...
1. DELTA meets the lines at the UPPER or LOWER NARROWS, the trend reversal runs a very short distance or is nonexistent. 2. DELTA meets at the MID-NARROWS or near Zero, the trend reversal runs a long distance!
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Notice that the Renko Chart, which does not draw a BRICK until so many ticks have passed, has tamed our STS tools! 39 of 41 STS The Teaching Manual
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1. PULLs and patterns are much easier to see. 2. You may choose to trade the PRIME, COMBO, DELTA or best of all JERK inflections much more easily. 3. Renko charts "removes" some of the noise and sideways (chop). 4. Renko charts show trends, reversals, ceilings and floors. 5. Renko charts show price action channels that staircase up or staircase down. 6. Renko charts are only based on price action, it pays no heed to time. Therefore, it is quite appropriate for our STS Tools, since our tools work best when PULLs or pivots happen.
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Results:
This paragraph will be updated with how well our trading strategy does for our profitability.
Conclusion:
There is no Holy Grail of technical indicators. The best an STS practitioner can do is to "Dance" with the market and know when the market is doing the FOXTROT (PULL sure profitability) or the JITTERBUG (destroyer of trading account).
Stay away when the market does the JITTERBUG or JERK in DIVERGENCE with price action!
When we are NOT Profitable... it is because of our LACK of Trust in the tools and our LACK of Discipline.
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