Future Mechanix - Cycle Based Trading Systems

Cycle Based Trading Systems (CBTS)

See past participants' feedback about the course.

This course is for those who have done the Advanced Cycles course. It bridges cycle theory and analysis to ACTUAL trading. Essential cyclic theory will be reviewed then applied directly to back testing, paper trading and real time trading.

Initially we will look in detail at three cycle based trading plans. You will have full knowledge of what to do and when and why. I will be using what I consider to be the correct cyclic model for each market rather than blind adherence to ‘a single model fits all’.

A variety of demonstration accounts are available via brokers. The pros and cons of these will be considered and every participant will establish at least one demo account (at no cost) for paper trading purposes during the course if they do not already have one. Specific but simple setup instructions will be provided.

Overall I will present a range of example ‘off the shelf’ trading plans that utilize cyclic knowledge. Each plan will have somewhat different components within the categories of signal, entry, stop loss exit, profit exit and position sizing. I will be explaining and demonstrating this range of components and will be encouraging participants to snaffle components of interest for their own plans. Key cyclic concepts included in this range of components include TIME (the most important), VTLs and FLDs. Key money management and risk management concepts will be included along with a detailed discussion of position sizing models.

Please note that you do NOT need cycle software to participate in this course. I will demonstrate the use of www.barchart.com and of course if you are maintaining your hand charts then these will work well. If you choose to use software then that will be fine.

After the initial stages of the course are bedded down I will expect everyone to construct a cycle based trading approach in close consultation with me and then develop a detailed and specific written cycle based trading plan. I have always contended that you need to construct your own plan. Once constructed, each participant will back test their plan for at least 50 trades – more is better. These trades need to be double checked to ensure accuracy and adherence to the stated plan. Then comes forward testing of at least 30 trades and finally paper trading. Stepping up and trading real time real money without back testing, forward testing and paper trading is not wise and is not my way. I will be fully available for discussion through these processes of plan development and testing - a mini Guide Beside situation really. You no doubt understand from the Trading Systems using Technical Analysis course that ME is critical in trading plan development, as is TSPE.

If you are not trading real money real time by the end of this course then you shouldn’t be far from it.

Vital aspects that are continually under valued and often ill considered (if at all) are ‘get the waste of time out of your life’, 'psychology' and 'success and wealth strategies'. The following dot points should give you a sense of some of the things that will be covered in these areas:
• People, events and things wasting time in your life and your market journey
• Why get-rich-quick and easy-money doesn’t work
• Why enjoyment and immediate gratification doesn’t work
• Self discipline, self-mastery and self-control
            - overcoming failure, frustration, under-achievement and unhappiness
            - improved self-esteem
                        - self respect
                        - personal pride
• Decide what you want
                        - persevere until desired results are achieved
• Character development
            - truth
            - integrity
            - high trust
            - perseverance
            - determination
• Overcoming ‘childhood’, ‘parents’ and ‘blaming’
• Taking responsibility for your life and all that happens
            + money
                        - lack of self discipline
                        - inability to delay gratification
                        - saving is the key to happiness (not spending)
                        - pay yourself first
                        - establish a financial freedom account
                        - spend only 50% of increase in annual income
                        - understand compound income and compound interest
                        - get out of debt
            + emotions
                        + fear
                                    - We will unpack a range of aspects and remedies
                        - greed
            + time
                        - plan
                        - prioritise
                        - do the ‘important’ that you can’t delegate
                        - decide what to discontinue
                        + manage your daily tasks
                                    -‘must do’, ‘should do’ etc
                        + focus
                                    - single-mindedness
• Why have goals and why take action

My aim in this course is to demonstrate the practicalities of taking cyclic knowledge to a consistently growing account in the hands of people who have the awareness and skills to handle the financial freedom. No guarantees of course because I can’t know what you will do with the knowledge.

Following is a guide to the details of the course but I reserve the right to make changes without notification.

Table of Contents
Risk Disclaimer and Disclosure Statement
For Your Reflection
Course Goal

STAGE 1 – Essential Cyclic Theory
What causes cycles to appear in the markets?
Cycle Parameters
• Measuring Cycle Periods
• Measuring Cycle Time Relationships
• Orb
• Reliability
• Dominancy
• Contraction
• Expansion
• Translation
• Troughs, Trends and Translation
• Measuring Cycle Price Relationships
• Price Retracements
• Price Targets (Repeat Range or Mid Cycle Pause MCP)
• Bullish and Bearish Phases of a Cycle
• Technical Price Triggers
Dewey
Physics of the Markets
Simple Harmonic Motion and Uniform Circular Motion
Hurst’s 8 Principles
Unpacking Hurst’s Principles
Divide By Two Market Example
Half Span Moving Average
Phasing and Current Cycle Status
Methodology for Locating Cycles
Hurst Phasing and Trend Analysis
Valid Trend Line (VTL)
Future Line of Demarcation (FLD)
FLD Summary
Full Span, Half Span & the FLD
FLD Study
Interpreting ‘Skewing’ and FLDs
Mid Cycle Pause

STAGE 2 – Demo Accounts

STAGE 3 - My Trading Philosopy
How Do I Analyse the Markets
Becoming a Trader
Trading Lifestyle
Plan to Become a Trader
Underlying Trading Principles
Trade both ways - Long & Short
Establishing a Trading Methodology (or Edge)
What is Trading About?
Don't Give Up Your Day Job
Developing a Trading System
Trading System Outline
System Concepts
Devising an Approach
Testing the approach
Measure the approach
Using the approach
Trading Your System
Risk Management - Stop Rules
Risk Management - Getting Stopped Out
Risk Management - Margin Call
Risk Management - Monitoring
Reflect on the System
Reflect on YOURSELF
Money Management
Asset Allocation
Position sizing and the 2% Rule (Risk Management)
Money Management Beyond Trading
Assets and Liabilities
Budgeting

STAGE 4 – Three Trading Plans
Trading Plan: TIME
Market Prices Fluctuate
   Buy Low and Sell High
   Know the Phasing
   TIME Considerations
   Tools To Use
TIME Trading Plan
MASTER Road Map
Current Hurst Phasing
Practice Exercise: TIME Trading
Live Exercise: TIME Trading
Measuring TIME and Price Relationships
Cycle Phasing
Measuring Cycle Time and Price Example
Trading Plan: VTLs – The Basis
Timing Your Buys with Graphics – GRUEN Industries
VTL Trading Plan
Practice Exercise: VTL Trading
Live Exercise: VTL Trading
Trading Plan: FLDs
Idealized 22 Phasing (zero trend) 80d Cycle & 20d FLD (1/ of Cycle)
Market Example Crude Oil 22 20dFLD
Market Example $DOWI 32 20d FLD Anchor 111004
Market Example $DOWI 32 20d FLD Anchor 120112
Market Example $DOWI 32 20d FLD Anchor 120604
Plan Development Exercise: FLD Trading
FLD Trading Plan
Practice Exercise: FLD Trading
Live Exercise: FLD Trading

STAGE 5 – Plan Development

STAGE 6 – Off the Shelf Plans
OPTION Trading Plan
Options on Crude Oil
Example Trading Plan: VTL01 Flat - LONG
Example Trading Plan: VTL01 Uptrend - LONG
Example Trading Plan: VTL01 Downtrend - LONG
Example Trading Plan: VTL02 Flat - LONG
Example Trading Plan: VTL02 Uptrend - LONG
Example Trading Plan: VTL02 Downtrend - LONG
Example Trading Plan: VTL03 Flat - LONG
Example Trading Plan: VTL03 Uptrend - LONG
Example Trading Plan: VTL03 Downtrend - LONG
Example Trading Plan: VTL0 Flat - SHORT 22
Example Trading Plan: VTL0 Uptrend - SHORT
Example Trading Plan: VTL0 Downtrend - SHORT
Example Trading Plan: FLD01 Flat - LONG
Example Trading Plan: FLD01 Uptrend - LONG
Example Trading Plan: FLD01 Downtrend - LONG
Example Trading Plan: FLD02 Flat - LONG
Example Trading Plan: FLD02 Uptrend - LONG
Example Trading Plan: FLD02 Downtrend - LONG
Example Trading Plan: FLD03 Flat - Short
Example Trading Plan: FLD03 Uptrend - Short
Example Trading Plan: FLD03 Downtrend - Short
Example Trading Plan: FLD0 Flat - Short
Example Trading Plan: FLD0 Uptrend - Short
Example Trading Plan: FLD0 Downtrend - Short

STAGE 6B Trading Plan Development Process

STAGE 7 - Advanced Trading Techniques
BIG Ducks Trading
Advanced Money Management - Pyramiding
Scaling In (or Sequencing)
Pyramiding Using Cycles
Advanced Money Management – Position Sizing
Minimum While Learning
Cyclic Position Sizing
2% Rule
Kelly
Optimal f
Advanced Money Management - Profit Compounding
Example of Profit Compounding
System Measures
Check & Re-Check Metrics
System Profitability Chart
Trade Tracking
Indicators
Dealing with Limit Moves

STAGE 8 - Psychology
People, Events, Things In Your Life And Your Market Journey
Why get-rich-quick and easy-money doesn’t work
Why enjoyment and immediate gratification doesn’t work
Self discipline, self-mastery and self-control
Decide what you want
Character development
Overcoming ‘childhood’, ‘parents’ and ‘blaming’
Taking responsibility for your life and all that happens
Money
Emotions
Time
Goals and Action overcome
Core Values
No Excuses
Psychology Resources
Life Assessment
Balance Metric
Spirituality Defined

STAGE 9 - Putting It All Together

Course Structure
This course will run subject to sufficient interest.

• Incubator Workshop 1 x weekend day, lunch included.
• 8 x 2 hour week night sessions over the following 4 months (by mutual agreement)
• tutorial assistance
TOTAL 22+ hours

Venue to be confirmed (Adelaide CBD).

See past participants' feedback about the course.

This course has been superceded by Trading Advanced Cycles (TAC).