During the webinar, I took you through the February, 2016 low on the SPI200 (API-Spotv). We looked at the analysis that called the low, and then we looked at potential trading opportunities coming out of the low. In this exercise, you will go through this same process with the monthly turns that we have been studying on Wesfarmers (WES.ASX).
In Case Study 2 (Part C of this Booklet), I take you through the reasons for the 23 February, 2015 top on Wesfarmers, so we will begin our trading from this top. This leaves you with 8 turns to consider in terms of both analysis and trading:
(i) 23 February, 2015 High
(ii) 23 April, 2015 Low
(iii) 15 May, 2015 High
(iv) 30 June, 2015 Low
(v) 4 August, 2015 High
(vi) 21 September, 2015 Low
(vii) 28 October, 2015 High
(viii) 16 November, 2015 Low
Remember to consider the following techniques when you work through your analysis:
- Ranges
- Sections of the Market
- The Power of the First Range Out
- Time by Degrees
- Squaring Time and Price
- Square of 144
Once you have looked at your analysis, you need to consider the potential trading entries that could have helped you into this trade. In the answers, I will focus on the two main kinds of entry that we discussed during the webinar:
(i) Enter as the swing chart turns
(ii) First Higher Bottom / First Lower Top
You are free to be creative and use any (legitimate) entry to trade these turns. Keep it realistic, and most importantly, make sure that it fits in with your Trading Plan. It’s no good saying “I would short the Openers”, for example, if you are working and can never watch the open, or have no intention of ever entering a trade that way.
In sports, they say “Practice how you play” – in other words, the quality of your practice tends to filter through to your actual performance on “Game Day”, so make sure you practice hard!