Long Term Secrets To Short-Term Trading

Figure 7.1 U.S. Dollar (daily bars). Graphed by the "Navigator" 
(Genesis Financial Data Services). 
Figure 7.2 A bullish pattern. 

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If we buy on any day but Thursday, a day we know tends to see selling pressures spilling over into 
Friday, we make a little less, $50,037 but bump our average profit per trade up to $555 and increase 
accuracy to 86 percent with drawdown going from $8,000 to $6,000. These results use a $2,000 stop to 
exit or the first profitable opening exit rule. 
We can use this same pattern for setting up trading opportunities in the Bond market as well. This 
pattern is so powerful that it can be used in all markets as a stand-alone trading formation, but 
stacked-deck Larry still prefers to have additional confirmation to make certain I use only the best of the 
best trades. Figure 7.4 shows the results of taking all outside day down closes followed by a lower 
opening the next day in Bonds. To get out of the trade, we will take a $1,500 loss or exit on the first 
profitable opening. Few traders realize that such a mechanical approach to trading can be so good, we 
score an 82 percent accuracy and $212 average profit per trade on the 57 occurrences since 1990. 
Can we make this a better performing pattern? You bet. Got any ideas how? You should by now, in 
fact, you are probably wondering whether the pattern is better on some days of the week than others. It is. 
If we take the trade on any day but Thursday, just as in the previous S&P results, we skyrocket the 
accuracy to 90 percent and make $17,245 on 41 trades for an average profit per trade of $420 (see Figure 
7.5). Folks, it doesn't get much better than this. 
Figure 7.3 Using the first profitable opening exit rule. 

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Figure 7.4 All outside day down closes. 
The problem is these outside day patterns do not occur as often as we would like! The next time you 
see an outside day with a down close lower than the previous day, don't get scared, get ready to buy! 
Time for another bullish looking pattern in the S&P 500. We will now look for any day that closes 
above the previous day's high and is preceded by two consecutive up closes, making it the third up day in a 
row (see Figure 7.5). Such seemingly strong showings of strength have been known to lure the public into 
buying.