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Trading Strategies for Market Phases

1. The document outlines five key market phases or structures: triple tops/bottoms, gaps, trends, and consolidations. Specific trading strategies are associated with each phase. 2. The strategies are defined by looking for particular patterns involving three units of time/price movement. For example, a triple top formation requires three peaks, a trend requires three movements in the same direction, and a consolidation involves three corrective movements. 3. Rules for entering trades are provided for each of the five market phases/structures. For example, for a triple top one waits for a downward movement away from the third peak before selling. The strategies aim to identify high probability entry points at significant turning points or phases within trends

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247 views6 pages

Trading Strategies for Market Phases

1. The document outlines five key market phases or structures: triple tops/bottoms, gaps, trends, and consolidations. Specific trading strategies are associated with each phase. 2. The strategies are defined by looking for particular patterns involving three units of time/price movement. For example, a triple top formation requires three peaks, a trend requires three movements in the same direction, and a consolidation involves three corrective movements. 3. Rules for entering trades are provided for each of the five market phases/structures. For example, for a triple top one waits for a downward movement away from the third peak before selling. The strategies aim to identify high probability entry points at significant turning points or phases within trends

Uploaded by

Alfonso Logrono
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Rule

THE SAMNI NO DEN OF THE MARKET

1; equilibrium between price and time is crucial


-not be greedy
-do not try to obtain maximum possible
-win without becoming greedy
2. Learn to wait for best opportunities
-act at the right time
-avoid temptation to buy when its too late
-avoid anxiety and impatience

3-increase position direction of market(if continues to rise)


-
- Buy first 300 and then more if market continues to go way.DO NOT BUY EVERYTHING
SAME TIME
- Exercise patience = greater number of winning trades
-
4 in case we are wrong , we must close our positions and stay away from market for period of
40-50 days.

5
close 70 to 80% of positions as soon as you have minimum expected gain. Wait until end
of movement to close others.
-learn to wait and have courage to se our position develop according to the precise plan
that was prepared in the beginning.
-one MUST recognize that a plan that was prepared previously will tell us when to close
the first 70-80% of position and when to close rest
- once we know when to buy and sell, we must still learn how much to buy or sell.

-finally when engaged in trade, we must know when to exit and close positions(rules 4-5)

THE SAMNI NO DEN consists:


1- How to manage time and price
2- How to manage buying and selling points
3- How to decide what size of position to take
4- How to mange lossess
5- How to mange wins.
THE SAKATA STRATEGIES
-part of Sokyu Honma and focus on structures/phases of market

EACH OF THESE STRATEGIES OR METHODS ARE RELATED TO SPECIFI MARKET PHRASE OR


CONFIGURATION:
1-2= turning points, tops or bottoms,
3= gaps
4=trends
5= consolidations, or times when markets rest before continuing their trend.

****MARKET CAN BE IN ONLY ONE OF THESE 5 PHASES OR STRUCTURES AT A TIME****


-Each of these five market phases has a ternary structure, the foundation of which has
a precise meaning, minimum requirement to define a phase that is valid for trading.

-for trend to be exhausted, require minimum of three gaps,


-for trend to exist, must be at least three movements in same direction
-For consolidation to appear – we require at least 3 corrective units

THEY ARE 5 STRUCTURES (or Basic Configurations)


1.San Zan= three mountains and is the TRIPLE TOP
as head and shoulders can be considered to be a variety of triple top

2. San Sen= three rivers and the TRIPLE BOTTOM OR INVERTED HEAD AND SHOULDERS

3. San Ku= means triple gap and refers to empty intervals between prices. Also occurs within
a trend, - first gap is evidence of new buying or selling power and third gap often announces
end of actual trend
4.San Pei= three lines and refers to continuously ascending trend that is composed of the 3
time/price units. They Signal beginning of trend. The three lines can be in different time
frames.

5. San Poh= three rests and refers to corrective movement within a trend that is made up
three times/price units. The market will correct three time/price units before continuing in
the direction of the trend
THE GREAT CYCLE OF THE TRADER SAMURAI

RULES FOR BUYING AND SELLING ACCORDING TO EACH OF 5 METHODS


Method for Selling Triple Top (San zan)
-rule here is to wait for a triple top and sell as soon as the market has a sudden
movement that takes it downward and away from the triple top. This applies to every time
window.

Method for Buying Triple Bottoms (san sen)


Wait for a strong upward impulsive movement with a long range (wide price
fluctuations) after the triple bottom is fully in place, as soon at it happens,buy.

Method for Buying or Selling Gaps ( San su)


-for the buying method, we wait for a third gap to appear in downward market. Then,
we wait as long as it takes for a market turnaround, so that it goes upward and closes the
previous downward gap. Then, we buy. Exit position third gap.

For selling, we wait for at least a third gap in an upward trend. Which means that the
trend is near its end. Then, wait for a turnaround of the market and the beginning of a
downward trend. Once the market has turned around and closed the former uptrend gap,
sell.

Method for buying or selling Trends ( Sans pei)

Buy or sell within a trend that already has three/time prince units (bars) in the same
direction.

Method for Buying or Selling correction Within a trend (San Poh)

RE

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