Aiki Trading

A great reference for all beginner traders. Aiki Trading will look at a robust method to understand what the market is doing in a specified timeframe. Essentially, markets are either trending up, trending down, or is in sideways or range bound congestion. Chapters are devoted to each of these three conditions, and the concepts are explained in depth. In addition, specific trading strategies will be explored for the different market conditions. These strategies are what I define as high probability, low risk trading strategies that have higher probability of success because it conforms to the nature of how markets behave. With more than 25 years of experience in financial markets, Jeffery's stock market career began in 1977 with JM Sassoon and continued with Kim Eng Securities. During his time in Stock-broking, Jeffery witnessed many cycles of boom and bust, including the 1987 meltdown in worldwide equity markets. In 1997, Jeffery joined Refco Singapore. During this time he developed new expertise in International Futures Markets and FX. Jeffery joined CMC in April 2007. He was responsible for the content and presentation of CMC's educational programmes. And he is currently the Resident Trainer with SGX Academy, and is based in Singapore.

Foreword ix Preface xi Acknowledgments xiii Introduction 1 The Philosophy of Aiki Trading 2 CHAPTER 1 Aikido 7 History 7 The Principles and Techniques of Aikido 10 CHAPTER 2 Candlestick Charting 15 Feudal Japan’s Ethos, and its Impact on the Development of Japanese Candlestick Charting 15 The Methods of Aiki Trading 19 CHAPTER 3 The Expanded Sideways Range Pattern 25 Bulls, Bears, and Turtles 28 Observations and Conclusion 31 Codifying the Trading Rules for the Expanded Sideways Range Pattern 31 The Action Zones 31 The Entry Trigger 32 Risk and Money Management: The Stop Loss Exit 34 Qualifying the Trade 42 CHAPTER 4 The Directional Trending Pattern 51 Identifying and Trading a Type 1 Trend Pattern 61 Planning the Stop Loss Exit 66 The Structural Risk 68 The Profit Exit Strategy 68 Timeframe and the Selection of its Relevant Moving Average Value 71 CHAPTER 5 The Successful Breakout 77 Managing the Trade 92 CHAPTER 6 Using Oscillators 97 Relative Strength Index 98 The RSI Divergence Signal (or RSI Camouflage Signal) 104 The Slow Stochastic Oscillator 108 CHAPTER 7 Applying Fibonacci Numbers and Ratios in Trade Analysis 119 Assessing the Fibonacci Profit Target 127 CHAPTER 8 Trade Volume and its Interpretation 139 CHAPTER 9 Risk, Money, and Trade Management 153 The Learning Phase 153 Trading for Profits 155 The Preservation of Capital 156 Money Management: The Preservation of Our Capital 157 Risk Management Combined with the 2 Percent Money Management Rule 158 Position Sizing 161 Winning Trade Management and the Rule of 3 163 CHAPTER 10 On Trading Psychology 173 Summary 175 Beliefs About Success 175 Market Understanding 175 Risk Management, Money Management, and Trade Management 176 Winning Psychology 177 Index 181