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.

Auteur

Jeffery Tie is a successful trader and trainer with more
than 25 years of experience in financial markets. His stock market
career began in 1977 with JM Sassoon and continued with Kim Eng
Securities.

In 1997, Jeffery joined Refco Singapore where he developed new
expertise in international futures markets and foreign
exchange.

Jeffery's experience and training at stock broking and futures
broking enhanced his understanding of technical analysis and
trading. This expertise was augmented by his association and
friendship with a well known fund manager and trading coach.

Jeffery's proficiency in technical analysis was recognized by the
Singapore Exchange (SGX) who invited him to its panel of educators
where he consistently gets very positive feedback from attendees of
his seminars and

courses. Jeffery has spoken to international audiences in
Singapore, Jakarta, Mumbai, and Sri Lanka.

Jeffery is also an instructor registered with the International
Shinkendo Federation (ISF), an organization that promotes Japanese
swordsmanship and martial arts. This interest has allowed him to
notice the similarity in the

philosophy of martial arts and the philosophy of trading.

Jeffery joined CMC in April 2007 where he was responsible for the
content and presentation of CMC's educational programs.

He currently focuses on both trading and conducting technical
analysis courses and workshops with the SGX and the Financial
Training Institute@SMU.

Résumé
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.

Contenu

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