Kewltech’s Trading Course

459 Pages·2018·91.67 MB·English

by  Kewltech

Kewltech’s Technical Trading Blog
Course

Technical Analysis. The only way to trade. Focusing primarily on
S&P E-Mini. With some stocks to demonstrate proper use of technical
analysis of the markets. The charts and comments herein are based out
of my technical analysis. Trade at your own risk. ISSN 2153-6295 ©
2009-2013

Note: This e-book and related files are licensed under a Creative
Commons Attribution-Noncommercial-No Derivative Works 3.0
United States License. You may share this book so long as you give
credit to Kewltech, and you are not permitted to resell, or modify the
document for commercial or financial gain.
How To Learn: First watch the 4 videos (see below) as they are
examples of how people trade Kewltech style. This first video in this
series gives a general idea of the the technique used. Videos 2-4 go
into more detail, and provide more examples. Then go through
the Kewltech Summary Course (it's towards the end of this epub -
Modules 1-4), and then go through Kewltech's actual issues (1-89
+ Spaztiks' issues 1-6). For more information & conversation
see: https://futures.io/emini-index-futures-trading/37023-price-action-kewltech-
style.html.
To download all the
vids: https://mega.nz/#F!v3AVnKBS!6eFT7YGcDww0aT-MTuBTNg
Mirrors: 1) https://www.bitchute.com/video/auu3PVRsgl0e
2) https://www.bitchute.com/video/A0fGD5F7AWg3
3) https://www.bitchute.com/video/uS1sFCSXGzGu 4) https://www.bitchute.com/video/wKz5jlZ6ZpaP
FOR MORE INFORMATION AND EXAMPLES SIGN UP AND
MAKE AN ACCOUNT AT:
https://futures.io/emini-index-futures-trading/37023-price-action-
kewltech-style.html – You need to register for free to see the images in
the thread. You should also hit the 'USER CP' button -> Edit Options
-> and change number of posts to show per page to 40. The thread
discusses KewlTech's Method and is one of the more popular & active
threads in this forum. It is advised to go through the posts of the
thread contributors from beginning to end of the thread.
Introduction
Markets moves from support lost to support gained and vice versa. Watch how
markets react to levels. In every single time frame. Learn to put the time frames
together. Learning momentum, distribution, accumulation, legs, proper support
and resistances are key. You'll get the hang of it if you are persistent :)
Issue 1/89 – Cycles
Kewltech is going circle of life thing. Cue the music Elton! NOT!

As you can see, I really only use 2 oscillators. I used to use RS Wilder but
essentially it took too much chart space and became obsolete. Well, not obsolete,
but redundant.

What are oscillators used for?

Generally, they are momentum indicators. They also tell you when something is
overbought or oversold. Some people use them to tell them when to buy and sell.
There are a host of indicators and I've never aimed to use them all. I became well
acquainted with 2 indicators and those are my MACD and Slow Stochastic.

MACD StockCharts.com Definition - Developed by Gerald Appel, Moving
Average Convergence/Divergence is one of the simplest and most reliable
indicators available. MACD uses moving averages, which are lagging indicators,
to include some trend-following characteristics. These lagging indicators are
turned into a momentum oscillator by subtracting the longer moving average
from the shorter moving average. The resulting plot forms a line that oscillates
above and below zero, without any upper or lower limits. MACD centered
oscillators apply.

As a momentum indicator, MACD has the ability to foreshadow moves in the
underlying security. MACD divergences can be key factors in predicting a trend
change. A Negative Divergence signals that bullish momentum is waning, and
there could be a potential change in trend from bullish to bearish. This can serve
as an alert for traders to take some profits in long positions, or for aggressive
traders to consider initiating a short position.

Stochastic Slow StockCharts.com Definition - Developed by George C. Lane
in the late 1950s, the Stochastic Oscillator is a momentum indicator that shows
the location of the current close relative to the high/low range over a set number
of periods. Closing levels that are consistently near the top of the range indicate
accumulation (buying pressure) and those near the bottom of the range indicate
distribution (selling pressure).

I suggest you visit StockCharts.com and read up on these 2 old school indicators.

These 2 indicators compliment each other. One is known as a lagging indicator
(MACD) and the other is known as leading indicator (Stochastic). I think the
term leading indicator is a bit of a stretch when it comes to indicators. It is a
term leading indicator is a bit of a stretch when it comes to indicators. It is a
matter of perspective and interpretation. Yadi yadi ya. To use these indicators
effectively, you have to understand the cycles they run.

Both of these indicators have 2 lines that crisscross each other. Both have fast
and slow lines. When the fast line is above the slow line, it is known to be in
POSITIVE DIVERGENCE. When the slow line is above the fast line, it is
known to be in NEGATIVE DIVERGENCE. At the point where the fast and
slow line meet, it is known to be in CONVERGENCE.

When I use the terms Positive and Negative Divergences. I only mean these
cycles and not the divergences between peaks as some are known to trade. It is a
matter of perspective and interpretation. Yadi yadi ya.

Cycle is always this:

Convergence -> Pos Divergence -> Convergence -> Neg Divergence ->
Convergence -> Pos Divergence -> Convergence -> Neg Divergence ... at
infinitum.

The MACD loops through these cycles in a generally cleaner fashion than the
stochastics. It is easier to discern the cyclic nature than the often-wild frenzy of
the stochastics. Regardless, the said cycles above are respected.

Price Action and Cycles

Imagine a clock. Imagine that these 2 oscillators actually travel in clean circles.
And the point of interest is the tip of the fast line of both oscillators.

Convergence is always at 9 o'clock. Price Action on Pos Divergence:

9 o'clock -> 12 o'clock pos price action
12 o'clock -> 3 o'clock neg price action

Convergence

Price Action on Neg Divergence:

9 o'clock -> 6 o'clock neg price action
6 o'clock -> 3 o'clock pos price action

Why do these cycles exist?
Simply they describe incoming volume. On pos divergence, generally the bulk
of volume coming in are bullish and then tapers off and becomes more bearish
cycling you to the next cycle of neg divergence. What do you mean coming in?
Well in order for these things to work, it needs input. The math to produce the
charts and the oscillators need input data. In this case volume of orders for buy
or sell. Knowing this, how can an oscillator or indicator be leading if it relies
only on data that has come in and doesn't actually represent what will come in?
It is a matter of perspective and interpretation. Yadi yadi ya. LOL.

The cycles describe the incoming data. Hmmm…

Pos Divergence "generally the bulk of volume coming in are bullish" ...
"generally" meaning there is some bearish volume in there. Hmmm... Ergo Neg
Divergence should have some bullish volume too.

Oh that makes sense because this produces the range of the candles. And even
there is a rally there are moments of pause where we get a red candle too. Oh!!

As mental midget would say..."Imagine that."

Take a few to digest the concepts above and then later on we will move on to
build on this. Elton... your turn.

Issue 2/89 – Accumulation

Accumulation StockCharts.com Definition - The act of buying more shares of
a security without causing the price to increase significantly. After a decline, a
stock may start to base and trade sideways for an extended period. While this
base builds, well-informed traders and investors may seek to establish or
increase existing long positions. In that case, the stock is said to have come
under accumulation.

I'm as plain Jane as can be. Boring old MACD. Boring old Stochastic. No fancy
indicator sets that can compare to Star Trek Level 3 Diagnostic in the
engineering room. Well don't include the original Star Trek of the 60's. Las
Vegas flashing lights is all they could do back then. Hello! But I digress.

When the market wants to pop up the price. It accumulates.

Doesn't matter if it will be a big move or a weee little one point move. It will
Doesn't matter if it will be a big move or a weee little one point move. It will
accumulate.

Mr. StockCharts.com says "... After a decline, a stock may start to base and trade
sideways...”

When do you usually see accumulation? After a decline.

What will you see? You should see the candles start to base and trade
sideways.
Very basic display of Accumulation. And exactly as Mr. StockCharts.com
defined it.

But Mr. Kewltech sir, the definition also states and I quote, "The act of buying
more shares of a security without causing the price to increase significantly."
How does that happen? How pray tell do you build up bullish tones without
causing the price to increase significantly?

How do you buy shares and not affect the price?