Value Trading

CISCO

CISCO Futures
1-303-306-1521 1-800 800 7227 Fax 1-303-306-1598
http://www.cisco-futures.com
dljones@cisco-futures.com

Value Trading: Overview and Qualifications for Short Course

CISCO Futures©
June 30, 2006

The goal of this article is to give you a guide to value based trading, including the prerequisites for understanding the CISCO courses. By value, we simply mean the price range that the bulk of buyers (traders) will accept within a given timeframe (day, week, etc.). Value is a price range, not a fixed number. Also, value is time dependent. Yesterdays' value may not be the same as the average value for the week. Value trading is the development of trading strategies based on value and value change in both short and longer timeframes. Many people think of the value analysis field as Market Profile, but Market Profile is just the tip of the iceberg.

Who is Qualified, Who is Prepared to Learn Value Methodology
Before we get into describing value methodology, you need some idea of whether our courses are for you. To take this significant step into market analysis, you should already know something about trading; what futures are, how they work and the risks as well as the benefits. You are expected to have a general understanding of the Market Profile concept--the idea that a day's trading volume traces out a rough bell shaped curve on the price axis (see 'A Picture of Value' below, where the price column is matched up with the TPOs column. Those TPOs show frequency of trading (volume) at each price. And as noted, this leads to (day) value. Our courses focus on value (day and longer). Since longer term value defines the congestive market condition, and longer term value comes from a collection of day values; it is important for the trainee to start with some familiarity with the basics of profiles. (You can find what you need in the first four chapters of Mind Over Markets by Dalton, Jones and Dalton.)

Ideally, you will have dealt with the markets and gained enough experience so that, unlike the ads, you know making money trading is not easy. You are not expected to know that most of the books, seminars, charts and trading models you meet up with do not work. You are expected to have enough sense to realize that if 95% of new traders lose, and all the books, seminars, charts, etc., did not work for them, then the same tools most likely will not work for you either. If you still have faith in the wild claims of the industry (i.e. gain without effort, someone will sell me a model that works,...), you are not ready for value training. In that case, you should go to the link for beginners on our main page under the CISCO logo.
Beginning Trading

Trader Psychology
If you are still with us, we want to take you on a short detour before getting down to the business of locating value. We want to talk to you about psychology, namely yours. Trading involves taking risks. You can lose on over half your trades and still be quite successful. But you have to be able to take a loss. If you were in a poker game with six other players your wins would come (on average) once every seven hands. That is just an average. In a real poker game you may lose 20 hands in a row. The same is true for trading; on a fifty/fifty average (win half the time), out of 1000 trades you can expect somewhere a run of 10 losers in a row (also there will be 10 winners in a row, but this is no problem). You must know how you face up to adversity.

Some people cannot handle losing at all. They are not trader material. Others' risk orientation makes them play for the low risk very short term (seconds or minutes). Yet others are willing to take a larger risk over a longer time. You need to know yourself. That requires some introspection and probably takes some time in the market as well. You may have to feel your way. An article on our site at the Whats New link on our main page, looks at the Psychology of Stress in Trading. Another article on creating a trading model goes into some detail on the fitness question.
Trading Model Development

Philosophy of Trading
You may feel that trading philosophy belongs in the classroom, not in the actual give and take of the market. Don't you believe it. The implicit philosophy that leads to standard technical analysis "all I need is in price (and sometimes volume)" and "data is there so I can find trading signals in graphs and simple calculations" has cost millions (yes millions!) of traders their capital.

Professional fields rely on a knowledge base of fundamentals. A physician who does not know anatomy is not the guy you want looking at your sciatica, or setting your broken arm. There was little progress in the medical profession until the rise of medical science. The old philosophy of medicine was bleed, put on poltices, do witch dances, etc. Medical science and research now provides a base of fundamentals. The current practice of medicine is examine, test, diagnose and treat (i.e. follow the scientific method).

Today's trading is like the practice of medicine before medical science. Current trading relies on a combination of ideas, beliefs, hearsay, computers, charts, charlatanism and self dealing that has little to do with actual market understanding. Trading decisions do not follow the scientific method. The trading philosophy of traders cannot be based on science because traders do not have the basic market facts and the appropriate methodology to apply them.

A newly evolving Auction Market Value Theory, described in the two links in the last paragraph of this note, offers traders that fundamental information (value) and the technology necessary to find it. This brings market analysis into the arena of science. Now traders can understand basic market facts. The door is opened to a trading philosophy of: examine, test, diagnose and create strategy (i.e. follow the scientific method). The basic variable, the fundamental information, is value rather than price; although price behavior over time is the source of measured value.

A Picture of Value

                     Meta-Profile REPORT FOR 01 26 06
                          with SEGMENTED AUCTION

                       Mini S&P 500 (CME-IOM)MAR 06


  Price TPOs                Segmented Auction (Half-hour Bars)
 128075 G                                G                        
 128050 G                                G                        
 128000 GM                               G                 M      
 127950 FGMN                          F  G                 M  N   
 127900 FGLMN                         F  G              L  M  N   
 127875 FGHLMN                        F  G  H           L  M  N |    VAU
 127850 FGHLMNP                       F  G  H           L  M  N |P
 127800 FHLMNP                        F     H           L |M |N |P
 127750 FHLMNP                        F    |H |        |L |M |N |P
 127700 BCFHIKLNP         B  C        F |  |H |I |  |K |L |  |N |P
 127650 BCFHIKLN         |B |C |     |F |  |H |I |  |K |L |  |N | 
 127600 BCEFHIJKL        |B |C |  |E |F |  >H >I >J >K >L >  >  >    POC
 127550 BCDEFIJKL        >B |C |D |E >F >  |  |I |J |K |L |  |  | 
 127500 BCDEFJKL         |B |C |D |E |F |  |  |  |J |K |L |  |  | 
 127450 BCDEJK           |B >C |D |E |  |  |  |  |J |K |  |  |  |    VAU
 127400 BCDEJ             B |C >D >E |  |  |  |  |J |  |  |  |    
 127350 CDE                  C |D |E |  |  |  |  |  |             
 127300 CD                   C  D       |  |                      
 127250 CD                   C  D                                 
 127200 D                       D                                 
 127150 D                       D

A profile day is broken into half-hour periods. B is 8:30 to 9, C is 9 to 9:30 and so on. The half-hour trading ranges are shown on the right, the Segmented Auction--a vertical alphabetic line for each half hour.

On the left is the graphic from collapsing the half-hour bars. The bulge shows where the market saw value (via trading decisions). Some prices rarely traded, such as 128075 amd 127150; others (around 127600) traded a lot. Prices between 127875 and 127450 encompass 70% of the letters (TPOs) for the day (dark area). This region is called the 'Value Area'. As the value area develops throughout the day, it is marked by the vertical bars (|) and the center (point of control) by the arrows (>).

On this day, in this market, the collective decision of all traders overwhelmingly preferred the price range 127875 to 127450. See how trading returned to this region time after time throughout the day. This is VALUE. Value is defined as 'price over time'. The mid-point of value is the POC (point of control) at 127600.

Looking over several profile days in row shows that the value area changes from day to day. If the market is congesting, the day-to-day is bounded by the congestion region. One of our students, (G.D), labelled value as "continuous and migratory", i.e. changing in response to changing conditions, but bounded by the congestion. Also, since value is chosen by a multitude of traders, it is not a single price, but is rather smeared out (over the value area).

Two Levels of Value
Now for some details. You must learn the two primary timeframes for value in auction markets. By 'learn' we mean thoroughly understand at the level of 'second nature'. First; the short timeframe (shown above) is a day or less (this is called the Minor Auction). Minor auction value is found by the Meta-Profile. Day value is called the 'value area' and is comprised of the central 70% of the day's trading activity. The value area offers the shortest term support and resistance prices for the current market. It tends to change from day to day and to experience breakouts within the day. Minor Auction refers to the time span, not the magnitude of the day's market activity (which can be major, indeed).

In the special case of value found from cleared volume, the CBOT Market Profile value area is the central 70% of the cleared volume. Practically, Market Profile is used little since it covers only CBOT data and coincides with the market only at the close. Historically, Market Profile is important because it is the way Pete Steidlmayer and the CBOT introduced the concept of day value measurement in 1985.
Introduction to Day trading

Major Auction is the longer term, multi-day value, also called market condition. It is found from the Overlay Demand Curve. The Overlay is sometimes referred to as a composite display, since Overlay Demand Curve is a CISCO trademark. Overlays are linear combinations of Meta-Profiles for selected numbers of days. While individual profiles often form a bell shape, as in the graphic above, Overlays have flatter tops, but usually still have a clear central peak. An Overlay 'value region' contains the bulk of the multi-day trading, often around 90% of the period's total trading activity. A major auction in balance, i.e. congesting, will have well defined upper and lower limits (resistance and support). Thus, value is defined by the value area (short term) and value region (longer term). Naturally, the longer term value region is the more stable. A trader can detect value changes and use that information for trading. Overlays are compactly presented in the CISCO 'Visual Graphic' display. A thorough review of the Visual Graphic is available at the link:
Visual Graphics Information Links

A major, major auction may continue for months or years (e.g. the long 'dot com' run-up that ended in the 2000 crash). Within that long run there can be many smaller major auctions, all of which include their own minor auctions. The major, major auctions for equity indexes can be thought of in terms of Elliott waves (5 waves up, three down) or the Kondratieff 57 year wave. For the trader, the major, major auctions are of intellectual interest only. What governs trading decisions is the current major auction detected by the Overlay (5 days, 7 days, etc., but rarely over 20 days) and the embedded intra-day Meta-Profile that shows current trader defined (market) value.

Market Condition
Market condition is the current market situation in which you are operating. The market's condition is found by the Overlay Demand Curve (Visual Graphic). You must know what the market is doing before setting any strategy. Markets are generally in one of two states or conditions. They may be in balance (congesting) or moving (distributing, trending). A congesting market is bounded, as shown on an Overlay display, having a clearly defined upper and lower limit. These limits are the resistance and support levels. As price moves out of a congestion, either the support or resistance is broken. Alternatively, a breakout can be seen as an alert to a change in value. The breakout trader keys off changes in value. As a trend emerges, the Meta-Profile deforms from the quasi- bell shape of congestion to become more elongated, adding another element supporting the early detection of a move.

Markets that remain in balance always show internal price rotation. This movement also offers trading opportunities. Prices near the upper limit of a balance can be sold at low risk, prices near the lower limit are low risk buys. This is known as responsive trading. More detail on the major and minor auctions is found at:
Intra-day Trading with Tick Based Profiles, March 1990

In addition to the two primary value measures there are many lesser value detectors (reference points, see Appendix 1, below). Some are straightforward like the 'trade facilitation factor' which gives you a quick read on trend activity. Others, like 'attempted direction' are more arcane, more judgemental. This is the real world; at any time some reference points are useful, others are not. You need to develop the judgement, the familiarity with markets to know which is which. An understanding of reference points enhances your ability to read your market (s). Putting together the Meta-Profile and Overlay Demand Curve along with the lesser reference points gives you, the trader, all the necessary inputs for developing a trading strategy.

Guide to Value Based Trading
The first question is how to get and learn the two primary tools; Meta-Profile and Overlay Demand Curves (Visual Graphic). That is easy today. Information abounds on the CISCO website, open to all (note the included links). Once you understand the profile (Minor Auction) and Overlay (Major Auction) you will be in a position to better understand the other reference points.

Information sources are as close as your browser. Our References page catalogs the principal articles on value trading. Our book, Value Based Power Trading, is also free on the site. Virtually every element of data on our website has a (free) sample and a background discussion explaining the CISCO trading data in detail. Many of the various reference points are organized into historical summaries on the CISCO site (also mostly free).
Free Tables of Averages

Where to start? What can you do by yourself? How about taking the bull by the horns and learning the Meta-Profile and Overlay thoroughly. You can do it. It is there for you. We have given you the links. Our site offers free access to the Meta-Profile and Overlay (CMaPS and Visual Graphic) data on Saturday and part of Sunday (Friday data). Unlimited access!

To repeat: learn about Meta-Profile for short term (minor auction) value, learn to recognize profiles in different types of markets. Test yourself on the real markets (you can do this free on weekends, or subscribe to our data). Familiarize yourself with the Overlay (major auction) in the same way as for the minor auction. Again, our site contains the information. Do not expect that learning to use these powerful tools is trivial pursuit. But if you learn, you will be ahead of the vast, vast majority of traders.

CISCO Short Course
Another learning option is to take our Short Course. It is an organized, five month approach and for many, the most cost-effective way to jump-start the learning process. You can get a feel for the course content from the Appendix 1, below. The course is designed as an apprenticeship. You learn and then you do. There is a lot of drill. All needed materials are included. You get the explanation and the data all in one package. Daily trading information comes from our site via your browser. There is No software to set up, no database to manage.
Short Homestudy Page

You can begin to trade immediately (paper, we hope!). A resource that comes with the course is 15 minutes of consultation per week. So you never have to remain in the dark for long. The six lesson outline is below. You can get mentoring, if needed, (search the web for market profile). Tom Alexander (www.alexandertrading.com) is one person we know who offers a number of profile oriented training/trading services, including mentoring.

There is certainly enough information on the CISCO website to permit learning value trading without taking our courses. The courses offer direction and continuity. An organized approach to the world of value trading.

CISCO Long Course
The Long Course is for those who cannot trade within the day. The emphasis is on overnight, swing trading. Outline is in Appendix 2.

However you handle your learning, the key is to become intimate with the two best tools available for market analysis, Meta-Profile and the Overlay. These two together open the door to market understanding at a level that is hard to grasp at this point. You are fitted to read congesting markets, where they start and where they end; as well as trending markets (where start and stop points are just the converse of the congestions).

A Brief Word on Auction Market Value Theory
At this point most traders run for cover. Who wants to talk about old dry theory, we just want to trade! You do not use market theory directly in your trading. But you ignore the theory at your peril. Here is why: Theory divides the market into positives (the kinds of analyses that are valid) and negatives (invalid analyses). If you trade from an invalid methodology, such as moving averages or oscillators, you are throwing darts or worse. How can this be? EVERYONE uses moving averages and oscillators. But wait, EVERYONE (or almost everyone) loses. That is not proof, but it is good evidence. Theory supports and validates value based market analysis. CISCO Short Course (and Long Course as well) are correctly based on market theory. Most technical analysis tools are not. You can learn more, if you wish, at:
Auction Market Value Theory
Discoveries Basic to Auction Market Value Theory

Appendix 1:
Outlines of Short Course Lessons

Month 1 and 2. Major Auction

    Introduction
      Market Condition, the overall picture
      Overlay Demand Curve is source of condition
        Trending ==> long time-frame traders
        Balance ==> short time-frame traders 
        Trader Control Package provides data
A.  Elements of Auction Markets and Exchange Member's Roles
      Market Cycle
      Four exchange member types
      Two market timeframes
      Two trader timeframes
B.  Market Generated Data:  Price and Time
      Market Profile (tm)
      Liquidity Data Bank (tm)
      Overlay Demand Curves (tm)
      Trader Control Package
      Non-Market Generated Data
        Ticks
        Open, High, Low, Close, Volume, Open Interest
C.  The Bell Shaped Distribution and How it Affects Your Trading
      Standard for comparison
      Expected and unexpected events
      Defines center of value and value area
D.  Swing Trading Reference Points; the Primary Six
      Six basic reference points of 'Value Based Power Trading'
        Bracket:  Limits, Octant, Middle, Commercial, Internal Trend
        Trend:  Run-pause characteristic of trends
E.  The Run-Pause Trend Reference Point Illustrated.
      T-bonds April 1 - April 7, 1998
F.  Additional Reference Points, Free TCP Tables
      (Day) Market Review reference points
        Reference Point
          Daily Range           Uses High - Low
          Close                 Relative to previous day
          POC                   Maximum TPO count price (center of day value)
          Value Area            Day value
          Total TPO's           An estimate of trading intensity
          TPO's Above POC       Day demand above POC
          TPO's Below POC       Day demand below POC
          Trade Facilitation    A measure of congestion
          Shape Factor          An estimate of the symmetry of the bell curve
          Volatility CV         Short term volatility
          Total Volume          Cleared, total LDB volume
          Commercial Volume     Cleared, commercial LDB volume
          Public Volume         Cleared, public LDB volume
          Initial Balance       High/Low prices of first two TPO pds of the day
          I-B Range             Range of first two TPO periods of the day
          Clo/IB                Close relative to IB (ABV, INS, BLO)
          Pct/Tot               IB percentage of the total days trading range
          Value Area Range      Range of the value area
          Attempted Direction   Direction the market is trying to go (U, Null, D)
          Value Area Dir.       Value area position relative to yesterday 
                                H = Higher, A = Overlapping to Higher, Bl = Inside
                                L = Lower,  Z = Overlapping to Lower

          Tables on homepage
            Summary Bracket Screen     Dollar range of brackets. No limits inc.
            Summary, Last 10 days      Brackets, last 10 days
            Bracket Range Averages     Average width, last 250 days
            Leading Deliveries         Estimated date of delivery
            Total Exch. Volume Avg.    Exchange (newspaper) volume (inc. spreads)
            Total Volume Averages      LDB cleared total volume (no spreads)
            Floor Mem. Volume          LDB cleared floor mem. volume (no spreads)
            Commercial Mem. Volume     LDB cleared commercial mem. volume (no spreads)
            Public & Other Volume      LDB cleared public & other volume (no spreads)
            Trade Facilitation Fac.    TF Factor averages (congestion)
            Daily Range Averages       Daily Trading Range
            Daily Range Dollar Avg.    Daily Trading Range averages in dollars
            Volatility Rng. Averages   Day volatility averages in range factor
            Volatility Averages in $   Day volatility in dollars in range factor
            Initial Balance Ranges     Day Initial Balance range averages
            Value Area Averages        Day Value Area in dollars
G.  Developing a Basic Swing Trading Strategy
      Basic Breakout Strategy
      Low Risk Day Trades
        Breakout
        Responsive
      Longer Timeframe Swing Trading
H.  Trading the Basic Strategy
      Basic Strategy
        T-bonds, May 7, May 8, 1992
I.  Expected/Unexpected Events, Projections, Predictions 
      Overlay Soybeans, June 4, 1998
      TCP ==> evaluation ==> set trade parameters ==> stop on entry ==> continuation
J.  Practice Trading, Four Months (Jan - Apr 1996)
      Basic Model
      Questions for notebook
      Swing trades tabulated
      Questions/answers/errors
      Commercial control of trading
      Trades tabulated
      Review of six basic reference points
K.  Trading as a Business
      Method, discipline, rules, leverage, cost control
L.  Questions
      Open book exam, 30 questions
    Appendix:  Legend for Visual Graphic

Month 3. The Minor Auction

    Introduction
      Market Condition, the overall picture
      Overlay Demand Curve is source of condition
A.  Elements of Markets and Exchange Member's Roles
      Market Cycle
      Four exchange member types
      Two market timeframes
      Two trader timeframes
B.  Market Generated Data:  Price and Time
      Market Profile (tm)
      Liquidity Data Bank (tm)
      Overlay Demand Curves (tm)
      Trader Control Package
      Non-Market Generated Data
        Ticks
        Open, High, Low, Close, Volume, Open Interest
C.  The Bell Shaped Distribution and How it Affects Your Trading
      Standard for comparison
      Expected and unexpected events
      Defines center of value and value area
D.  Attempted Direction 
      Yesterday AD formula
      Current (partial day) AD 
E.  Market Profile from Period to Period
      Five days through June 4, 1998 for soybeans
F.  Market Profile
      List of Market Profile reference points
      Half-Hour tick bars June 4, 1998
      Point of control (POC) 
      POC direction (H, E, L)
      Initial Balance 
        Initial Balance range, Close location, Pct of total 
        Initial Balance, Percent of total day range
        Initial Balance location of close (A, I, B)
        Gaps
      VA, range, direction
      Shape factor (less is better)       "   "     " 
      TPO's total 
      TPO's above POC (less is bullish) (Mkt Prof Theory) 
      TPO's below POC (less is bearish)   "   "     " 
    Half-Hour Tick Bars and Volatility
    Running Profile (Split day) June 5, 1998
G.  Additional Reference Points
      Excess
        Long Term Bar Chart  Soybeans Feb 26, - Jun 4, 1998
        Long Term Overlay Demand Curve Mar 9  - Jun 4, 1998
        Long Term Overlay Demand Curve Msy 22 - Jun 30, 1998
H.  Trade Facilitation Factor
      TFF = # TPO's per price level
I.  Intra-Day Congestion: Short Covering, Long Liquidation
      CISCO Congestion Report
J.  Overlay Demand Curve with Market Profile
      Overlay Demand Curve  T-bond May 19, 1998
      Combined Overlay and Market Profile  T-bond May 20, 1998
K.  Value area location in Overlay (higher or lower) 
      Overlay with VA   T-bond May 19, 1998
      Market Profile   T-bond May 20, 1998
L.  Volume Reference Points
      Volume interpreted within market condition
M.  Practice Trading
      Congestion ==> high TFF ==> narrow range ==> narrow VA ==> low committment
      Minor Auction trading, soybeans Overlay Jun 8, 1998 
      Period by Period trading
N.  Trading as a Business
      Method, discipline, rules, leverage, cost control
O.  Questions

Month 4. Reference Points Developed and Reviewed

Introduction

Part 1. Trade Selection
On-Line Equity Trading
Trade Selection
Advice Engine
Specifics for Analysis
Market Profile
Market Dynamics
Overlay Demand Curve
The One Market Trader
Advice Engine Report, Part 1
Advice Engine Report, Part 2
Data Bases for Research
Entry Point, Price for Entry
Risk on Entry, Research
Drawdown
Search
Potential for Profit, History
Timeframe
Long Term Market Behavior
Recent Market Behavior
Value Diagram

Part 2. Trade Management
A. Bracket Screen
B. Overlay Reference Points
Bracket Limits
Bracket Octants
Bracket Middle
Location of Close
Overlay Consistence (5 + 10)
Shape
Time Pattern of Trade
Gaps
Nodes
C. Commercial Activity
Commercials Re-balance (buffer) the Market
Commercials Go-with Trending Markets
Measuring Commercial Activity
Three Quantitative Measures of Commercial Activity
D. Rotation Index/Quadrant of Close
E. Visual Check of Overlay Demand Curve
F. Volume Reference Point
G. Volatility as a Reference Point
H. Trade Facilitation Factor
I. Value Area & Direction
J. Attempted Direction
K. Point of Control
L. Range
M. Quadrant of Close
N. Visual Graphic
O. Market Review in TCP Text File
P. Congestion
Q. Excess
R. Consolidation/Continuation
S. Expected vs Unexpected Behavior
T. Sources of Other Reference Points
U. Acceptable/Reasonable Risk

Outline of Advice Engine Lesson 1
Text: Value Based Power Trading, Jones, Probus Press 1993 (Traders Press)

1. Market Profile
a. Example
The Market Profile
Structure
Normal Distribution (Bell Shape)
5 days of Profiles
b. Text, Chapter 1, Futures Data

2. Overlay Demand Curve
The Overlay Demand Curve
5 days of Profiles
Structure
Multiple days (5,10, 15, 20)
Market Patterns (balance, run, pause, congestion)
a. Text, Chapter 4

3. Trade Selection
a. Text, Chapter 5
Day Trading
Trading Rules, p 123
Position Trade, p 134-144
Trading Rules, p 139
b. Advice Engine
Figure 3.1 Selections for November 17, 2000

4. Trade Management
a. Text, Chapter 6
Day Trading, p 145-146
Position Trading, p 147-173
Trading Rules, p 148
Responsive/Breakout Trading, p 173-181
Trading Rules, p 173, The Basic Model

Outline of Advice Engine Lesson 2
Text: Value Based Power Trading, Jones, Probus Press 1993 (Traders Press)

Reference points covered, in order:
Overlay condition
Overlay Limits U and L
Octants UO and LO
Middle M
*Internal Trend Ri and Qc
*Commercial *
*Nodes
*Location of Close cl

Market Profile
*Volatility Vo
*Initial Balance IB
R range 7 on the VG
% % of day range 70
C loc of close INS (inside the IB)
*Value Area
VA U upper limit
VA C center
VA L lower
R range
*Trade Facilitation Factor Tf
Reference points preceded by the * are the subject of this lesson.

Note that volume is not included as a reference point. Volume is potentially an important
reference point, but getting the correct volume is difficult. Exchange Official volume, the
sort found in the newspaper, includes spreads. Since spreads vary widely day to day and may
be a substantial part of the total, a large unknown variance is created. In most research
cases we find that TPO volume (counts) work well as a volume surrogate. Liquidity Data Bank
data on the CBOT carrys the actual cleared volume without spreads. This data is used in
the TCP's Commercial Capping measurement, but since it is not so generally available, we eschew
forming a reference point with it.

Fees and details are in the Product Catalog.

Product Catalog

Appendix 2:
Outlines of Long Course Lessons

Quarter 1, Months 1, 2, 3: Familiarization with Auction Market Analysis

Major Auction: New Trades, Starting Out: Selection Validation Confirmation Strategy Swing Trading Basic Model: Elements of the Model Example Potential Improvements Track Record Old Trades: Resetting stops Reference Points for trade continuance
Auction Market Analysis: Elements of Auction Markets Bell Shaped Curves Reference Points The Minor Auction: Short Term Analyses Continuation Reference Points ExpectedBehavior Trade Management: Commercial Reference Point Market Cycle Hourly LDB’s Fluctuation and Volatility: Long and Short term Volatility, Volatility as a Reference Point Responsive Day Trading: Overlay Demand Curve, Commercial Control, Model and Rules, Example
Reference Points: Overlay Demand Curve (3) Internal Trends Commercials Pauses in Trends (nodes)

Quarter 2, Month 4, 5,6: Review of Ref Pts, Volume, Trade Facilitation, Quadrant of Close
Cost Control: Discipline Rules Leverage Scale-up Scale-Down Cost Control Slip Workbook: Examples and Tests Trading: Data Market Profiles LDB’s, Hourly LDB’s Overlay’s Selection Management Menus Four Phases of Markets: Balance Testing the Balance Trending Testing the Trend Testing: Transitions, Continuation Analyses, Liquidity Data Bank and LDBRES Processor Reference Points: Volume Volatility Trade Facilitation Factor Quadrant of Close

Quarter 3, Months 7, 8, 9: Major to Minor Auction, Commercials, Review of Reference Pts
Reference Points: Value Area (2) Point of Control (POC) Shape Factor Trading Range (2) Initial Balance (2)
Interaction of Major & Minor Auctions: Major/Minor Auction Timeframes Short Timeframe Traders Commercials: Function/Role Capping Going With Work-out-time Risk Limitation Three Measures Review of Reference Points: The Basic Six Volume Volatility Value Area Others

Quarter 4, Months 10, 11, 12: Technical Analysis, Exiting, Review
Reference Points: New Highs/Lows Total TPO’s TPO’s Above/Below POC Top4/Bot4, Congestion
Technical Analysis: Role in NMA Cycles Oscillators Moving Averages Pivot Points Trade Exit: Basic Exit Model Exiting (Why) Examples
Review: Major/Minor Auctions Testing Day and Swing Trading Exits Money Final Exam

Fees and details are in the Product Catalog.
Product Catalog

CISCO 1 303-306-1521
PO Box 441396, Aurora, CO 80044
1 800 800 7227
http://www.cisco-futures.com
dljones@cisco-futures.com