The Profitable Art and Science of Vibratrading

Acknowledgments ix Introduction xi CHAPTER 1 Challenges to Conventional Trading and Investing 1 Directional vs. Non-Directional Methodology 1 Problem of Maintaining Long-Term Consistent Positive Expectancy 3 Predictive vs. Reactive Approaches to Risk in Trading 5 Trader Inactivity and Volatile Price Activity 6 Subjectivity vs. Objectivity in Trading and Investing 7 Filtering and Trade Signals 9 CHAPTER 2 Understanding the Basics of Order Entry 13 Common Trading Terminology and Definitions 13 Common Orders 15 Entry Orders for Bounded Vibrational Trading 17 CHAPTER 3 The Objectives of Vibratrading 19 Vibratrading as an Income Strategy 20 Introduction to the Components of Vibratrading 21 Main Components of Vibratrading 24 Meaning of the SISO and SOSI Acronyms 29 Basic Scaling Entries and Exits 31 CHAPTER 4 Controlling Risk in Vibratrading 35 Types of Risk 35 Risk Control Mechanisms 36 CHAPTER 5 The Mechanics of Equity-Based Price Action 47 Equity-Based Calculations 47 Market Value vs. Profit Potential 48 Price Leverage Ratio (PLR) 49 Money Leverage Ratio (MLR) 53 Buying Leverage Ratio (BLR) 53 Account Leverage Ratio (ALR) 58 Calculating the Initial and Current Market Value 62 CHAPTER 6 The Mechanics of Securitization and Monetization 63 Monetizing in Margin and Non-Margin Accounts 65 Securitizing Profits and Risk Capital 67 The Basic Principles of Price Action 68 The Effects of Negative Spread Bias on Reward to Risk Ratio 73 Hedged Price Action Principles 79 CHAPTER 7 The Principles of Boundedness 83 Capital Boundedness 86 Directional Boundedness 92 Range Boundedness 94 Order Entry Boundedness 97 CHAPTER 8 The Mechanics and Dynamics of Vibratrading 101 Vibrational Operations, Mechanisms, and Constructs 102 The Scale Factor 105 Capstone Mechanisms 108 The Macrososi Vibrational Mechanism 109 Macrosimo Mechanism (Upbuy - Upsell) 114 CHAPTER 9 Pyramidal-Based Vibrational Mechanisms 121 Microsiso 121 Interval Slip-Through 125 Macrosiso 129 Extracting Macrosiso Vibrational Profits 134 The ''Arbitrary'' Vibrational Construct 140 Upside Bounded Macrosiso and Microsiso 144 Unbounded Upside Macrosiso Mechanism 145 Unbounded Hedged Vibrational Constructs 145 CHAPTER 10 Diversification in Vibratrading 147 Bounded Versus Unbounded Zero Test Level Event 148 The Six Levels of Diversification 150 CHAPTER 11 Volatility Matching 157 Historical Range Volatility (HRV) 157 Event Trading (High Volatility Trading) 158 Range Zoning (Medium to Low Volatility Trading) 158 CHAPTER 12 Putting It All Together, Finally! 161 The Return Characteristics of Vibrational Constructs 162 A Brief Guide to Understanding the Scale Analysis Tables 162 Introduction to Vibradirectional Techniques 172 Calculating Working and Running Capital within Vibrational Grids 176 Free Swing with Constant Capital per Level with Type 1 (Roll to Break-Even) 183 Gaps in the Grids 187 The Balance Between Opportunity Cost and Profitability 189 Free Styling across Multiple Levels without Risk Freeing 198 Unbounded Bidirectional Profit Capture Constructs 200 The "Big Hedge" Technique 202 The "Small Hedge" 203 The Upside Short Hedge 204 Zero Cost Hedging Technique for "Loading the Matrix" 205 More Constructs 206 Exiting With Profit 211 CHAPTER 13 The Vibrational Vehicles 213 Characteristics of Exchange Traded Funds (ETFs) 214 Types of Risk Associated with ETFs 215 Funds to Avoid In Vibrational Trading 217 The Replicated ETF Portfolio 222 CHAPTER 14 Comparison with Other Trading Systems 225 Vibratrading vs. Scale Trading 225 Vibratrading vs. Dollar Cost Averaging 225 Vibratrading vs. Value Averaging 226 Vibratrading vs. Buy and Hold 226 Vibratrading vs. Directional Trading 226 CHAPTER 15 Profiting from Non-Vibrational Flatline Price Action 227 The Basis for Non-Directionality 227 Riskless Short Options Trades 228 Using Short Options in Vibratrading 228 CHAPTER 16 Summary of Vibratrading 229 The Two Rules of Vibratrading 229 A Quick Recap 230 Choosing a Vibratrading Construct 234 The Importance of a Balanced Pyramidal Structure 238 Conclusion 239 Index 241