Trend Trading Set-Ups

L. A. LITTLE is what Jim Cramer called a "technician extraordinaire" on his Mad Money television show. Little is a professional trader, money manager, and writes frequently for online publications including Minyanville.com and MarketWatch.com while continuing to contribute articles to well-known print publications like Stocks & Commodities, Active Trader, and Traders World. Little has presented in numerous conferences both domestically and internationally, appeared on syndicated radio shows, and provides daily market analysis and the tools to implement the trading strategies covered in this book on his website TAToday.com. With a trading philosophy centered on capital protection first and the accumulation of consistent gains over time, Little espouses a simplistic technical approach to trading the markets that refocuses technical analysis away from patterns to supply and demand levels. He is the author of Trend Qualification and Trading, also from Wiley.

• Foreword ixAcknowledgments xiIntroduction 1PART I 7CHAPTER 1 Identifying and Qualifying Trend Probabilities 9Trend Determination 10Qualified Trend Failure Probabilities 13Qualified Trade Failure Probabilities 31Summary 37CHAPTER 2 Anchor Zones: The Key to Timing Trades 41Anchor Bars and Zones 42Reconsidering Trade Failures 46Summary 54CHAPTER 3 Broader Influences Affecting Stocks 55Sector Congruence 59Virtual Industry Groups—Future Direction 72General Market Congruence 74Summary 81PART II 85CHAPTER 4 Formulating a Workable Trading Plan 89Trend Direction and Strength 90Time Frames 94Entry and Exit Timing 95Trading Size, Scale Trading, Trade Success Probabilities, and Reward-to-Risk Ratio 100Evaluating and Acting Upon the Plan 104Summary 105CHAPTER 5 The Data behind Trend Trade Set-Ups 107The Only Two Types of Trade Set-Ups 108Trading Breakouts and Retraces 111Breakouts versus Retrace Trade Probabilities 113Probabilities for Trade Set-Up Scenarios 122Summary 133CHAPTER 6 Sideways Range Trades 135Trade Set-Up Conditions and Categorizations 136Trading Sideways Trends 137Summary 155CHAPTER 7 Breakout and Retrace Trade Set-Ups 157Retrace Trade Set-Ups 158Breakout Trade Set-Ups 186Considering Other Trade Set-Ups 199Trade Set-Up Rationale and Thoughts 201Summary 205Conclusion: Unleashing Trade Potential 207Appendix: Data Tables 209About the Author 241Index 243