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The Power of Three (Part A)

The document outlines a trading strategy called 'The Power of Three,' which divides the week into a three-day cycle focusing on breakout trades and market reversals. It emphasizes the importance of identifying key levels on Monday, Tuesday, and Wednesday to predict market movements and potential trading opportunities. Additionally, it warns traders about the possibility of traps in the market and stresses the need to master setups before making trades.

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Michael Junior jacob
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55 views13 pages

The Power of Three (Part A)

The document outlines a trading strategy called 'The Power of Three,' which divides the week into a three-day cycle focusing on breakout trades and market reversals. It emphasizes the importance of identifying key levels on Monday, Tuesday, and Wednesday to predict market movements and potential trading opportunities. Additionally, it warns traders about the possibility of traps in the market and stresses the need to master setups before making trades.

Uploaded by

Michael Junior jacob
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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THE POWER OF THREE

PART A}
 WEEKLY TEMPLATE I.E DAY 1,DAY2 AND DAY3
 SIGNAL DAYS I.E THREE DAYS OF BREAKOUT TRADERS

1. WEEKLY TEMPLATE (DAY1,DAY2 AND DAY3)


 THE WEEK IS DIVIDED INTO TWO TEMPLATES I.E MONDAY,TUESDAY,WEDNESDAY AND
WEDNESDAY,THURSDAY AND FRIDAY
 MONDAY IS THE OPENING RANGE OF THE WEEK I.E IT GIVES US THE INITIAL HIGH AND
LOW FOR THE WEEK.
 TUESDAY IS THE INITIAL BALANCE FOR THE WEEK
 ONE OF THOSE LEVELS MAY TEND TO HOLD AS THE EXTREME FOR THE WEEK
 WEDNESDAY WHICH IS DAY 3,WE LOOK FOR PARABOLIC MOVES WHICH MIGHT BE
REVERSAL TRADES BACK TO THE HIGH OR LOW OF THE WEEK OR TREND CONTINUATION
 THE COUNT RESETS AT THE END OF WEDNESDAY AND IT BECOMES OUR DAY ONE AGAIN
WITH FRIDAY NOW BECOMING OUR CLOSING RANGE OF THE WEEK

TEXTBOOK EXAMPLE

MONDAY TUESDSAY WEDNESDAY THURSDAY FRIDAY

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CHART EXAMPLE

FRIDAY WILL ALWAYS BE DAY 3 OF THE WEEK.I.E CLOSING RANGE OF


THE WEEK.FOR THIS CASE WEDNESDAY WAS A HOLIDAY THAT’S WHY
I’VE PASTED IT.TO SHOW REGARDLESS OF WHAT HAPPENS THE DAYS
REMAIN CONSTANT

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2. SIGNAL DAYS I.E THREE DAYS OF BREAKOUT TRADERS
 THIS INVOLVES PREVIOUS DAY’S HIGH OR LOW BEING TRIGGERED FOR
THREE CONSECUTIVE DAYS
 IT HAS TO CLOSE OUT OF BALACNCE I.E NOT AS A FAILED BREAKOUT
 THIS IS IMPORTANT AS IT MEANS BREAKOUT TRADERS ARE IN THE
MARKET
 AND AS WE KNOW THE MARKET WILL ALWAYS COME FOR YOUR MONEY
 THIS GIVES US A THESIS COMING INTO THE FOURTH DAY WITH A
POSSIBLE REVERSAL TRADE IN MIND
 IT USUALLY PROVIDES LARGE SCALABLE OPPORTUNITIES I.E 90/10 SET
UPS THAT CAN BE SCALED UPON
 IT ALSO GIVES SETUPS BACK TO THE LOW OR HIGH OF WEEK.
 IT PRESENTS FOR BOTH BULLISH AND BEARISH SCENARIOS.
TEXTBOOK EXAMPLE OF BEARISH BREAKOUT
TRADERS IN THE MARKET *IN PROFITS*

 MONDAY TUESDAY WEDNESDAY THURSDSAY


FRIDAY

DAY 1 OF
BREAKOUT
TRADERS
DAY 2 OF DAY 3 OF
BREAKOUT BREAK OUT
TRADERS TRADERS
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CHART EXAMPLE

 THE SET UP IS THE SAME FOR BOTH BUYING AND SELLING SET UPS
YOU ONLY INVERT THE CHARTS AND YOU HAVE THE BEARISH SET UP.
 THE MOST IMPORTANT DETAIL I WANT YOU TO UNDRSTAND IS THAT
THE SAME WAY IT IS A SET UP IT CAN ALSO BE A TRAP.
 AND THAT’S ONE DETAIL THAT MOST RETAIL TRAERS ARE NOT
TAUGHT IF THERE’S A SYSTEM THAT WORKS MOST PROBABLY THE
‘BIG DOGS’ IN THE TRADING SPACE WILL CREATE A FALSE
PERCEPTION OR SET UP BUT I PERSONALLY CALL IT FUGAZI TO MAKE
YOU BELIEVE YOUR SET UP IS READY TO BE TAKING.SO MASTER YOUR
SET UP UNTIL YOU UNDERSTAND WHAT IT TRAP LOOKS LIKE.I’LL
PASTE SOME FEW EXAMPLE.
 WE WILL FOCUS ON ENTRIES ON ANOTHER SECTION.I ALWAYS INSIST
THAT BEFORE YOU LOOK AT ENTRIES TO PRESS THE BUY OR SELL
BUTTON,MAKE SURE YOU HAVE MASTERED YOUR SET UPS
 SET UPS FIRST,ENTRIES FOLLOW THEN LIFESTYLE LATER
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DAY 3 SELLERS WERE TRIGGERED IN ON THE BREAK OF PREVIOUS DAY’S LOW
THEN THE MARKET PULLED BACK AGRESSIVELY TRAPPING THEM ONLY FOR IT TO
GIVE A BUY SET UP LATER IN THE DAY.NOTICE THE WAY THE BUY SET UP WAS
QUICK AND EXPLOSIVE.YEAH IT WAS GOING FOR THEIR STOPLOSSES.

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3. THREE DAY CYCLE
 IN A THREE DAY CYCLE,WE’RE LOOKING FOR A POSSIBLE PARABOLIC TREND TRADE OR A
REVERSAL TRADE
 ONLY IF THE SET UP PRESENT
 THREE DAY CYCLE IS DIFFERENT FROM WEEKLY TEMPLATE AND IT IS A TRADE SET UP ON ITS
OWN
 WE START COUNTING FROM DAY ONE,WHICH CAN OCCUR IN TWO SCENARIOS

SCENARIO 1
 WHEN WE HAVE A FALSE BREAK AT THE HIGH OF THE WEEK
 THE FALSE BREAK IS VALID WHEN THE MARKET BREAKS THE CURRENT WEEK’S HIGH OR
 LOW CLOSES OUTSIDE THEN WORKING ITS WAY BACK INSIDE
 WHEN WE HAVE A WICK THROUGH THE WEEK’S HIGH THEN IT ISN’T CONSIDERED A DAY
ONE
 FOR MONDAY WE USE FRIDAY’S HIGH AND LOW FOR REFERENCE

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SCENARIO 2
 WHEN THE HIGH OR LOW OF WEEK IS BROKEN IN A PARTICULAR DAY,THEN THE DAY ENDS
CLOSING OUT OF BALANCE(OUTSIDE THE BROKEN LEVEL)
 THE FOLLOWING DAY IMMEDIATELY PULLS BACK INSIDE THE DAY THAT INITIALLY BROKEN
OUT
 WHEN THAT OCCURS,THE DAY THAT BROKE OUT AUTOMATICALLY BECOMES DAY ONE
 THE DAY THAT PULLED INSIDE BECOMES DAY TWO
 THE NEXT DAY THEN BECOMES DAY 3 OF THE THREE DAY CYCLE

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