Table of Contents
Foreword ix
Preface xi
Acknowledgments xiii
Introduction 1
The Philosophy of Aiki Trading 2
CHAPTER 1 Aikido 7
History 7
The Principles and Techniques of Aikido 10
CHAPTER 2 Candlestick Charting 15
Feudal Japan’s Ethos, and its Impact on the Development of Japanese Candlestick Charting 15
The Methods of Aiki Trading 19
CHAPTER 3 The Expanded Sideways Range Pattern 25
Bulls, Bears, and Turtles 28
Observations and Conclusion 31
Codifying the Trading Rules for the Expanded Sideways Range Pattern 31
The Action Zones 31
The Entry Trigger 32
Risk and Money Management: The Stop Loss Exit 34
Qualifying the Trade 42
CHAPTER 4 The Directional Trending Pattern 51
Identifying and Trading a Type 1 Trend Pattern 61
Planning the Stop Loss Exit 66
The Structural Risk 68
The Profit Exit Strategy 68
Timeframe and the Selection of its Relevant Moving Average Value 71
CHAPTER 5 The Successful Breakout 77
Managing the Trade 92
CHAPTER 6 Using Oscillators 97
Relative Strength Index 98
The RSI Divergence Signal (or RSI Camouflage Signal) 104
The Slow Stochastic Oscillator 108
CHAPTER 7 Applying Fibonacci Numbers and Ratios in Trade Analysis 119
Assessing the Fibonacci Profit Target 127
CHAPTER 8 Trade Volume and its Interpretation 139
CHAPTER 9 Risk, Money, and Trade Management 153
The Learning Phase 153
Trading for Profits 155
The Preservation of Capital 156
Money Management: The Preservation of Our Capital 157
Risk Management Combined with the 2 Percent Money Management Rule 158
Position Sizing 161
Winning Trade Management and the Rule of 3 163
CHAPTER 10 On Trading Psychology 173
Summary 175
Beliefs About Success 175
Market Understanding 175
Risk Management, Money Management, and Trade Management 176
Winning Psychology 177
Index 181
