Book: Kane Trading on: A Totally New 5-Point Pattern
January 16, 2005 Commentary (weekend edition)-
Well, as I mentioned last week, it sure is a long, long time now between commentaries. I got so desperate to share something I was looking at this week I posted it to a forum. Now for all you forum readers, I'm not saying I just posted at the forum out of desperation, but what I mean is I like to share my thoughts and such with my core readership here, and I couldn't do that. So I posted to a forum where those readers could see it, but my readers here couldn't. I don't think that's right.
Alas, though, that problem is about to come to an end. I finally made a decision about the ongoing debate regarding a members section. Although I didn't formally ask for feedback like I had planned, I have gotten enough e-mail on the topic since I started this website to have a good handle on what the readers think, and want. I decided to base my initial service on that information, and see how that works.
I plan to launch this with the upcoming month of February, starting, obviously, on the first of the month. I have laid out a membership page outlining the details of the service. I'm pretty excited about it. It will give me the chance to post something the minute I mark up my own charts, if I so choose.
I plan to post many of the setups before the potential trade area is hit so the subscribers can see ahead of the fact what I'm watching. I'll be able to update management changes when I make them. I will be able to discuss anything and everything that I see or that I feel is of relevance to my ongoing mission of providing good, solid trading education, designed to help traders develop their own comprehensive 'Trading Plan'.
I won't have to 'hold back' like I do in the free commentary. My target audience is my core readership; those that have the books and feel I can help them. I get the same repeating e-mail over and over about how much my books have helped him or her, and how I'm now top on the list for their educational process. If you are one of those people, I think this service is for you. This is a chance to hear my best thoughts, with detailed references to the techniques and to specific pages in the books.
I can lay out the why of what I am doing in tutorial fashion, in a timely manner. It won't be as timely as a live chat room, but then again I won't be focusing on tick charts, either. I will utilize many different timeframes, from tick charts to monthly charts, but I will have a lot of daily and 60-minute charts with setups well in advance so they can be followed as they unfold. I will be doing my 'trader talk' just like what so many have said they love about the books, but this time where it can be followed as it unfolds. This is a chance to listen to me on a frequent basis.
On top of all that, I think this is a great chance for my international readers, too. I will be accepting international PayPal for this service, so regardless of where you are located, as long as it's on the long list of PayPal countries, you will be able to sign up for this very conveniently. I know it has been a chore for my international customers to order my books. I wanted to make this as easy as possible.
Two quick things before we move on to some charts. Before you e-mail me and ask if I have a 'free trial', please read this FAQ. The other thing is I know I am going to get a lot of e-mails asking me for more details than I have laid out on the membership page. All of these e-mails will come from those that haven't bought any books, I suspect. Those that have my books know exactly where I stand, and understand the value of my work.
Then there are those that want it all for free (I believe you get what you pay for, or at the least that if it's free it's almost always worth about that much). They will send me endless e-mails asking about what is in the service, how it compares to other's services, how the price isn't right compared to what this or that other service does, telling me how great this or that other service is, how they give free trials, and so on.
Please don't send me those types of e-mails. If you don't have the books you are still welcome to sign up, and you will likely be able to glean a lot more of what I do from the service than what you could from the free commentary, but without the books you will only have bigger pieces without the full understanding of what it is I am trying to show. It really makes no sense to sign up for a reason like that (Hey, I can sign up for one month, get all the info, and quit. That's a better deal than $400 for all the books.), as you will not learn what is in the books that way, trust me.
My target audience is those that want more from me. They send me e-mails asking if I have anything else, or if I can offer anything else. That's why I created the phone support offering, and the mentorship and course. This is one more option, and a convenient one for those that aren't ready to fly to my area for a mentorship. It's a way to see me apply the methodology in a much more timely fashion than the books, on an ongoing basis, with a lot of discussion and explanation thrown in.
Those people won't have very many questions for me except 'Where do I sign up?' They won't need a free trial, they'll want in immediately. They won't have to send me endless e-mails trying to prove to me how so and so is a much better deal, or how my stuff really isn't all that useful or unique (even though they have only read a small selection of free commentaries!). They know the value of my techniques and insight to them, and that's all they need to know.
Now, I'm sure some people are wondering why I am going on and on about this, and maybe a few will advise me that I shouldn't be so 'personal' like this 'in public'. They'll tell me I'd probably sell more stuff if I were more 'tactful'. Ah, well that's the point. Those that know me and follow me closely appreciate my no punches pulled, straight shooting approach. I'm telling it like it is, regardless of the consequences.
There are a lot of people out there that aren't part of the target audience, and although they are welcome to sign up, all the information that I feel is needed to make a decision is on the membership page and in what you have learned about me from the books and the large stockpile of free commentary and free articles. If your response to what you read on the membership page isn't along the lines of 'Wow, that's what I've been waiting for, it's about time. This is great. I'm in.', then this service likely isn't for you.
If you have to think and think and mull it over, and try to get me to prove it's better than this or that, you aren't in the target audience. I won't try to say any more about the service than what I already have. (If you do have an obvious question about the service or the sign up that I just didn't think of, don't be worried about asking me, though, that's not what I mean here.)
I'll stop at this point, as I think I have set a new world record on verbosity and the beating of a dead horse. I truly think that this is going to be a really helpful service, and I'm looking forward to sharing my innermost trading thoughts. Keep an eye on the What's New page for updates as the launch date approaches.
Let's look at some charts. I'll show what I posted to that forum. I saw a setup forming in all the indices at the same time. I looked over the 'context' and I felt it was a key setup and area. What was most important to me was what happened with this area, not just the one potential trade I may get out of it. I wanted the one trade, but in the larger 'context' I wanted to see what happened there. That would tell me something about the market's larger scope intentions.
I'll show this in the DIA, although my main focus was on the ES. The traded timeframe was the 15-minute chart.

Chart 1
This is the point where I posted to the forum, but I had the area set up shortly after the C point was formed. (In the members section I would have posted this well before the point shown on the chart.) Notice the time symmetry, too. Also note that incredible rush up into the potential trade area, and think about how most people are thinking at that point. Does that bar look like a sell?
I started to see many other things coming together here, too. Let me add some more data, and a few lines, to the chart.

Chart 2
I drew a line in from two swing-low points, and cloned that to make the top line. I dropped it down to meet the swing-high point you see in the center of the chart. This was done as soon as that bottom point was formed. It hit right at the grouping area. Then I saw another interesting line.

Chart 3
I added a very 'unorthodox' line in just because of where it hit. Although not a regular part of my methodology, if I see something curious, I add it in. This was curious. And although it isn't shown this way here, everything so far was on the chart as soon as the C point was formed. Now I'll add in some median lines and parallels.

Chart 4
The chart is getting a little bit hard to read, but bear with me. I added on two sets of median lines and parallels that I had on the chart from before. Notice that two lines hit right at the potential trade area. There is at least one more set that has a key line also hitting right there, but I can only show so much before the chart is too hard to follow in a venue like this.
The point is that this was a very key area for me. Now it should be clear why this area was a lot more significant to me than just the one potential trade. Take a look at the 'context' and make an assessment. See if you can see what I am looking at. I'll finish by showing the reaction to the area.

Chart 5
The chart is a bit cluttered, but just take a look at how the DIA came off that area. All the indices responded in a similar manner. This is the methodology at its finest. Notice the structure of the only pullback of size in that downtrend off the pattern? Hmmm, looks familiar.
That's it for now. I'll be back next weekend with another free commentary. I hope the reaction to the new members offering is very positive, as I have put a lot into that, at the request of many of my serious readers. It will be done with the same Kane Trading quality that you have come to know.
The next free commentary will be next weekend's edition, posted by Sunday, January 23.
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