INSIIDE Track Trading provides technical & cyclical-based analysis and publications - dedicated to educating & informing traders and investors while preparing them for developing opportunities. This analysis is structured to take a practical approach to trading, rooted in sound principles of proper money management and risk control.
INSIIDE Track publications draw from Eric Hadik's 35-year career trading & analyzing the financial markets and his development of acclaimed trading indicators & axioms featured in dozens of other publications, websites & interviews. [Many of these are available to subscribers via the 140-page trading manual: Eric Hadik’s Tech Tip Reference Library.] Eric’s unique application of cycle analysis - filtered by specific price indicators - provides an effective approach to trading the markets.
All signals require confirmation - the act of a market moving in the anticipated direction and either breaking through successive levels of resistance or support OR triggering additional signals, based on corresponding indicators.
Depending on the location of the initial signal (with or against larger-degree trends, early or late in developing trend, etc.), this confirmation is different. In addition, the frequency & placement of ensuing confirmation signals is determined by the type of trade being taken. In other words, a trade needs to be repeatedly & consistently ‘confirmed’ - by subsequent price action - which is also when & where trailing stops are usually adjusted (reigned in).
This is also where it is of paramount importance that a trader knows his/her objectives, level of patience & risk tolerance. These vary greatly between traders. And, the vehicle being traded (from the high-leverage extreme of futures to a less-leveraged vehicle like stocks or ETFs) is equally a critical factor.
There are many nuances of these rules that could come into play, depending on one’s objectives. Although this might appear complicated, on the surface, it becomes more simplified in practice. The primary layers - Principles & Money Management - should be internalized (once they are ascertained) and become the ground rules for every trading decision.
The secondary layers - Cycles & Structure - come into play when surveying the charts. Finally, the ultimate filter (PRICE ACTION) takes center stage and governs the final three layers (Resistance/Support, Trigger Signals, Confirmation Points). And, while that is unfolding, other markets can continually be monitored for appropriate Cycles & Structure to fall in place.
Once a market has fulfilled - or begun to fulfill - the timing & structure for a new trading opportunity, and is testing AND holding corroborating support or resistance, a trigger signal must be activated in order to validate - or bring to fruition - what appears*** to be developing.
[***After 30+ years of intimate involvement with the markets, one thing is certain - ‘looks can be deceiving’. That is why various forms of subjective analysis - like Elliott Wave and even cycles - are used as a backdrop, BUT MUST BE VALIDATED AND SPECIFIED! It is also why our publications attempt to place the role of charts back into proper perspective.
It is more important to understand the numbers that go into creating a chart - just as it is more important for a doctor to understand all the components of a body, organ or blood BEFORE reading a related chart. Too many traders amuse AND deceive themselves by pulling up a chart and starting to draw an overwhelming amount of lines, channels, perceived wave structures, etc. on that chart… without truly understanding the numbers at work, in a comprehensive manner. More on that in our publications.]
One of the primary signals that INSIIDE Track uses is a 2 Close Reversal, once the daily trend (or related period, i.e. hour, week, month, etc.) pattern is in the proper position. However, there are others that have also proven themselves to be effective within specific context.
Once the timing and the structure are mature - and positioned for the anticipated move (a reversal, a breakout, an accelerated trend, etc. - depending on the indicators used and trading strategy employed) - then price takes center stage.
In a general sense, price plays three critical roles:
Here again, the specifics of each of these depends on the strategy being employed. Some traders prefer to pick bottoms & tops. There are some benefits to that, but also some serious drawbacks (see Eric Hadik’s Tech Tip Reference Library for a more expansive discussion).
Other traders like to trade breakouts - when a market has violated an established trading range and typically accelerates in a new or reenergized trend. Here again, one needs to understand the pros and cons to see if this style of trading is most suited to their mindset, risk tolerance and overall trading acumen.
While INSIIDE Track Trading integrates both of these approaches, the majority of trading strategies (system trades) are based on a third approach that combines the stronger points of each of these preceding ones… while trying to cull out some of their respective drawbacks. This approach could best be described as STTW ‘Seeking the Third (‘3’) Wave’.
That approach combines more subjective analyses - including Cycles, Elliott Wave & Gann - while honing them with more objective indicators, in a search for the most dynamic move in each trend. That is the wave in which a market will move the fastest & farthest… in the least amount of time.
Whereas ‘Cycles’ identify the when of trading, ‘Structure’ begins to identify the where of trading. This does not necessarily imply the where of a specific price level (that will come next)… but rather the ‘where’ within an overall trend or wave structure. A market has to be at the right position in a trend - primed to reverse or to accelerate in that trend - before a corresponding trade is advisable.
This is a key way of determining if a (previous) trend has fully matured or if a base (or top) has fully traced out and is ‘ripe’ for a big and sustained move. There are several ways of recognizing this, including a working knowledge of Elliott Wave. There are also key indicators - in our arsenal - that helped distinguish this.
While the two primary foundational levels of this pyramid involve the business aspects of trading, the remaining tiers shift the focus to actual market analysis & trading. Here again, it begins with the broader components and steadily narrows the focus to the most specific. And this is where cycles - and other forms of market timing - come into play.
It might surprise readers to see that there are still 4 additional layers above/beyond Cycles. While many of the discussions, articles & interviews on this site (and related sites like www.40YearCycle.com & www.17YearCycle.com) are primarily based on cycles, that is ONLY a starting point when it comes to trading. Cycles provide the backdrop or foundation (a higher-level of foundation) for all of the ensuing aspects of trading. They provide the ‘when’ for anticipated market action and/or reversals.
Timing is Everything! … but you still need to know what you are timing. It might be easy to identify when is a good or necessary time to buy a house, but that is only the starting point. A buyer then needs to pinpoint the general location, then a specific location, then the desired property & related specifications, and then the actual target house. Even then, there is still the aspect of price that needs to be dealt with.
Similarly, cycles start the process… but there is a LOT more that follows.
Ultimately, trading is a business… or at least it should be treated that way. If you are in it for the thrill of the chase and love to treat trading like a lottery or roulette wheel, we cannot help you. INSIIDE Track Trading approaches trading as a business and a long-term one at that. With that in mind, one of the most important factors is that of risk control & proper money management. This can take on several forms…
One of those involves ‘risk points’* or ‘stop losses’* on any trade. While these risk points* do not have to be placed in the market, a trader needs to recognize - right from the outset - where their decision would be considered wrong if a market turns against them. This is where technical analysis outshines a fundamental analysis approach, since it should provide clearly defined levels where a signal is negated or where a perceived trend is reversed.
Another aspect of proper money management involves the amount risked* (proportionate to entire account or amount of risk capital) on any given trade or trade campaign. INSIIDE Track Trading takes a fairly conservative approach, believing that risking* 3--5% of risk capital - on a particular trade - should be the maximum. That allows plenty of room for the inevitable drawdown or series of losing trades (and, yes, there will be losing trades!).
[*All of these references to ‘risk’ or ‘risk points’ involve the perceived risk going into a trade. If a trader enters a long position in market ‘A’ at 100 and concludes his/her risk point is at 95, there is no guarantee that an order to exit at 95 will be filled at 95. However, for these discussions, that risk point - at 95 - is the focus. Trading involves substantial risk and fast or illiquid markets can greatly magnify the actual risk or loss in a trade… which is another reason that only small percentages of overall risk capital should be committed to individual trades or campaigns.]
At INSIIDE Track Trading, we view trading (and all market analysis) with the same multi-stepped or multi-tiered approach. It is not enough for cycles or Elliott Wave or a single technical signal to lead to a conclusive decision & trading strategy. Instead, it is the synergy of multiple steps AND multiple signals or events (within some of those steps) that ultimately leads to a firm decision and resulting trading strategy.
As in any pyramid, the bedrock layers must be strong, solid and spread wider than those at the top. It is the foundation from which the entire trading edifice rises. In another perspective, that bottom layer is the core around which everything else surrounds. In trading, this begins with the foundational principles of any successful endeavor. One of the most important is that which was already referenced in the preceding paragraph - Synergy. The whole is greater than the sum of its parts. A cord of three strands is not easily broken.
Do NOT, however, confuse principles with platitudes. This is not referring to those ‘feel good’ - often pithy - sayings about trading or life in general. It does not refer to positive mental attitude or self-esteem psychology. Instead, it refers to time-tested, historically-proven principles that ultimately yield success in business as well as in trading/investing. Several of these can be found in the Axioms of Trading, contained in Eric Hadik’s Tech Tip Reference Library.