Sample of Lab Class:

Market Condition Lab Class Week 1

Copyright © 2007, Martha Stokes C.M.T., all rights reserved.  This online training class is protected by the copyright laws of the United States.  Registered Students are permitted to print off the weekly lessons for the purpose of their own study only.  No other permissions of duplication, use, or distribution are granted.  TechniTrader® is the sponsor of this class and TechniTrader® and Martha Stokes C.M.T. aggressively pursue all copyright infringements which are investigated by the FBI.  US law provides for fines and or imprisonment for any copyright violations.

TechniTrader® Students:

Welcome to the TechniTrader® Market Condition Lab Class.  This is an online eight week class that will explore, in-depth, how to analyze Market Condition.  The TechniTrader® Market Condition was developed by Martha Stokes C.M.T. to help short term traders call the market for the next trading day, and by extension, the current week.  Since it is such a critical, and generally overlooked aspect of trading, we felt it was important that we offer this education to you to improve your trading results.

Short Term Trading Styles are:

Intraday Trading

 

Velocity (Momentum) Trading

 

Swing Trading

 

Position trading

All traders of these styles need to understand Market Condition for optimal entries and exits, and to avoid whipsaws and trend reversals.

Market Condition analysis by TechniTrader® was developed over many years of research and testing in the live marketplace.  While most traders use either futures, indexes, or a market indicator such as a breadth indicator, it becomes obvious that these popular methods for determining the direction of the market for the next trading day fail to provide all of the information necessary for consistent trading results.

Introduction to Market Condition Analysis:

Market Condition Analysis is very similar to how meteorologists forecast weather for the next day and/or next few days.  Nowadays, most local weather forecasts are fairly accurate even in areas of the country that are difficult to forecast.  Traders need to be able to forecast the “weather conditions” of the market and have an accurate measuring device for tracking important changes in the market conditions from day to day.

Just as with weather, there will be the occasional surprise in the weather of the market but as you hone your market analysis skills, you will be able to anticipate these subtle changes quickly and accurately.

Just like weather, it is impossible to predict distant future events for the stock market.  But like weather, we have plenty of historical and statistical data to study in order to relate what is happening now to what happened a year ago, ten years ago, and so on.  No meteorologist could have exactly predicted how catastrophic hurricane Katrina would be as it hit land -- or that it would veer off course to hit New Orleans -- until the storm was a only few days away from that area.

Similarly, forecasting the “weather conditions” of the stock market cannot predict what unexpected future global international event will impact the market.  The 9/11/01 attack on the World Trade Center was a catastrophic shock to the stock market and its participants.  No one in the NYSE could have predicted that event. 

Conversely, Market Condition Analysis is based mostly on day to day evaluation of various aspects of the market.  Yes, we study historical patterns, but we do not rely on them as concrete evidence of what is going to happen.  It is unwise, and has been proven over and over again, that those who use cycles strictly, such as the perceived 4-year economic cycle, do poorly in the market.  That is because economic cycles and business cycles, as well as stock market cycles, are under evolutionary pressures – and conditions change over time.

For example, for a technical analyst to assume that the Presidential 4-year Cycle says that this year is going to be an up (or down) market year is foolish and can lead to poor results.  Instead, technical analysts should employ cycle theory as a basis for reflection on what has been in comparison to what is occurring.  I wrote my thesis, Cycle Evolution Theory, to prove this fact.  There will be more detail on Cycle Evolution Theory later in this course.