

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Problem #1: No Selection Criteria
Problem #2: You Buy When Wall Street Sells
Problem #3: You Quickly Cut Profits but
Slowly Cut Losses
Problem 4: You willingly Accept Too Much
Risk
Problem 5: You Never “Get” It
Problem 6: You Engage in Lifestyle
Inconsistent Trading






Solution to Problem #1: Adopt a Long Term Trend
Following Criteria
Solution to Problem #2: Watch the Trend and Use
Stops to Exit Falling Markets
Solution to Problem #3: Learn to Cut Losers and Hold
Winners
Solution to Problem #4: Limit Risk by Limiting Position
Sizes
Solution to Problem #5: Learn From Your Mistakes
Through Careful Record Keeping And Review
Solution to Problem #6: Develop a Lifestyle Consistent
Approach to Stocks and Stock Options



For years I ignored this signal.
I did so despite what I can only call cosmic rebuff…
COSMIC REBUFF #1: Timing with this signal allowed
retired engineer Joyce to turn about $20,000 into
over $1,000,000 combined with LEAPS in less than a
decade.
› She left my presentation disappointed for my not having
discussing it or its power.


COSMIC REBUFF #2: My own academic research
showed the prescience of this one critical signal.
COSMIC REBUFF #3: Nicolas Darvas used this as his
first and most important signal in his stock system that
turned $36,000 into $2,500,000 million in just over 6
years.
Is good business on Wall Street.
 American Robber Barrons maintained vast fortunes
manipulating the stock market through “accumulation”
and “distribution.”
 JP Morgan was the greatest stock market manipulator of
all time.
 In numerous stock manipulations before 1868 Cornelius
Vanderbilt hammered thousands of investors quietly
“accumulating” stock cheap and “distributing” dear to a
frenzied uninformed public.

› His upins’ were a comin’
In 1868, Cornelius Vanderbilt quietly attempts to take over
rival Erie Railroad by clandestine accumulation.
 He confidentially instructs his brokers to buy every Erie
share they can find.






Daniel Drew, Jay Gould, and Jim Fisk had
“accumulated” most of the Erie shares
outstanding already - dirt cheap - in the quiet
months before when nobody was looking.
The Commodore’s buying pressure squeezes
Erie stock to astronomical prices.
Drew, who was Erie's treasurer, responded by
printing up more Erie shares.
The three “scoundrels” sell into Vanderbilt’s
buying.
The Commodore loses a small fortune as the
stock price churns at apogee then crashes.






Jesse Lauriston Livermore is born July 26th, 1877.
He kills himself on November 28th, 1940.
This American stock trader known as the “Boy
Plunger” and the “Great Bear of Wall Street”
used this signal intensively.
He was famed for making and losing large
fortunes.
He short sells during crashes.
Livermore’s short profits in 1907 and 1929 were
legendary; the later landed him in front of a
Congressional hearing.
Wyckoff enjoyed close contact with the
most important pioneering traders of Wall
Street.
 He studied the market operations of Jay
Gould, Jesse Livermore, J.P. Morgan, and
Andrew Carnegie.
 He learned an incredible secret through his
friendship with Livermore.
 104 years ago Richard Wyckoff was the first
to document the most powerful buy signal
in 1909.


Ted Warren was a sixth grade educated common laborer
who wrote the book,
› “How to Make the Stock Market Make Money for You”

He retired early on a fortune from trading stocks starting in
1928 through the early 1980s - his premise was that.
› Insider groups manipulate stock prices.
› The manipulation’s first phase discourages outsiders as prices
channel sideways while insiders slowly accumulate.
› The next phase is a slow unnoticed price markup.
› As the share price rises the public gradually jumps back in.
› The stock price moves up substantially on increased volume.
› Insiders then sell (distribute) their accumulated shares back to
the unsuspecting public for a windfall profit.

Ted Warren made a fortune applying Wyckoff’s writings in
his youth.
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
Documents turning $36K into $2.5 million in 6-½
years in the 1950s.
Factor 1: Four centuries after Wyckoff he
documents volume as the most important first
signal that a stock might be rising.
Factor 2: He recognizes that the stock must
have rising share prices on increasing volume.
Factor 3: He recognizes that the stock must
have a rapidly rising earnings trend.
Factor 4: He looks for sideways “boxes”.
Factor 5: He is right only half the time



Factor 6: He starts with a pilot purchase that is 1/5, ¼,
1/3, or ½ of his maximum potential position.
Factor 7: He adds an initial stop-loss that he adjusts
upwards while using profit to add to the pilot
purchase.
This is Sheer Genius…
› By (1) testing the waters with a small portion of his trading
capital and (2) setting an initial stop based on the prior
accumulation pattern he is able to protect himself from
price reversals that killed Jesse Lauriston Livermore.


He precisely documents the process in his book “How
I Made $2,000,000 in the Stock Market”
The Nicolas Darvas book is highly recommended by
Ted Warren.






Turns $5,000 into $200,000 in 1962 & 1963.
Factor 1: Buys stocks coming out of broad
bases beginning new highs relative to a
preceding price base.
Factor 2: Looks for a high EPS Rating.
Factor 3: Looks for a relative strength rating
above 87.
Factor 4: Watches indexes because he
notices that most stocks follow a general
trend.
Factor 5: He ignores P/E ratios.





Factor 6: Sets his initial stops such that he never loses
more than 7% on any trade.
Factor 7: Eschews diversification as a “hedge for
ignorance” in favor of focused money management.
Factor 8: Looks at losing streaks as a sign of general
market weakness.
Factor 9: Averages up in his buying NEVER down.
Factor 10: He cuts his losers and holds his rising stocks.
› The opposite was shown to be the norm by O’Dean,
Terrence (1998) Are Investors Reluctant to Realize Their
Losses?, Journal of Finance, Vol. LIII, NO 5., October
Appropriate # of Stocks Held At Any One Time According to William J. O’Neil
Amount
Min
Max
$
5,000
1
2
$
10,000
3
4
$
25,000
4
5
$
50,000
5
6
$
100,000
6
7





Is William J. O’Neil’s best student.
He reads every book he can on stock investing
before being hired by William J. O’Neil & Company in
1982.
Applies Wyckoff’s teachings 7 decades later in the
1980s.
Enjoys a 3 year portfolio return of 1,379%.
Scans 4,000+ price charts per week looking for…
› Factor 1: Stocks rising out of accumulation bases on high
volume.
› Factor 2: Relative Strengths as high as possible where 99 is
better than 95.
› Factor 3: An exit point on existing positions where relative
strength tapers off.

Factor 4: Group Strength rating should be B- or better.
› NOTE: Darvas also recognized the importance of industry
strength.

Factor 5: Few Shares Outstanding < 30 million; 5-10 million
is ideal.
› Aggregate shares outstanding from 1990 to 2010 increased 6.03
fold → 30 million x 6.03 = 180.9 ≈ 180 as upper limit today.
Factor 6: Low Institutional Ownership where 1% to 10% is
ideal.
 Factor 7: Sells half of his position if the stock price falls
back into the prior base.
 Factor 8: Looks for decreasing volume as the rising stock
enters into a new higher base.
 Factor 9: P/E ratios as low as or up to double the S&P 500
P/E ratio.

› NOTE: He disagrees with O’Neil who says P/E is useless.






Key #1: High volume.
Key #2: Prior sideways accumulation base patterns.
Key #3: Share Prices that are rising above prior sideways
accumulation base patterns on increasing volume where
the Relative Strength (RS) Rating > 87.
Key #4: Rapidly rising earnings trends -- EPS Rating > 80.
Key #5: A stock only pilot purchase of ½, 1/3, ¼, or 1/5, of
the maximum potential position (Refer Back To The O’Neil
Money Management Slide) with a market order (O’Neil &
Ryan) or buy stop order (Darvas).
Key #6: Set Initial Stop below the mid point of the prior
base making sure it is never wider than 9% (Darvas), 7%
(O’Neil & Ryan) or set one stop for half of the pilot position
at the top of the prior base and another stop for the rest
at the mid point of the prior base.

Key #7: Only add to the position if the stock price
continues to rise.
Key #8: Lock in profit by adjusting trailing stops relative to the
technical support of new rising bases.
 Key #9: After my -- stock only -- pilot purchase I use long expiration
DITM call options for leverage rather than margin.




Only buy call options once the position is profitable & the trailed initial
stop-loss has locked in profit.
 Buy options cheap at low implied volatility levels using
Ivolatility.com as a guide (free).
 Never buy calls on stocks with high dividend yields – or you will
erase the yield on dividends.
Key #10: When profitably knocked out of the trailed initial
stop on the pilot purchase of the stock I liquidate calls.
Key #11: Watch the general market trend via the
Vanguard 500 S&P Fund (SPY) trend, and institutional
nervousness via the VIX.






Non Key #1: Few Shares Outstanding < 5- 180
million.
Non Key #2: Sell when relative strength tapers
off.
Non Key #3: Low Institutional Ownership
between 1% to 10%.
Non Key #4: Decreasing volume as the rising
stock enters into a new higher base.
Non Key #5: P/E ratios on par or up to double
the S&P 500 P/E ratio.
Non Key #6: Group Strength rating B- or better.







#1: ChartMiner (Required).
#2: Track N’ Trade High Finance (Required).
#3: Online Subscription to Investors Business
Daily for the EPS and RS Ratings (Required).
#4: Online Subscription to Barron’s (Optional).
#5: Weekly Print Edition of Barron’s (Optional).
#6: Subscription to I-Volatility.com for over or
under pricing of long DITM call options (Free).
#7: Yahoo Finance for Institutional Ownership
(Free).

Source #1: Ted Warren & David Ryan scanned
thousands of charts weekly for stocks moving
up on volume.
› I use ChartMiner as my starting point.


Source #2: Nicolas Darvas found hot stocks by
looking at the “Winners and Losers” tables in
Barron’s weekly print edition.
Source #3: This can also be done using the
Investors.com IBD E-Tables & sorting on “%
Volume Increase” which should be above 50.
› You should employ all three methods in your Sunday
& Daily Trading Routines.

I wanted to scan thousands of charts the
way Ted Warren & David Ryan did.
› I found just two alternatives but they were way
too expensive and way too complicated.
 MarketSmith ~ $1,000 per year.
 Panaray ~ $25,000 per year.

I begged Lan Turner, “Give me a stock tool
with just two things; price and volume.
Make it really fast like a chart Roll-O-Dex.
› ChartMiner was born.

This tool was custom made for my first pass
search for volume moving momentum
stocks.
› It allows you to scan 1,000+ stocks (and
growing).
It’s as fast as flipping through a Roll-O-Dex.
It catches stocks that have prior volume
spikes that have pushed prices up that I
would have missed on Barron’s or the IBD Etables.
 Go to ChartMiner.net for more + Replay.


› I make nothing on Gecko sales.

Weekly Search
› Print Edition has two sections that track equity trading volume.
› Section 1: Winners and Losers
 NYSE Biggest % Movers – Winners
 NYSE Market Biggest % Movers – Winners
 NASDAQ Biggest % Movers – Winners
 NYSE Most Active - Volume Percentage Leaders
 NYSE MKT Most Active - Volume Percentage Leaders
 NASDAQ Most Active - Volume Percentage Leaders
› Section 2: Charting the Market
 Look at the volume pattern under the price graph in the charts.

Daily Search
› Barron’s Online has the Volume Percentage Movers section
updated daily.
Symbol
BCEI
Company
Bonanza
Creek
Energy Inc
NATH
Nathan's
Famous
TROV
Trovagene
PJC
Piper Jaffray
Cos (PJC)
HRL
Ambarella
Inc (AMBA)
Noah
Holdings Ltd
Ads (NOAH)
Krispy
Kreme
Doughnuts
(KKD)
Hormel
Foods Co
(HRL)
AOS
A. O. Smith
AMBA
NOAH
KKD
GV
Box
Goldfield
Coirp
Seacube
Contnr
Leasing
Composite
SP 500 P/E Rating
EPS Rating
P/E Ratio
RS Rating
Group RS
SMR Rating ACC/DIS
%
Institutional Shares
Ownership Outstanding Source
Date
32
17.28
96
81
97 C+
B
A
83%
40.1 I
22
17.28
94
96
91 B
A
B
40%
4.47 B
12/14/2012
17.28
62
3
99 A
NaN
A+
3%
14.2 B
12/16/2012
19
17.28
93
85
95 A
E
B
18%
26.1 B
12/30/2012
18
17.28
96
97
99 B
A
A+
26.1 I
12/30/2012
16
17.28
96
87
84 B+
A
A-
9%
27.9 B
1/4/2013
25
17.28
93
80
97 B
C
A+
50%
65.2 B
1/4/2013
18
17.28
91
88
80 A-
B
A
33%
263.6 B
1/4/2013
21
17.46
93
85
92 B-
B
A-
94%
46.2 B
1/20/2013
8
17.46
99
81
99
B
A+
4%
25.5 I
1/20/2013
17
17.46
97
59
90 A+
A
A-
78%
20.3 I
1/20/2013
NaN
N/A
1/4/2013





VIX is an index, like the Dow Jones Industrial
Average (DJIA).
It was intended to provide a benchmark of
expected short-term market volatility as
reflected in the S&P 500 index.
A HIGH VIX says that institutional fund
managers consider a stock market crash MORE
likely.
A LOW VIX says that institutional fund managers
consider a stock market crash LESS likely.
There is no other interpretation of the VIX.






TDAmeritrade or OptionsXpress allow you to
set an underlying stock price at which an
option stop will sell your option at market.
Only trade options that have a least 10,000
open contracts in the front month.
This ensures a tight bid-ask spread.
If you don't see a good bid-ask spread up
front, don’t take the trade.
Make sure you calculate your total risk
factoring in Delta.
Risk is always much higher than on stock.

Set up 3 Track N’ Trade High Finance
Chartbooks.
› Chartbook 1: Watch List
 Tracks stocks you are watching but have not
yet bought or culled.
› Chartbook 2: Active
 Tracks stocks you already own.
› Chartbook 3: Cause of Error (COE)
 Tracks stocks you have exited.


I am Dr. Scott Brown.
I am a tenured professor of finance.
› My MBA students work for Wall Street.



I publish my research in leading academic journals in
the field of finance.
I hold a Ph.D. from the University of South Carolina.
The Ph.D. in finance is valuable.
› Our knowledge is arcane, mathematical, and highly
sought.



We are paid the same as medical school professors.
I hold the most rigorous applied mathematics degree
in the social sciences.
I can teach you to invest and trade better.
› I do it as a career.
Benefit #1: Best Selection Criteria
 Benefit #2: Develop Market Wisdom.
 Benefit #3: Best Investing Practices.
 Benefit #4: Clear Risk Limits.
 Benefit #5: Organization, Record
Keeping, and Review Practices.
 Benefit #6: Lifestyle Consistent Trading
Approach.

I have taught over 4,000 students
throughout the world. Here’s what they
have to say.
 [add testimonials]

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Your money back for the next 8 weeks (about 60
days) if you are dissatisfied for any reason.
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product or any claim, statement or opinion used in
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I am giving weekly lectures to populate
the course videos. Once I finish these
time limited lectures will be over. LIMITED
TIME TILL CLOSED! CERADO! FECHADO!
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
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 Advanced Bullet-Proof Investing Stocks
 Enroll $97.97 One Time Charge.

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



Here’s two more ways you lose if you don’t
enroll today.
Loss #1: As the program grows you will get less
and less access to me.
Loss #2: I will discontinue the live lectures when
all of the PowerPoint slides have been
converted to video MP4.
I Iook forward to welcoming you personally into
our virtual classroom!
-Dr. Scott Brown, Ph.D.
› Associate Professor of Finance, University of Puerto
Rico, Graduate School of Business

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




P.S. Please remember that this is a limited
time offer. The live virtual classrooms will
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Enroll right now using one of the links below.
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