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3S Code Ebook

1) The document describes a trading pattern called the "123 Top/Bottom" that can be used to trade various markets and timeframes. It involves identifying a high or low point ("1"), a second higher low or lower high ("2"), and a third point where the market fails to make a new high or low ("3") to anticipate a trend change. 2) Examples are given of trading this pattern in different markets like currencies and stocks, both incorporating seasonal trends to improve the odds of successful trades. Entry is triggered by a break above or below the "2" point, and profit targets and risk levels are also defined. 3) Incorporating this pattern with seasonal analysis is described as putting significant

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Capitanu Iulian
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430 views

3S Code Ebook

1) The document describes a trading pattern called the "123 Top/Bottom" that can be used to trade various markets and timeframes. It involves identifying a high or low point ("1"), a second higher low or lower high ("2"), and a third point where the market fails to make a new high or low ("3") to anticipate a trend change. 2) Examples are given of trading this pattern in different markets like currencies and stocks, both incorporating seasonal trends to improve the odds of successful trades. Entry is triggered by a break above or below the "2" point, and profit targets and risk levels are also defined. 3) Incorporating this pattern with seasonal analysis is described as putting significant

Uploaded by

Capitanu Iulian
Copyright
© © All Rights Reserved
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Download as PDF, TXT or read online on Scribd
You are on page 1/ 14

www.seasonalswingtrader.

com

Dear Trader,

Welcome and thank you for downloading your FREE report, ​“The 3S
CODE: My #1 Favorite Pattern for Trading Seasonality.”

Now, before we begin it is important to note that it is not imperative that the
pattern be used to trade seasonality alone…in fact, it can be used to trade
any time frame and any markets where seasonality may not even come
into play….

For example, seasonality is not going to come into play on 5m chart of the
Nasdaq, or a 30m chart of some cryptocurrency…..hopefully you get my
drift.

In addition to the above statement, you can even swing trade stocks,
options, ETFs, commodities and the like ​without taking into account
seasonality.

So this FREE report should be beneficial to those that are looking for a very
reliable high-probability pattern and setup to add to their trading arsenal, as
well as those that want to learn how to incorporate this powerful pattern
along with seasonality to help put odds in their favor.
Let’s get started….

In this free report you are going to learn how to trade ​Historically reliable
seasonal patterns AND coupled with Historically reliable chart pattern
analysis.

When you combine the two together, any trader can put significant odds in
their favor to capture seasonal trends and project moves as dictated by
simple chart patterns.

Drumroll...Here is the Setup!


This pattern is sometimes referred to as the (A-B-C) Top/Bottom. It
anticpates a change in trend from up tp down on a break below the “2” or
“B” point. It anticipates a change in trend from down to up on a break
above the “2” or “B” point. It is because the market fails to make a higher
high or a lower low….the market is exhausted and ready to turn the tide so
to speak.

Generally speaking, the more bars it takes to complete the pattern, the
bigger the move, and the more accurate the signal will be. Again,
confirmation of entry is on a break OR close above or below the “2” point.

1) Exit strategy #1 is the distance between the “1” and “2” points
2) Exit strategy #2 is the 50% retracement level
3) Your RISK is ​above​ the #1 or #3 points for short trades
4) Your RISK is ​below​ the #1 or #3 points for long trades
Let’s look at some examples to put this into context:

123 TOP - Australian Dollar


•#1 point put in at 52-week high
•Prices moved lower to establish #2 point at support
•Market rallied but failed to make new highs, making our #3 point
•Confirmation sell triggers on break and close below the #2 point
•Reached profit objectives within approx. 20 trading days

As I said earlier, we can trade this setup (“pattern”) on an intraday basis as


well - see below a 5m chart of the ES (Emini SP 500).
•#1 point put in at session high
•Prices moved lower to establish #2 point at support
•Market rallied but failed to make new highs, making our #3 point
•Confirmation sell triggers on break and close below the #2 point
•Reached profit objectives within 10 minutes
Here are a couple of examples of the 123 Bottom - same rules as the 123
Top but inverse.

See this Daily Chart of Lean Hogs --


•#1 point put in at 52-week low
•Prices moved higher to establish #2 point at resistance
•Market sold off but failed to make new lows, making our #3 point
•Confirmation buy triggers on break and close above the #2 point
•Reached profit objectives within 7 trading days

And this Weekly chart of AAPL --


•#1 point put in at multi-week low
•Prices moved higher to establish #2 point
•Market sold off but failed to make new lows, making our #3 point
•Confirmation buy triggers on break and close above the #2 point
•Reached profit objectives within 10 bars (weeks)

Okay, so by now you should be able to see how this very simple pattern
works on any market and any timeframe.

Let’s take a quick glance on how to incorporate with seasonality. Below is


a Daily Chart of Hess Corp (HES). I have used drawing tools (yellow
“1-2-3”) to illustrate the 123 bottom that formed in August. ​Note: My 3S
CODE indicator also painted the 123 bottom on the chart automatically as
indicated by the green (1), red (2), and blue (3) arrows.
We have also added a free study that is included in the ThinkorSwim
platform - the Seasonality Indicator

**To add, go to top right-hand corner of chart, select the 3-bar “sandwich” button, go to
Style>Chart Mode>Seasonality. The turquoise line is the actual price; red line is
seasonal price average

So if we take a glance at what HES does on a historical seasonal basis,


you can see that HES typically experiences strength in the late August /
early September time period. This helps us with further confirmation on
getting long, since we also have a 1-2-3 bottom formation taking place.
Once the price broke above the most recent red arrow (the #2 point), that
was a trade confirmation. A more conservative entry is to wait for a solid
close above the breakout point (#2), or wait for a retest of the breakout
area - which we got both. Then, as you can see, the profit target was
reached in approximately 10 trading days. Again, you know BOTH your
profit and risk beforehand, and you can place your orders accordingly.

This trade was good for a little over $4.00, or $400 per 100 shares traded.
A trader in this example could have:

1) Bought the stock


2) Bought call options or call spreads
3) Sold put spreads

Let’s take a look at one more example - this is a daily chart on Live Cattle
(/LE):

Here, we have a 1-2-3 Top formation that formed in May. From a


seasonal perspective, we also know that the Cattle market tends to “top”
out during this time period, thus indicating we have a high-probability trade
at hand.
Approximately 3 months later, Cattle reached its profit objective of 13
points at 107.65, which is $5200 per single contract traded.

This is a trade that can be replicated by shorting Live Cattle futures, buying
puts or put spreads or selling call spreads.

We thoroughly hope that you have enjoyed this report and can see the
importance of adding the 123 top and bottom pattern coupled with
seasonality as part of your overall trade plan. Whether you are a stock,
futures or options trader, Seasonal Swing Trader has a trade idea for you.

If you’d like to see more examples, you may be interested in checking out
this video I made HERE!

Best of luck in trading!

Stay Seasonal,

Seasonal Swing Trader

IMPORTANT NOTICE! No representation is being made that the use of this strategy or any system or trading methodology will generate profits. Past
performance is not necessarily indicative of future results. There is substantial risk of loss associated with trading securities and options on equities.
Only risk capital should be used to trade. Trading futures, options, futures, forex, and securities is not suitable for everyone. Disclaimer: Futures,
Options, Securities and Currency trading all have large potential rewards, but they also have large potential risk. You must be aware of the risks and be
willing to accept them in order to invest in these markets. Don’t trade with money you can’t afford to lose. This website is neither a solicitation nor an
offer to Buy/Sell futures, options, stocks, or currencies. No representation is being made that any account will or is likely to achieve profits or losses
similar to those discussed on this web site. The past performance of any trading system or methodology is not necessarily indicative of future results.

CFTC RULE 4.41 – HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN LIMITATIONS. UNLIKE AN ACTUAL
PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL TRADING. ALSO, SINCE THE TRADES HAVE NOT BEEN
EXECUTED, THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS,
SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE
DESIGNED WITH THE BENEFIT OF HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO
ACHIEVE PROFIT OR LOSSES SIMILAR TO THOSE SHOWN.

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