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Trend Trading Set-Ups: Entering and Exiting Trends for Maximum Profit

Trend Trading Set-Ups: Entering and Exiting Trends for Maximum Profit

L. A. Little , Alan Farley (Foreword by)

ISBN: 978-1-118-22247-8

Aug 2012

272 pages



An expert reveals a step-by-step process for profiting from neoclassical qualified trend trading

Trend Trading Set-Ups extends the neoclassical concept of qualified trend first introduced by Little in Trend Qualification and Trading, providing traders and investors with a sound methodology for uncovering the very best trade set-ups  and the ability to time trade entries like never before.  In Trend Trading Set-Ups, Little reveals the data behind qualified trends and utilizes a novel concept involving time  to calculate trend failure probability rates.

 Little reduces the complex to its most simplistic form compressing all trades types into just two classes – retraces and breakouts. Once simplified, over a decade worth of qualified trend data is examined. The result is a comprehensive presentation of what makes some trades enormously better than others and how you can both find and exploit the most favorable  trade set-ups.

Some trading books are an interesting read but soon forgotten. A few books you place on the reachable shelf and refer to often. In Trend Trading Set-Ups L.A. Little offers you an entirely new way of approaching an old subject and does so in a style that is both as riveting as it is valuable. As with Trend Qualification and Trading you will find this book an easy but comprehensive read and one that you will turn to again and again while pursuing your trading and investing endeavors.

Foreword ix

Acknowledgments xi

Introduction 1


CHAPTER 1 Identifying and Qualifying Trend Probabilities 9

Trend Determination 10

Qualified Trend Failure Probabilities 13

Qualified Trade Failure Probabilities 31

Summary 37

CHAPTER 2 Anchor Zones: The Key to Timing Trades 41

Anchor Bars and Zones 42

Reconsidering Trade Failures 46

Summary 54

CHAPTER 3 Broader Influences Affecting Stocks 55

Sector Congruence 59

Virtual Industry Groups—Future Direction 72

General Market Congruence 74

Summary 81


CHAPTER 4 Formulating a Workable Trading Plan 89

Trend Direction and Strength 90

Time Frames 94

Entry and Exit Timing 95

Trading Size, Scale Trading, Trade Success Probabilities, and Reward-to-Risk Ratio 100

Evaluating and Acting Upon the Plan 104

Summary 105

CHAPTER 5 The Data behind Trend Trade Set-Ups 107

The Only Two Types of Trade Set-Ups 108

Trading Breakouts and Retraces 111

Breakouts versus Retrace Trade Probabilities 113

Probabilities for Trade Set-Up Scenarios 122

Summary 133

CHAPTER 6 Sideways Range Trades 135

Trade Set-Up Conditions and Categorizations 136

Trading Sideways Trends 137

Summary 155

CHAPTER 7 Breakout and Retrace Trade Set-Ups 157

Retrace Trade Set-Ups 158

Breakout Trade Set-Ups 186

Considering Other Trade Set-Ups 199

Trade Set-Up Rationale and Thoughts 201

Summary 205

Conclusion: Unleashing Trade Potential 207

Appendix: Data Tables 209

About the Author 241

Index 243