Dynamic Trend Profile

We received some good questions related to the Dynamic Trend Timing Boxes. The only way to answer these questions are to first review the Timing Box basics. After that, we will try to address specifically those other questions. Hopefully, by the end of this work, we will all gain a better understanding of this DT tool and we can use it better in our DT trades. Marc

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[SIZE="3"]Dynamic Trend Profile[/SIZE]
[SIZE="5"]Timing Boxes[/SIZE]

Timing Boxes are a Dynamic Trend Profile indicator designed to identify and display the duration of the current trade setup in a particular room-size area. The duration assigned to each trade varies based on what room is being traded.

Timing Boxes are made up of a series of nine small boxes, segmented into three sections, or groupings. Each section represents an average time available for that trades phase-- from trade beginning, mid-life, to its possible end life. The Timing Boxes indicator is not a guarantee a trade setup will work out as defined, but it does provide a good independent tool to help guage a trades potential swing trade life cycle. Timing Boxes are simply designed to help confirm a proper entry time and to show how much time is left before statistical odds begin to work against you. The Timing Boxes algrithym serves as a trading time frame-of-reference. It statistically tells how much time a trade "should" take in a particular room-size setup. Technically, a trade triggered could hits its target early in a life cyle. It could also hit a target very late in a cycle. It could also fail. All the Timing Boxes are designed to do is keep track of pre-defined timing parameters for trades developing under normal conditions.

Timing Boxes begin their calculations at the far right, and move one box at a time toward the left until reaching the final box. This movement represents a trades standard "life-cycle" for that room. Trade life-cycles will vary from room-size to room-size. Even adjacent rooms have different trade life settings.

The [color="Red"]red[/color] Timing Boxes are located [color="Red"]above[/color] the strength bars in a Profile room-size window. When a potential sell setup appears in that room, a red color will show up in the first upper Timing Box. These [color="Red"]upper[/color] Timing Boxes identify the typical time duration allowed for a [color="Red"]sell[/color] position setting up in that particular room-size. The [color="Blue"]blue[/color] Timing Boxes are located [color="Blue"]below[/color] the strength bars in a Profile room. When a potential buy setup appears in a room, a blue color will show up in the first lower Timing Box. The lower Timing Box identifies the standard time duration normally allowed for a [color="Blue"]buy[/color] position. Again, Timing Boxes always begin their calculation of that rooms normal trade "life cycle" at the first box on the Timing Box far right. It then moves to the left, one box at a time, based primarily on how much time is normally statistically available for a standard trade going on within that room. Again, the Timing movement mechanism varies based on the room being identified and measured for trade ideas.

[SIZE="2"]Timing Box Entry Phase[/SIZE]

The Timing Boxes are divided into three sections. Each box in a section represents a cycle level within a trade phase. As it develops a blue or red color moves left one box at a time. The further away the Timing Box moves within these boxes, the older the trade cycle becomes. The first section is the Entry phase. The Entry phase is where the stock should be setting up for a buy or sell entry, and it is where you should be considering it for a trade, if interested in that setup.

[SIZE="2"]Timing Boxes Kick Out Phase[/SIZE]

The second section is the trade Kick Out phase. The Kick Out phase is that phase where the trade should be 'kicking out' of the end of a room setup and moving toward the target direction. The Kick out phase is where the trade setup begins the maturing process. Here it needs to be moving or picking up energy. If it is not moving successfully during this phase, the longer it takes to work through this phase the greater the odds of failure in the trade. It could suggest your risk is increasing in that setup the longer it takes to hit targets now.

Timing Boxes Close Out Phase

The third Timing Box section is represented by the Close Out phase. It is that phase of trade development where the trade should statistically have run its course, and by now it should be nearing the end of its trade life cycle. When this phase is identified, that trade is no longer at a lower risk status, but traders should consider either closing out a trade very soon, taking more profits and tightening the stop, and monitored very closely the position at the bare minimum.

Entry Phase Example

Here is an example of using the Timing Boxes, in the Entry phase. The price is right at or near the trades trigger price. You know your stop loss, general risk along with the potential profit target. The trade should also be listed either in the Matrix or in the Profile at the same time since the trade is in the Entry phase.

In this example we have a buy signal. You have qualified the trade-- designated by blue bulls eye, normal strength, good RF and/or Star rating, low RI-- and you verified it has good higher room strength. Before you can take the trade you also have to make sure there is blue in one of the two Entry phase Timing Boxes.

Kick Out Example

In the Kick Out phase, you need to see some strong moves toward the target. In most cases it is now too late to enter a new trade. Sometimes you might get a chance to enter again when the price goes back to the trigger price. In general, however, you need to be very careful entering a new position when it has now entered the Kick Out phase, particularly when it is not near the trigger price.

During the Kick Out phase the stock has to exhibit strong "kick out" tendencies. Simply stated, this means you need to see a strong price movement now where the price moves towards the price target. It can move convincingly, ideally, or it can just start to migrate toward your minimal initial target, but it does have to show a minimal attempt to return the previous trend now. However, if that stock begins to trade sideways, specifically if the stock moves above and below the trigger numerous times, it can indicate a problem exists. It means you begin to build lower expectations for this trade being successful trade. (This is also the reason why entering a new trade when it is now in the Kick Out phase is not the best situation.) If, under these conditions you are in a trade and it is just not showing encouraging efforts to push toward your targets, you really might want to consider; (1) either reducing your position, (2) maybe even consider scratching the trade. The longer it remains a trade stays in a Kick Out box without attempts to push toward your target, the greater your odds of failure. Under this condition, you may want to consider could you better utilize your margin elsewhere? That is partly what the Kick Out phase is designed to help you measure during that particular stage of a trade's life cycle.

Finally, in the Close Out phase, it means if you have not taken any profits, if your stock has done well, look to take at least some profits or get totally out of that position. The Close out phase is simply the program helping identify the strong high risk associated with continuing to hold that trade beyond what it statistically is designed to do under normal conditions within that room being measured. It does not mean you have to get 100% out of a trade if, for example, when monitorinng the Profile you continue to see strength building across the board in higher rooms, RF values approaching 14-15's, your strength bars with particularly momentum pushing to the extreme high range 5 setting. The Close Out phase does mean you need to monitor extremly closely the Dynamic Trade Profile and determine-- based on your experience-- is their enough increasing strength to expect that trend to continue. If, in your judgement, you still want to attempt to stay beyond that trades designed life cycle parameters, you can. Just realize now that trade being identifyed now in the Close Out phase now means that holding that position beyond its trade life cycle is now extremely risky and, hence, protect that trade very aggressively from any kind of unexpected problem.

One more sample of Timing Boxes in action from the Entry to the Close Out phase. This represents how the Timing Boxes are suppose to work.....

now, tomorrow, I promise to continue this discussion.. and will attempt to answer mor specifically some of these really good questions emailed....

gotta go for now.. getting late.

Question-- "Larry had sent me your BOOM trade in the SD Room. I noticed on the Profile page that the trade had met its target as shown be the solid blue line. Then I noticed it was still in the set-up box (#2). I wondered how it could still be in set-up when the trade was completed?"

In the case of the BOOM, SD room trade, it was triggered in the afternoon. Less than an hour after the next morning stock market open, this stock hit its target. (See attached trade chart)

The algorithm designed to define and time SD trades looks for 4 to 8 trading days for the trade to work out. Typically it looks for the maximum value. It can even extend beyond that benchmark time, in some instances. From its perspective it was on less than day 2. It was "technically" still in its Entry phase, as defined by the Timing Box mechanism for that particular room-size.

This BOOM trade is considered a statistical anomaly because it took only one day to hit its target and there are up to 7 or more days left in its "life cycle." (SD = in general, an 8 day trade framework.)

The Timing Boxes algorithm is an independent calculation. Timing Boxes are not connected to the trade parameter logic. It does not know the target has been hit. It only knows that a room-size trade still has approximately 7 days (= or -) left. In other words, when the price hits the initial target it does not now define that trade as in the Kick Out phase, or half over. It doesn't know that. When a price target is hit, it does not now shift the Timing Boxes to the Close Out phase just because the target was hit. Again, it does not know that. It only knows the statistical mean or medium range available for that room-size trade, and it tracks it based on the amount of time it thinks should be left. Timing Boxes are not designed to manage the trade for you, but to help you better manage the amount of time left in a typical trade.

The Entry phase represents the best "window of opportunity" for entering a new trade. After that time decay in a typical room-size trade is identified to help you (1) recognize the diminishing time left, but (2) recognize the return of higher risk(s) the longer that trade remains open.

Here is a sample what a typical room Timing Boxes is designed to measure, in general.