FibonacciSecrets™ Bonus #1

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FibonacciSecrets™

BONUS REPORT #1
The Amazing Market Reversal Setup

What is a Market Reversal?

As a trader or an investor in futures, commodities, stocks or options, the most
important and absolutely critical pattern you need to be able to recognize is the
Market Reversal.

"Every Reversal is not a Top or Bottom

…but every Top and Bottom has a Reversal"

The ability to read the markets “background sounds” and foresee a Market
Reversal coming is perhaps one of the single greatest trading assets you can
ever develop.

It is this ability that will allow you to trade with deadly, profitable accuracy, as
your skills to enter and exit markets near tops and bottoms will become greatly
enhanced. This will allow you not to only enjoy the largest part of market moves,
but to also be able to exit while not leaving large chunks of money on the table.

There are popular beliefs spreading amongst Traders like “it’s impossible to trade
tops and bottoms”, or “trying to buy bottoms is like catching a falling knife”, and
so on.

Certainly, in the history of the markets, as the majority of traders continue to lose
their money, you can find countless tales of Traders who have been sent to the
slaughter house trying to trade top and bottom reversals.

This has nothing to do with the possibility of trading tops and bottoms and
everything to do with their individual ability.

The big money in the markets just about always buy bottoms and sells tops.

You will now begin developing the keen awareness and ability to properly time
your entries with as much accurate information as possible which supports the
idea that indeed the market will reverse …and has reversed.

A Market Price Reversal follows a deceleration of momentum in one direction,

with a renewal of momentum in the opposite direction.

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You should note that not all Market Reversals happen in one day. Many
reversals will show visible signs of slowing before quickly turning.

For example, prior to a Major Market Reversal, the trade may post a Reversal
Pattern of some kind and then continue in the direction of the dominate trend.

It’s that initial Reversal Pattern that should alert you to the possibility of a change
in trader and investment psychology. That’s called “background weakness or
strength”, depending on the trend. We will take a look at that in this Bonus
Report.

While the actual Market Reversal may look like it happened in one day and
turned on a dime, chances are, it didn’t. If you look at the background signals you
would see signs that the market was about to make a Reversal.

By “background sounds” we are referring to the previous bars and candlesticks to

the left of the Chart. This gives you advance warning of a coming Market
Reversal and can also serve to notify you that the Reversal has taken place and
has been confirmed.

What is the importance of a Market Reversal?

The importance of a Market Reversal is that it signals a change on investor and
trader psychology. This change in psychology is what leads into long term trend
changes.

Once you are able to identify Market Reversal Patterns, you have more than 50%
of what’s needed to begin mastering entering markets near tops and bottoms and
trading successfully from those levels.

The power of each Reversal Pattern is significantly enhanced when it appears

near Fibonacci Levels and Trendlines.

Let’s look at “The Amazing Market Reversal Setup” and one we consider to be
the most explosive and accurate warning of a market reversal.

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The Cross and Doji

The Cross is formed on the Bar Chart, while the Doji is formed on the
Candlestick Chart, however, they tend to look the same.

The Cross/Doji is formed when the Close is the same, or nearly the same as
the Open, creating a horizontal line. With Candlesticks, the actual length of
the shadow can vary, however; the longer the shadow, the more powerful
the Doji.

• When the Cross/Doji is seen near the top of a market, it’s considered
Bearish and the rule is to sell immediately on the next bar/candle.
• When the Cross Doji is seen near the bottom of a market, it’s considered
Bullish and the rule is to wait for the next bar to confirm.

The Cross and Doji do NOT always appear before a market reversal.
However, a market reversal just about always appears after a Cross and
Doji, making this one of the strongest signs of a market reversal.

If you have an uptrend and you see a Cross/Doji and the market is up the next
day, you now have weakness in the background, which suggests the market
will roll over and decline in price soon.

If you have a downtrend and you see a Cross/Doji and the market is down the
next day, you now have strength in the background which suggests the market
will reverse and rise in price soon.

The Cross and Doji are considered a “bread and butter” money pattern for many
traders who know about it. This is because there really is no other single Bar or
Candlestick pattern as powerful and as accurate as this one.

Some traders only look for this setup and will only put a trade on when this setup
is visible either immediately or as weakness/strength in the background. Let’s
take a look at why this is the case.

What to look for:

• The Close is the same or nearly the same as the Open.

• With Candlesticks, the length of the shadow (the stem) should not be
excessively long. This more applies to the end of a bullish run than a
bearish run.

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Pattern Strength: If the following appear with the Cross/Doji, then the pattern
has increased strength and reliability.

9 The Stochastics is in a bearish crossover for a Sell and in a bullish

crossover for a Buy.
9 Overbought conditions are present for a Sell and Oversold conditions are
present for a Buy.
9 The Cross/Doji has appeared near Fibonacci Support or Resistance.
9 The Cross/Doji is created followed, by a Parabolic signal.
9 The market gaps away from the Cross/Doji against the dominant trend.
9 There is increased volume on the day of the Cross/Doji.
9 The day prior to the Cross/Doji was an exceedingly long range as
compared to the normal range of trading, like an expansion move, for
example.

You should pull up your charting program and check the daily charts and the
weekly charts for the Cross/Doji setup.

Also look at the prior days and weeks of trading and spot the Cross/Doji setup
and see what the result of the setup was. This will help to increase your
confidence in this setup.

When you have all things working for you such as;
1. A Bullish Cross/Doji at Fibonacci Support.
2. Condition indicators suggesting an oversold environment exists.
3. Your other indicators (Stochastics and Parabolic) suggest a trend reversal
could be seen.

…then you are looking at as sure fire of a buy entry as you’ll ever see. The
opposite is true for a bearish setup for a sell entry.

See the illustrations on the follow pages so you know exactly what the Cross/Doji
looks like.

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After the market has been trending, the Cross/Doji uncovers indecision on both
the bullish and bearish sides. After the market opens the Bulls and Bears duke it
out with the end result being that the price closes at or near the level of the
opening. This puts the dominate group on their heels creating uncertainty while
giving the other group confidence that the dominating trend has lost its strength.

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There are various kinds of Cross/Doji setups. These are more visible when
looking at the Candlestick Charts.

However, for the sake of simplicity, a Doji is a Doji is a Doji. For the more
advanced Candlestick Traders, you may already be aware of the Dragon Fly
Doji, the Gravestone Doji, The Long Legged Doji, the Abandoned Baby and
others.

You can also get multiple Cross/Doji patterns beside each other. This creates
patterns like the Double Cross, the Double Doji, the Triple Cross and the Triple
Doji.

Now, let’s take a look at a couple of Charts.

The above Canadian Dollar Chart shows a series of Cross/Doji background

weakness that let’s you know this market was going to reverse lower.

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In the March US T-Bonds Chart above, we labeled the visible Reversal Bars so
that you can see each Reversal that appeared when the market created a top
and bottom.

We are confident that what you have learned in this Bonus Report can
dramatically increase your market time and winning trade percentage while
potentially helping you to avoid bad trades.

Using this setup with Fibonacci Analysis creates a very potent trading method
with great potential for fun and profits.

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U.S. Government Required Disclaimer - Commodity Futures Trading Commission

Futures and Options trading has large potential rewards, but also large potential risk. You
must be aware of the risks and be willing to accept them in order to invest in the futures
and options markets. Don't trade with money you can't afford to lose. This is neither a
solicitation nor an offer to Buy/Sell futures or options. 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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