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Dear Fast Break Plus Reader,

Welcome to this weeks addition of Fast Break Plus. Today's author is Jared F. Martinez. Jared is the President of Market Traders Institute Inc. (MTI) and the author of "The 10 Steps to Successful Trading", an acclaimed and accredited Educational guideline for Traders in the Forex Market.

Jared is one of the country's foremost experts in currency trading, has been involved in the trading industry for over 10 years, and is a firm believer of the principle "Education First"! He believes that by empowering the Individual Trader with the education and the trading tools needed to trade successfully, they will be able to take back control of their own finances, rather than listening with "blind faith" to broker recommendations. He encourages traders to continue learning in an environment where knowledge is the key to power and success."

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Dear Fast Break Readers,

With having offices around the world, I recently returned from visiting our MTI Offices in South Africa and South America, and was pleasantly surprised to see that our trading methodology is making a difference in the success of Traders worldwide! This truly means that we are achieving our goal in “Taking our message worldwide” for the sole purpose of empowering Traders, such as yourself.

Most individuals try their best at taking simple things and complicating them. For some reason they find purpose and self-fulfillment. However, it takes someone of a genius to take a complicated issue and simplify it! My focus has always been to take the complicated issues of the market and simplify them.

In the spirit of keeping things simple, the market can only do three things ... go up, down, and side ways. As it moves up, down, and sideways, success for most traders comes from having a very simple trading methodology or plan for “entering, exiting for profit, as well as exiting to limit potential loss” while applying sound Equity Management. Trading with Equity Management is like driving a car ... some are better at it than others. What I aim to do is to not only give you some “Advanced Drivers Training lessons”, but advise you when it is time to make a “U turn” and go the other way. That “U-turn” is called a King’s Crown.

Years ago, I was introduced to the “head and shoulders” pattern as THE REVERSAL or TURNING POINT in the market. Like most novice traders, I began trading this pattern with all kinds of excitement thinking I had hit the “entry vein” that would lead me to the “motherload”, only to find out that as I aggressively entered at the “neckline”. Per the rules of trading the “head and shoulders”, I was constantly cutting my own throat by getting emotional after the market took me in at the neckline and went the other way, until it would “stop me out”, or I would voluntarily choose to get out, due to the fact I could no longer stand the emotional pain of my potential loss.

During this process, the “head and shoulders” pattern looked more like a “King's Crown” to me, and I discovered a more profitable “entry point” than the “neckline” with far less emotional and financial risk. It is called the “right tip” of the King's Crown.

Recently, we have seen some great “King's Crown reversals in the FOREX markets. Therefore, I dedicate this week's educational content to providing you with clear insight into my discovery of the King's Crown, and how to effectively trade it to generate positive, profitable trades in the FOREX. Educating yourself on this pattern recognition will enable you to take advantage of the market, before it takes advantage of you.

“”In order to get an edge in the market… sharpen your skills and the edge will appear!!”
J. Martinez (FX Chief)

The King’s Crown is a candlestick formation that derives its name from the spatial intelligence and clear visible formation that resembles the shape of a “crown”. In my years of teaching, I have developed a step-by-step process for Traders to follow, and if recognized early enough in its formation, it can become one of the most profitable trading patterns in the market. A King’s Crown is a technical reversal trading pattern which involves the Fibonacci numbers and the natural movement of the markets.

There are two types of King's Crowns: an UPTREND CROWN which is a top or the end of a “rally”. The DOWNTREND CROWN, is a bottom and the end of a “dip”. As they form, they look just like crowns. The examples below are geometric examples and almost 50% of the time the market, as it forms the crown, will move geometrically.

STEP 1

In trading the uptrend Crown, the uptrend line is broken; this indicates a 50/50 chance of a trend reversal. There are still Fibonacci numbers below the trend line that may hold as support and keep the trend bullish.

STEP 2:

The market returns and tests the previous level of support, equals it, or takes it out and makes an equal low or lower low. The odds now change to an 80% chance of a Trend reversal and a 20% chance of a continued up trend move.

STEP 3:

Find B of the up A,B,C,D. That will be the left tip of the crown. The height of the left tip will give you an indication of where the right tip may go.

STEP 4:

Enter the market at the backside of the trend line and or the corresponding Fibonacci number which will now become C in the new down trend indicating A,B,C,D.

Using the Fibonacci tool, draw your Fibonacci lines from the new down A, B to project the C (indicating your SELL entry), and the D (indicating your BUY exit for profit) Place your protective stop loss order at the last high or the new Down A. This will protect you against loss should the crown or reversal not hold and the uptrend shifts it channel and continues up.

STEP 5:

Draw a new downward trend line across A & C. The market should continue to fall below the trend line making new A,B,C,D’s.

THE FINAL PRODUCT:

The Uptrend King’s Crown is now complete and if the market is meant to fall, the continued movement will begin to wave down.

The graph below shows an actual example in the market of an Uptrend King's Crown.

THE RULES OF TRADING THE KING’S CROWN

• Find and Draw all Trend lines… inner, outer and long-term.
• This will help you to determine if you are in an uptrend, downtrend or if a trend line has been broken signifying the potential end of a trend.
• Find the trend line BREAK. See if the market has returned to the support line in an uptrend, or resistance in a downtrend. (Remember, if an inner trend line is broken it my only go to the outer and only create a small move.)
• Follow the potential crown movement steps 1-5. If steps 1 and 2 are achieved, start setting up your trade, a crown is about to form.
• There are only two entries, at a .618 / 786 / back side of a trend line or Entry at B, only after a .382 bounce.
• Pull out your traders check list and create a trading plan and trade the plan.
• If you can’t afford the potential loss should the trade not work out, then … STAY OUT and DO NOT TRADE
• The exact same rules apply to trading a downtrend crown, but in the opposite direction.

The graph below shows an actual example in the market of a DOWNTREND King’s Crown.

Let us look at examples of a King's Crown in the current FOREX Euro Market.

MTI 4.0 Charting Software will enable you to visually recognize specific Candlestick formations in the market, such as the King's Crown. Our Traders further have access to a global inter-active Chatroom, where novice as well as experienced money managers receive valuable ongoing assistance, mentorship and guidance with their trading.

Earlier this year, the EUR developed a bearish King’s Crown pattern after failing a third time to sustain new highs above the 1.2900 level.

The first part of the crown formation is labeled as #1, the trend line break. The second part of the pattern is the test of previous support as labeled by #2. Number 3 is finding the left tip of the King's Crown.

Prices then recovered to form a near perfect right tip as shown by #4. Selling into the right tip or on a break of #2 in this case proved to be rewarding as a new downtrend developed.

Now the crown is complete, and selling the right tip of the crown proved to be extremely profitable.

More recently after the “dip” in the EURO from 1.2900, the EURO started to “bottom out” and a downtrend King’s Crown formation developed on the 1 hour chart. In this case, after breaking an inner-down trend line, prices worked their way to the outer or next downtrend line, where prices completed the #2 of the pattern, as they bounced at the outer downtrend line. A morning star candlestick formation appeared at the right tip of the crown, which confirmed the rally. Since then, prices have been working their way toward the next outer-downtrend line.

The crown reversal pattern can become one of the most powerful and profitable price patterns to those who understand it.

IN SUMMARY …

Successful traders will do… what unsuccessful traders can’t and won’t do.

Once again… Education First! Learning pattern recognition is imperative to the technical trader. Remember, you must keep it simple. The market can only move UP, DOWN or SIDEWAYS! We teach you how to recognize 4 Crown / Reversal formations. Each one comes with a set of rules for “entry”, “exit for large profit” and “exit for small loss”. Learning the crown formations can make a significant difference in your Trading profitability. We will teach you how to try to take advantage of the markets as it reverses… so that it doesn’t take advantage of you!!

Health, Happiness and Successful Trading,
Jared Martinez

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Statement of Disclaimer: This report includes information from sources believed to be reliable but no independent verification has been made and we do not guarantee its accuracy or completeness. Opinions expressed are subject to change without notice. This report cannot be construed as a request to engage in any transaction involving the purchase or sale of a futures contract and/or commodity option thereon. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.

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