FDates Market

Timing

Guidelines

Bar Labeling and Setups

PurposeThe purpose of this document is to simplify the method of market timing with

FDates in the direction of the trend.

There is a learning curve that can be steep for some traders depending on

their prior trading educational experience. It can be said that even the most

experienced trader may find it a little difficult to learn new concepts where a

new trader may find it easy to pick up.

After many years of teaching THE GUIDELINES to literally thousands of

traders, it has been determined that, while the whole concept is very easy

and quick to use each day, this only comes once the trader has fully learned

and embraced the concept.

Terminology also appears to be the Achilles' heal for a large number of

traders. Too many acronyms or abbreviations soon become too wieldy for

anyone but the most determined.

Purpose (con‟t)In all previous training materials relating to The Guidelines, we have had to

learn such terms as PSB, PST, DSB, DST, WSB, WST, Swing Bottom, Swing

Top, Potential Swing Bottom, Potential Swing Top, Pause High, Pause Low,

Pause Top, Pause Bottom, etc. etc. etc.

If you were looking at a WEEKLY price chart, it would have its own set of

abbreviations or acronyms. On the DAILY price chart, it would have its own.

The terms found in this document are not meant to add to this already long

list of abbreviations and acronyms, but rather, to REPLACE THEM!

The terms found in this document are equally applied to weekly charts as to

daily charts. I believe it successfully captures the whole essence of what

SETUPS are as taught in The Guidelines for years, but does so with an

easier approach.

Purpose (con‟t)The new terms are simply SC, BC and Reversal Bar.

That‟s it!

Now, while this document covers the subject of Buy and Sell Setups, it does

not address the other two important parts of the FDate Market Timing

approach. These are:

Trend Determination

Analyzing Setups for Risk/Profit Potential

These are to be covered by their own training documents.

And now, let‟s get right into the process of learning about Setups.

What are FDates?The name FDates is short for “Future Turn Dates”.

FDates are used to expose the time periods where a short-term market „reversal‟ is most likely to occur.

A „reversal‟ is a change in market direction. If prices have been making higher-highs (moving up), but then fails to make a higher-high, the short-term direction has reversed (at the very least, momentarily). If prices have been making lower-lows (moving down), but then fails to make a lower-low, the short-term direction has reversed (at the very least, momentarily).

FDates are produced using proprietary methods that are based on Geometric and Cycle Pattern Extraction algorithms. These protocols are incorporated in a few special software applications, together referred to as the FDates Suite of Applications (not for sale to the public although licensing is possible for qualified Premium Members).

The ReversalIn order to get the most out of FDate market timing methods, it is important to

understand what constitutes a „reversal‟ for the purpose identifying possible

trade setups.

There are several definitions about „reversals‟ found in books or written about

on websites that you may have come across. Whatever you have been taught

about „reversals‟ may or may not completely agree with how they are taught

here. It is important that you adjust your thinking to how they are described

within this training material.

A „reversal‟ is also known as a „swing‟ or „pivot‟.

Reversal DefinitionIf the market is making higher price bars, we consider the direction to be UP. If

the market is making lower price bars, we consider the direction to be DOWN.

If the direction is UP, this means that the BUYERS have control over the

SELLERS.

If the direction is DOWN, this means the SELLERS have control over the

BUYERS.

If the direction was UP and a price bar fails to make a new high, BUYING has

failed to overcome SELLING at that point in time. This change is a

REVERSAL of the upside movement or momentum.

If the direction was DOWN and a price bar fails to make a new low, SELLING

has failed to overcome BUYING. This change is a REVERSAL of the downside

movement or momentum.

Reversal DefinitionTo simplify for purposes of market timing, we will accept the following:

BUYERS have the power when a price bar makes a new high.

SELLERS have the power when a price bar makes a new low.

Power is changing from BUYERS to SELLERS when a higher-high price bar is

followed by a lower-high price bar.

Power is changing from SELLERS to BUYERS when a lower-low price bar is

followed by a higher-high price bar.

Again, this change in power can be for a single day or for several days before

changing back again.

Each “change in power” is what forms the REVERSAL or SWING TURN.

The REVERSAL BAR will be the LAST BAR prior to the „change in power‟.

In the previous examples, notice that when a price bar makes a new high, we

say the BUYERS have the power. When a price bar makes a new low, we say

the SELLERS have the power.

When the power „changes‟ from Buyer to Seller or Seller to Buyer, we

consider that a REVERSAL pattern, since it is a „reversal‟ of power.

In previous example demonstrated that this „change‟ in power is also

considered when the price bar forms an INSIDE BAR. An INSIDE BAR is a

price bar that has a lower-high and higher-low than the previous bar as shown

below:

The INSIDE BAR will always be

considered the OPPOSITE in power

than the previous bar.

In this example, the previous bar

shows the BUYERS had the power.

Therefore, we consider the INSIDE

BAR to be that the SELLERS now

have the power, at least for now.

It is easy to understand this concept when you consider that the BUYERS did

not have enough power to make that inside bar into a HIGHER-HIGH bar. This

„loss of power‟ from the BUYERS is attributed to the SELLERS.

It should be noted that if an INSIDE BAR follows an INSIDE BAR, the power of

the new INSIDE BAR will be the same as the prior INSIDE BAR.

The INSIDE BAR will always be

considered the OPPOSITE in power

than the previous bar.

In this example, the previous bar

shows the SELLERS had the power.

Therefore, we consider the INSIDE

BAR to be that the BUYERS now have

the power, at least for now.

It is easy to understand this concept when you consider that the SELLERS did

not have enough power to make that inside bar into a LOWER-LOW bar. This

„loss of power‟ from the SELLERS is attributed to the BUYERS.

It should be noted that if an INSIDE BAR follows an INSIDE BAR, the power of

the new INSIDE BAR will be the same as the prior INSIDE BAR.

FDates and ReversalsFDates are used to anticipate the „change of power‟ between the Buyers and

Sellers.

Our Buy and Sell Setups are based on FDates.

When the trend is UP, trade Buy Setups.

When the trend is DOWN, trade Sell Setups.

The TREND can be determined by the WEEKLY PRICE CHART or by the

daily chart pattern. View the study material on DETERMINING THE TREND

for further details.

This document assumes you already know how to determine whether the

trend is up or down.

REVERSAL BARSIt is very important to understand how to identify the REVERSAL BAR, as

this will be the SETUP bar that must be „inside‟ the FDate.

When you have a price bar where the BUYERS have the power that is

followed by a price bar where the SELLERS have the power, the REVERSAL

BAR is the bar that the BUYERS last had control.

When you have a price bar where the SELLERS have the power that is

followed by a price bar where the BUYERS have the power, the REVERSAL

BAR is the bar that the SELLERS last had control.

REVERSAL BARSThe example shown here is where a

price bar where the SELLERS have

control is followed by a price bar

where the BUYERS have control.

The last bar where the SELLERS

have control before when the

BUYERS gained control is

considered the REVERSAL BAR.

This is also commonly referred to as

a SWING BOTTOM.

REVERSAL BARSThe example shown here is where a

price bar where the BUYERS have

control is followed by a price bar

where the SELLERS have control.

The last bar where the BUYERS

have control before when the

SELLERS gained control is

considered the REVERSAL BAR.

This is also commonly referred to as

a SWING TOP.

The FDate WindowA REVERSAL BAR is EXPECTED to form inside each FDate listed on the

FDate Report.

The PROBABILITY is quite high, usually 81% or higher that this will occur.

The REVERSAL BAR is EXPECTED to form on the DATE listed for the FDate.

However, during periods where the BUYERS or SELLERS are really strong,

the REVERSAL BAR can form ONE TRADING DAY of the DATE listed.

This time deviation of +/- one trading day makes up what we call the FDate

Time Window.

The FDate WindowANY price bar that forms within ONE DAY +/- of the FDate listed on the report

is considered to be „inside‟ the FDate.

If the price bar is one trading day BEFORE the FDate, we refer to it as the -1

bar of the FDate.

If the price bar has formed exactly on the FDate, we refer to it as the 0 (zero)

day or ON-TIME bar of the FDate.

If the price bar is one trading day AFTER the FDate, we refer to it as the +1

bar of the FDate.

The Buy SetupThe TREND is UP.

The is a price bar „inside‟ the FDate that is controlled by the SELLERS that is

not currently a REVERSAL bar.

The low of this price bar „inside‟ the FDate must be HIGHER (or equal) to the

low of the last REVERSAL BAR low (Swing Bottom) that formed on the chart,

where that last REVERSAL BAR (Swing Bottom) low is the result of at least

two consecutive Seller controlled price bars.

The Sell SetupThe TREND is DOWN.

There is a price bar „inside‟ the FDate that is controlled by the BUYERS that is

not currently a REVERSAL bar.

The high of this price bar „inside‟ the FDate must be LOWER (or equal) to the

high of the last REVERSAL BAR high (Swing Top) that formed on the chart,

where that last REVERSAL BAR (Swing Top) high is the result of at least two

consecutive Buyer controlled price bars.

Follow along with the comments found on the next page.

Setup BarsUsing the chart shown on the previous page, we are going to make the

assumption that when you are considering Buy Setups, you know the TREND

is up. If you are considering Sell Setups, you know the TREND is down.

Notice that each price bar is marked as BC or SC. EVERY price bar, even

inside bars and outside bars, should be marked. For outside bars (not shown),

you would mark the top as BC and the bottom as SC.

The bars where you see the BC or SC in a box are bars that are REVERSAL

BARS. A BC bar would be a REVERSAL BAR if followed by a SC bar. A SC bar

would be a REVERSAL BAR if followed by a BC bar.

Those bars with the HAPPY FACE (1,3,5,7 and 8) are those bars that would

have qualified as a SETUP bar if that bar is located „inside‟ an FDate.

Those bars with the ANGRY FACE (2,4,6) are those bars that would NOT have

qualified as a SETUP bar even if „inside‟ an FDate.

Setup BarsThe BC bar with the STAR is unknown whether it would have qualified as a

SETUP because there are not enough bars to the left to determine this.

Before a price bar becomes a REVERSAL BAR, it may have been a SETUP

bar if it was „inside‟ an FDate.

If this SC bar was „inside‟ an FDate, it would have been a BUY setup.

This is because the SELLERS are in control of this bar, and it‟s low is

higher than the last REVERSAL BAR low (not shown, but you can

already see a lower low bar at the very left of this chart.)

If this BC bar was „inside‟ an FDate, it would not have mattered. This is

because it‟s high is not EQUAL or LOWER than the high of the last BC

REVERSAL BAR (indicated by the STAR) that is of two or more BC

bars.

Setup BarsIf this SC bar was „inside‟ an FDate, it would have been considered a

BUY setup. This is because it is a SELLER controlled bar with a low

that is HIGHER than the last SC REVERSAL BAR low (#1) that is

made up of two or more consecutive SC bars.

If this BC bar was „inside‟ an FDate, it would NOT have mattered. This

is because it‟s high is not EQUAL or LOWER THAN the previous BC

REVERSAL BAR high (#2) that is made up of two or more consecutive

BC bars.

If this BC bar was „inside‟ an FDate, it would NOT have mattered. This

is because it‟s high is not EQUAL or LOWER THAN the previous BC

REVERSAL BAR high (#2) that is made up of two or more consecutive

BC bars.

If this SC bar was „inside‟ an FDate, it would have been considered a

BUY setup. This is because it is a SELLER controlled bar with a low

that is HIGHER than the last SC REVERSAL BAR low (#1) that is

made up of two or more consecutive SC bars.

Setup BarsIf this SC bar was „inside‟ an FDate, it would have been considered a

BUY setup. This is because it is a SELLER controlled bar with a low

that is HIGHER than the last SC REVERSAL BAR low (#1) that is

made up of two or more consecutive SC bars.

If this BC bar was „inside‟ an FDate, it would have been considered a

SELL setup. This is because it is a BUYER controlled bar with a high

that is LOWER than the last BC REVERSAL BAR high (#6) that is

made up of two or more consecutive BC bars.

Practice Labeling Each Bar

Every single price bar on the price chart is assigned a label.

If the price bar is a HIGHER-HIGH only, it is a BC (Buyers Controlled) price bar.

If the price bar is a LOWER-LOW only, it is a SC (Sellers Controlled) price bar.

If the price bar is an INSIDE BAR, it is the OPPOSITE of the previous bar, unless

the previous bar is also an INSIDE BAR. In that case, it will take on the same

label as the previous INSIDE BAR.

If the price bar is a HIGHER-HIGH and LOWER-LOW price bar (called OUTSIDE

BAR), it is labeled as both a SC and BC bar.

If an INSIDE BAR follows an OUTSIDE BAR, it is labeled the same as the

OUTSIDE BAR.

If a BC bar is followed by a SC bar, the BC bar is a REVERSAL (Top).

If a SC bar is followed by a BC bar, the SC bar is a REVERSAL (Bottom).

It does not matter if the SC or BC bar is an Inside Bar or Outside Bar. By using

the labeling process, you can quickly determine all the market reversals on the

chart.

Simple REVERSAL BAR Identification

REVIEWYou want to be on the BUYERS side if the trend pattern is forming higher SC

REVERSAL BARS.

You want to be on the SELLERS side if the trend pattern is forming lower BC

REVERSAL BARS.

So if the pattern is higher SC REVERSAL BARS, do not look for Sell Setups,

only Buy Setups.

If the pattern is lower BC REVERSAL BARS, do not look for Buy Setups, only

Sell Setups.

Setups can only occur from a price bar that is „inside‟ an FDate. A Buy Setup

would be the SC bar inside the FDate that is not a REVERSAL BAR (yet). A

Sell Setup would be the BC bar inside the FDate that is not a REVERSAL BAR

(yet).

Trading the Buy SetupOnce you have determined you have a Buy Setup, and assuming you have

taken steps to evaluate whether it is worth trading or not (another lesson

document), you are ready to place the trade.

A BUY-STOP order should be placed ONE-TICK above the high of the setup

bar.

If the trade is filled, a stop-loss should immediately be placed below the low of

the setup bar.

If an INSIDE BAR forms following the Buy Setup bar, the order will not be

filled. At that point, you can decide whether you want to try again the next

trading session by placing a BUY-STOP order above the INSIDE BAR high or

keep it above the setup bar high.

If the trade is not filled by the time a new BC or SC bar forms that is not an

inside bar, no trade is to be taken for that setup.

Trading the Sell SetupOnce you have determined you have a Sell Setup, and assuming you have

taken steps to evaluate whether it is worth trading or not (another lesson

document), you are ready to place the trade.

A SELL-STOP order should be placed ONE-TICK below the low of the setup

bar.

If the trade is filled, a stop-loss should immediately be placed above the high

of the setup bar.

If an INSIDE BAR forms following the Sell Setup bar, the order will not be

filled. At that point, you can decide whether you want to try again the next

trading session by placing a SELL-STOP order below the INSIDE BAR low or

keep it below the setup bar low.

If the trade is not filled by the time a new BC or SC bar forms that is not an

inside bar, no trade is to be taken for that setup.