Trading DetailsThe Weekly Re-Lay

Overview

The Weekly Re-Lay service is a weekly publication - supplemented with intra-week Alert (s) - and structured for more active traders. It offers 1-5 day and 1-4 week indicators, cycles, analysis & trades ('system trades'). The trades are intended to choose the highest probability/lowest risk opportunities based on synergy. In addition, the daily and weekly trends are provided as guidelines for trading when a 'system' trade is not generated or in force.

Analysis

The Weekly Re-Lay is a more numbers-intensive publication, focusing primarily on key levels & cycles in the markets. It incorporates subjective analysis (like cycles, Elliott Wave, Fibonacci & Gann analysis) with objective trading indicators (2 Close Reversals™, 2-Step Reversals™, MAC/MARC/AMACs™ , Double-Key™ & Turn-Key Reversals™, etc.) to provide a balanced and comprehensive perspective on the markets.

Within that context, the guiding principle is always that ‘price is the ultimate filter or deciding factor’. In other words, cycles or a perceived wave structure might be heavily favoring one conclusion but price action must confirm that. That is why key price patterns & indicators are usually the primary focus.

The goal of the Weekly Re-Lay trading system is NOT to catch every move in the market, but rather to choose the perceived 'cream of the crop' based on a proprietary combination of indicators.

System Trades

System Trade Strategies provide a small sample of corresponding action, seeking to choose the perceived lowest risk/highest probability trades based on specific patterns - with strict money management being first priority. They do not imply the only action to corresponding analysis, are not always directly linked to the latest analysis, and should be viewed/traded as a whole (portfolio).

As such, specific analysis does NOT always lead to corresponding 'system trades' if a proper entry signal - with prudent risk parameters - does not present itself. (e.g. Based on minimum reward/risk analysis, a trade could be triggered on the close of one day’s trading but have consumed too much of the anticipated move before arriving at that daily close - thereby preventing it from ever being published. Money management acts as a decisive filter for all potential trades.)

System trades are a specific pattern-recognition discipline that looks to capitalize on the 3 - 5 day and 1 - 4 week trends, which often go against the larger (1 - 3 month, 3 - 6 month and/or 6 - 12+ month) trends. This particular combination of patterns & risk control parameters also resists markets that have entered periods of high volatility or accelerated trends.

Money management plays an overriding role that can trigger an exit from existing trades even if nothing has changed in the prevailing analysis. For this reason, traders should not confuse these signals with the underlying trends or assume that they imply any change in the longer-term trends or analysis unless specifically stipulated. They represent just one particular approach that should be understood and implemented in its proper context.

There are many other applications for the analysis and readers should seek to integrate it with their own trading approach, utilizing our proprietary indicators, identification of daily & weekly trends, cycles & resistance/support zones. Always use synergy & prudent money management (see Eric Hadik's Tech Tip™ Reference Library ).

System trades are aimed at traders who have learned to treat trading as a business... not simply as a source of excitement. Just as most businesses focus on only a few opportunities or products at any given time (those deemed to be the best choice and with the highest profit-potential or market-appeal at that point in time), so, too, does our approach to trading select only those trades that are perceived to have the best potential.

To reiterate, the goal is not to overtrade, but to accurately trade!

Integrating with your own trading strategy

Every trader has a different approach to the market and vastly different risk comfort levels. As a result, you are encouraged to integrate the analysis with your own trading strategy or strategies, particularly when the analysis does not result in a specific (published) system trade strategy.

If you are focusing on only one market, keep this in mind since no claims are being made or implied that specific system-based trades are going to capitalize on all, or even the majority, of the analysis. This is why both analysis and trading strategies are provided.

When a specific trade is not in force, the daily and weekly trends should determine the preferred direction in which to trade (using corresponding resistance & support to trade against or use as a breakout signal). In addition, analysis & trading recommendations should be incorporated with the daily & weekly trends.

For example... If a trend is clearly down, then this is a known factor. As a result, the analysis will often focus more on what would change this even if a reversal is not immediately expected. This is so that traders can both recognize the underlying trend AND be aware of where this trend might be neutralized or reversed (and corresponding action necessary). The absence of these reversal signals carries the assumption that the underlying trend remains in force and should be respected.

The most important factor in an established trade or trend is knowing when to get out or recognizing when it is reversing. As a result, the potential negative factors will regularly be given during an uptrend or long trade and the potential positive factors will dominate during a downtrend/short trade. This is primarily to inform traders what should be monitored as potential danger signs. factor (the trend) is already known. Therefore, the other factor (what will derail this trend) often receives more attention.

Analysis can point to a big move in a specific market without a trade being generated by the criteria built into this particular trading program. This does not mean that a trader should not act on the analysis, only that this specific program was not able to generate a trade or that a money management filter or volatility filter overrode that potential trade.

(This should also be kept in perspective when discussing longer-term holding of various investments like equities, gold or silver, bonds, etc. That is much different from short & intermediate trading analysis.)

In some cases, an intermediate trade might be generated while a short-term one is not. This is why it is important to understand the distinctions of the two forms of trades and choose your preference accordingly...

Short Term Trades & Intermediate Trades

Short-term trades (1 - 5 days) are NOT intended to catch the big moves but rather to provide 1 - 5 day trades with reasonable risk. As such, traders following only short-term trades should not expect to be in all, or many, of the big moves since they often occur after a period of inactivity or after a short-term trade has run its course & triggered an exit signal. That short-term trade would have accomplished exactly what it was formulated to do, which must be kept in proper context.

Unfortunately for some, the standard principle in life also applies to successful trading: You cannot have your cake and eat it too. This is not intended to be facetious or cynical. Let me explain...

All trading is a calculation of reward versus risk. (Believe it or not, almost every decision you make in life involves some facet of the same calculation, e.g. "Is the potential reward of sharing this innovative idea greater than the risk of embarrassment if it is misunderstood or proven to be ludicrous?"... etc.) In most cases, the one is proportional to the other. If you are looking to only risk $500 on a specific trade, it is likely to be a trade with profit potential of $1,000 - $2,000.

As a result, a trade with that type of risk will be exited in that general area - assuming it has been successful and followed expectations - unless it immediately enters a parabolic move and escalates into an intermediate trade (about 1 out of 10).

This does not mean that the trade is immediately exited when it reaches that level (although trailing stop levels are often significantly tightened at that time) but rather is a reflection of the criteria built into this particular trading methodology. If it enables you to enter a trade with that small of risk, it is likely to be exited much quicker and with much less adverse action than is required to hold on to a big mover.

In addition, these trades are sometimes against the weekly trend since the contra-trend moves are often the sharpest. This is another reason why more acute sensitivity is designed into a short-term trading program - to avoid returning 90% of the profits on each minor move.

Short-term trades, once initiated, need to take out - on a closing basis - intermediate resistance or support points if they are to extend beyond the prescribed 1 - 5 days. (In some cases, tightening trailing stops will be recommended, allowing a trade to remain open if other factors favor its extension.) If a breakout occurs, they can then be considered an intermediate trade with the updated risk and profit-taking factors.

Intermediate trades (1 - 4 weeks) follow similar principles albeit on a slightly larger scale.

Daily & Weekly Trends

Daily & weekly trends are a lagging/confirming indicator based on a proprietary pattern that is not revealed. These trends are used as a backdrop and/or confirming signal - not a trigger mechanism. They also help identify the extreme of an initial rally or decline in a new overall trend.