IDENTIFYING A BARGAIN DAY

                       After determining a trend bias the next step is to identify a bargain day.
Chapter 3 introduced you to the concept of finding bargain days, and the
Sitcom System uses them to locate days that potentially offer the best deal
on a trade. Traders often jump into trends at a price that doesn’t represent
the best possible value for their trade. This is usually referred to as

DETERMINING TRENDS

                       Every trading day has a high and a low edge that you could potentially trade
along, but it isn’t efficient to do so. To increase your chances of selecting
a successful trade, the Sitcom System begins by determining a directional
trend bias through the use of a simple moving average indicator. The rules

Bargain Hunting Along the Edge

This chapter contains the first of three trading methodologies that will
put the support and resistance tactics you learned in Chapter 3 to
good use. In this chapter you will learn a trading methodology I affectionately
refer to as the Sitcom System because it allowed me to trade on
my own schedule, often while I watched a favorite television sitcom. The
system combines what you have learned about support and resistance with
simple price action analysis. The Sitcom System focuses on daily charts,
and for the purposes of this discussion I define the end of the trading day
as 5:00 P.M. Eastern Time. This ensures that both the London and New York
trading days have closed before we begin to plan a trade, allowing us to see
the full range or price action for that trading day.
After each trading day there are two distinct boundaries formed by
support and resistance. The daily high is a boundary that buyers could not
overcome; the daily low is a boundary that sellers could not overcome. The
extreme edges of price action for a trading day mark the front lines in the
battle between buyers and sellers. Traders can use these clearly identified
support and resistance zones to their advantage with the help of simple
price action analysis.
To trade the Sitcom System, you need a trend, a bargain day, a support
or resistance zone, and a profit target. If you’re one of those traders who
believes that a daily chart requires 100 pip stops, you’re about to learn a
much better way to trade long-term charts.

AUTOMATING PROFIT WITH LIMIT ORDERS

                           Automating profit management through the use of limit orders is just as
important as managing risk through the use of stop orders. It might seem