Speaker A
okay so I want to uh welcome everybody to the Mr top steps boot camp and my segment here on the the 3-day cycle uh Polaris trading groups part of our educational series that we uh present uh with our members and the
Webinar by Polaris Trading Group presenter explaining the 3-Day Cycle (Taylor Trading Technique), its history, core premise of smart-money price behavior, and how it guides daily trade preparation.
Key Takeaways
- The 3-Day Cycle is a template for anticipating typical intraday/short-term price behavior driven by institutional activity.
- Trade setups are most favorable at extreme price points where smart money reverses prices.
- Understanding exception and rejection of key highs and lows is essential to applying the cycle.
- The method helps traders prepare each day rather than predict outcomes with certainty.
- Traders benefit from improving decision-making habits and becoming more informed.
What the video covers
- Speaker welcomes attendees to the Mr. Top Step boot camp segment on the 3-Day Cycle, part of Polaris Trading Group's educational series.
- The 3-Day Cycle is also known as the Taylor Trading Technique, originating with George Douglas Taylor in the 1940s-50s as a short-term trading method.
- The speaker shares his background: 30+ years in trading, including market making at Lehman Brothers, a biotech firm, and UBS, plus later hedge fund work.
- After the 2008 financial crisis and fund redemptions, he began trading independently and eventually founded Polaris Trading Group to teach decision-making and trading habits.
- Polaris's mission includes demystifying price action, improving decision-making, encouraging good trading habits, and turning traders into 'informed' participants.
- Core premise: collective action of institutional 'smart money' drives prices from extreme lows to extreme highs, with the best risk/return at those extremes.
- The cycle describes an expected pattern of highs and lows across three days, with a typical decline occurring around cycle day 3.
- Concepts such as exception and rejection of key reference points (daily highs and lows) are central to reading the cycle.
- Markets probe levels to test how far they can move; failed probes and breakouts are discussed as part of the cycle's logic.
- The method is presented as a daily preparation template rather than a prediction of exact outcomes, with fine-tuning and risk models left to the trader.
Chapters
- 00:00Welcome and Introduction to the 3-Day Cycle
- 03:23Speaker Background and Trading Career
- 06:14Polaris Trading Group Mission
- 09:00History and Core Premise of the Taylor Method
- 13:00Exception, Rejection and Key Reference Points
- 19:00Cycle Structure and Typical Decline on Day Three
- 30:00Breakouts, Probing and Expected Outcomes
- 51:00Using the Cycle as a Daily Preparation Template and Closing
Full Transcript — Download SRT & Markdown
Speaker A
3-day cycle some of you may already uh know of it uh also known as the tailor trading technique it's been around for quite a while uh it's something that I've used for a number of years and uh it's helped guide me uh with uh with a
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lot of my own personal trading and and years back when I worked for the investment Banks um this slide should be familiar to virtually everybody out there right the disclaimers uh we all know about those just one point about uh Polaris uh we do
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offer services in an educational basis on a subscription and uh um we have various strategies and so forth that we employ and of course uh all the past performance stuff is not indicative future results so we all know
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about that so let's just glance over that all right a little bit of my background uh for those of you unfamiliar I've been around for you know 30 plus years I think going on nearly 33 years now and I worked for a variety of
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different uh uh investment Banks over the years trading individual stocks as a uh Market maker uh NASDAQ Market maker I've traded various derivative products uh Structured Products um so forth and so on through those uh years uh started
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off years back at the old sheers and Leman Brothers uh way back when for those of you that uh Old-Timers you remember them um I went on to work for a biotechnology firm uh accounting company they're not listed here but I was a a
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biotechnology uh Market maker for many many years back when Amgen was a orphan drug company so that'll take you give you some idea how far back that goes uh I went on and worked after that I worked couple small firms and then uh found my
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a nice place over at the uh United Bank of Switzerland UBS uh I was in New York at um when I was a count um down on Old Slip in uh in downtown Manhattan uh over at UBS I was
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the uh head biotechnology Healthcare Trader over there so since my background from Cowen led me over to the over UBS but during the the entire sequence there i' I've traded a lot of various products Futures etc etc um when I left UBS back
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in 2004 now uh I worked for a couple high frequency type uh hedge funds now these are not the hfts of today but rather High turnover over Type U you know trading funds that that managed uh quite a bit of money and and I was um part of
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that group and uh again I had an allocation of capital and so forth now uh that was the the fund that I worked for was a a fund of funds and back in uh 200 I guess 78 that that period when the
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financial crisis hit um since it was a fund of funds and actually they had a uh a 30-day Redemption policy which was are not necessarily common place at the time but all the other funds that that needed to
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raise Capital uh for known purposes of course um uh came and uh you know uh hit the ATM button to withdraw their funds out of the fund that I was working uh on behalf of and I found myself basically
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uh out of a job all right because it was no more Capital to trade so um so that said there there was no other place on on on the street in that sense to to find a job so I ended up uh started
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trading for myself and uh worked my way you know into uh you know work finding some of these chat rooms out there cuz I was you know at home sitting in myself kind of getting myself in trouble uh effectively
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you know sitting there on your own and I'm sure many of you know that and and can share similar experiences of of getting in trouble so I felt as though I needed to be you know some place with some uh
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people so I started looking around and and frankly there weren't that many good places and and one the ones that I've you know visited with I said they really teach this stuff and I was really shocked at what was out there so uh I I
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I I hooked up with a friend of mine and we started a small little kind of educational thing very very small and uh I was with him for a few years and it it just didn't really really wasn't going to the direction I
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wanted and uh um so I ended up um creating Polaris Trading Group and and I my my basic goal over Polaris was to teach uh those that wanted to learn uh somebody with with the experience that I had at the time you know coming off the
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investment Banks um you know how to improve decision making skills that was one of part of the the mission that I wanted to create uh would make thousands and thousands upon decisions every day some good some some not so good but uh
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we you know one of the goals was I wanted to improve uh the decision- making capabilities of of each individual Trader including myself at the time as well you know again coming off uh working as a market maker and
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then transitioning you know into a proprietary and then then uh effectively retail type Trader you know individual um you know I had my ups and downs as well just as everybody does and one of the things that you know I wanted
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to do is um take all my experience combine it and then you know saying boy I got some great skills that I've learned and I want to you know make a cohesive program uh the best the least that I know how to have done so uh so
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Polaris traing Trading Group was created and um you know it's we've been now this is beginning of our fourth year over Polaris and here's my mission basically to improve you know decision- making skills uh learn new empowering trading
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habits many of us have bad habits uh want to try to improve those uh get some good ones and and try to encourage and enforce you know the good habits uh demystify price action now a lot of people realize you know seem to realize
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that you know there seem to be some big mystery about how the markets trade and um frankly you know one of one of my missions here was is to set out to try to demystify all that action you know
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pull a curtain you know who's the man behind the curtain type of thing pull it back you know uh and and when somebody realizes that the market isn't all that um you know mysterious all right when there's some basic uh tenants that that
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you need to uh follow then at least they have um a better chance to you know Excel to learn and to be profitable now as Danny mentions quite a bit you know this is not your father's markets and I
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100% agree and but you know we still need to learn learn new techniques we need to learn uh you know some some new courses and strategies to um to compete you know in this type of market and Excel all right and then basically the
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last one here guys is to is to help you become you know a more informed Trader now people say there's professional Traders and there's retail Traders I personally categorize them into two two groups informed and uninformed and I I
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know a lot of so-called professional traders that frankly a clueless and they trade a lot of money so what I'm trying to do is is hopefully um bring our members and and those that want to uh learn uh to get into that informed group
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okay so today's topic is the three-day cycle so uh I want to get right into it here um give you a little bit of background history and then we'll get into uh some of the core charts so this B basically dates back
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you know uh 1940s 50s gentleman by the name of George Douglas Taylor it was simply uh it was a short-term trading method and he basically saw saw that the markets were inherently choppy which frankly we see on a daily basis as
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well uh but what you know he was a smalltime Trader he wasn't carrying big institutional accounts or trading big money but at the same time he realized that you know as we do all here and I don't think there's anything real new to
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anybody but when he back in the you know 40s and 50s it wasn't as uh widely you know known as it is today but the large institutional guys are the ones that drive this the price all around and we
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know that and as they do today all right so so-called smart money all right that type of thing uh the core premise simply was that the collective action of that smart money you know drives prices from you know extreme lows to extreme High
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but more in a cyclic type pattern that he has found anyways from his observations more of a 3-day type of cycle all right now there are other type Cycles out there some people use a 2 and 1/2 to 5 day cycle some use a five or
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7day um in his experience you know a 3-day kind of shortterm cycle uh seems to catch uh the uh highs and low kind of extreme in a fairly consistent way and he was able to calculate uh in anticipation of
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what the next potential cycle Peak or cycle trough uh could potentially be and then that way he he learned to position themselves in a particular way to be on the same side of the large institutional type so-called SMY uh smart money guy
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all right so you don't want to be on the you know back end of that you want to be along with them so so the structure of the 3-day cycle simply goes on a cycle day one which is also referred to as a
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buy day which by the way is today uh cycle day two a sell day and a sell short day cycle day three all right so as you can see here in the little inset um the pattern can be generalized all
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right in a perfect scenario uh a rally from the cycle day one low to the cycle day to high and then ultimately from a decline from the cycle day three high back down to the cycle day one low so
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that's the generalization all right let's get into a little bit more of the details all right in the core premises so the the three-day Cycle Concepts and assumptions the uh first is um the terms that we use here will be
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violation and penetration so violation is is of the previous day low in order to create some selling forced selling and then the institutions try to buy as low as possible right that's part of the uh cycle and then on the flip side and
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the upside was the force of penetration of a high in order to sell previous low contracts all right and then ultimately push the price higher to sell essentially overvalued either stocks Futures you know individual hard Commodities Etc and then look to exit
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their Longs establish shorts and then get the cycle pushing back down the other way so the the end of a cycle basically how what uh George Taylor found was that the that was the greatest moment of opportunity so when you can
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when the institutions can press the price as low as they can and when the sellers finally you know cough it up that's provides the opportunity for them to absorb all that selling because they have the power to do so right absorb all
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that selling and then Jam the price back up and then everybody you know scratching their heads all right so the risk return turned out to be the best at those extreme points all right so a lot of people by the way use the term
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overbought and oversold um I got to tell you that when I uh was a market maker over the years I never or heard the term at least internally in the investment Banks uh of conditions being overbought or oversold uh we always use the term uh
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statistical extremes or statx so you know what's what what's an overbought and what's an oversold condition all right very hard to truly identify it you can though measure a statistical extreme and that's the kind of the area in the background that I've
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come from having work for the Investment Bank so we use those type of terms so the extremes Mark the end of one cycle and the beginning of the other so let's go further into the uh violation and penetration aspect of it so when the
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market has a tendency to exceed the previous day higher low right there's some residual momentum there right when you're able to uh expand the range so this results in what's called this violation penetration right um terminology and that provides some opportunities but
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what happens you know it's not just enough to penetrate or violate a high it needs to convert that higher low uh into new support new what we call Upper support or or lower resistance and then if it can do so effectively you
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know in a collective manner then the market then then press uh more directionally okay so at other times what we'll find is uh it'll be a f what we call false breakouts right false breakdowns uh we actually saw when today all right
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we'll I'll take a look at that on the chart um shortly and so what happens when there's a false uh breakout all right the price Retreats back into the range so being able to identify those and again there
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are techniques that we can use um you know the the previous presentation uh that Rob did was about uh you know looking at at the order flow all right and and density areas all right very good um techniques and and
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skills that that need to be developed what we're discussing here is more a generalization so then you have an you know you have an understanding of what could be happening and then when you drill down into the more granular um
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charts uh you'll be able to understand what's happening you know on on that on an intraday basis so again uh these highs and lows in in in terms of the range all right that what we call Simply key reference uh levels or key reference
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zones all right and their markers all right for the day and they become important because uh they provide a reference of whether or not the market is accepting uh higher levels right or lower levels or are they rejecting them
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right so that's important to understand this concept of exception and rejection all right so this is all uh part of that and those you know always key reference points such as uh you know daily highs and lows or for that matter
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value Area High and lows all right A lot of people don't really you know I mean uh think about the the value area highs and lows as reference points but they're actually perhaps sometimes even more important than than a Range High a daily
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Range High or daily range low all right so again if if the price is effectively rejected off of one of these reference points okay then simply it's it's categorized as a reversal so it provides an opportunity then to establish a long
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or a short position and then of course many of you realize that there are what are called trapped buyers trapped Longs or trapped sellers trapped shorts okay and you know what's going to happen to them all right and exactly
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what happened uh yesterday and and and we'll get to that so let's go step by step we only have three uh days to consider so let's let's go and describe each day a little bit more more detail and see what we're looking to do on a
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normal cycle now not every cycle is normal there are aberant uh days but if we know what the norm is to be expected then we can then um on a relative basis judge whether or not the uh cycle is
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acting normally and then again some of that Insight can provide us with all the other tools that we use whether they're Fibonacci um Elliot type you know patterns um you know volume profiling all that stuff that um is is also very
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useful all right uh when we combine uh the analysis or what we simply just talk about is context all right once we know the context and we get a good understanding of what the context and what the market is attempting to do and
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then determining whether or not it's s it's succeeding all right in um you know what they're what the collective action of the of the participants you know is doing so on cycle day one simply the main task is to probe all
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right to find a new secure low so the previous cycle is assumed to have have ended now a new cycle is beginning and typically on cycle day one which is also referred to as a buy day and it's kind
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of a misnomer sometimes because a buy day doesn't necessarily mean you're just buying all through the day but rather we're trying to find a buy point or a low point or as lowest point that we can right in the range all right
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expectations and range averages of the market to find a secure Lo from which to uh one have all the sellers sell out and then establish long positions once the big institutions are able to establish uh long positions and they're confident
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that there's no further follow through selling then now they're able to uh Force prices higher all right and again their Collective action they can do that so there is an average decline uh usually that it occurs on cycle day
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one and that average decline is calculated and I think it's probably if I'm not mistaken it's about 15 and 1 12 handles right now uh measured off of the cycle day 3 high and we'll show you that in the spreadsheet that we use as well
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all right now what we do here at Polaris is uh we send out a daily trade strategy each morning and that daily trade strategy is also posted into the uh Mr TOP Step room all right and let me just show you you
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quickly what that looks like while we're on that topic okay so this is uh the the mailer that we send out to our subscribers and members each morning and we just got a little background history of the market
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the calendar and then this is kind of the meat uh of the uh of the uh report here so it says ptg trading so like for instance this is today's for uh early this morning morning okay and uh we basically I
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talked about there was some trap shorts yesterday which we'll get to today is cycle day one our expectation today this morning was that the bullish momentum is expected to carry through all right before any normal decline which would
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normally occur on cycle day one to unfold now that did not happen today the decline but we were expecting carry through momentum today to the upside all right and um we were also talking about that that if the Bulls should
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clear and convert the 2294 handle upside expansion targets will be in play uh we'll get to those in a minute as well and then we write out two scenarios bullish and bearish scenario so the bar bullish scenario this morning again
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clearing convert the 2294 upside targets uh were measured out to 2300 up through 2310 uh we're we're we're pretty good there right now we're somewhere in the middle of that uh range uh as we speak uh the downside scenario uh never took
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place today all right so this is a report that we send out uh every day and uh every all our members and and the folks over at MTS uh receive that as well all right so uh continuation on the
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the cycle day one concept is uh the idea is is um any selling that's out there will continue until there's uh a low uh to be made okay and once that low is made then you know all the all the sellers and
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positions are are flushed out and then uh the market can uh begin to uh look to establish new bids and and push the cycle into cycle day two okay uh higher now again uh here is a little bit of a
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graphic snapshot on the next slide of what that looks like all right the decline begins from the cycle a three high again this is a normal cycle now if we're talking about all right smart money will establish some short
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positions have After exiting their Longs uh okay into cycle day uh one all right the cycle day three low is violated again which forces long liquidation uh weak hands get flushed out forces the selling into cycle day one and again the the goal of cycle day
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one is to uh find that new secure low all right once all the sellers are flushed out okay the buyers can you know and again you know the big boys they know they have a sense of when the the
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market is truly flushed out and so they'll they'll begin to establish positions Maybe cover their previous uh shorts from from the prior highs of the of the uh prior day or so again the cycle kind of begins they cover begin to
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establish long positions once everything is flushed out now they have the ability to uh uh to push now on the flip side you may have some uninformed Traders out there that actually short near the low of cycle day
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one what's going to happen to them they're going to be trapped right so then we rotate into cycle day two so once that low is established all right the large smart money type institutional player can now begin to
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force prices back up they use some of the late shorts that are trapped as fuel right and what they're trying to do now is they're trying to push price up to what is considered an average cycle range so an average range projection
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from the cycle day one low to the cycle day too high there is an average range all right it's an average true range uh that has been historically observed on cycle day two and so once price reaches that level
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all right then there's some selling that can begin you can they can start taking profits all right there's a perhaps a little backing and filling that that occurs on cycle day 2 cycle day 2 tends to be a little bit of a choppy type day
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uh if if it's a normal cycle because there is some backing and filling that occur people will take profits prices will come back down buyers will Reep step in again all right and and again uh a little more of a balance type uh
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activity that occurs within the context there uh once they've established and again price does not always reach the range average but once it gets near to it once it reaches about 75% of the average range then you'll start seeing the market
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start getting a little sluggish unless of course there's some external uh news or events out there that you know that take a a higher precedent over the normal uh trading action remember we're talking about normal action here uh rather than
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abnormal and uh so there's it it it provides a template if you will of what the expectation is and then again we can fine-tune and hone in on on our own strategies uh and and various risk models that we have uh in order to uh
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you know position ourselves you know accordingly whether you're an intraday Trader whether you're an options Trader using options as as a swing trading vehicle all right or whether you're an ETF you know stock Trader type thing where you're you're trying to position
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yourself however you're doing this is not always just for like an intraday scalping by the way this is not really a scalping uh type type cycle strategy it's more um you know a 3-day kind of Swing pattern all right but intraday
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Traders if you're specifically trading on the intraday time period uh this can certainly be used uh very effectively again understanding what the the bigger folks are doing helps be able to position ourselves um and take advantage of that all
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right so once we get to the cycle day to high let's just assume that the market has reached its average uh average targets then how the market acts from there right is going to determine whether or not on cycle day three the market
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continues higher or does it fail to go higher and then retrace back down or or beginning of the new you know uh beginning of the new cycle so what's really key is when we talk about these uh violation and penetration
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levels of the prior Range High daily range higher daily range low becomes into play how is the market reacting or acting relative to those markers relative to the prior High relative to the prior low what happened in the overnight session now uh the
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overnight session is taken into consideration though the greatest liquidity is during the the cash hours but simply uh it it it is taken into consideration of how well the market attempted to penetrate through a high or violate a low and then of course
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we do place the greatest amount of emphasis uh on the on the cast session itself all right so yes all right so um if you take a look at the slide here again a failure or a rejection at the cycle day to high
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right will determine whether or not the market is establishing you know new positions trying to uh push up existing positions or exiting positions And then trying to establish new short positions okay so again this is a this is a very fluid you
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know um you know uh type environment and the way things you know unfold right it's just not black and white there's a lot of Shades of Gray all right but what we want to do you know is look
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collectively at at the bigger picture of what's happening again many day Traders get too myopic in in the minua okay in in the detail it's there it's important to understand the detail but it's also it's even probably more important to
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understand the bigger picture of this okay so once there's once the the high cannot be uh penetrated and then uh on the flip side the you know at Point 2 here the uh low is violated all right then
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becomes a cell signal all right Longs are forced out all right and then uh you know further decline now in this case can happen so this kind of completes the 3-day uh cycle all right so just some final comments and
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observations here uh you know in in general uh simply that you know since we know that the 3-day cycle is is um you know from the 3-day from the cycle day 3 down to the one and back up all right
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the the overall statistics that um have been generated this is is very high odds that there's a positive 3-day cycle now what's a positive 3-day cycle all right now if you keep in mind that the majority of the large money players are
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effectively long only type players right the big mutual funds so there there's actually a skew right to uh on the bullish side of the equation all right so many times even in a uh a correction Market that's going you know a market that's pulling
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back many times the the cycle itself right uh still becomes positive now what basically constitutes a positive 3-day cycle all right simply that what we want to be doing is the core of it is on cycle day three or
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cycle day 2 all right we want to be above that cycle day one low all right that becomes the key marker right that's that secure low level that was formed all right so uh the Bulls want to keep it above that
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on cycle day two now there are times where on cycle day two the cycle day one low gets violated and they try to push it they proba try to push price lower many times uh the normal action would be uh the the
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Bulls buy that Supply up and they rally it back above the cycle day one low but the key of it is all right by cycle day three all right price needs to be above that cycle day one low at some point
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during the session now it doesn't need to achieve upside targets so this is where technically you know um because on cycle day 3 prices uh have historically been above cycle day one 84% of the time right there is a skew
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for the positive 3-day cycle now if we took the statistics and and say well how many of those positive Cycles actually reach the upside targets well that's going to be less I don't actually have those numbers handy but it's going to be
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less but that's not really the the point the point is there's a general bullish skew and there's a kind of a flow uh to the cycle itself now it's not perfect no cycle is uh Cycles can be um jolted by
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external events um but you know there's there's so like a beach ball you can push it underneath the water for so long and eventually it's going to come back up now the cycle tends to kind of write itself it's like a kayak you know you
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you flip a kayak over and you know it tends to you know roll itself back up anyways um I've experienced this uh three-day cycle when I was a market maker this is where I originally learn this all right um Jesus over I guess
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about at least 15 or 18 years years ago all right I really was introduced to this and uh it it Formed kind of a core of my understanding you know as a market maker and uh it it just allowed me to
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kind of see the market from a different perspective um many of the hedge funds and mutual funds uh use it not saying they all do uh but the ones that I've experienced over the years uh they've actually taught me that's where I learned it from
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was was from a few different uh uh money managers and you know this is something that that they do follow and I think they do follow it today even though we have the electronic markets the way we do today uh it's more of a strategy and
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um you know I don't I don't think regardless of how the markets are you know executed um techniques like this you know uh will uh we'll stand the test of time all right now again does this technique conflict with Elliot wave
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analysis or some other analysis out there no they're actually complimentary to one another right I've studied Elliott and and I know WB does a lot of that in our room he's excellent on it and again I continue to learn a lot of
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stuff you know from the folks in the room as well I don't think it it uh it takes away from from anything I think it enhances many times there are things what we call matches right a level that
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I have matches with you know uh other folks in the room so what what we'll generally do is we'll type I got a match on that okay all right uh the last part of this guys is we have what's called an ebook
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all right an electronic book now uh Taylor did What's called the book method it was uh you know he had a physical book and I think you can you you can find copies of it out there on the
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internet somewhere I don't think it's the original book but uh like e uh ebooks or scrib books those type of things you can probably find it out there um but he he took a you know a hand uh book and and you know wrote it
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in uh very difficult to decipher now I I never did uh I have a friend of mine that that did and um and I work with him and he basically has produced an ebook an electronic book he use a spreadsheet
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for him so um instead of just you know figuring out and trying to guess uh what my friend Rich is done is we he's created this ebook and it basically takes the Taylor method and uh and and puts puts it in a more
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concise uh Manner and here's a snapshot of it and I'll show you I'll show you a um live version of it today but what it basically does is you know it gives all the statistics of the range now he goes back there's
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there's two parts of this ebook uh he started it originally back in 2008 and he has raw data every single day and what you're doing is you're comparing cycle day one to cycle day one to cycle day one right it's not um consecutive
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days but rather consecutive cycle days cycle day two to cycle day two to cycle two and three to three and three and so forth all right and the data goes back to uh 2008 um the most recent we look at a
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20 period average of Cycles all right for the most recent data and and again it's almost similar to like an you know an exponential moving average where we're waiting everything to the most recent but the last 20 Cycles are the most uh let's
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just say accurate I would imagine you know Common to what's going on uh you know in the market uh currently so uh here's a snapshot of the uh e- minis for the S&P uh Nas Russell and DOW we also
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have spreadsheets for crude oil uh the metals okay in the energy sector uh natural gas Etc and uh this is provided uh on a subscription basis all right on a day-to-day basis so let me show you um today's
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cycle okay as we entered in to the session okay so everybody see the chart here everybody should see this uh profile type chart Market profile and volume profile chart okay so okay terrific so this is one of our charts
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that we use and and as I mentioned uh let's first and foremost like the scenario one that comes from our daily trade strategy so if price clears in vers 94s upside targets up to the 2300s 2310 that was the outline for today uh
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had the price broken down we had down side targets okay that did not play out many of you know we've been in this sideways chop pattern for seeming seemingly forever okay and um but we finally were anticipating some
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sort of a breakout we just didn't know what side the breakout all right so you can see over here I I labeled the previous cycle day one all right and then it goes into of course cycle day 2
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cycle day three now this has been an abnormal cycle simply because the prices have been in a tightly wound 10 to 12 handle range and the price has not been able to H nor hit the normal uh Rhythm
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of the cycle now again that happens um but when that does happen you know the markets are coiling up and we are expecting some sort of an explosive move all right um so what you'll see here from what's what's on our
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chart is uh a number of different levels okay over here on the right hand uh panel and you'll see the previous days high and low again those are always going to be key markers and then what these levels here represent on the right
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hand side where we'll say map and tttp which means that on cycle day one if the prior high is converted to support penetrated in converted to the support these were the normal cycle day penetration targets okay up above we also have
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targets to the downside as well should the cycle day uh the current low of the day I get violated so there's downside targets as well uh I'm focusing here today on the upside one since this is what happened uh in our in our markets
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today uh what we were looking for now let me just show you here yesterday if you recall and I'm sure everybody here does uh they tried to push the market lower didn't they on the opening failed this is that this is that um
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failure that I was talking about earlier when the markets fail to violate a low and stay there you get trap Traders you get some weak Longs that got blown out all right and then they reversed it back into the range yesterday all right
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so this is what happened yesterday so today coming in in the overnight the way this profile is it's a split profile uh on the tpos I the 30 minute lettering we see the overnight profile here with the volume of that overnight
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as well as the cast session with today's cast session volume so it allows us to view the markets in a split manner to see what happened in the overnight how it reacted where were the volume uh where was the distribution of volume
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what were they attempting to do in the overnight were they successful in their attempt okay so you can see here in in this example now on cycle day one we're expecting a couple things right the expectation would be for a normal
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decline on cycle day one but on cycle day three they attempted that decline early right and they failed so actually this low here on cycle day three all right was an alternate secure low that was an alternate secure low so
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with that the big money Players realized that they couldn't break the lows they meaning the you know the Bears and and the ones that are aggressively trying to sell they couldn't break the lows so now they have a window of
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opportunity since in the overnight last night there was no further selling that came into the marketplace very little volume of course but no further selling and they actually attempted a little bit of a a coup breakout in the overnight
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that seemingly uh early on looks like it failed but what they proved here we talk about probing a lot so the market probes to see how far they can move the market all right so this I think in in reading and
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we discussed it today this was an a probe okay to see how far they could push it in the overnight and then as you can see here as it retraced look at the high volume node there right so again we
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get into some of our uh profiling um knowledge okay and you can see here on the cach opening and a period they didn't break that volume uh point of control from the overnight session and then it was game on right
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during the opening range and then once they took out the high of the overnight and I think Danny was even mentioning that in the room that he was expecting a move up to the 2300s and Beyond which was a great
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read uh we were um we were in our trading room here matching as well saying if they take out that a period High and the overnight High uh you know this thing is gone all right and and it's exactly what they did but for those
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of you that were trading early this morning you could see that there was a battle going on at that 9596 huge cuz there was a it was a previous level that 95 was a previous level all right and so once they blasted
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through that and they got to the 96 78s it was gone all right and then so the targets that we had today already outlined where if the market cleared and converted at minimum the 94s and that's what it did on the opening we had upside
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potential right that would initially bring to the 2300s and here it is right up here at the 2300 so there was a a Zone be you know basically I chose that simply because of the it's a whole number but two um penetration zones
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right in there right between the 99s and 01s so just kind of split the difference remember this is not pinpoint accuracy but rather you know giving General zones and the zones are usually within a couple points of each other plus or
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minus U but we also said that if the market can you know uh hold that 90 that 2300 all right as new upper support all right we have potential today to go to you know the 10 all right so right here
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possible high for the day all right and again this is all given uh for us uh in advance all right in the morning and so our members and our subscribers uh can prepare so this is again we're not we don't make any
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predictions about what's going to happen what we want to do is be prepared of what may happen and then look at the actual data as it's unfolding making some assumptions some inferences about if this occurs and if this more likely happens what's the
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what's the expect expected outcome all right so we're trying to lay the probability of course uh you know on our side so we were looking at the 94s to convert and should they convert take out the ight high right and
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as they did in b period here we knew that the probabilities favored heavily to at least get up to the uh you know the low 2300s here so this is where we currently are session High here about what
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775 so as far as I'm concern anyways at this point um you know mission accomplished uh now it's it's just gravy at this point you can see the high volume note up here at the 04 halfs already so they're still pressing and
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there's no um the the Bears are just hung up you know by their collar um you can see up here yeah there you go the 23450 spot Perfect all right so that's a match all right that's a match of one of
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the things we had H how how accurate is that huh look at that high volume note and what WB has at 0 450s right spot on as he says so this is this is great stuff uh if there's any residual now
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buying you know into the uh uh you know into the rest of the day here okay you know we have n uh the next the average 3-day rally all right is 23911 there we are we got another match and then we got
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another match WB look at that at 2310 okay so you know now this is all independent analysis what I've done the software that we have now this is all available uh the software that we have via ninja Trader or Sierra chart uh and
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trade station uh if if anybody's interested in exploring this further um all this does the indicators here all these levels basically take the information from the spreadsheet okay and and places it uh right on uh the chart okay so it makes
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it a lot easier for us to to follow along what the next instead of you know looking at a spreadsheet like this okay and staring at numbers you know on a spreadsheet okay you know it takes these numbers uh off the spreadsheet and just
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simply places them on the chart makes it a lot easier for us you know to uh uh to to analyze the stuff all right so this is the uh 3-day cycle uh pretty much in a nutshell all right uh and again I think
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it's it's very complimentary to you know the work that uh others are doing uh you know in the membership all right and I love it when you know the the uh the cycle levels and targets U match up uh with uh
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say what WBS are doing and and and and others in the room um it it's just kind of you know since we're coming from different directions all right but much of the analysis is complimentary and and I think it's a uh a solid um way to
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approach it for me anyways the 3-day cycle uh over the years has offered me a an a more like a template of you know not what's going to happen but how I can prepare each day and it's really
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important that you as an individual Trader have some sense of what may happen based upon certain events occurring so again it's all about preparation rather than prediction and those out there and you know that that want the the next Guru to predict where
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the Market's going to close and how far it's going to go up and so forth um there's too many of those people out there that's not what you get here at at MTS it's not what you get from the
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contributors here all right at at Mr TOP Step what you're going to get is is meat and potatoes all right that stick to your ribs but you have to do the work you have to do some of the work you'll
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get the guidance but you have to do the work on your own and it's important that that you guys do that and uh and I think everybody here certainly um you know is uh wants to do the work
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and you know wants to learn this no matter whose you know method it is or strategies you know there some great ones in here um you know there's a lot to choose and pick from you know whatever resonates with you uh is
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probably you know uh where you want to kind of focus some of your attention so uh with the boot camp here again you know just kind of wrapping it up we're we're able to provide everybody with a uh a cross-section of strategies
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knowledge all right techniques that uh you know are used by professionals and people that have been around in the business for a long time uh not somebody that you know just went to the Barnes & Noble picked up a book
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and opened up a website and and calling themsel an educator all right uh there's a lot of that uh going around these days and and you know we want to make sure that we have quality uh you know and uh transparency
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of what we do and I think Danny and you know the folks over at missed the top step you know at all uh do a great job and I'm very honored to be part of this as a contributor and uh this is what I wanted
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to offer for you guys today hopefully it's been helpful uh if you guys want any additional information okay you guys can uh contact me either at uh Polaris Trading Group David poist trading group.com here and again this will be recorded and will uh
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be made available uh for all or you can visit us at the website that we have all right Polaris trading group.com very simple and if you are interested in taking a free trial coming in and learning more about the 3-day
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cycle uh or or any of the other you know uh offerings we have and things that we do um come on in and take take a look you know no obligation uh again we you know we have a a cross-section of of
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folks uh from uh various rooms cross-section with us and with other rooms uh simultaneously uh click on the free trial come in you know two weeks uh no obligation love to have you all right and see what uh you know what else uh
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can we can do for you all right in conjunction to what Danny's doing and everybody else in here at the MTS all right that concludes my uh present for today I want again thank you Dan Danny and uh the folks at MTS for giving
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me an opportunity to be a contributor and I want to thank everybody for your attention and hopefully it's been helpful for you today all right thanks everybody we uh we'll see you uh back in the room
Topics:3-day cycleTaylor trading techniqueprice actionsmart moneyday tradingPolaris Trading Groupmarket structuretrading educationGeorge Douglas Taylorswing highs and lows
