Chapter 16
Summary of Vibratrading
Markets move up, markets move down. That is their nature. No matter which underlying forces drive these fluctuations, traders and investors will always be confronted with the challenge of balancing reward and risk. But the vibratrader need only be concerned with the challenge of balancing reward and opportunity.
The Two Rules of Vibratrading
In a nutshell, vibratrading only works if:
1. There is virtually no possibility that the traded instrument or market can test ZTL.
2. There is sufficient, disposable, and timely capital for the implementation of the vibrational constructs.
The first point is of immense importance. We only trade equity ETFs and commodity-based CFDs. Single stocks are avoided as there is no mechanism preventing a single stock plummeting to zero test level and winding up (unless we replicate an ETF or use the oscillatory propagation technique).
If the two basic conditions above are fulfilled, the vibratrader will be able to extract vibrational returns from the market indefinitely. All constructs below the pyramidal apex will not require more working capital than originally planned. Entering long positions at successively higher price levels above the apex will eventually entail new capital once upside trend capture constructs like free swing or free styling have used up all the initial capital allocated for this purpose. In some cases, a self-financing situation may develop within the construct, thereby allowing the vibratrader ...
