The document outlines Daryl Guppy's 6 step process for developing rules-based trading strategies. 1. Analyze the market to understand if you are a pirate looking for opportunities or a miner focused on fundamentals. 2. Conduct strategic analysis using two independent confirmation tools like head and shoulders patterns and RSI divergence. 3. Design a deep pool of potential trades using 10+ technical indicators and filters. 4. Apply additional filters like GMMA and countback lines to independently verify signals and avoid false signals. 5. Manage trades using indicator exits, targets or time frames. 6. Employ leverage carefully through derivative pricing or small position sizing to survive using rules-

1. www.guppytraders.com
Author of Share Trading, Trend
Trading, The 36 Strategies of the
Chinese for Financial Traders,
Guppy Trading,
TURNING STRATEGY INTO TACTICAL
RULES FOR BETTER TRADES
Daryl Guppy

2. YOU CANT MAKE
RULES IF YOU
DON’T KNOW THE
GAME
1. The game
2. Strategic analysis
3. Trade pool creation
4. Pool filters to find best trade
5. Trade management
6. Execution choices

3. 1
THE GAME

4. Are you a gold miner
or a pirate?

5. Warren Buffer
Market
fundamentals

6. 10

7. THE BATTLE FIELD
1.ETF
2.ALGO

9. ETF

10. MARKET DIFFERENCES- ALGO

11. 2
STRATEGIC
ANALYSIS

12. HEAD AND
SHOULDERS
ABOVE THE REST

13. RSI

14. RSI DIVERGENCE
Strongest Weakest

15. 3
POOL DESIGN

16. We need a deep pool of money
20

17. 2 6 4 3

18. DIY
• 10 30 period MA crossover
• Bollinger band compression
• Specific mathematical conditions
• RSI Divergence
• Stochastic cross
• New 5 day highs
• Price and volume
• NO VOLUME, NO TRADE

19. USE SPECIFIC RELATIONSHIPS
TO SET TARGETS
5 day average range
(Note this is not ATR)
(eg100;110;95;90;105)/5= 100 five
day average range of price
85% probability of
reaching 75% of the 5
day average range
value
ADR

20. 4
POOL FILTERS

22. GMMA BASICS 1
OBJECTIVE: GET
THE ENTRY
SIGNAL AS NEAR
TO PIVOT
POINT LOW
(PPL)
AS POSSIBLE
AND AVOID
FALSE SIGNALS
3,5,8,10,12, 15
EMA

23. GMMA BASICS 2
OBJECTIVE: GET
THE ENTRY
SIGNAL AS NEAR
TO PPL
AS POSSIBLE AND
AVOID
FALSE SIGNALS
30,35,40,45,50, 60
EMA

24. GMMA SOLUTION
OBJECTIVE: GET
THE ENTRY
SIGNAL AS NEAR
TO PPL
AS POSSIBLE AND
AVOID
FALSE SIGNALS
Entry window near to
PPL

25. COUNTBACK LINE
Self adjusting volatility-based stop

26. COUNTBACK LINE

27. 5
TRADE
MANAGEMENT

28. INDICATOR EXIT
HOPE
CONFIDENCE
CERTAINTY
Scaling in application

29. TARGET OR TIME
GBP/AUD
Daily
500 pips
Time based
trend trade
GBP/CAD
Target trade
2 minute chart
60 pips = 75% of 5 day
Average Range

30. 6
EXECUTION

31. 5%
B
C
Price leverage
140%
Instrument leverage

32. 1 Pirate opportunities
2 Strategic analysis – 2
independent confirmation
tools
3 Deep pools
4 Independent verification
– GMMA, CBL
5 Trade exit – indicator
conditions; target or time
6 Execution uses
derivative or price leverage
RULES BASED
SURVIVAL

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