SWING: Trifecta Counter-Trend

Welcome back friends. Lets talk about counter-trend Trifecta trading. It is the original and it is the best.
Its the original form of Trifecta trading and it just is the best one. Theres nothing like it. It is super
consistent, and it really is the only trade you need.
The original Trifecta counter-trend trade was swing trading, trades that last between one day and
maybe a week at most. We used to plan these from the 15-minute chart, but were now planning these
from the 60-minute timeframe chart, and were going to trade to daily pivots. And actually were
probably going to trade halfway to those daily pivots. Well focus on daily pivots in Trifecta 3 for swing
trading, but you can use weekly pivots. They are just as righteous. They are just as awesome, and you
can do as much trading with those weekly pivots as you want as well, and all of the principles remain the
same.
All right, let me just give you an example of what a Trifecta trade is. The first thing that we do when
were going to take a Trifecta trade is we look for a missed pivot. So, swing trading Trifecta is all about
missed pivots. This is the Australian Dollar/New Zealand Dollar 60-minute chart. And youll notice as the
Australian Dollar/ New Zealand Dollar was falling it missed this pivot. Thats number one. Thats the first
thing we want to focus on. Its the most important element of a Trifecta swing trade.
As it falls, youll notice that the currency pair is printing gargantuan gobs of bullish Knoxville divergence
underneath price, all giving us an idea that this currency pair wants to move up back to that daily pivot.
Now of course, it moves way down here. And there are a variety of things that I want to talk about, but
its all very, very simple.
Element number one is the existence of a missed pivot. Element number two is the existence of bullish
divergence. Element number three is either a trend line across the tops of the candles, or the existence
of a bullish reversal tab. If you have a bullish reversal tab, that is, in most cases, an automatic entry up
toward that missed daily pivot. But at the very beginning of this trade we didnt have a bullish reversal
tab; all we had was a trend line. Now we had to wait until the day was over before we could draw our
trend line on the tops of those candles. And once that day is over, we can draw a trend line across the
tops of those candles, and wait for a break of that trend line. Well that break of that trend line doesnt
happen until around the same time that we get a bullish reversal tab. And thats a buy trade.
So, lets talk about stop losses and profit targets. A stop loss on the trade could go below the lows, if you
are stopping out very quickly on a trade and you do not want to hold open a losing trade. Thats called
quick stop trading. On a longer term trade, well not necessarily a longer term trade, but if you dont
want to use a stop loss, you can simply remove the stop loss completely, and you can trade your way
out of trouble using the rollover method, which well discuss later on in this course. Then we buy the
currency pair and we wait.

Now the ideal profit target is halfway the difference between the entry price, which is the break above
this trend line, and the missed daily pivot. It just so happens that that ideal profit target comes at or
around the weekly pivot. You can see it right here on the chart. And price very easily gets all the way
there. And thats your profit target.
If youd like to add to the trade as it moves in your favor, you might just stagger additional orders
equally distanced on the way up to that halfway point to the profit target. Originally, and really
traditionally, you can get all the way to this missed pivot. And the market does go all the way to that
missed pivot. Youll see that the market just jumps upward here. And the Australian Dollar and New
Zealand Dollar doesnt have a lot of trouble getting up there.
We want to win as often as possible, and so were not going to worry about taking the full profit. Now
something interesting is going on as this trade emerges. As this trade is moving up, you will notice that
what happens is we miss a daily pivot. This daily pivot is missed as price goes up, and that starts the
process all over again. Were going to complete our trade up to the profit target, knowing in the back of
our mind that the movement up is creating an eventual trade that comes back down.
And so Trifecta trades really are moving up, and then moving down, and moving up, and moving down,
and moving up and moving down. Just kind of like the oceans of the sea, the waves of the sea. Thats
why I put waves in the ocean on the front page of the Trifecta course at the very beginning. We go
down, and then we go up, and then we come back down.
If we move forward in time we can plan and watch this whole thing emerge step-by-step. Number one,
we have a missed pivot. Number two, we have bearish divergence. And youll see here we keep printing
bearish divergence. And now, as soon as we finish printing bearish divergence we can draw a trend line
underneath the candles. Weve already missed the pivot, and we can draw a really steep trend line here.
So theres a super steep trend line. So we have number one, a missed pivot. Number two we have
bearish divergence. And then number three, we have a trend line break.
Well there you have it; those are all the elements of a Trifecta trade. Were going to sell on the break of
that trend line. What are we going to target? Halfway the distance to that original missed pivot. Now if
you want a super high probability profit target, take profit at that very nearest pivot thats right in front
of you at the time you take the trade. Thats a super high probability order. I prefer going one-half the
distance to the missed pivot down here.
Now, as you can see, the trade will open, and price will begin to move lower, but doesnt do it. In fact, it
moves even higher. Now probably almost goes above the highs, and if you had a stop loss on this trade,
your stop loss would be hit. Otherwise, it prints another divergence line up here, and as soon as it does
that Im going to draw a trend line underneath those candles. And guess what Im going to do, Im going
to take another trade on a break of that trend line. And then we get a reversal tab, so not only do we
have a break of the trend line lower, we have a bearish reversal tab. And now we are really in this to win
this. We are definitely excited about this trade.

And as youll see here, price drops slowly but surely over the course of the next few days, down toward
this weekly pivot. And were still going halfway the distance to the original missed pivot that we saw a
while back. I guess I need to draw a horizontal line across so we know where were going for. And as
youll see here, well miss a pivot as we fall, no big deal, doesnt create a trade until we have divergence.
And boom, we strike that level and were out of that trade with a profit.
Now, there are a variety of questions that emerge when looking at a set of trades like this. For instance,
why didnt we stop out? Well there are two methods of stopping out, once again. One is the quick stop
method that is jumping out of a trade immediately when a price moves beyond a high or low. And then
the other method is just to keep the trade open, and then take additional breaks of trend lines after
additional printings of divergence. And in that manner you dont take a loss very often and you dont
really worry about the trade. Now, were going to get deeper into that in the rollover method, but
youve got the basics down already.
I want to show you what Ive been doing recently on a trade I took on this same exact currency pair. Its
a nice currency pair to trade. It can drive me a little crazy sometimes, but it can be a really nice currency
pair. I originally took a sell trade on the Australian Dollar/New Zealand Dollar at 1.0875. We had a
missed pivot here. We had bearish divergence here. And then I had a trend line drawn, a very steep
trend line drawn, across these candles, and I sold it right on the break of that trend line. I actually sold it
early. I sold it even before the break of the trend line. I anticipated the break, and I got myself into
trouble. An economic report was released and the Australian Dollar/New Zealand Dollar popped
upward.
Then I decided if it printed more divergence I would go back into this trade again. And I have my settings
on divergence a little bit screwy right now, but you will see that it did print divergence again on the
standard Knoxville divergence settings. So it prints another bearish divergence, and then it broke a trend
line. And I sold it again at 1.1018. Then I said I would sell it again if it broke another trend line even
lower at 0975. If you dont feel comfortable drawing trend lines just wait for the reversal tab. That will
do it. That will be plenty.
Now wheres our profit target. Well our original missed pivot is down here in the 0819 area. So what I
decided to do was move the profit target to halfway the distance from this final entry to that pivot level.
And that comes out at about, at this point now, 0900 or so. And that would be the target. And thats
looking pretty good finally. Its finally looking pretty good. You can see here, I mean, I would trade this
live. I trade all these live.
You guys already know this stuff, but lets just take a look at it. I got a lot of trades open right now. As of
the time Im doing this video, I have a ton of trades open. Heres the MetaTrader chart, and those are all
my trades that are open. And Ive got Australian Dollar trade number one, 0873, thats down 2000
Dollars, 1.1018 thats up 522 Dollars, and then at 1.1003 thats up 1,181 Dollars. And that will eventually
reach its profit target, and I will eventually have some delicious profit on this trade, and its been a
reasonably awesome ride so far, and no big deal. And Im looking forward to it. So that is a Trifecta trade

in a nutshell. Now that would work for stocks. That would work for forex. That would work for futures. It
doesnt really matter what financial instrument that youre looking at.
Once again, youre going to look for a missed pivot. Then youre going to look for divergence. Then
youre going to draw a trend line, or use a reversal tab, and then take a trade. After you take the trade
youre going to place a stop. If youre going to do a quick stop, its right below the lows or right above
the highs. If youre going to do the rollover trade method then you dont have a stop loss, well, you have
one, but were going to trade our way out of trouble as I will describe in the rollover trade method. And
then after the trade is open and you have a profit target set, you go and do something else. All right, so
remember, one Trifecta trade leads to another Trifecta trade, and thats basically how this swing trading
system works.
Why dont we take a look at the stock market and Ill give you some ideas of some things that you can
do. All right, so heres an example of Microsoft. Now Microsoft back in May of 2014 was dropping quite
nicely. And as it was dropping it was missing daily pivots. It missed a daily pivot here. It missed a daily
pivot up here. And it missed a daily pivot right here. This is pretty crazy, right? I mean its missing all
these daily pivots, and so obviously we want to buy this currency pair and let it jump upward.
Now if its missing multiple currency pairs, which one of them are we going to choose for our profit
target? Ill give you a simple rule of thumb that you can use to make as much money as possible. The
nearer the pivot that you choose, the higher your win percentage will be. So the highest probability
trade is going to be the nearest missed daily pivot. And it easily hits that missed daily pivot. The second
best target that you can choose for a win percentage is the next nearest missed daily pivot. Thats pretty
awesome. The next best target that you can always use is a weekly pivot that has not yet been hit. And
last of all, the furthest daily pivot is your target of last resort.
I would recommend that the best profit target that you can take is the nearest missed pivot. Its the
lowest amount of profit, but its the highest win percentage, and I think youre going to be happy if you
take that, you get out with that money. I think youre going to be happy with that. I want to encourage
you to start grabbing some of that money. Take some of your profit off the table, and then let the rest of
that trade run. That can be a very effective way to take these trades.
As usual, as is the case, a move upward like this to complete this bullish trade is going to lead to a
bearish trade back down to these pivots. And I want to encourage you, dont worry if while you are in a
trade you start to see missed pivots on the other side of the move. If its not a full Trifecta trade in the
opposite direction, you dont have to worry about it.
All right, now that Ive explained all that, lets remove everything off the chart here and let me tell you
about this trade, specifically. So Microsoft was moving down, it missed a pivot. Thats number one.
Number two, Microsoft prints a bullish Knoxville divergence. Thats an early warning sign that were
ready to go back up. Then we grab our trend line tool and we draw it across the tops of our candles.
Now, we dont draw the trend line until after the divergence has printed. We dont draw the trend line
until after that pivot is missed, so all those conditions are met. Then we buy it on a break of that trend

line, and we can target for the highest probability trade, the nearest missed pivot. Or we can target
halfway the distance to this furthest missed pivot, all the way up here. As it moves up its going to
produce and give us daily pivots below price and a divergence line. And you can see we got all kinds of
divergence printing as we go up.
The first divergence line finishes itself right up here. At the point where it finishes were going to draw a
trend line underneath price. Lets draw a steep, thats a really steep trend line. Thats crazy. But lets
draw a trend line underneath price like that. Lets circle these candles that break that trend line, and
lets sell it.
There are two ideal places to take profit here. Number one is the nearest missed daily pivot. Number
two would be halfway the distance to this furthest missed pivot. Well, number three would be the
weekly pivot for that week. Number four, last of all, final idea, would be the original missed pivot, all the
way down here. You could target halfway the distance to that level. So we sell Microsoft short, or we
buy a put, or we buy a put spread, and then we take the trade, or whatever we do. You can see here
that one trade just simply leads into another.
All right, so lets talk about some of my favorite financial instruments for these counter-trend Trifecta
trades. All right, my favorite currencies for Trifecta swing trading are the British Pound anything, British
Pound/ U.S. Dollar, British Pound/Swiss Franc, British Pound/Australian Dollar, British Pound/U.S. Dollar,
British Pound/anything. My second favorite is the Australian Dollar against anything. Australian
Dollar/Canadian Dollar, Australian Dollar/Swiss Franc, Australian Dollar/U.S. Dollar and so forth.
Anything would be fine.
My favorite stocks for Trifecta swing trading include any internet stock, Twitter, Facebook, Amazon,
Groupon, Gogo, its doesnt matter what it is, there are a lot of them out there now, and I like them all. I
like them a ton. So take a look at those.
Then what you would do next from this point on is open up your favorite chart and go back in time and
trade it visually. Go back in time and say, OK, I see the missed pivot here. Im going to move forward a
little bit in time, and Im going to see when divergence appears. Now I see divergence, now Im going to
start drawing a trend line, or now Im going to start waiting for a reversal tab. And then the reversal tab
or that trend line break occurs, take the trade, move the chart forward, and then say, Oh, wow, look at
that. That was a winner. Or say, Oh my goodness, that was a loser.
If you get a lot of them that are losers then youre looking at a financial instrument, in particular a stock
that isnt really Trifecta friendly. Now, 90% of all stocks are going to be Trifecta friendly, even low
volatility stocks, even penny stocks. Most stocks are going to be Trifecta friendly, but youre going to
want to do your own research, and make sure that before you take any trades that you go back in time
and you look at that financial instrument thats your favorite, and visually walk through some trades and
make sure its operating in a way that you feel super comfortable with.