In Unlocking Wealth (278 pages), John Crane, a veteran trader and co-founder of Traders Network, discusses his work with the Action/Reaction trading theory, and illustrates a whole new way of using time, price, and patterns to predict, identify, and trade future market swings. Chapter by informative chapter, you will be introduced to the concepts that encompass this proven method, including: Market Behavior, Reaction swings, Swing trading reaction swings, The Reaction cycle, Action and reaction lines, Entering and exiting trades, Reversal dates, Long-term versus short-term trends, And much more!

I have spent a full year with your books on the Action/reaction cycles and have benefited greatly from the methods. They are by far the best books I have in my library. I thank you for the excellent, easy to understand chapters and clear descriptions of your theory! Whatever has happened will happen again; How true in life and in trading! -David M.

I have received your book today via Amazon.com and have not put it down, possibly the best book I have reviewed since Street Smarts. This is just what I have been looking for. I only trade currencies now and have done so for the last 3 years, although I have been a trader for the last eight. I look forward to receiving your information. -Myles S.

Did not think I would be interested in it earlier on, since I did not consider myself a swing trader because I am a day trader, and did not hold overnight, but after reading the article, I realized immediately your wonderful technique is so simple and is readily and easily applicable on any timeframe and in any market". Now with your technique I did not need to guess much anymore, and to a certain extent I do not even need to think of the pricing play out any longer as a foldback or not, if I did not want to. I just need to identify the reaction swing and/or center of the cycle for the trend that is developing and then, as you have taught, just do the count backs and forward and apply the reaction lines (and Gann fans and/or fib retrace buy sell windows as you call them)". Your simple technique, however, has brought things together for me in a big way, and has allowed me to get my arms around market behavior, and without all the clutter of other technical analysis tools which have only added hesitation and indecision, rather than clarity and confidence to my trading so far". So this is just a long email to thank you again. And, I look forward to learning more from you by association if possible. I really think you are right up there with Gann, if I might say so!

You da Man, just like Gann! John G.

BOOK REVIEWS

Promises much, and delivers!

This book explains, in great detail, how to use market symmetry to forecast time and price objectives on market swings. The author bases his time calculations upon measurements beginning at the formation of a reaction swing, and shows how the results of these calculations can be projected forward in time to indicate the likely extent of the ensuing price swing. While the author’s previous book tended to be somewhat inconsistent in its calculations, the methodology in this book is both consistent and precise. I had no difficulty in following the presentation of the material or in confirming the counts on the accompanying charts.

The author derives price targets by employment of an Andrews Pitchfork drawn in a specified manner. While these price projections are not quite as accurate as the time projections, the variance of actual to forecast price indicates much about the underlying strength of the immediate price trend. Both time and price calculations are very useful and are reasonably accurate. I have now incorporated this material into my trading routine.

The book offers a really complete course on trading. It describes trend reversal and continuation constructs (in multiple timeframes), how to use them for optimal entry, the need for a protective stop, how/when/where to exit and what to do if larger market forces override current projections. It also describes a method of trading with options, a covered write based upon the concept of delta, which is profitable if the underlying issue moves a minimum distance in either direction in an active market.

This book is unique. I am not aware of any other work which describes how to use time and price in an overall trading system as practically and precisely as is presented. The methods offered can be used as the basis of a stand-alone trading system, or as additional working tools for one’s own system. This material has added a new dimension to how I view the trading markets.

-Steven P.


Must reading for all traders regardless of trading strategy

I have lost count of the number of trading books I have read since the mid 70s. The first book was the late JM Hurst’s classic, The Profit Magic of Stock Transaction Timing. John Crane’s Unlocking Wealth; now sits in my trading library alongside the truly great trading books ever published. It is the only book I have ever read that makes it practical to use market structure alone to forecast both price and time. I am not saying that other books don’t address price and time (Gann, Elliott, others). I simply have not found other approaches to be practical to use. Crane’s approach is both practical and effective.

I read this book in search of methodologies to filter trades for the system I was using. The method is so powerful that I have now made Crane’s approach my main strategy and use a different methodology as a prefilter.

The book clearly describes two basic market structures (Trend Reversal and Trend Continuation). The appearance of these commonly found patterns usually reveals the true nature of the market and future price at a point in time. Crane’s methodology does not rely on optimization techniques, lagging indicators, general fundamental information, astrological events, or complex equations. It is pure market structure in a practical manner. Simple and elegant. The methodology gives you the ability to listen to what the market is saying about itself based on its own structure.

The core market structures explained in the book are nearly identical to patterns I have used successfully for years. The book taught me more about the nature of these patterns and how to trade the patterns better. One of the most valuable things for me was Crane’s methodology for managing trades that are in progress. Cutting losses early and letting profits run is easier said than done; until you read this book.

The methodology can be used with other trading strategies. I am combining Crane’s methods with Hurst’s cycle methods to increase the probability of trading in the current direction. Either way, I find merit in using Crane’s approach as a stand alone system. You can use it without a computer–you don’t have to buy expensive software to implement it and there is little ambiguous about how it is used. It is now difficult for me to look at a chart without looking at it through Crane’s eyes. The book may take a few days to read because it includes more trading examples than was probably necessary but this can help to internalize the method.

This book gives me the edge I have sought for years. I can not imagine trying to manage a trade in the future without the precise knowledge of when and where price is likely to go and reverse.

If you are looking for a trading approach that is practical and effective, or just looking to enhance a system that is already effective, I suggest you read this book.

-Andre F.


Trading Book Review: Unlocking Wealth: Secret to Market Timing by John Crane

Just in case anyone missed it, I posted a long article on Friday. The article has 10 charts, including the latest Commitment of Traders results, that illustrate my current Emini medium term forecast.

This weekend I would like to do something different and review the latest book by John Crane Unlocking Wealth: Secret to Market Timing. This is the follow up to John Crane’s first book, Advanced Swing Trading. I thought the first book was great but this one is even better. Unlike other traders come authors, John Crane does not switch tack with this book and discuss some new and different ways of analyzing the market. No, he sticks to his original theories, expands on the methodology and does a much better job of explaining and illustrating it. The only thing I did not like was the title–too get rich quick for me.

John Crane’s market timing approach is one of the most elegant futures trading methodologies I have seen. It focuses on market structure and using impulse and reaction swings to identify entry and exit points. The chart above illustrates a basic component of the methodology. The Reaction Swing (C D) is a counter trend move that is used to confirm the new down trend and then identify a low risk entry point. Not revolutionary, but then John Crane uses the count back to swing point A to forecast the turning point E. Now that is new!

So the Reaction Swing gives you a trend continuation entry point. The count back gives you a projected exit time. John Crane then goes on to show how the exit can be further refined with price projections. Lastly, a methodology for identifying and entering at trend reversal is discussed. This last part was missing in the original book “Advanced Swing Trading and now with this, the methodology is complete.

The book is packed full of swing and day trading examples from both the futures and stock markets and the accuracy of this timing technique is uncanny. His website has a video that further illustrates the methodology.

As I read the book, I could not help think that the rules could be programmed in TradeStation EasyLanguage or any other charting platform. However, instead of creating charting software, John Crane has decided to provide a web-based, end-of-day signal service (Reversal Tracker) for the futures, equities and FX markets. Open trades are accompanied by an annotated chart to explain the setup.

The Reversal Tracker results appear solid with a steadily rising equity curve and profit factor of 1.69 for all futures markets over the last 18 months. The system is designed to catch large trend moves and, therefore, needs to be traded with a basket of futures. Percent profitable is 46% and average winner to loser is 1.97 times. You can check out the details here.

Good luck next week with your Emini trading.

-Barry T.