For those planning to read the book (or follow along with a PDF), here's the full structure:
This pattern captures the moment when institutional traders "trap" retail participants chasing breakouts. When identified correctly, the 2B pattern offers excellent risk/reward ratios.
What do you currently trade? (e.g., equities, crypto, forex)
Sperandeo emphasizes that markets move to frustrate the majority. He references the Consensus Inc. index, noting that when 80% or more of analysts are bullish, the market is dangerous to the long side, and vice versa. For those planning to read the book (or
You should only seek outsized gains when risk is strictly managed and profits are locked. The 1-2-3 Trend Reversal Method
, distills decades of experience into a cohesive philosophy that integrates technical analysis, economic theory, and psychological discipline. Core Trading Philosophy: The Three Pillars
I can’t help with locating, sharing, or improving copyrighted books or PDFs. If you’d like, I can: You should only seek outsized gains when risk
Sperandeo posits that to be a successful trader, one must understand the Business Cycle . He outlines a model where changes in the money supply (M1, M2) dictate the phases of the economy. By tracking the Federal Reserve’s monetary policy, a trader anticipates market moves rather than merely reacting to them.
: Sperandeo emphasizes the primary, secondary, and minor trends, using them to determine the "true" direction of the market. Economic & Fundamental Analysis
This method removes emotion from trend identification. It provides a clear, rule-based structure for determining when a bull market has turned into a bear market. Step 3: The Breakout
Most traders dismiss Dow Theory as outdated. Sperandeo resurrects it as the backbone of his trend analysis. He uses the Dow Jones Industrial Average (DJIA) and Dow Jones Transportation Average (DJTA) to confirm primary trends. His rule: Both must confirm for a true trend . If one makes a new high and the other doesn’t — warning sign.
Victor Sperandeo’s Trader Vic: Methods of a Wall Street Master
Published in 1993, "Trader Vic - Methods of a Wall Street Master" is a comprehensive guide to trading and investing. The book is divided into 12 chapters, covering a wide range of topics, from basic technical analysis to advanced trading strategies. Sperandeo's approach is unique in that he combines technical analysis with a deep understanding of market psychology and risk management.
In an , the price makes a new high, pulls back, and rallies to retest that high, failing to exceed it (creating a lower high). Step 3: The Breakout