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First this week, a WARNING, courtesy of my 'Computer Guru'. He has just finished upgrading my anti- v*rus software after I had received a couple of recent (failed) attacks, and he wants me to pass on the message that everyone should understand the necessity of running their anti v*rus programme at least once a week- merely having one installed is not enough- it has to be regularly updated, followed by a full scan of ALL your files. This procedure does not just happen automatically, but has to be scheduled by you.

He also tells me that 'free' software is not really adequate nowadays, in his opinion.

His advice is; 1) Buy and install a decent programme- his preference is Norton Symantec but he is also happy with McAfee. 2) Check at least once a week for updates and download them.
3) Run a full scan every weekend of every file in your computer. (Mine takes about an hour- offline- and I have it scheduled for coffee time on a Saturday- so when you get WICS, you can be assured there is nothing hiding in it other than my ramblings.)
I am passing this on not only to help ME, believe me! If YOUR computer has a v*rus, you are passing it on unwittingly, and I am 100% certain you wouldn't wish to be doing so. And your PC may be running a lot slower than it needs to- not to mention who might be looking for your banking password. (If you are wondering why I am not spelling correctly the relevant words, it is because my Techie friend tells me that those of you who use the likes of Hotmail, may have the message blocked at the server end, as part of their own anti v*rus protection.)

If you have been trying to email me and have had no response, it could well be because my software has deleted your message before I could open it, almost certainly due to something potentially damaging contained inadvertently within it.

I pass this information on, purely as an ignorant computer user myself.

Moving on, my second 'warning' is just to reiterate what I have said in the WICS Archive supplement on the website, concerning the potential 'information overload' that is contained in my WICS charts. Your trading experience ranges from 'total beginner, to 'fairly hard bitten but willing to listen' and clearly I wish to do my best to help all levels.
Therefore, I need to make a very strong point about this. If you are a beginner, for now stick to the manual and base your Mentoring questions on that. The rest will come to make sense as you go through that process, but be assured, the TTEW manual on its own, encapsulates everything you need to trade profitably.
The WICS charts simply expand upon the basics, and are intended to provide even deeper insight into how markets work via price movement over time.
In my experience, 'pennies start dropping' at different stages, for different people, and the WICS charts are always uploaded to the website so that they can be revisited at any time.
Therefore, there is no rush to try to understand everything all at once, and by now I am sure you know you can email me for help when you need it.

Continuing with 'bits and pieces', a note about 'Investment Companies' and 'Investment Trusts' within Sharescope: often, their charts and/or Director Dealings look interesting, but equally often when you look at the volume it is tiny and therefore spread costs will be very wide due to overall lack of liquidity. This can pretty much cause a potential profit to be wiped out by the spread. There are loads of good prospective trades within the mainstream 'Shares' list on its own, so click on that icon rather than the 'All' one when you are doing your research.

One final thing before I talk about today's WICS charts: a bit of 'psychology'. it is to do with the fact that one's brain seems to be 'wired' such that it skews information to favour what you WANT to hear. Whatever the topic, if you have any kind of opinion about it, you will (and so will I) give more weight to that which reinforces your existing view, and to a degree will deny that which favours an opposing position. It's just the way we operate, but it is dangerous when you are in a trade, because it means you become 'pleased' when it is going your way, and 'disappointed' when it does not.
I am not going to expand further for now, but I simply point it out as a very important reason why you MUST manage trades using some kind of fairly rigid stop loss formula, because not to do so, eventually will wipe you out. This is not a forgiving arena, and Mr Market cares not a jot if you end up starving in a hovel somewhere, any more than he cares if you become a multimillionaire.

OK- moving on to the attached charts. 'Triangle' formations (also called 'compression areas' or 'springs') often provide us with a bit of early warning of what might happen next. They are caused by a compressing of people's beliefs, in the sense that each up and down 'swing' gets shorter than the preceding one, as participants try to anticipate what is going to happen next, and pre-empt it. For example, if a price gets to 200, say, and drops back to 100, often the next time it reapproaches 200, some traders will say "The last time it hit 200, it fell to 100. If I sell it at 200, it will drop again and give me a profit." (A valid trading methodology, by the way- just not MY preference, but I have never claimed TTEW is the ONLY way to trade.)
The price reaches, say, 185, and 'hovers'. The trader then says "Gosh- maybe it won't reach 200 this time. I'll just sell it now." If enough people do this (and enough 'investors' get disappointed and also sell), the price will drop.
Then, as it drops towards the previous 100, it hesitates at say 112 (doesn't matter why) and Joe Trader who had sold at 185, says "Hmm, maybe I won't get a 'buy back' at 100. Best grab my profit by buying it back now." Some 'investors' also think it won't go lower, so they decide to buy and up it goes again.
This time, Joe Trader again 'anticipates' and this time, he sells at say 169, and buys back at say 121.
So it goes on, and over time, the triangle forms. Fewer and fewer people participate because more and more are beginning to wonder just where the share price is eventually going to go so they get out of the water and sit on the bank for a bit, watching the ebb and flow. That's why overall volume (usually but not always), falls away.
As the triangle (the 'spring') compresses, the more pent up interest there is from those waiting to see what will be the outcome.
Therefore, when eventually the 'spring' decompresses and releases its energy, there is usually a sharp move in one or other direction.

We can benefit from this by anticipating the move, as follows:
1) A triangle is USUALLY (note the 'usually') a continuation pattern. In other words, it usually ends with a break in the same direction as any prior trend. Therefore, if we have identified an uptrend, say, in which a triangle starts to form, we can perhaps find a valid entry at a better price than we might otherwise wait for.
2) The entry point is conventionally just above the last significant 'touch' (there or thereabouts) of the upper line, for a 'buy' and just below the last significant 'touch' of the lower line for a 'sell'.
3) Usually (again note well the word!) the 'spring is sprung' about two thirds of the way along the triangle- ie about two thirds of the way to the apex. If when you look, the price is still only halfway there, say, you can begin to anticipate where you might want to place an order.
4) Despite my point in 1) above, triangles do not ALWAYS form continuation patterns. Therefore, it can be a good idea to place BOTH a 'buy' AND a 'sell' order once the triangle has formed enough to let you see viable places to do so.
When one order is filled, the other automatically becomes your stop loss order, so you must remember NOT to place another one! You must of course also MOVE the stop loss as soon as you can, to its normal dma management position.

What do I use triangles for within my methodology? Essentially, I use them to try to identify valid entry points, using a bit more anticipation than is possible only with DMAs.
As I have touched on above, they can point me towards an earlier entry, at a better price, than I would otherwise consider. They are an extra 'Accessory', therefore, but one to be used with some caution, especially until you have followed a few for yourself, and in the greater scheme of things they are simply an added 'tweak' to TTEW.

Finally, for those of you 'advanced' enough to already know such things, this has been an introduction only, and there will be more to come on triangles in due course.

And finally..finally, for today- if I were to tell you that both the Financial Director and the Chief Executive of a company (that back in the Spring was the subject of potential bid activity), had in the last couple of weeks each bought rather a lot of its shares, would you want to have a look at the chart? I don't know if I need to name it, because if you are using the TTEW methodology, you should already know....Oh, all right then, it's your favourite High Street newsagent.

'IMPORTANT NOTICE: These WICS charts are for EDUCATIONAL PURPOSES ONLY. They represent only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should they be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.