Presents

Pristine.
com Presents
Core Trading for a Living

With
Oliver L. Velez
Founder of Pristine.com, and Author of the best selling book,

Tools and Tactics for the Master Day Trader
Copyright 2002, Pristine Capital Holdings, Inc.

Table of Contents
Introduction The Key Events

The Major Time Shift 3 to 5 Bar Set-ups
The Major Analytical Shift Tail Set-ups
Fundamental vs. Technical
COG™ Set-ups
Foundation The Strategies
Four Styles of Trading
Mighty MA Play
Core Trading Defined
Core Trading vs. Investing Pristine Buy/Sell Zone™
Macro Core vs. Micro Core CBS™ & CSS™ Plays
The Never-ending Battle Putting It All Together
Tools of the Core Trade
Introduction
Introduction
The Major Time Shift
Fact # 1 Fact # 2
20 years ago, the Today, the
typical investor typical investor
looked to hold a looks to hold a
stock position for stock position for
4 ½ years, on 4 ½ months.
average.
Pristine Theories
Theory # 1 Theory # 2
We believe, the Long-term
investor’s average Investing,
holding period for commonly referred
any stock will drop to as the “buy-and-
to 4 ½ weeks…. hold” approach, is
becoming less
inside of 2 years!! effective each year!
The Dynamics of Change
What has led to this dramatic change?

I) 25 Year Decline in Commission Rates
II) Worldwide Collapse in Interest Rates
III) Phenomenal Technological Advancements
IV) New Order Handling Rules
V) The Advent of the Internet
VI) A More Sophisticated Public

Fundamental vs. Technical
Fact # 1 Fact # 2
20 years ago, “Today, the
fundamental ‘purely’
analysis was fundamental
considered the analyst is
only proper way virtually extinct.”
to make market – Mark Douglas, author of
The Disciplined Trader and Trading In
decisions The Zone
The Dynamics of the Analytical Shift
What has led to this dramatic shift?

I) Money!
II) Markets are not mathematically logical and/or rational
III) The hopes and fears of people move stocks
IV) Under extreme stress and glee, people react the same way.
V) Charts are the foot prints of these actions and reactions
VI) In other words: Charts Don’t Lie!

The Building Blocks
Foundation
Four Styles of Trading
Types of Trading
Four Styles of Trading: Core; Swing; Guerilla; Micro
Which fall into….
Two Broad Trading Categories: Wealth; Income

Two Broad Trading Categories
Wealth Trading Styles Income Trading Styles

Core Trading Guerilla Trading™
- Weekly Charts - 60 Min & 30 Min
- Weeks to Months - Hours to Days
Swing Trading Micro Trading

- Daily Charts - 5 Min & 15-Min
- Days to Weeks - Minutes to Hours

The Pristine Philosophy
Pristine Tip:
The Pristine Trading Philosophy calls for a

trader to have 1) a Wealth Building trade and
2) an Income Producing trade on….
At All Times!
Core Trading Defined
What is Core Trading?

1) A style of market play that typically covers a holding period of
several weeks to several months.
months
2) There are two forms of Core Trading: Macro; Micro
3) This style of trading has become the new form of investing.
investing
4) The Core Trader uses weekly charts to make entries and exits.
5) Core Trading is best used on key stocks and indices.

indices
6) Core Trading is the key to capturing substantially bigger gains
than the swing and/or day trader is accustomed to.
7) Core Trading is style of trading that can be practiced by ALL!!
ALL
Core Trading vs. Investing
Core Trader Sells!
Core Trader Sells!

Core Trader Shorts!
d20ma
d40ma
Investor Buys!
r20ma Shorts!
r40ma
The Investor is a loser!
Core Trader Buys!
Chart Courtesy of MasterTrader.com

Macro vs. Micro Core Trading
Macro Core Trader Sells! Micro Core Trader Sells!

Key Point: The Micro Core
Key Point: The Macro Core Trader only looks to ride
Trader looks to ride the one color, primarily. This is
entire (macro) move, while the “no pain” approach.
ignoring the temporary r20ma
r20ma Micro Core Trader Sells!
weekly set backs.
r40ma
r40ma
Macro Core Trader Buys! Micro Core Trader Buys!
Charts Courtesy of MasterTrader.com

Core Trading Chart (QQQ)
S
CSS 3-5 Candlestick Bars
20ma
40ma
BT S
B 20ss
3-5
3-5 S
B
Pristine Charting Power!!
CBS
B
Color Coded Volume Volume Climax

Core Trading Tools
Tools of the Core Trade

Charting Tools: Weekly charts displayed in
Japanese Candlestick form.
Technical Tools: Color coded volume; 20 & 40

period ‘simple’ moving averages.
Weekly Chart with Volume
Wide Bars
Japanese Candlesticks
Small Bars
Color coded Volume

Core Trading Tools
The Only Tools You Need!

1) Weekly Chart
2) Colored Volume Japanese Candlesticks
3) 20sma
B
4) 40sma B
B
B r20ma
B r40ma
Color coded Volume

The Weekly Battle
Determining Who Won The Battle
High High
Close Open
Open Close
Low Low
Bulls Win Bears Win

Pristine Capital Holdings, Inc.
An Important Statistical Fact
Pristine Tip:
Bulls and Bears cannot consistently win more
than 5 battles in a row. Each side typically
surrenders to the other after 3 to 5 battles won.
However…
If the Bulls or Bears win significantly more than

5 battles in a row, a catastrophic loss will be the
price paid for such an abnormal winning streak.
3 Key Pristine Events
The Key Events

3 to 5 Bar Rallies
3 Pictures of Greed
Think “Sell”
Think “Sell”
Think “Sell”
3 Bars Up 4 Bars
PristineUp
Capital Holdings, Inc.5 Bars Up
3 to 5 Bar Declines
3 Pictures of Pain
Think “Buy” Think “Buy” Think “Buy”
3 Bars Down 4 Bars Down

Pristine Capital Holdings, Inc. 5 Bars Down
Count Your Way to Profits
4 Green Bars 3 Green Bars

3 Green Bars
3 Red Bars
3 Red Bars 5 Red Bars
5 Red Bars

Count Your Way to Profits
5 Green Bars
4 Red Bars
3 Red Bars
3 Red Bars

Bull & Bear Tails
Bottoming & Topping Tails

3 or more green bars
3 or more red bars
+ +
Topping Tail (TT) Bottoming Tail (BT)

Topping Tail Play I
Topping Tail Topping Tail

1) 6 Up Bars in a row
2) Topping Tail (TT)
6-Up 6-Up
$160 Catastrophe!
The Party is Over!
r20ma r20ma
r40ma r40ma

Bottoming Tail I
1) 6 Down Bars in a row

2) Bottoming Tail 110% Party!
6-Down
It’s Party Time! 6-Down
Bottoming Tail
Bottoming Tail
r20ma
r40ma r20ma
r40ma

Bull & Bear COG
Changing of the Guard (COG)

3 or more green bars
3 or more red bars
+
+
Bear COG™ Bull COG™

Bear Changing of the Guard™
Topping Tail Topping Tail

Bear COG™ Bear COG™
1) 5 Up Bars in a row
5-Up 5-Up
2) Bear COG™
3) Topping Tail (TT)
$120 Catastrophe
The Party is Over!
r40ma r40ma

Changing of the Guard™ Plays
4 Up Bars Bear COG™ 5 Down Bars

3 Up Bars 3 Up Bars
5 Down Bars
4 Up
3 Down Bars Tails Bars
Bull COG™
Bull COG™ Bull COG™

Pristine Core Trading Strategies
The Strategies
Mighty 20ma Plays
The Powerful 20ma Play

3-5 Red Bars +
Bull COG +
r20ma d40ma
=
High Odds Rally
3-5 Green Bars +

Bear COG +
r20ma d20ma =
High Odds Drop
20 MA Play I
1) Rising 20 MA (r20ma) +
3) r20ma > r40ma =
Stock Will Rally Off r20ma
r20ma
r40ma
3 D/Bars
3 D/Bars

20 MA Play II
3) r20ma > r40ma =
Stock Will Rally Off r20ma
r20ma
r40ma

20 MA Play III
1) Declining 20 MA (d20ma) +
d20ma 2) Declining 40 MA (d40ma) +

d40ma 3) d20ma < d40ma =
Stock Will Decline Off d20ma

20 MA Play IV
d20ma
d40ma
3) d20ma < d40ma =
Stock Will Decline Off d20ma

Pristine Buy & Sell Zones™
Pristine Buy & Sell Zones

Sell Zone
Pristine Buy Zone™ Play

(PBZ) d40ma
d20ma
r20ma
Pristine Sell Zone™ Play

r40ma
(PSZ)
Buy Zone
Pristine Buy Zone™ Play I
r40ma
r20ma

Pristine Buy Zone™ Play II
r20ma
r40ma

Pristine Sell Zone™ Play I
d20ma
d40ma

Pristine Sell Zone™ Play II
d20ma
d40ma

Climactic Buy & Sell Set-up
Climactic Buy & Sell Set-ups

Climactic Sell
Snap
40ma
s
Back
Bar
Wide Distance
Up
Wide Distance
to 20
ore
5o
ma
rM
ma
rM
to 40
5o
ore
Back
Do
20ma
wn
Ba
Snap
rs
Climactic Buy
Climactic Sell Set-up I
1) 6 Up Bars in a row 2TT

2TT
2) 2 Topping Tails (TT)
3) Wide Distance from 20ma 6-Up 6-Up
The Party is Over!

$75 Catastrophe
r20ma
r40ma

Climactic Sell Set-up II
1) 5 Up Bars in a row 3TT 3TT
2) 3 Topping Tails (TT)
3) Wide Distance from 20ma 5-Up 5-Up

4) Climactic Volume
$85 Catastrophe
The Party is Over!
r20ma r20ma
r40ma r40ma
Climactic Volume

Climactic Sell Set-up III
1) 5 Up Bars in a row Tail/COG Tail/COG
2) Topping Tail (TT) 5-Up 5-Up

3) Bearish COG
$70 Catastrophe
4) Wide Distance from 20ma
The Party is Over!
r20ma
r20ma
r40ma r40ma

Climactic Buy Set-up I
d20ma
d20ma
It’s Party Time!
125% Party!
1) 9 Down Bars in a row 9-Down 9-Down
2) Climactic Volume
3) Far from 20ma
Climactic Volume Climactic Volume

Climactic Buy Set-up II

2) Bullish COG d20ma
3) Far from 20ma
d20ma
6-Down 6-Down
A 100% Party
COG
COG
It’s Party Time!

Climactic Buy Set-up III

2) Climactic Volume
3) Bullish COG
4) Far from 20ma
d20ma
4-Down $12 Party

4-Down
It’s Party Time! COG
COG
Climactic Volume Climactic Volume

Core Trading Summary
Core Trading Combinations

3 to 5 Bar Buy/Sell Set-ups
Can happen with:
Powerful Core
1) Topping/Bottoming Tails Trading
Combinations
and/or
2) Bull/Bear COG Set-ups
These Combinations can happen:

1) At or Near the 20ma
or
2) In the Buy/Sell Zones Location
or
3) Far from the 20ma
STOCK UNIVERSE AND YOUR PLAN
STOCK UNIVERSE
STOCK UNIVERSE
Introduces
What is ?
• Inspired by feedback from our
STOCK UNIVERSE
UNIVERSE
STOCK seminar students, subscribers, and the
active trading community, Pristine
ESP™ was developed to alert traders
to the exact moment when a Pristine
trading opportunity occurs.
• ESP does the work for you, using
Pristine's proprietary technical
analysis while scanning thousands of
stocks simultaneously.
• Once a powerful setup is identified,
ESP swings into action, providing real
time alerts delivered without a
moment's delay.
What is ?
STOCK UNIVERSE
UNIVERSE
• The Pristine ESP™ product is
STOCK
programmed to identify key
setups occurring daily in the
TECHNOLOGY
marketplace.
• These setups are based on the
TRADING PLAN
proven methods that
Pristine.com has been teaching
successful traders for the last
seven years.
• In addition, Pristine ESP™ alerts
traders to stocks meeting more
generic criteria.
What is ?
STOCK UNIVERSE
STOCK UNIVERSE
TECHNOLOGY
The moment an individual stock matches a defined setup, the Pristine ESP™
alerts are instantaneously broadcast to the trader's computer.
Pristine ESP™ is able to simultaneously monitor the stocks on NASDAQ and

NYSE and alert subscribers at the exact moment when any of these stocks
meets the defined criteria for a particular trading system.
Real Time
Alerts & Scans
• Basic provides over 30 alerts
STOCK UNIVERSE
STOCK UNIVERSE
and scans.
• Master provides over 140
alerts and scans for the:
– Basic Trader
– Core Trader
– Swing Trader
– Guerilla Trader
– Micro Trader
What is ?
STOCK UNIVERSE
STOCK UNIVERSE
Through Merlin’s messages, we will be reminded of

useful information.
Pristine ESP™ continually reminds the trader of

certain trading timeframes, and what should be
done during those timeframes.
&
STOCK UNIVERSE
STOCK UNIVERSE
Your Trading Platform
• The Pristine ESP™ can be
used to provide alerts with
your quote and trading
platform.
• customers can
link Pristine ESP™ to their
trading platform, allowing
the ESP selection to load
automatically into the
“linked” windows in addition
to performing over 79 scans
STOCK UNIVERSE
STOCK UNIVERSE
Where To Get
WWW.PRISTINE.COM
OR
Contact a Pristine Counselor

today for more information
about Pristine ESP™ in
addition to Pristine’s other
education services.
STOCK UNIVERSE
The Pristine Day Trader™ Pristine Real Time Rooms
Pristine Lite ™ PDT Intra-Day Updates

Tools & Tactics – A Must Read
A Japanese proverb says, “If you

wish to know the road, inquire of
those who have traveled it.” The
authors of Tools and Tactics for
the Master Trader clearly know
the road. Their unique insights,
trading tactics and powerful tools,
so enjoyably presented, make
this a book that belongs on every
trader’s shelf.
Steve Nison, CMT - Author of

Japanese Candlestick Charting
Techniques
www.pristine.com
Pristine Seminars
The Pristine Core Trader
Pristine CD ROM Collection
For this and other

seminars on CD visit:
http://www.pristine.com/seminars/seminars_online.htm
Mastertrader.com
Pristine’s Core Trading Manual
Pristine’s Core Trading

Manual is available for
download at:
www.pristine.com/core.htm
© Copyright 1995-2002, Pristine.com. All rights reserved.
COPYING AND OR ELECTRONIC TRANSMISSION OF THIS DOCUMENT

WITHOUT THE WRITTEN CONSENT OF PRISTINE.COM IS A VIOLATION OF THE COPYRIGHT LAW

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Pristine.

Core Trading for a Living

Founder of Pristine.com, and Author of the best selling book,

Copyright 2002, Pristine Capital Holdings, Inc.

Introduction The Key Events

What has led to this dramatic change?

II) Worldwide Collapse in Interest Rates

III) Phenomenal Technological Advancements

IV) New Order Handling Rules

V) The Advent of the Internet

VI) A More Sophisticated Public

What has led to this dramatic shift?

II) Markets are not mathematically logical and/or rational

III) The hopes and fears of people move stocks

V) Charts are the foot prints of these actions and reactions

VI) In other words: Charts Don’t Lie!

Which fall into….

Two Broad Trading Categories: Wealth; Income

Wealth Trading Styles Income Trading Styles

- Weekly Charts - 60 Min & 30 Min

- Weeks to Months - Hours to Days

Swing Trading Micro Trading

- Days to Weeks - Minutes to Hours

The Pristine Trading Philosophy calls for a

What is Core Trading?

5) Core Trading is best used on key stocks and indices.

Core Trader Sells!

Core Trader Sells!

Chart Courtesy of MasterTrader.com

Macro Core Trader Sells! Micro Core Trader Sells!

Macro Core Trader Buys! Micro Core Trader Buys!

Charts Courtesy of MasterTrader.com

Chart Courtesy of MasterTrader.com

Tools of the Core Trade

Technical Tools: Color coded volume; 20 & 40

Color coded Volume

The Only Tools You Need!

2) Colored Volume Japanese Candlesticks

Color coded Volume

Determining Who Won The Battle

Bulls Win Bears Win

If the Bulls or Bears win significantly more than

The Key Events

Think “Buy” Think “Buy” Think “Buy”

3 Bars Down 4 Bars Down

4 Green Bars 3 Green Bars

Pristine Capital Holdings, Inc.

Pristine Capital Holdings, Inc.

Bottoming & Topping Tails

Pristine Capital Holdings, Inc.

Topping Tail Topping Tail

Pristine Capital Holdings, Inc.

1) 6 Down Bars in a row

Pristine Capital Holdings, Inc.

Changing of the Guard (COG)

Pristine Capital Holdings, Inc.

Topping Tail Topping Tail

Pristine Capital Holdings, Inc.

4 Up Bars Bear COG™ 5 Down Bars

Pristine Capital Holdings, Inc.

The Powerful 20ma Play

3-5 Green Bars +

3) r20ma > r40ma =