In our goal to make trading fun (and more understandable), we took on the mantle of "Trade like a Pirate". Instead of technical jargon used by the typical financial trader we use easy to understand, visual terms. Who wants to talk about Trend, RSI, and Pivot Points when we can simply look at the weather, set sail, and seize our treasure?
Below is a glossary of terms we use beyond the "Aaaarrrrrgh...."
This is commonly known as the Trend. It is said that "The trend is your friend... until the bend in the end." Generally sailors (and pirates!) don't want to sail against the trend... it's like swimming upstream! This is the first factor in knowing whether we will set sail or not in our 3-step trading system. We only want high-probability, low risk trades. Mother Nature always wins, so we "don't fight the tide."
Without "giving away the goods" the Wind is the second determining factor in the Sabre Trading System. If the tide is right, and we can set sail with the tide, the next determining factor is whether we will be sailing with the wind at our back. If the weather is good, we will look for the right "wave" to set sail - to place our trade.
This is the Sabre pattern of Supply or Demand we are looking to place our trade, where we are looking to "set sail". Once the weather is good, when the tide is going our way and the wind is at our back, we set sail, that is, place our trade.
Checking the Weather
Pirates (or any sailor) don't want to sail unless the weather conditions are optimal. In our two-pane trading system the left hand pane tells us what kind of trade we are looking for: what "wave" we are to set sail on. If the weather isn't favorable, if the tide is against you and the wind isn't at your back... stay put in Pirate's Cove.
This is a signal to wait. The Waves and the Wind aren't going in our direction. Sometimes trading means "Don't Trade" - we don't want to trade / set sail where the probabilities of success are not in our favor. We only set sail when the Weather tells us we can set sail.
This is a trade unique to the Sabre Trading System: the counter-trend trade. When we are in a downtrend we are looking to "catch the falling dagger" with a high-probability Long trade. In an uptrend we look to "Grab the musket ball" with a high-probability Short trade. Inspiration for the Clubhaul trade comes from the scene in Pirates of the Caribbean, The Black Pearl, where the Interceptor drops anchor and does a 180 to attack the enemy. (Watch Video)
This is a high-probability trade opportunity that most commonly appears on "Stranger Tides" - sideways or whipsawing trends where most traders fear to tread. Following our rules, the "Pirate Code", we are able to navigate the rocks and plow through the rocks and claim the treasure waiting for us on the other side.