Intermediate corrections or rallies running counter to the primary trend, lasting from a few weeks to several months.
Most retail traders enter the market focusing exclusively on how much money they can make. Sperandeo flips this paradigm on its head, establishing a strict hierarchy of trading objectives:
: The grand macro direction lasting from one to several years (Bull or Bear markets). Intermediate corrections or rallies running counter to the
One of Sperandeo’s most famous contributions to technical analysis is his objective formula for identifying when a trend has officially ended. This eliminates the guesswork of trying to "pick tops and bottoms."
Accept losses as part of the trading process. Don't chase losses, as this can lead to over-trading and further losses. One of Sperandeo’s most famous contributions to technical
Treat losses as a standard business expense. Cut losing trades immediately when your logical thesis is proven wrong. Summary of the Trader Vic Matrix Framework Element Core Tool / Concept Practical Application Market Structure Dow Theory (3 Trends) Identify the dominant market tide before entering. Execution Tool 1-2-3 Reversal Rule Wait for trendline breaks, tests, and support failures. Volatility Tool 2B Indicator Fade false breakouts at major structural highs/lows. Fundamental Anchor Fed Policy & Credit Cycle Trade aligned with global liquidity and interest rates. Survival Rule Strict Stop-Losses Keep single-trade risk under 2% of total capital.
The principles and techniques outlined in "Methods of a Wall Street Master" can be applied in a variety of trading and investment contexts, including: Treat losses as a standard business expense
Only take trades where the realistic profit target is at least three times larger than the distance to the stop-loss.