Pristine The Refresher Course PDF

Pristine.
com Presents
Trading The Pristine Method Part I

The Refresher Course
With
Oliver L. Velez
Co-founder of Pristine.com, and co-Author of the best selling

book, Tools and Tactics for the Master Day Trader
Copyright 2003, Pristine Capital Holdings, Inc.
Disclaimer
It should not be assumed that the methods, techniques, or indicators presented in this book will be profitable or that they
will not result in losses. Past results are not necessarily indicative of future results. Examples in this book are for
educational purposes only. This is not a solicitation of any order to buy or sell.
HYPOTHETICAL OR SIMULATED PERFORMANCE RESULTS HAVE CERTAIN INHERENT LIMITATIONS.
UNLIKE AN ACTUAL PERFORMANCE RECORD, SIMULATED RESULTS DO NOT REPRESENT ACTUAL
TRADING. ALSO, SINCE THE TRADES IN THIS BOOK HAVE NOT ACTUALLY BEEN EXECUTED, THE
RESULTS WE STATE MAY HAVE UNDER OR OVER COMPENSATED FOR THE IMPACT, IF ANY, OF
CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. SIMULATED TRADING PROGRAMS IN
GENERAL ARE ALSO SUBJECT TO THE FACT THAT THEY ARE DESIGNED WITH THE BENEFIT OF
HINDSIGHT. NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL OR IS LIKELY TO
ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE SHOWN.
The authors and publisher assume no responsibilities for actions taken by readers. The authors and publisher are not
providing investment advice. The authors and publisher do not make any claims, promises, or guarantees that any
suggestions, systems, trading strategies, or information will result in a profit, loss, or any other desired result. All
readers and seminar attendees assume all risk, including but not limited to the risk of trading losses.
Active Trading can result in large losses and may not be an activity suitable for everyone.
Copyright 1994-2002 by Pristine Capital Holdings, Inc. All rights reserved. Printed in the United States of America.
Except as permitted under the United States Copyright Act of 1976, no part of this publication may be reproduced or
distributed in any form or by any means, or stored in a database or retrieval system, without prior written permission of
the publisher.
Table of Contents
Introduction
Trading w/ the 20MA
Trading the 4 Different Stages
Pristine Trendline Techniques
Pristine Method
Trading the PBS & PSS
Trading the CBS & CSS
Trading the PBZ & PSZ
Trading the PBO& PBD
The Exams
Pristine Quizzes
Pristine Trading Exercises
Pristine Trading Exams
Pristine ESP
Product Review
Pristine ESP: The Climactics
MasterTrader Pro
Pristine ESP & MT Combined
Introduction
Trading With The

Trend & The
Mighty 20 MA
The Pristine Railroad Tracks

1)
2)
3)
4)
Up Trend Formula
Rising 20ma (r20ma) +
r20ma > r40ma +
Relatively even space in between
Nice space
Nearly all dips should rebound sharply
r20ma
r40ma
Find and circle 7 Pristine Buy Set-ups (PBS)
Chart Courtesy of Mastertrader.com
The Pristine Railroad Tracks

1)
2)
3)
4)
Up Trend Formula
r20ma > r40ma +
Relatively even space in between
Nearly all dips should rebound sharply
r20ma
r40ma
Circles show 7 Pristine Buy Set-ups (PBS)
Playing the Uptrend

Marking up charts in this
fashion builds trading skills
Far move from 20ma
and trains the eye to find
Sell
opportunity. Do it often!
-COG w/ TT
far from 20ma
Sell
Breakout
Buy
RLs
PBS
Breakout
Buy
PBS
r20ma
r40ma
RLs
Note the rising lows (RLs) before the breakouts

Note the railroad like moving averages
The Macro Swing Trade
PSS in the PSZ

Breakdown
The Macro Swing Trader rides the trade
as long as the stock stays below the d40ma.
The Macro Swing Trader would consider covering if:
1) The MAs began to narrow;
2) A Climactic Buy Set-up (CBS) formed
d20ma
d40ma
Trading with the 20ma

There are Core Trade & Swing Trade
opportunities in Nortel (NT)
d40ma
Narrowing moving averages
indicate a near end to stage 4
The Pristine Trained

Trader (PTT) trades in the
same direction of the
20MA 92% of the time.
d20ma

There are Core Trade & Swing Trade
opportunities in Teradyne (TER)
d40ma
d20ma
The Pristine Trained

Trader (PTT) trades in the
same direction of the
20MA 92% of the time.
The trader considers

covering some here

PTT shorts rallies
with the d20MA
Note the nice spaces between

the moving averages. They
move like railroad tracks on
the way up and down.
r20ma
r40ma
r20ma
r40ma
PTT buys dips in the same

direction of the r20MA
= Pristine Trading Opportunities
Foundation
The Four
Different Stages
Of
The Stock Cycle
Three Major Stages (2-3-4)

Stage 3
Stage 2
PBS
Breakdown
Pristine Bear
Mortgage Play
Stage 4
PBS
The Moving Average Story

Stage 3
Narrow MAs
Stage 4
Stage 2
Breakdown
20ma
40ma
Note how the moving averages can reveal what

stage a stock is in. In stage 2 we have the upward
railroad track MAs. In stage 3, we have narrow
to flat and wavy MAs. In stage 4 the MAs
convert to a downward railroad track pattern.
= Pristine Trade Opportunities

Stage 3
MAs Cross & Flatten
Breakdown
Stage 2
d20ma
d40ma
Did the moving averages warn of a possible Stage 4?
Stage 4
All 4 Major Stages (1-2-3-4)

Stage 3
Flat & Wavy MAs
Stage 2
r20ma
Stage 1
r40ma
Stage 4
What are the moving averages saying right now?

R&F
Stage 3
R&F = Retest & Failure
Stage 2
Whippy MAs
r20ma
r40ma
Stage 4

R&F
Stage 3
MAs say sell

rallies & B/Ds
MAs say buy
dips & B/Os
Stage 2
MAs say use support &

resistance techniques
PBS
PBZ
PSS
B/D
Stage 4
Note how the moving averages dictate how to trade

Peek-a-boo Breakout
Stage 3
Stage 2
Breakdown
Pristine Tip:
70% of all breakouts fail, resulting in many
peek-a-boo attempts. When bullish bar
breakouts fail to follow through on the very
next bar, a major reversal is usually at hand.
PSS
Stage 4
50%
CBS
The Three Stages (2-3-4)

Stage 3
Peek-a-boo New High

Wavy MAs
Breakdown
Stage 2
r20ma
r40ma
Stage 4
Note how the moving averages tell the story of the stages

Stage 3
Stage 4
Stage 2
Wavy MAs
20ma
40ma
Note how the MAs reveal how to trade the stock

Ending Stage 4
Stage 3
Flat & Wavy MAs
Breakout
Breakdown
Stage 2
PSS
Stage 4
Pristine Tip: The CBS usually ends (finalizes) Stage 4
CBS
The Completed Cycle

Stage 3
d20ma
r40ma
Stage 2
r20ma
Stage 1
r40ma
Stage 4
Major Area of Support

Volume Ignites
Move
Volume Ends
Move
What are the Moving Averages telling us?
Stage 4
Stage 2
Stage 1
Flat and Narrow MAs
Trend Line Technique
The Pristine Trend

Line Technique
Uptrend Line Break (UTB)

Stage 3
2 Best Short Opp.
Transitional Phase B
R&F
Stage 2
1
Point 1
Buy, but dont look

for a New High
Point 2
Breakdown
Up Trend Line Break (UTB)

Stage 3
Transitional Phase B
Best Short Opp.

R&F
Stage 2
Buy, but dont look
for a New High
Point 1
Point 2
Breakdown
Stage 4
Pristine Pop Quiz
1)
2)
3)
4)
5)
Instructions & Questions

Draw a Down Trendline
Number the Trendline events
Which Transitional Phase?
What is the next likely move?
Where could the move go?
Pristine Pop Quiz

Point 2
1)
2)
3)
4)
5)

Draw a Down Trendline
Number the Trendline events
Which Transitional Phase?
What is the next likely move?
Where could the move go?
3?
Point 2
1
Transitional Phase D
2
Trading The PBS & PSS
Trading The
Pristine Buy & Sell
Set-ups
60-minute Chart of ROK

CSS
Trading Tip: The Pristine Trained Trader (PTT) uses the 60-minute
chart to find Swing, Guerilla & some Day trading opportunities.
PBS
Circles = Pristine Trading Opportunities

r20ma
PBO
r40ma
-Trap
30-Min Pristine Buy Set-up (PBS)

Pristine Buy Set-up on a 30-min chart
Note: The best intra-day PBSs occur
when the 20ma is above the 200ma
r20ma
200ma
15-minute Chart of GSF

Trading Tip: The Pristine Trained Trader (PTT) uses
the 15-minute chart to find day trading opportunities.
CSS

PBS
200ma
PBS
PBS @ MPS
r20ma
5-minute Chart of RCL

Trading Tip: The Pristine Trained Trader (PTT) uses
the 5-minute chart to find micro trading opportunities.
Circle = Pristine Trading Opportunity
r20ma Plays
r20ma
200ma
2-minute Chart of COST
PSS
Trading Tip: The Pristine

Trained Trader (PTT) uses
the 2-minute chart to find
d20ma scalp trading opportunities.
PSS
PSS
PBS
PBS
15-min Pristine Buy Set-up (PBS)

Pristine Buy Set-up on a 15-min chart
Note: The best intra-day PBSs occur
when the r20ma is above the 200ma
Stage 2
r20ma
Stage 4
200ma
Stage 1
Anticipating w/ the Bearish COG
d40ma
d20ma
Bear COG
1)
2)
3)
4)
3 or more green bars plus

A relatively solid red bar that closes near the low at
A declining 20ma equals
Anticipation Short Play
* Reverse this technique for the Anticipatory Long
The Power of the 200ma

Using the PBS with MAs & Major Support
r20ma
r200ma
The Complete Pristine Buy Method

Pristine Buy Criteria
1)
2)
3)
4)
5)
6)
Stock in Uptrend
Rising 20ma
Rising 40ma
Rising 20ma < 40ma
OBV rising (not shown)
ADX above 25 (not shown)
Pristine Buy Set-up

7) PBSs (4)
8) CCI(5) Signals
Follow Action Steps:

9) Enter; 10) Stop; 11) Target; 12) Manage
The Complete Pristine Sell Method

d20ma
Pristine Sell Criteria

1)
2)
3)
4)
5)
6)
Stock in Downtrend
Declining 20ma
Declining 40ma
Declining 20ma < 40ma
OBV declining (not shown)
ADX above 25 (not shown)
d40ma
Pristine Sell Set-up

7) PSS w/ -COG
8) CCI(5) Signal
Follow Action Steps: 9) Enter; 10) Stop; 11) Target; 12) Manage
Trading Against the 20ma
The Pristine
Climactic Buy &
Sell Set-ups
Trading Against the 20 MA

5+ Red Bars
Climactic Buy Set-up (CBS)

1) 5 or more Red Bars (or lower highs)
2) Far from 20 MA (8% or more)
3) Bottoming Tail (BT), NRB, and/or +COG
4) Pick-up in Volume
Volume
BT
The Climactic Buy Set-up & the PSS

d40ma
d20ma
PSS
Note: The CBS will often deliver a playable
PSS a week or so later. Therefore, CBSs
represent dual profit making opportunities.
But dont expect a new low on the decline!
The same applies in reverse.
5 Red
CBS
It should always be noted that the CBS

will lead to sell opportunity as well;
however, the subsequent PSS must be
played based on the 40/60 Rule.
The same applies in reverse.
Tip: The decline after a CBS will often
be a shallow one.
PSS
5 Red Bars
Big Volume
50%
CBS

PSS
r20ma
5+ Red Bars
r40ma
CBS
Marking it Up
Major Resistance
PSS/R&F
Failed PSS
Major Support
PBS
CBS w/ Darling Doji

Climactic Volume
Wide Range Bars (WRB)

Wide Range Bar (WRB)
The WRB (the widest bar of the base)

dictates the next direction.
Another WRB that originates not
far from the d20ma indicates more
downside is on the way.
WRBs far away from d20ma
indicates move is near complete.
PSS w/ Doji
In the PSZ
The PBZ & PSZ
Trading The
Pristine Buy & Sell
Zones
The Pristine Buy Zone

The zone between the rising 20ma & 40ma
acts as a very powerful area of support.
r20ma
r40ma
Pristine Sell Set-up in PSZ

d40ma
After a CBS, KSE has formed a:

1) PSS (Pristine sell set-up);
2) with a COG (bearish COG);
3) And a TT (topping tail)
4) In the PSZ (Pristine Sell Zone)
5) After a 40/60 (% retracement)
6) At the EOM (end of the month)
d20ma
See circle for all 6 items
CBS
The Pristine Buy/Sell Zones

1: Which of the two trades could have
been anticipated? Buy or Sell?
PSS in the PSZ
2: Can you find other signals?

3: Point out the first warning of an up
trend change.
PBS in the PSZ
Area of Macro Support
The Pristine Buy/Sell Zones

R&F
1: The PBS can be anticipated due to the +COG
closing near the high.
1st Warning of a Trend Change
PSS in the PSZ
2: Circles show other Pristine signals.

3: R&F is the 1st sign of a trend change.
PBS in the PSZ
Area of Macro Support
Pristine Sell Set-up in the PSZ

Stage 3
Stage 2
20ma
40ma
Stage 4
PFGC forms a:
PSS; with a -COG; and a deadly Doji; in the PSZ;
after a 40/60%; on the 1st pullback of a breakdown.
See Circle for items listed above
Trading Breakouts
The Pristine
Breakout Method
1-2-3 Breakout Pattern
1)
2)
3)
3 Parts of the Breakout

Buy aggressively if you find it
Look for the PBS and Buy
Buy only if not extended
The Pristine Breakout

Notice the Pristine Trained Trader (PTT)
does not wait for volume. The PTT helps
to create the volume. Volume will usually
lift the committed PTT on breakouts.
Pristine Breakout
Stop
Volume comes after
the PTT buys
The Breakout Play

In Stage 2 the Pristine Trained Trader (PTT) buys:
1) Dips and 2) Breakouts
Buy Breakout
Pause
Stop
Stage 1
Buy Breakout
Stop
Big Volume
Pristine Breakout Buy

Tip: A strong breakout, accompanied
by big volume, typically leads to
multiple buy opportunities
B/O
PBS
Breakout Buy
r20ma
r40ma
Stop
Big Volume
The Pause That Refreshes

Note the narrow nature of the base
Note the drop off in volume
PBS
Why is the PBS considered high risk?

Answer:
Because its too far from the 20ma
Breakout Buy
Stop
Drop in Volume

At or near the point of contact with the r20ma,
CBE breaks out and explodes to the upside.
Buy
d20ma
d40ma
Drop off in Volume

AAsideways
sidewayspause
pauseinto
intoan
an
r20ma
r20mawill
willtend
tendto
toproduce
produceaa
very
Breakout
verypowerful
powerfulbreakout
breakout
Breakout
r20ma
200ma
Volume drop off
Volume drop off
The Pristine Breakout Play

Note the narrow base
accompanied by rising lows and
narrowing moving averages.
Breakout
r20ma
r40ma
Pristine Combos
Trend is down
Stop
Pristine Tip
The PTT will usually play a PBD
from a narrow base very aggressively.
PSS w/ TT
at mPR
PBD
50%
Ant. CBS
Transitional Phase A
Whats next for IBM? Up move or Down move?
Answer:
The next move should be up
3
1
Trading Tests
Pristine Trading
Exams
Identifying Clean Pristine Trades

Identify the three cleanest trading opportunities
1)_____________
2) _____________
3) _____________
Identifying Clean Pristine Trades

3
Identify the three cleanest trading opportunities

1) Pristine Breakout
2) Pristine Buy Set-up (PBS)
3) Climactic Sell Set-up (CSS)
2
1
Find The Clean Trading Opportunities
1) Circle each clean trading opportunity

2) Name each clan trading opportunity
Find The Clean Trading Opportunities

1
Be cautious of
PBSs after CSS
Breakdown that is not as clean

2
4
5
7
1) CSS; 2) PSS; 3) PBD; 4) PSS; 5) PSS; 6) CBS; 7) PSS
Finding The 4 Best Pristine Plays

Find the 4 best Pristine Trades
1) Circle the trades
2) Name the trades
3) Choose your favorite
Finding The 4 Best Pristine Plays

CSS
2
PBS
1) PBS; 2) PBO; 3) PBS; 4) PBS

My Favorite is 4: PBS w/ a doji at mPS, off the r20ma
Pristine Trading Test

Find and Name the Following:
1) Nine Possible Plays
2) The best Breakout Play
3) The best two PBSs
4) The best short set-up
Can you find a 1-2-3 Breakout Pattern?

Best Short
9
1) PBO; 2) PBO; 3) PBS; 4) PBS; 5) CSS; 6) PBS; 7) CSS; 8) PBS; 9) PSS

Best Breakout Play: 1, due to the tight and narrow base.
Best two PBSs: 6 and 8 due to the prior peaks being new monthly highs
Best Short Set-up: 9 due it also being an R&F (Retest and Failure).
1-2-3 Breakout Play: The red numbers 1, 2 and 3
5
1
2
2
6
3
Best B/O Play
2 Best PBSs
1)
2)
3)
Instructions
Circle and name the last 2 Guerrilla trades in this chart
Which Pristine Entry Method you use for trade 2
Point out the area you look to exit each trade
2 Bear 20/20
Guerrilla Trade 1: Gap n Snap Play

Guerrilla Trade 2: Bear 20/20 Play
Entry Method for Guerrilla Trade 2: 30-minute Sell Rule
Exit for Guerrilla Trade 1: In the area of the 20ma
Exit for Guerrilla Trade 2: In the 40/60 Retracement Area
Exit
Exit
Gap n Snap
1
1)
2)
3)

How many Buy Opportunities?
Circle and name them
Find the failed Pristine Sell Set-up

Failed PSS
PBS
2
CBS
1
PBS
d20ma
d40ma
Questions
1)1) Find
Findthe
the33best
besttrading
tradingsignals
signals
2)2) Which
Whichtrade
tradecan
canbe
beanticipated?
anticipated?
3)3) Why
Whycan
canititbe
beanticipated?
anticipated?
d20ma
d40ma
2 PSS
Answers
1: CBS; PSS; PBS
2: Trade 2 (CBS) can be anticipated
3: The CBSs +COG closed near the high
1 CBS
Big Volume
3 PBS

1)
2)
3)
4)

How many Pristine (long) trades can you find?
Name the trade types
Which trades can be anticipated?
Find 4 high risk short points

4
Answers
1: Four Long Trades
2: 1-CBS; 2-PBS; 3-PBS; 4-PBS
3: Anticipate trade 4, the PBS
4: Red circles and numbers
2
1
4
3
2
1
Mark This Chart Up
Mark This Chart Up

Rounded top
V Top
PBO off r20ma
A
2
1
PBS off 20ma
r20ma
r40ma
PBS at MPS
A = Skeptical PBS
Pristine Products
Pristine Product
Review
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6 Pristine Trading Modules

200 Pristine Scans
111 Pristine Alerts
Real-time Education
Seamless Link to Realtick
Real-time results for

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Unrivaled market
intelligence for the
individual trader
Dont just study the Pristine Method. Live it!
Pristine ESP v1.2

Get the Power!
Alerts
The Power of Pristine ESP
Merlin:
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Intra-day Climactic Scans
Example of how to use

ESP to find my favorite
Intra-day trading pattern:
the CBS and the CSS.
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Trading Alerts,
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Screen with colored
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Execution module with

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Pristine.

Trading The Pristine Method Part I

Co-founder of Pristine.com, and co-Author of the best selling

Trading With The

The Pristine Railroad Tracks

Nearly all dips should rebound sharply

Find and circle 7 Pristine Buy Set-ups (PBS)

Chart Courtesy of Mastertrader.com

The Pristine Railroad Tracks

Nearly all dips should rebound sharply

Circles show 7 Pristine Buy Set-ups (PBS)

Chart Courtesy of Mastertrader.com

Playing the Uptrend

Note the rising lows (RLs) before the breakouts

Chart Courtesy of Mastertrader.com

The Macro Swing Trade

PSS in the PSZ

Chart Courtesy of Mastertrader.com

Trading with the 20ma

The Pristine Trained

Chart Courtesy of Mastertrader.com

Trading with the 20ma

The Pristine Trained

The trader considers

Chart Courtesy of Mastertrader.com

Trading with the 20ma

Note the nice spaces between

PTT buys dips in the same

Chart Courtesy of Mastertrader.com

Three Major Stages (2-3-4)

Chart Courtesy of Mastertrader.com

The Moving Average Story

Note how the moving averages can reveal what

Chart Courtesy of Mastertrader.com

Three Major Stages (2-3-4)

MAs Cross & Flatten

Did the moving averages warn of a possible Stage 4?

Chart Courtesy of Mastertrader.com

All 4 Major Stages (1-2-3-4)

Flat & Wavy MAs

What are the moving averages saying right now?

Chart Courtesy of Mastertrader.com

Three Major Stages (2-3-4)

Chart Courtesy of Mastertrader.com

Three Major Stages (2-3-4)

MAs say sell

MAs say use support &

Note how the moving averages dictate how to trade

Chart Courtesy of Mastertrader.com

Three Major Stages (2-3-4)

Chart Courtesy of Mastertrader.com

The Three Stages (2-3-4)

Peek-a-boo New High

Chart Courtesy of Mastertrader.com

Three Major Stages (2-3-4)

Note how the MAs reveal how to trade the stock

Chart Courtesy of Mastertrader.com

Flat & Wavy MAs

Chart Courtesy of Mastertrader.com

The Completed Cycle

Major Area of Support

Chart Courtesy of Mastertrader.com

Three Major Stages (4-1-2)