"I attended the chart seminar a couple of months ago and think I got a reasonable understanding of what was what. There is one big exception which is baby steps. My understanding is (and I need to be corrected if I am wrong) that baby steps is the technique you employ before a market takes off (i.e. a base building phase). I have been attempting to tackle the sugar market through the leveraged etf LSUG. I have found it very hard to understand where to take my profits in a baby steps strategy. So I have been building a stake as pull backs have occurred. But because the market has done well the pull backs have usually been at prices higher than earlier purchases.

"Even if the price rise had not been so good, I still don't understand how, if I take profits on rises, I could be in a position to benefit from a breakout. e.g coffee (etf COFF).

"Hey Ho, if it was easy it wouldn't be so hard.

"Thanks for all the stimulating stuff."

David Fuller's view Thanks and I am sure this question will be of interest to a number of other subscribers. Baby Steps works best in a volatile and primarily sideways trading range, ideally in a market that is objectively both technically and fundamentally oversold. Using Baby Steps one buys lightly and incrementally on easing within the range and lightens on rallies, while usually retaining a core long position for the eventual breakout. Think of Baby Steps as a way of harvesting some of the additional ranging base development while waiting for the eventual upside breakout and subsequent trending action.

Conversely, one can do the reverse with an incremental Baby Steps short-selling tactic when reasonably confident that a market is developing a broad top formation. However this is more risky because it is easier to judge objectively when a market is fundamentally cheap to the extent that there is quite limited downside risk, than to gage when a market is so overpriced that it is very unlikely to go higher.

Your apparent difficulty with LSUG (weekly & daily) is due to the fact that following the May low it has shown a gently rising trend to date. Nevertheless the percentage swings have been significant and if you adjust the tactics in line with the nature of the price activity, a Baby Steps profit or two taken on the rallies, while retaining some of your long position, might have generated a little more performance and allowed you to repurchase on small setbacks. In other words, adjust tactics in line with the nature of the price action which you can see on the price chart. (See also my original Baby Steps articles in the Subscriber's Forum.)