Special Report- The Bonsai Elite Wavetrader presents…

“Surfing the Stock Market’s Biggest Waves”

For the past 2 years, Paul Lemal and Daryl Thompson
have been working quietly behind the scenes with a small
group of traders in a unique trading club testing, refining
and improving a momentum trading system developed over
the years which was designed to isolate and surf the stock
market’s biggest waves. In other words, to find the stock
market’s strongest performers, and to hold the stocks for
maximum gains. How’d we do?

The results were astonishing, even to us….

‐ 1 ‐ 

 
**Disclaimer** Your results with any form of stock trading depends a lot on the current
market cycles—as well as your level of self discipline, your attitude and commitment to
succeed. There are no guarantees that you will achieve the level of trading success
achieved by our subscribers.

Hypothetical or simulated performance results have certain limitations. Unlike actual

performance records - sample trades, even those published in advance of a breakout do
not necessarily indicate that even the publisher would have caught the majority of the
move. An individual’s trading performance is entirely the result of their level of
experience, their personality, broad market health and various other factors. No
representation is being made that any account will or is likely to achieve profits or losses
similar to those shown. There is a substantial risk of loss associated with trading futures,
forex, stocks, and options. Only risk capital should be used.

© 2008 Paul E. Lemal

In this E-Book

“Success Leaves Clues” – How Millionaires Are Made in the Stock Market….…………4

The “Keys to the Vault” - Momentum Signatures and the BMI Indicator….…………….5

The Curious Concept of “Stock Prices as Energy”…….………………………………….6

How to Look at the “Big Picture” and Make Hedge Fund-Like Gains…………..….……7

A Picture Is Worth a Thousand Words – How to Find the Monster Stocks…….…….....12

The Origins of the Bonsai Elite Wavetrader System …….…..………………………….16

Is There A Holy Grail to Stock Trading?...........................................................................19

What Momentum Stock Home Runs TASR and HANS Taught Me…..………………...23

Is This a Complicated System That Uses Technical Analysis?……………………….…28

Follow The Cycles to Stock Market Wealth ………………………………………..…...30

Stock Trading Systems - Do They Really Work?……………………………………......32

Fundamentals-Schmundamentals! A Sure Trip to the Poorhouse at Times………….….34

In Conclusion, the “Millionaire-Maker” Pattern, etc. ……..……………………………36

‐ 2 ‐ 

 
B.E.W. Frequently Asked Questions…………………………………………….………39

Announcing: The Bonsai Elite Wavetrader Home Study Course….…………….………43

Real World Proof! Testimonials from Very Happy Course Owners…..……….………..47

Addendum - More FAQ’s………………………………………………………………..59

“That’s Daryl Thompson, my good friend, trading partner, and co‐author of the Bonsai Elite 
Wavetrader momentum stock trading system… in front of his mini‐villa on the beautiful island of 
Contadora, Panama that one trade in TASR paid for!  Read on to discover how to find these kinds 
of mega‐mover trades for yourself…”  

‐‐‐ Paul Lemal, Author, The Bonsai Elite Wavetrader System 

‐ 3 ‐ 

 
 “Success Leaves Clues” – The Discovery of
How Millionaires Are Made
from the Stock Market

Years ago, I set out to see if I could discover the secrets to stock market success.

I was a student of the human potential movement and a fan of Tony Robbins, the
personal success guru. I liked his concept of “success leaves clues.” I had applied it in
my 20’s (after physically crashing, with severe fatigue and a whole host of other health
issues) to regain my health, and I figured it would work wherever it was applied.

For example, if you want great relationships, study people who have great relationships
and see what they did right. If you want to be a great public speaker, study great speakers,
etc.

So I applied this philosophy to the study of health, and discovered TONS of information I
had never learned before - including exactly what it took to achieve and maintain
extraordinary, glowing health. I found doctors who understood this integrated approach
to achieving health - and was back to my old self within 6 months. I eventually formed
an Integrated Healthcare Association to spread the good news about non-drug and non-
surgical approaches to wellness.

But I digress.

Anyway, I then used this particular school of thought to study the stock market. After
doing what I usually do when I want to learn about something, I headed to the bookstores
(in the early 90’s the Internet was still in its infancy), this time looking through every
stock trading book I could find in an attempt to discover something different, unique and
outside the box.

I found something very interesting in a few paragraphs I read from an old, eclectic book
on stock momentum. Those few paragraphs described the concept of a stock “changing
character.” The gist of the message was that when a stock is plodding along in a
consistent and normal fashion for itself - and all of a sudden has a dramatic change of
character - it is time to pay attention.

‐ 4 ‐ 

 
 The “Keys to the Vault” - Momentum
Signatures and the BMI Indicator

What that really meant took several more years to fully comprehend as I began to
undertake a study of the top performing stocks in the market. The basic concept of
“stock momentum” is nothing new - but after I started to understand the “forces” and
subsequent accumulation coming into a stock as it changed character, I discovered what I
now call “Momentum Signatures.” Momentum Signatures are nothing more than simple
mathematical formulas that can be used to isolate the top potential prospects in the stock
market, based on specific price ranges and levels of liquidity.

I call these measurements BMI (Breakout Momentum Indicator) readings, and they
operate in a consistent fashion among the unique breed of momentum stocks that become
the biggest winners in the stock market. These BMI readings became the basis for my
style of trading, which evolved over the years to include stock cycle analysis, pattern
quality, fundamentals and timing analysis.

Now don’t think for a minute this is some uber-complicated, eclectic mathematical
approach. It is simply using stock timing models based on consistent patterns of behavior
garnered from an exhaustive study of the top performing stocks of the last 15 years.

The various BMI readings are an excellent tool for evaluating the strength of the
accumulation coming into the stock. Combining this analysis with the previous criteria
mentioned above can isolate many of the market’s potentially top performing stocks
before they make it on the radar screens of the general investing community.

Now many momentum traders already have a pretty fair grasp of stock momentum, but
far fewer have really examined every aspect of a momentum stock’s trend - including its
short and long-term cycles - and integrated these concepts into their trading toolbox. The
consistency of these momentum stocks’ price trends can be truly amazing.

Understanding these consistencies can enable a trader versed in these strategies to truly
annihilate the market averages!

‐ 5 ‐ 

 
 The Curious Concept of
“Stock Prices as Energy”
What made this whole concept of stock momentum come together and finally make sense
to me was an understanding of the concept of energy. That understanding developed over
the years from study done in completely different areas such as Eastern philosophies,
Feldenkrais bodywork, Swan te’, QiGong and martial arts.

This study helped me to understand how powerful moves can occur with the proper
setups and how a certain situation called a “price squeeze” can explode given the right
conditions. With a basic understanding of martial arts, you’ll quickly understand how a
stock’s price action coming from a foundation of strong support can allow for explosive
movement, whereas poor basing and wild and loose trading action can quickly lead to a
dissipation of energy - and subsequent failure.

Most world-class sprinters operate within milliseconds between each other at the highest
levels of the sport. Weightlifters similarly operate within a small percentage variance in
their performance at the Olympic level.

Stock momentum and the “energy” behind these price thrusts can also often have its own
form of limitation. Now, I know this may sound “out there” and maybe difficult to grasp
- and I know you may be thinking to yourself “How am I going to see what you are
seeing when this is all new to me?”, but these concepts are actually much easier to
understand than you might think.

In fact, for short-term swing trading - if that’s your bag - there are usually only three
cycles to pay attention to. Stock prices gyrate within these common cycles with an
amazing level of consistency among the top performing stocks.

How accurate can you be with this style of trading? Watch this video below for a great
example (believe it or not, we called this stock at $22 – it ran to $64 in six weeks, and we
nailed the top within one hour and shorted it…)

Click Here to Watch the Video

‐ 6 ‐ 

 
 How to Look at the “Big Picture” and Make
Stock Market Gains Most Hedge Funds Would
Die For

DRYS - A 350% gain in 6 months - posted in our Trading Report on April 19, 2007 at $28.90.

After scoring a 350% gain in six months after my initial post, I began to alert our trading
club subscribers to consider taking profits on DRYS - just 5 days before its eventual
peak. My cycle analysis was suggesting a top might be near. A few weeks later the
prices began to plummet, falling 60% in a little over 2 months, providing an excellent
shorting or put option buying opportunity.

The power in this form of trading is derived from an ability to look at the big picture. The
stock’s recent trading action is obviously important, but you must also analyze the stock’s
much longer cycles - as well as the stock’s sector and the broad market.

This discovery and understanding of momentum stock super-cycles - and the internal
cycles within them - have allowed us the uncanny ability to spot turning points in a
stock’s run - often to the day (if not the hour). The “Attention Windows” concept we use
as well as our own form of wave analysis (no, it’s not Elliot Wave, it’s much simpler than
that) can lead to an unfathomable knack for identifying bottoming action like no other
trading system out there.

For another great example, let’s look at TSL. I posted it in our trading chat club on June
12, 2007. Based on my cycle analysis, I predicted a bottom near the $40 mark -
expecting a potential 50% run in a few weeks. The strength of the run surprised even me,
and the price topped out a month later for a 75% plus gain.

‐ 7 ‐ 

 
TSL - A 75% gain in 1 month - posted in our chat club on June 12, 2007 at $40.00.

If you’re just focusing on catching the biggest waves, what happens when the broad
market conditions deteriorate?

I’d be the first one to admit that there are not always big waves in the market. Just as
surfers down at the seashore have their favorite times of the year for surfing the Kahuna
type waves, the stock market has its own internal cycles that must be obeyed to
successfully trade it.

There are definitely some common seasonal broad market cycles. For example, 90% of
stock market profits are usually generated from November through May of the following
year.

Obviously, bull cycles are the best opportunities to have sustained market momentum to
give a stock some “lift.” But when you are surfing the internal cycles of a stock and you
understand common bottoming cycles, you can always find some surfing somewhere.

For example, VPHM had been in a steady decline after a huge 1,000% run-up in 2005.
But based on just one of the common Bonsai Elite Wavetrader stock cycles; this stock
could have been traded for more than a 100% gain in 4 months from its July 2006
bottom.

‐ 8 ‐ 

 
VPHM – A 100% gain in 4 months from the July 2006 bottom after a 10-bagger run in 2005.

I know traders like to make things complicated since they are usually very analytical.

Thousands of investors have developed countless investment strategies, based on

anything from the cycles of the moon to complicated convergences of current interest
rates, T-Bill discount rates and what year of the Presidential election cycle we are in.

But very few of these investors have ever really stood back and looked at the big picture.
It’s like many traders are so deep into the forest that they can't see the trees. What
actually constitutes success in the stock market? The definition of success may have as
many definitions as there are traders.

One trader may believe that ultimate success in the stock market involves a fixed monthly
rate of return that involves minimal research time and generates a predictable average
monthly rate of return of 20%.

Another investor may consider success to be an annual rate of return of 40% or more
since this is triple his or her average mutual fund rate of return.

But true success in the market will always be defined by the market’s top performing
stocks. Having made it a mission of mine to break down and study the market’s top
stocks from every conceivable angle, I can safely say I know of no other trading system
that has so clearly defined these mega-movers and teaches what it takes to surf them
successfully.

Our track record in the Bottomspringers trading club bears us out. Professional traders
paid Daryl and me a hefty sum to look over our shoulders in the last few years to get an
inside look at the power of this trading strategy.

‐ 9 ‐ 

 
The top performing stocks of 2007 were abundantly represented in our top stocks Trading
Pond including: DRYS 350% gain in 6 months, FSLR 175% gain in 2 months, SIGM
133% gain in 5 months, BIDU 250% gain in 6 months, RIMM 333% gain in 13 months,
AUXL 100% gain in 6 months, ISRG 200% gain in 9 months, KUN 265% gain in 4 days
and on and on.

As you can see from some of these prior charts, stocks with high momentum insure a
quick completion to the trade, allowing you to keep your capital working by moving
quickly into the next momentum trade. This may explain how some of the more
sophisticated momentum traders have managed gains upwards of 1,000% in one year.
Easy to understand when you realize the power of compounding and getting in and out of
trades quickly.

When powerful news and the chart’s trading action merge to confirm the potential power
of the breakout, this is when the most explosive breakouts usually occur.

For example, take GGR, which was posted in our weekly ezine on 6-27-05 based entirely
on a solid chart pattern reflecting a strong level of momentum. Within 3 days of the post,
the stock had risen 175%.

GGR – A 175% gain in 3 days from our ezine post on June 27, 2005.

We were not aware the company had made a major oil discovery, and the point at which
the price of the stock exploded was the day of the announcement of the discovery. The
stock was posted in our ezine entirely based on a solid chart pattern that reflected the
potential power of the breakout. The news that initiated the breakout itself confirmed the
momentum of the chart pattern and vice-versa.

‐ 10 ‐ 

 
Interestingly enough, the most powerful breakouts - resulting in the largest gains - often
are some of the most predictable breakouts, once a complete understanding of the internal
cycles within a high momentum stock’s move is undertaken.

‐ 11 ‐ 

 
 A Picture Is Worth A Thousand Words –
How To Find Monster Stocks In Minimum
Time
I was recently talking with another trader, and we were dissecting an impressive stock
breakout.

I was coming from the technical side, having examined the chart and realizing that
something big was about to happen. It was a “perfect” chart setup - one that usually leads
to very significant gains in a short period of time.

I had previously identified what I believed to be the actual "breakout day" prior to the
breakout. I had no idea of the stock’s fundamentals, or the specific day the company
planned on releasing dramatic news.

The chart showed the stock was being accumulated in a big way. My friend was not as
focused on chart patterns as I was - he usually followed price action combined with
analysis of the news surrounding the stock. He also caught the trade, but well after I did
when he learned of some impressive news the company had just released.

Through personal experience - and lots of trial and error - I have learned that the most
productive way to analyze a stock’s potential is to learn how to interpret the stock’s
trading action. This is usually the case after a stock has had a little trading history to
show you what it is capable of. You wouldn't go to the racetrack and put all of your
money on a horse that is in its first race. Nor would you place a bet right away on a horse
that had to run 3 miles just to get to the racing park.

A study of the top performing high momentum stocks shows an increasing level of
trading activity and volume - as well as specific trading setups - which often lead to
explosive breakouts further into its cycle.

Not all high momentum stocks offer high levels of predictability. I will venture to say
that those stocks not “showing the signs” also manage to catch many of the insiders and
those who follow the stock off guard. That's OK - we can still do quite well catching the
80% that do provide us sufficient clues.

An experienced chart reader can quickly analyze 50 charts in less than a minute, "A
picture is worth a thousand words." How long do you think it would take to pick up the
newspaper, turn to the financial section and glance through the articles looking for the
news stories for individual stocks, decipher how much impact the news has, while
analyzing how the investing public will interpret it? I’ll bet quite a while longer.
‐ 12 ‐ 

 
If the reason you are investing money in the stock market is to actually make money with
your money, I know of no better approach to optimize your stock investing than to
undertake a study of momentum to learn how to catch these phenomenal trades. Many
traders understand support and resistance levels. But far fewer understand the effect that
the proper levels of momentum, in conjunction with support and resistance (as well as
timing models), can have on a stock’s potential.

Many of you have heard of the great baseball player Barry Bonds. I recall reading a
magazine article where he was being interviewed by the press in the dugout before a
game. The opposing pitcher was on the mound, and Barry wowed the reporters by being
able to identify the type of pitch just by listening to the ball as it left the pitchers hand.
Sounds incredulous, but easy to understand when you realize the number of pitches he
has faced.

The same can be said about momentum traders who have an uncanny knack for
identifying potentially explosive price zones based on an understanding of the price
tension created by the ongoing battle between the bulls and the bears.

Here are some of our other major movers posted in our Trading Pond report from our
2007 spring and fall cycle. Some of these trades were nothing short of phenomenal, with
many going up several hundred percent - without the risk of time decay options.

Here is JASO - up 185% in 7 months from its Trading Pond Report post on April 13th at
$22.

BCSI had a 420% gain in ten months from our post late in 2006 at $10.23. It was posted
again on August 17, 2007 at $27 for a 45% pop in 4 days.
‐ 13 ‐ 

 
BIDU managed a 254% gain in 6 months from our Trading Pond alert.

I originally posted BIDU in the trading club in early 2006 near $58 but we didn’t
formally place it in the Trading Pond report until it met our long-term cycle criteria in
late April of 2007. Still, it was no slouch from there, with a monster run from $120 to
$400 plus in just 7 months.

‐ 14 ‐ 

 
YGE was another one of the solar stocks on fire during 2007, with an 83% run in just 6
weeks from our Trading Pond alert.

‐ 15 ‐ 

 
 The Origins of the Bonsai Elite Wavetrader
Approach to Stock Trading
About 15 years ago, I began tweaking and optimizing a stock investment strategy that
was published back in the 1960’s. The basic gist of this particular strategy was to buy
stocks reaching a new high on a dramatic increase in volume.

These price and volume surges often forecast a continuation of a strong uptrend and often
lead to a stock price’s doubling, tripling or more in a relatively short time. This was all
well and good for awhile, and the system seemed to work very well - especially during
the tech stock boom in the late 1990’s. Several momentum traders using this kind of
system turned small amounts of money into comfortable retirement nest eggs during this
period. One momentum trader turned $10,000 into $42,000,000 in two short years during
the tech bubble.

But when the tech bubble burst in early 2000, followed by the Sept. 11, 2001 terrorist
attacks on our nation, the stock market was left reeling, and in a steep decline until late
2002 and early 2003. Once the stock market began to turn around, it was obvious to
many traders that we were in a different kind of market. What worked back in the 1990’s
did not work nearly as well in this new market environment. This observation was borne
out by analyzing the trading results of some of the top momentum traders around. The
results were not very impressive, nothing near their performance before the bubble burst.

This realization led me to “go back to the drawing board” – and to spend thousands of
hours examining tons of stock charts - looking for better ways to trade in this new stock
trading environment. This study led me to a basic understanding of how stocks really
move. It was far different than what I had learned from other traders and textbooks. I
began to notice the subtle, yet distinct trading pattern of stocks with different levels of
volume and price ranges.

I began to “reverse engineer” the stock market’s biggest winners. In doing so, I
consistently noticed distinct trading setups in almost every big winner, making a high
momentum breakout quite a predictable event.

These were stocks like IPIX, up 1,000% in 13 days, ANTP, up 900% in 30 days and
EXM, up 800% in 37 days. And there were often three to five additional excellent trading
opportunities within these high momentum stock’s cycles. This study led to being able to
magnify gains of a stock like TBUS from a “mere” 300% to gains of over 1,000% in a
few short weeks.
‐ 16 ‐ 

 
 I also wondered why these great traders were leaving so much money on the table.
Maybe it’s because they don’t fully understand how predictable these internal cycles are,
and maybe eventually they will come to the same conclusions.

One cannot analyze the successes of some of these great traders without analyzing their
failures also. The same momentum trader who turned $10,000 into $42 million in two
years lost half of his winnings trying to surf the treacherous waves at the back end of that
bubble.

Violent whipsaws and tremendous volatility often mark turning points and transitions in
the stock market. At the bottom of a steep decline in the market, you will often find the
same kind of volatility. Learning how to spot, interpret and ride these waves can be a
rewarding challenge, especially when a stock does exactly what you think it should based
on an understanding of the internal cycles consistent with most momentum stocks.

How accurate can you be when you understand the internal cycles within a stock super-
cycle using the B.E.W. trading system? Let me give you an example.

IFON - Infosonics Corporation broke out of a basing area in late April of 2006 near the
$6 mark (split adjusted).

My analysis showed it was just about time for this one to show us some more “jiggitude”
(Hey, what else do you expect from a “surfer dude? Leave the flowery techno-babble to
the techno-geeks).

Anyway, based on the trading action and its stock cycles, I recommended it as a buy in
our trading club, and within a little over a month the stock was up over 200%. But, while
many in the general investing community were just beginning to notice the stock, I was
warning members to consider taking profits and shorting the stock. This was on a Friday.
On Monday morning, the stock’s price started to plummet, and dropped 66% over the
next month.

‐ 17 ‐ 

 
This is the power in understanding stock cycles and the momentum characteristics of
prior mega-movers. These reoccurring patterns can unlock the door to some amazing
short and long-term gains.

‐ 18 ‐ 

 
 Is There A Holy Grail Of Stock Trading?
Forget it - it doesn’t exist. Stocks seldom do exactly what we think they’ll do, or when
we expect them to do it. Okay, so what’s the next best thing - if not the Holy Grail, then
what?

How about the concept of focus and concentration? Now that’s not something your stock
broker is likely to bring up as a strategy for amassing wealth, because it sure is not going
to make him wealthy if you are buying just a few select stocks.

Now, let’s look at a typical scenario – one many beginning traders are caught up in when
they first begin stock trading.

And this one drives me crazy… I know, because I was caught up in the same scenario
when I first started out.

They feel like they have to “eat everything at the buffet.” Their auto mechanic
recommends a “sure-thing” stock and they rush home, fire up the computer and click
“Buy” - it’s done without any further thought. Or their geriatric uncle recommends a
blue chip oil stock that he’s owned for 30 plus years and it sounds like a wise thing to do
so they buy that one also. Not to mention the endless array of “stock touting” magazines
they are now getting in the mail since they recently got on everybody’s mailing list after
subscribing to an investment publication. And don’t even get me started on the subject of
these “pump and dump” outfits.

A Smart Gambler Cuts His Losses Quick and

Bets the Pot on His Best Hand….

Why on earth would you want to concern yourself with 20-30 different stocks when you
could just as easily go out and buy an index mutual fund? You’ll probably get about the
same rate of return without all the hassles and whipsaws that usually occur when you
have more stocks than you have attention.

How do you think you would feel if you had TASR (Taser Industries) as one of the
stocks in your portfolio that scored a 3,000% gain in 8 months - yet the value of your
overall portfolio only went up by 100%?

I know many active traders who have so many stocks in their portfolio they resemble a
mutual fund. That’s fine if you’re at a period in your life where you’ve already
‐ 19 ‐ 

 
accumulated considerable wealth, are happy with your financial life, and you are just
looking for stable appreciation and wealth maintenance.

As I am writing this, I continue to be amazed by the power of being highly selective in

stock trading - there is no rule that says you have to buy everything that comes along.

Take for example IIIN – Insteel Industries.

IIIN had an A-Rated momentum trading pattern based on the Bonsai Elite Wavetrader
stock scoring system when it broke out in January of 2006. It topped out a few months
later for a 200% plus gain out of the base (doesn’t include margin or options) that’s over
1,200% annualized. Now that’s VERTICAL!

This shows the power in being selective about the stocks you trade rather than taking a hit
and miss approach based on rumors, speculation or someone else’s opinion. A stock’s
chart is often the best arbiter of what the stock’s future potential is. A 2-step
mathematical formula told us all we needed to know about the possibilities for this stock.

Now if you had bought every “B or C”-rated trade that came along during this same
period and had your capital tied up when this particular trade gave a buy signal, you
might have missed the train. These A-rated setups don’t come along quite as often as
many of the B and C-rated trades – so that makes it a little easier for them to stand out.

‐ 20 ‐ 

 
What if there was a way to focus your stock buying radar like a laser on stocks like these?
Think that’s impossible? Think again. If you take a long-term view of this chart, there
are several telltale “momentum signatures” that give this stock not only an A-rating but
an A+ rating.

The Bonsai Elite Wavetrader investing style employs an asset allocation strategy to focus
more capital on the A-rated trades, while at the same time not missing many of the
powerful shorter-term swing plays that can generate phenomenal short-term gains.

At the time of this writing, there have been no less than six B and C-rated stocks in our
Trading Pond (HEB, NVAX, VASO, TTP, GNBT and FTGX) in the last several weeks
that are up over 50-100% in just a few weeks time. Yes, they’re not A-rated trades but
neither are they slouches. Many B and C-rated trades can still offer phenomenal short-
term returns.

But, it’s the A-rated trades that offer higher levels of predictability, stability and gains
(especially if they are optionable or marginable).

Here’s another one, an A-rated trade our stock selection system identified in August of
2007 and posted in our Trading Pond service. ASTI, a solar stock, which as of this
writing is up nearly 200% in 4 months from the Trading Pond post and seems poised to
head even higher.

Did we have to go through reams of fundamental research to find this gem? No, nothing
complicated like that. Again, just a 2-step mathematical analysis of the stock’s price trend
and an overall analysis of the pattern quality of the trend.

‐ 21 ‐ 

 
The subtle accumulation that is not so subtle to the trained eye, can often forecast
dramatic breakouts in individual stocks. That accumulation often causes a momentum
signature that the Bonsai Elite Wavetrader style of stock investing is uniquely able to
identify. Our BMI indicator is one of the most powerful tools we have to isolate these
gems.

At any given time throughout the year, there are usually less than a handful of stocks that
offer this kind of potential. Some of the biggest movers in the stock market often go
through several periods of strong moves and then extended consolidations - or resting
phases - before advancing further. When our indicator begins to identify less and less of
these prospects, we become a little more careful with our stock investing because
oftentimes clouds begin to form on the stock market horizon.

‐ 22 ‐ 

 
 What Momentum Stock Home Runs TASR
And HANS Taught Me About Being Selective

You know, you don’t have to be a rocket scientist - or spend long hours poring over every
aspect of a company’s fundamentals - to be a successful investor or trader, because...

It’s all in the chart!

Well not “all” really, but I’d venture to say there are far more clues in the actual trading
history of a stock than in all the “behind the scenes” speculation as to how the public will
react to certain news.

Too often, I see one stock hammered despite a great earnings report, while another stock
spikes up in price despite a mediocre earnings report. Beauty is in the eyes of the
beholder.

I learned a long time ago that what drives the stock market or individual stocks is often
anyone’s guess. Sure, in general, you can say there are somewhat predictable responses
to exceptional earnings, or projected earnings growth, or the stock market’s response to
increases in the Federal discount rate that can dampen or ignite traders’ enthusiasm and
provide an environment where either the bulls or bears will thrive. But when it comes
down to how the stock will react to earnings news, product news, acquisitions, etc. there
is no more telling sign than the chart itself.

Fight the Tape at Your Own Peril...

There’s a saying on Wall Street-“don’t fight the tape.” Go against the tide of an
individual stock or the market’s price action at your own peril. Regardless of what your
analysis tells you about a stock, you should always look at the current trading action to
determine if this is a stock you should be in now. Many a trader who has fought the tape
and based his selections on fundamental analysis alone is sitting on worthless or near
worthless stock now.

The behind the scenes, corporate boardroom decisions that inevitably lead to a stock’s
accumulation or distribution can often be identified if you know what to look for. The
accumulation is easy to spot further into the trade (like in HANS below). But it’s the
accumulation within the base that will clue you in to whether this train ride is worth it,

‐ 23 ‐ 

 
while at the same time getting you into the trade at a price that will optimize your return
on investment.

Some of the recent stock market’s biggest movers had similar trading characteristics to
many of the other historically big movers in the stock market. This makes it easier to flag
these stocks in the beginning stages of their huge moves. These include - but are not
limited to - pattern quality, sales and earnings growth, cycle analysis and momentum.

How a stock reacts to price points or price advances can many times foretell if a move
will continue. How would you like to have given up on TASR when the price was up
“only” 500% - thinking there was no way it could go further? You may have caught only
a small portion of its entire move. But had you paid closer attention to the trading action,
knowing what to look for, you might have tagged along for one glorious ride.

‐ 24 ‐ 

 
This particular ride paid for my business partner’s vacation home on the beautiful island
of Contadora in Panama. These are the types of stocks that momentum traders live and
die for - and ones we are constantly scouring the market for.

‐ 25 ‐ 

 
How One Stock Trade Can Change Your Entire
Life For The Better…

“That’s me… and my mini‐villa on the beautiful island of Contadora, Panama that my TASR 
trade paid for! And yes, that one trade paid for the golf cart too. TASR also made me another 
$55,000 while lounging on the beach all week. Let us show you how to find these kinds of 
mega‐mover trades!”  

J. Daryl Thompson 
CEO, Trade Your Way To Wealth LLC 
Co‐Author, The Bonsai Elite Wavetrader System 

Had you followed just one of the Bonsai Elite Wavetrader exit strategies (based on stock
cycles) you might have locked in 90%+ of the move in TASR. High momentum stocks
need to be traded differently than many of the stodgier momentum stocks. Moving
‐ 26 ‐ 

 
averages can be helpful for portions of the move, but understanding basic momentum
swing trading techniques is crucial to locking in more of the stock’s ultimate move.

Even one of the more popular exit strategies - like the Darvas Box exit strategy - do not
respond quickly enough with the faster moving stocks to lock in a larger portion of the
gains. In the case of TASR, the Darvas Box exit strategy would have gotten you out of
this trade nearly 50% off of its peak price.

TASR’s launching pad for the run occurred in the $6 range, on its way to an ultimate high
near $150 (chart reflects splits). But many of the monster stock moves in the past have
taken off from much higher price ranges. In fact, the average launching pad price range
in the more price-stable, higher liquidity stocks is in the $37 range.

Some of the lower priced stocks have huge trading volume. Like FNSR, a $4 stock that
traded 22 million shares today and is up over 100% in the last few weeks. And there are
plenty more highly liquid, low-priced stocks. The B.E.W. trading system focuses on
primarily the higher momentum stocks, which at this point in time are generally those
stocks under $15-$20, but we do not limit ourselves to those. We go where the waves are,
whatever price range that may be.

‐ 27 ‐ 

 
 Is This a Complicated System that Uses
Technical Analysis?
Some of the techno-geeks who thrive on complicated, lots of “bells and whistles” trading
systems with sophisticated algorithms, stochastics, ADX, Wilders RSI, etc., miss the
most important thing in determining which stock to trade. Price is the one and only
leading indicator you can rely on. Although technical analysis can be helpful after you
are already in a trade or as an additional filter, the results are often poor if you rely solely
on technical analysis to make a buying decision.

In fact, looking back on many of the stock market’s biggest winners, there are only three
simple, visual criteria necessary to quickly analyze any stock’s long-term potential.
Although more extensive fundamental research can be helpful, our best performing BEW
stocks always made the first cut. And the best of these setups only required two more
simple and quick uses of fundamental analysis.

In the case of HANS, its own previous trading history gave ample clues to the viability of
its future potential. Knowing what the trading characteristics of the stock market’s
biggest movers are ahead of time makes it easier to decide whether or not to stay in a
trade, and for how long.

Nicholas Darvas was one of the pioneers of momentum investing. In his book “How I
Made $2,000,000 in the Stock Market”, he tells the story of how his trading account was
annihilated when he first began investing. Like most beginning investors, he based his
stock picks on spurious rumors about “must own” stocks that were “guaranteed” to go up,
but which quickly nose-dived shortly after he bought them.

Realizing that tactic didn’t work very well, he began to research a stock from every
fundamental angle. Shortly thereafter, he became nearly certain he had found the “goose
that laid the golden egg” when his analysis showed several stocks that were tremendously
“undervalued. He quickly bought them, and they quickly tanked.

In a final act of desperation, deciding he had nothing to lose, he started buying stocks that
were going up in price for no other reason than “the stock was going up in price”. After a
few winning trades in this manner that began to restore his trading account, he quickly
started to re-evaluate his approach to stock trading.

‐ 28 ‐ 

 
To make a long story short, using this momentum trading approach, he turned a $36,000
account into two million dollars in two years. And this was back when two million
dollars was a lot of money!

His success came without using any exotic technical analysis tools to muddy the price
action. No rumors. No broker feedback to encourage or discourage a particular trade. Just
the price action to tell him whether or not this was a stock he should be buying.

‐ 29 ‐ 

 
 Follow the Cycles to Stock Market Wealth
After an exhaustive study of thousands of charts over many months, I began to
understand there were many subtleties in stocks with different levels of liquidity and
trading volume. That made it much easier to decide when to avoid the often extended
periods where a stock was trendless, and also to capture more of the gain in a shorter
period of time.

I learned there are up to 3-5 strong breakouts within a high momentum stock’s cycle.
Identifying when those breakouts will occur allows you to swing trade a stock and not
have money languishing during the typical periods of malaise between breakouts and
market cycles. This allows you to preserve trading capital by staying on the sidelines
when the market conditions are unfavorable.

Additionally, I discovered that the best performing stocks have four traits that outshine all
the other stocks in the market:

1) Pattern quality: After understanding the importance of this concept, I was able
to very easily distinguish between a stock with so-so potential and a stock that had
legs.

2) Momentum: After staring at thousands of charts until the wee hours of the
morning, my bleary eyes started paying off. I began to notice there was a
particular setup occurring quite often within the base to give me the clues to what
might lie ahead with a stock’s price. Using a simple mathematical formula I
developed called the BMI indicator, I was able to hone in on and isolate stocks
with the kind of potential I was looking for.

The best of the charts usually demonstrated it wasn’t momentum alone that
signaled the best prospects. It was momentum in conjunction with the pattern
quality of the stock on pullbacks (remember the “solid basing - martial arts
analogy”) that forecasted strong continuation patterns.

3) Fundamentals: For those stocks “showing their hands” prior to breaking out,
meaning the fundamental aspects were public knowledge and didn’t come out of
left field (i.e., a merger, buyout, etc.), the accumulation often showed up in their
basing action.

4) Cycle analysis: Another thing I learned was that stocks with high momentum
‐ 30 ‐ 

 
 have up to 3-5 breakouts within its cycle. That made it much easier to surf
between waves, allowing me to move capital to other trades during periods of
consolidation.

Additionally, proper stock timing is one of the most critical factors in optimizing annual
ROI (return on investment). Learning how to catch a stock at or right before a breakout
of a price squeeze (based on the B.E.W. stock timing models I developed) is critical in
decreasing holding time and increasing the ROI. These timing models consistently
enable us to capture 90%+ of a momentum stock’s cycle and minimize unproductive
consolidation zones.

I performed most of this study during a fairly severe bear stock market after the 9/11
terrorist attacks. There wasn't much use in stock trading at the time, unless you just liked
throwing money away. After the market appeared to find a bottom in 2003, I began using
the tools I developed to see what worked and what didn't work.

The market volatility during 2003 demonstrated to me that a pure 1990’s approach to
momentum stock trading would not work nearly as well as it did in the prior strong bull
market. The new momentum trading environment - with a lot of “fear” in the market -
necessitated a much more nimble approach to trading.

Those long hours spent tweaking everything I had learned about momentum trading led
to the development of the Bonsai Elite Wavetrader stock scoring methodology. That
system has allowed many of my subscribers to pull some pretty big fish out of the
Trading Pond.

‐ 31 ‐ 

 
Stock Trading Systems - Do They Really Work?
Many beginning stock traders searching for strategies to increase their stock market
returns dabble in many different trading methodologies. And there is certainly no lack of
trading systems to choose from in the marketplace.

But very few of these systems address the most fundamental, underlying question that
many traders have: “Is this the best, most productive system for giving me the highest
return in the shortest time possible?”

What is the best way to determine how that happens? I believe it takes studying not only
the historical results of these systems through back testing, but also analyzing the track
record of more recent stocks the system has identified.

With the speed and processing power of today's modern computers, many different stock
charting analysis indicators have been developed to take advantage of what (before the
advent of computers) would have required copious amounts of calculations by hand.

In my study of the stock market’s biggest waves, I learned very quickly that much of
these exotic technical analysis tools worked much better after a potential trade was
selected based on other factors than they were at actually choosing the best stock to trade.

Personally, I found the most advantageous aspect of personal computers dealt with chart
analysis. The ability to scan charts with just the click of a button gives you a huge
advantage over the pioneers of momentum investing, who had to sift through all those
charts by hand.

This made it much easier to quickly flip back and forth between multiple charts, looking
for clues as to why these historical big movers performed like they did. This study led
me to the eventual conclusion that technical analysis alone was inadequate for identifying
the stocks that offered the best potential for massive breakouts.

I also discovered that fundamental analysis is rather lame at picking out the biggest
winners, because there were so many other factors that came into play driving the big
movers. This includes - but is not limited to - capitalization, float, previous trading
history and sector strength, the quality of a stock’s trend and the power of its “news”.
This still required a lot of work.

I’ve always been one to look for a better, more efficient way to do something. These

‐ 32 ‐ 

 
periods of intensive chart analysis led me to the three aforementioned factors topping the
entire list of the stock market mega-mover characteristics. And all that’s required is a few
seconds of chart analysis to separate the wheat from the chaff. I can’t overstate the
importance of these three factors: momentum, pattern quality and cycle analysis.

Do you know how you can pretty much predict how a person will act in a given situation
based on how they have acted in the past? Well, you know, absent the biology - stocks
are a lot like people. They have their own quirks and predictable ways of behavior based
on how they acted in the past or - for that matter - when they acted similarly to another
stock with a similar pattern.

Additionally, this study led me to a much more productive way to catch the big movers in
earlier parts of their cycles, and also to “surf the waves” between their up cycles - while
at the same time not tying up capital during periods of consolidation or pullback.

For example, a fundamentalist taking a “numbers crunching” approach in analyzing the

top stock potentials in the market would, in my estimation, take a lot longer to filter the
top trade prospects down. That’s simply because there is a lot more information on the
fundamentals side than there is on the technical side. And I use the “technical”
terminology lightly, because the B.E.W. version of technical analysis is a lot less
cluttered than what many swing traders or scalpers might consider technical analysis.

And as far as fundamental analysis goes in general, to that I say….

‐ 33 ‐ 

 
 Fundamentals… Schmundamentals! Why
Fundamental Analysis Can Get You a Quick
Trip to the Poorhouse
OK, it sounds like I'm a little cynical about using fundamentals as the basis for stock
selection. No, not really. A stock’s fundamentals can give valuable insights to its
potential for big moves.

My cynicism comes from the fact that many traders use fundamentals as a sole and
exclusive basis for stock selection. The stock market is replete with stocks having great
fundamentals whose share prices languish while the broad market advances.

Conversely, there are many stocks that explode for multi-hundred percent gains with
anemic fundamentals. So again, there are many factors influencing a stock’s price
potential. I know too many traders who will buy a stock even in a downtrend because the
fundamentals are “great” or they heard something good about the stock.

That's not just a little crazy, that's insane!

Stocks in a downtrend are usually there for a good reason. Insiders often know in
advance about a change in their company's fundamentals that the public will find out
about later.

And then there are the traders who will buy into a stock after a big run-up in price
because the stock still has stellar fundamentals, and they don't want to miss that mega-
mover-regardless of where it is in its cycle.

Many of the big movers in the market will often receive a following after a stock’s price
has climaxed to dizzying heights.

These climaxes will often result in the loss of 50% of its value or more in just a few
months. Do you want to be the one buying the stock at the top of a precipitous rise only
to be left holding the bag while the price collapses? I know of a few examples just in the
last couple of days that are down 30-40%.

Stock trading is not unlike horse racing at times. You get to see which of the stocks are
moving and you can choose to buy the obvious winners, or you can talk yourself out of it
because you have to make sure this "stock has the right stuff" by doing extensive
fundamental research.
‐ 34 ‐ 

 
A good analogy is that you are at the horse track with a bunch of your friends and they
are all "horse racing experts" - they all have their favorites.

Throughout the entire race, they keep reminding you there is no way their horse can lose
- it has the best jockey in the world, or they offer a multitude of other reasons that do
little more than confuse you.

All the while their horses continue to lag behind the leader of the race, losing more and
more ground as the finish line approaches ahead. And just for the sake of analogy, we are
going to pretend you can continue placing bets on whatever horse you like, right up until
the time the horses cross the finish line.

Now, are you going to let your friends continue to exhort you to bet on their favorite
horse (when the blithering obvious fact shows their horses are losing) or are you going
to just bet on the winning horse - friendships be damned?!

Now you may understand why I'm a little cynical about fundamentals. In the grand
scheme of things, what do they mean? I have seen too many cases where stellar
fundamentals result in zilch! No stock movement - in fact, prices falling. I learned it
doesn't take a pencil-pushing accountant with vast knowledge of a company's financials
to discover the next big stock mover. This is actually often a recipe for disaster. The
primary thing I look at is how the prices move. How decisively, and with how much
volume does a stock react when it reaches certain price plateaus?

I can give you ample examples of analysts (many momentum stock traders semi-jokingly
refer to them as anal-ysts) we see on our trading platform continuing to recommend a
stock as a buy when it’s already down 20% after completing its super-cycle. On some of
the higher performing momentum stocks, a typical average retracement on these monsters
can be as much as 50-60% in a few months time. You can see why we might be a little
cynical of an exclusively fundamentals-based approach to trading.

‐ 35 ‐ 

 
 In Conclusion… The “Millionaire Maker”
Pattern, The Trading Pond, And How To
Annihilate The Market Averages
Personally, I think I’m like many active traders. I don’t like to have my money sitting
still in turtle stocks. I look for stocks with proven momentum, a solid chart pattern and at
a range in its cycle that suggests it’s near a new breakout point.

As I have reminded traders via our blog and in our trading chat room, there are a lot of
world problems I would like to have a hand in solving, and I can’t do that if my money is
working like everyone else.

In fact, in just the last few weeks - despite a rocky trading environment - one of my
favorite trading patterns I call the “Millionaire Maker” nailed MTL for a 40% gain in
three weeks. Not many of these types of stocks are dominant in a sketchy market
environment and therefore stand out like a sore thumb. I currently only have another
three of these in the pipeline and I’m watching closely for a breakout. As market
conditions improve, more of these will show up on the radar.

Our small list of the Millionaire Maker patterns in 2007 generated some major movers.
For example: FSLR +150% in 3 months, SIGM +133% in 4 months, AUXL +100% in 6
months, ASTI 250% in 4 months, SVNT +71% in 2 months.

This is the power of trading stocks with proven momentum, and quality charts reflective
of quite often quality fundamentals. Unlike another aggressive strategy - trading options
- you don’t have to worry about the time decay of money and the inherent risk of a
trading strategy where 80% plus of options expire worthless.

For example, take a recent period during one of our prior bull cycles. The B.E.W. stock
scoring model identified some of these top stocks in the market in my daily subscriber
service (in 2008 we are going to a more focused weekly Trading Pond service).

‐ 36 ‐ 

 
The above chart is a sample of what part of our prior daily Trading Pond service looked
like. We do catch some amazing gainers!

In case the chart is hard to read, here’s a list of those big movers:

TIE 125 % gain in 2.5 months

ERS 190% gain in 6 weeks
SMSI 55% gain in 2 months
TGB 68% gain in 11 days
HOM 91% gain in 45 days
DVW 83% gain 31 days
GRZ 80% gain 14 days
GV 127% gain 13 days
MED 67% gain 34 days (and 156% in 3 months)
TMTA 50% gain 6 weeks
IPII 29% gain 5 weeks
TGC 84% gain 22 days
ACTG 23% gain 5 weeks
TGE 76% gain 2 months
ZOLT 37% gain 1 month
AMKR 22% gain 6 days
OMNI 18% gain 14 days (and 133% in 3 months)
‐ 37 ‐ 

 
IIG 37% gain 12 days

The B.E.W. approach to trading consistently identifies those stocks more apt to produce
dramatic short-term gains. Unlike other momentum trading systems out there designed to
select stocks that can take 4-6 months to deliver some decent gains, many of the stocks
we post based on our B.E.W. stock scoring model can deliver similar gains in a much
shorter period of time.

Maybe you’ve never been able get this stock trading game quite right. You can see the
potential in it, but you don't quite know what you’re doing wrong or what to do to get
better results. I can identify. There was a time when I had similar problems as a
beginning trader. Despite having had some excellent teachers, I kept making the same
mistakes.

Then I decided to cut to the chase and undertake a study of the top performing stocks of
all time. Some interesting things happened when I did this. I learned a few things about
stock investing I had read nowhere else.

I discovered there were many clues hidden in the charts of the best performing stocks –
and these "momentum signatures" made it easier to spot the next one coming along.

Are you ready for a different approach, one that actually proves itself in the market every
day, a system that simplifies the art of stock trading? And one that’s actually designed to
catch the really big movers and then stay on the sidelines when trades are less fruitful and
market conditions are unfavorable.

This is a system that allows me and my fellow subscribers to literally annihilate the
market averages with trades unfathomable with a conventional stock picking approach.

Listen, becoming proficient in any field of endeavor can oftentimes take a great amount
of study to master it. If you want to become a great stock trader you can study success
and thousands of stock charts yourself. Or you could learn from those who have already
done it. The B.E.W. momentum trading course series and our Trading Pond service will
help you to dramatically decrease the learning curve. Read on to learn more…

‐ 38 ‐ 

 
 The Bonsai Elite Wavetrader
Frequently Asked Questions

Q: Where does the name Bonsai Elite Wavetrader come from?    

A: The course was aptly named the Bonsai Elite Wavetrader to signify the
powerful stock waves the trading system is capable of isolating. The Bonsai
Pipeline located in Hawaii (also known as “Banzai” or “Bonzai”) is a surfing
mecca, providing some of the largest surfing waves in the world - especially
during specific times of the year, not unlike the stock market’s powerful waves
that also follow similar cycles. Since the primary focus of the B.E.W. style of high
momentum stock cycle surfing is in isolating the market’s top stock surfing
prospects, we thought it was a great fit.

Q: If this trading system is so powerful, why have I not heard of it?

A: Primarily because this system is a brand-new form of trading momentum

stocks. The research and course was finished in late 2007, and we’ve spent the
last several months finishing a series of videos to supplement the courses, as
well as preparing for the national marketing campaign, which you've just been
exposed to. In due time, many more people will hear about this system.

Q: Is this trading system for real? Is it really possible to get gains of a

few hundred percent in a stock in just a few days or weeks?

A: Yes and yes. But don't let me mislead you, not every stock is going to score a
dramatic gain, nor does every trade we post in our Trading Pond service pan out
– that’s just the nature of the stock market. The average returns in many of the
indexes over the last several years have been abysmal. This system gives you
an edge for finding stocks that are about to break out for dramatic gains. Like any
form of stock trading, the general market conditions can affect the outcome
dramatically. The heart and soul of the stock surfing approach to the Bonsai Elite
Wavetrader style of stock trading is to “go where the waves are.”

If there are no “waves”, or the waters are “choppy” that would be a good time to
put up the surfboard and wait. One of the things this course will teach you is that
over-trading rather than under-trading can lead to stock market losses.
‐ 39 ‐ 

 
And then you have personalities to deal with. Not every trader is going to take a
system like this and have the same results as the person who developed it. This
is because personalities come into play, your belief systems, your work ethic, the
ability for you to adapt this style of trading to your own personality. Don't get me
wrong, there are many types of momentum plays for every type of personality,
but some people try to become a type of trader that they are not. They try to push
when they are best at pulling, and when you ignore what you do best, just so you
can be like the other traders, then your results may not be as good.

What this system will do for you, is give you an edge that you otherwise might not
have had. It will help you to learn to isolate some of the top prospects in the
market. There are usually only a handful of A+ rated stocks each year that can
be classified as “cream of the crop” momentum stocks. The ones that bring it all
together - momentum, liquidity, fundamentals, pattern stability, etc. These are the
ones that this system is best suited to isolate with our proprietary BMI indicator
(no, it’s not complicated).

Q: Your marketing letter mentions the Darvas book. It sounds like a

pretty good trading book, why don't I just go out and buy that book
since it seems to be the basis for your style trading?

I would be remiss not to acknowledge the influences that have helped me to

develop this system. But the Bottomspringer's trading system is not a Darvas
system. Although there are bits and pieces that make up the fabric of this form of
momentum trading, it is by no means the entire cloth. Something happened back
in 2001 and the stock market has not been the same since. Trading a pure
Darvas approach during that time probably would have made you lose money.
Were Nicolas Darvas still alive today, I am sure he would have made similar
adjustments to his style of trading to adapt to today's markets.

This form of momentum trading was based on an exhaustive study of the stock
market’s best performing stocks of the last 15 years. Many of the stocks did their
thing since the Internet stock bubble collapse. Whereas the Darvas system
traded one form of momentum stocks, this system trades many forms and does
not rely on optimal market conditions to work. There are also shorting strategies
we use on some of the high fliers that can capture significant short-term gains. If
anything, this is a “Darvas on steroids” trading system.

‐ 40 ‐ 

 
Q: Is this a complicated system, and will I be able to understand it and
implement it once I've gotten through the course?

A: This course was written for the layperson, and does not have complicated
criteria for stock selection. I had a distinct advantage when I first began
researching and writing this course - I did not have my hands tied by years of
using exotic trading mumbo-jumbo. I actually let the charts tell me how to trade
the stocks. This intensive study led me to many understandings about stock
trading in my journey to stock market success. Having a background as a real
estate investor instead of a stock trader, was probably a good thing, because I
didn't “know it all” and was open to new ideas and concepts that I otherwise
might not have been.

This course was written for the lay person and is easy to understand. Even
advanced traders will benefit tremendously from the knowledge that clearly and
concisely pulls together the concepts behind high-impact short and intermediate
term swing trading. The information on stock super-cycles is breakthrough
information, and can enable those versed in this style of trading to “surf some of
the stock market’s biggest waves” with grace.

I challenge any one of you advanced traders out there who has studied or used
other systems to try our B.E.W. trading system! And if it is not the most powerful,
consistent system you have ever found for identifying the market’s top potential
trading prospects - as well as for trading their cycles successfully - we stand
behind the product 100% with an unconditional money-back guarantee.

Q: Is your trading system best suited for swing traders, option traders
or investors?

A: Frankly, all of the above! The first thing you need to do if you want to become
a successful stock trader is to find the right stocks to trade. Our stock selection
system is second to none. For example, many of the optionable stocks that our
stock selection criteria pick up are heading into long-term cycles. These stocks
selected based on our momentum criteria are capable of BIG things. Several of
our top optionable stocks from the 2007 cycle were up 200-300%+ on the stock,
not even taking into account the options.

As far as whether this style of trading is appropriate for investors, it is

ESPECIALLY suited for investors who take a longer-term approach to trading.
Our new weekly Trading Pond service, depending on the overall market
‐ 41 ‐ 

 
conditions at the time, focuses primarily on stocks heading into long-term cycles.
These are the types of trades that, once placed and they get a head of steam,
are capable of allowing you to turn off your computer and check back in 6 months
with the stock up 100-200%+.

As far as swing trading, it is ideally suited for helping swing traders understand
the simplicity of using the correct stock cycle analysis as well as our “attention
windows” timing models to identify turning points for entering and exiting trades.
Combining several of our short-term swing trade entry and exit strategies - such
as stock cycles, wave analysis, candlestick analysis, moving averages, price
point and accumulation analysis - can help take your swing trading to a whole
new level.

‐ 42 ‐ 

 
 Announcing: The Bonsai Elite Wavetrader
Momentum Stock Trading Course

Finally! After many years of research and many months of development (not-to-mention
many painstaking days in front of my PC monitor recording hours and hours of video
footage), my long-awaited “Bonsai Elite Wavetrader” home study course is now ready to
be released to the public.

I am very appreciative of the opportunity I have had over the last many years to
discover some powerful stock trading strategies and to now share them with the
public. It contains everything I’ve learned and discovered over the past 15 years
analyzing the stock market’s biggest winners. Plus Daryl Thompson’s contribution
contains his insider secrets he’s learned over his 21 years of trading and investing
experience, including 15 years working first-hand with a legendary billionaire investor,
as well as another three years mentoring under a modern-day Japanese candlesticks
master.

‐ 43 ‐ 

 
We hold nothing back in this course. We lay bare all of our secrets, systems and
techniques we’ve learned over a combined 33 years of investing and trading experience.

The B.E.W. course breaks new ground with extensive analysis from every conceivable
angle of these mega-mover stocks. Why the wave trader analogy?

Due to the fact that it was based on a study of the stock market’s biggest waves. These
were stocks that made monster moves - and left enough clues in their wake – to show us
how to surf the next biggest waves. Clues that enabled us to surf stocks like ERS, which
soared 1,200% in one year from our original June 2005 Trading Pond post, or ASTI, up
400% in 10 months from our original post, or DRYS, up 333% in 6 months from our
Trading Pond post and many, many, more.

If you are tired of stock trading systems that require you to be glued to the computer -
surfing every piddly wave that comes along - and forcing you to become an expert at
technical analysis to analyze every little wiggle in a stock’s trend, then this trading course
may be just what the stock doctor ordered.

There is no other trading course out there like it. How do we know? Because between me
and my trading partner, we own a ton of them! Several years ago, I realized that although
there were a number of decent trading systems on the market, the best teacher would
probably be the stock chart itself. So I set out to learn how to trade stocks based on how
mega-mover stocks actually trend in price. I began my study with the biggest waves the
market had to offer, looking for consistent patterns of behavior, and fortunately there
were an abundance of these patterns.

The timing models I developed based on the commonality of these big winning stocks’
price action left no doubt I was on the right track. An understanding of the consistencies
with which these mega-movers operated within both their short and long-term cycles
allowed me and my subscribers to literally annihilate the market averages on trades we
posted in our Trading Pond report as a result of this study.

I’ve heard a lot of theories about stock price movement. I learned that some of them
work, some of them work sporadically and a lot of these trading theories don’t work at all
- or are so complicated that you quickly throw up your hands in frustration. There are no
more telling clues than the stock market's previous big winners for learning how to surf
the next biggest stock market wave. And we set out to prove it over the last few years in
our World-Class BottomSpringers trading club.

Some of the trades posted in the club were flat-out mind boggling. That time period was
very productive for the development of the trading system. We had many eyes on the

‐ 44 ‐ 

 
market and individual stocks, and unearthed a multitude of trading setups we might never
have had without such an intense focus during this period.

Many of the momentum plays the BMI indicator (as well as candlestick reversal signals)
found generated returns you would expect from far more risky options trading. These
proving grounds left no doubt we were on to something really big - a stock trading
system that could in fact, market conditions willing, isolate the top potential trading
prospects over and over and successfully surf them (without all the risk usually
associated with higher momentum stocks).

During this time period, we developed some of our most powerful shorter-term swing
plays. Due to the fact we were in the market every day and market cycles being what
they are, we noticed there are some especially good times for stock surfing, and some
other points in time on the trading calendar where surfing conditions are not so ideal.

These periods of malaise forced us to become even more adept at finding swing trade
opportunities when the protracted trends of the market’s movers were in a hibernation
mode. Some of the most powerful B.E.W. trades were developed during this period,
including the Cobra, Scorpion, and High ARM trades.

The Base Cobra quickly became one of my favorite short-term swing trades, especially
when the overall broad market was near to and affirming an area of support. In fact, a
recent Base Cobra trade was good for 200% in 2 days. That shows the power in a
momentum approach to trading. Identifying price extremes based on stock cycles can
lead to excellent short and long positions as prices “snap back” to their implied value
line.

Anyway, getting back to the trading course, my trading partner Daryl Thompson and I are
extremely happy with the content in the trading course. In it are some of the most
powerful strategies for isolating the market’s biggest movers and surfing these waves
with grace.

No course that we know of has done the heavy lifting and broken down the top
momentum trading prospects so accurately and completely. I can say without reservation
and I have quite a few professional traders who will back me up on this - that the Bonsai
Elite Wavetrader is the most powerful stock trading course for surfing the stock market’s
biggest waves that we have ever seen.

B.E.W. is not a 97-page manual with a lot of fluff. This is a comprehensive trading
course with over 880 pages - spread out over four manuals - plus 13 hours of video
describing each of the strategies in detail, as well as 100 pages of bonus material, not to
mention a ton of PCF’s (personal criteria and scan formulas).
‐ 45 ‐ 

 
This is one of the most powerful approaches to trading the markets and the unique breed
of momentum stocks that the Bonsai Elite Wavetrader style of trading thrives on.

Many traders know the cup and handle pattern, and it can be a somewhat reliable trading
pattern given decent broad market conditions. But fewer traders know the power of
filtering strategies based on common stock cycles. Using these strategies, you can fine
tune your selection of cup of handle patterns, narrowing them down only to those most
likely to succeed based on their momentum score, pattern quality and stock cycle criteria.
Indeed, these strategies can “shine a light” on the top momentum trading prospects!

While many other trading courses are hyper-focused on trading every little zig or zag of a
stock’s trend, requiring an inordinate amount of time monitoring them, the B.E.W.
trading course will show you how to wait for near-perfect entries based on stock timing
cycles. This allows you to avoid the constant in-and-out trading that not only requires a
lot of vigilance, but can also be counterproductive.

Writing this course material was a 3 year labor of love - with some really intense periods
of non-stop staring at the computer screen for 15+ hours a day. But don't get me wrong,
or think I’m complaining! You see, I love research - especially when it helps to create
positive changes for myself and others. I have been fortunate to have created that
opportunity over the last several years and in between taking some well-deserved
extended vacations – I will continue to do so for the rest of my life.

Well, rather than go on and on here (and not being able to do justice to the complete
contents of the course), we’ve prepared a long letter for you that explains everything.

Here’s a link to that letter…

www.bonsaielitewavetrader.com
I’ll now let some of our friends, subscribers, and other ecstatic new supporters share with
you their experience with these trades and with the course (from its initial limited
release)...

Real World PROOF!

Bonsai Elite Wavetrader Testimonials*
‐ 46 ‐ 

 
Is the Bonsai Elite Wavetrader course right for everyone? Probably not, actually. There
are lots of traders out there who enjoy the thrill and adrenalin rush of minute-by-minute,
frenetic trading, scalping an eighth of a point here and a quarter there.

If you’re that type of trader, then the B.E.W. course is not going to work for you.

And I suppose the only way you’ll truly ever know if the course will work for you is to
simply try it out. I’d like to make that process as simple as possible, so that’s why I offer
a money-back guarantee on the course.

But I do know this - if you’re like me, and want to spend your time, effort, and hard-
earned cash only on the “Big Kills” in the stock market, then there’s no doubt in my mind
at that point – the Bonsai Elite Wavetrader is the perfect course for you!

But don’t take my word for it. Here is PROOF! The “proof is in the pudding” as they
say, and the true worth of any trading system or course are extremely satisfied course
owners, with bona-fide RESULTS – the real-world, tangible results investors and traders
are seeing and profiting from through the use of these techniques and methods.

Here are just a few of the comments I’ve received from my students, clients, and
members of the Trading Pond and the world-class BottomSpringers Chat Club (and I’m
receiving more and more each day).

WARNING: There is a LOT of information here, but it’s valuable in and of itself in
giving you a clearer idea of what’s in store for you as a future student of my course…

The course shows very well the potential of trading high momentum stocks. It is truly
immense.

I am gratified for the scans you provide which I happen to use. This makes the course
much more useful, because finding the stocks that exhibit the necessary momentum
would otherwise be very time consuming. I look forward to your video on Shorting.
You have obviously put a lot of effort into producing these videos and they are an
excellent supplement to the written course material. Thanks very much.

Doug McKee
Tuscon, AZ

The Bonsai Elite Wavetrader course by Mr. Lemal should be in every trader's library, or
better yet on top of your desk. The amount of knowledge contained in the charting
manual alone is worth its weight in gold. I can honestly say, it would have taken me
‐ 47 ‐ 

 
years to discover this information, if I ever would have. Not only will this course save
you years from the painful trial and error learning process, but will show its worth in your
account statement.

Barry Taplin
Sumner, Iowa

Prior to studying the Bonsai Elite Wavetrader trading course, I was a novice at trading.
After only one training session I have a much greater level of understanding about how
stock prices fluctuate in consistent patterns.....

Verna Barksdale
Tucker, Georgia

WOW!! Never before have I studied a stock-trading course (and I’ve studied several)
where the author had actually done hard-core research and discovered new indicators
himself! I’ve been following Paul’s picks for weeks and they’re phenomenal. You won’t
find this information anywhere but in his Bonsai Elite Wavetrader trading course.

J. Lasik
Alpharetta, Georgia

The course is extremely thorough and follows a logical progression. And because I tend
to overcomplicate things, the simplified, clean charts and the reminders to look at the big
picture of stock's cycles is a turning point for me. It helps me see forests, where in the
past I would normally just have seen trees. Rather than nervously reacting to red down
bars, I'm starting to count the days, weeks, and months cycles along with waves and legs
and staying calm in the process. Great product!

Katherine Reuter
Prescott Arizona

Lemal's momentum course is very thorough and comprehensive. He obviously did a

huge amount of research in putting this course together----and that's just the written
material. The DVD's enhance the total package. I think the course should be re-
named "The Definitive Guide To Momentum Trading".
‐ 48 ‐ 

 
Alan Craig
Maple Shade, NJ

There are a lot of trading courses out there, if you Google “Stock Trading Courses” you
will get thousands of results. Most of the courses are a complete waste of money. On the
one hand, there are the “Trading Secret” courses (“Secret” is a great marketing word)
which consist of grossly overused indicators and the “magic formula” to turn them into
an ATM machine producing instant wealth. On the other hand, there are the outrageously
expensive courses which usually include ongoing monthly costs for access to
“proprietary” financial websites. And of course the $5,000 “red and green lights”
software we see on T.V. infomercials. Regardless of the various ways people learn how
to trade, the fact remains; 9 out of 10 people who try their hand at trading fail. Clearly, in
order to make it in this highly competitive game, one needs to be doing something that
those 9 losers are not! One needs an edge.

The B.E.W. course is a unique approach to the stock market. Paul Lemal has spent many
years studying the markets biggest winners and the clues they leave behind that tip their
hand as to the next big move. The material does require a commitment of time and effort
to learn but let’s face it, if success in the markets were as easy as most of the courses
suggest, we’d all be millionaires. Paul and his partner Daryl Thompson are not Wall
Street professionals, just ordinary “civilians” who have put together a powerful and
unique way to consistently profit from the stock market and the B.E.W. course teaches
exactly how they do that.

Richard Laird
New City, NY

I am a self-employed, fulltime trader and am following the market all day long. I tried to
think if there were one or two things about it which had helped me the most with the
Bonsai Elite Wavetrader system. This was hard to do as the whole course and the
continued follow-up with the trading ponds comprise a wonderfully integrated system. I
think the most important thing that the course itself did for me was to expand my
knowledge of chart reading and portfolio management to a much higher level. The
methodology is sound and the examples in the course and ongoing pond picks prove its
ability to help make any trader more successful. I wish I had known about the B.E.W.
course when I had started trading a few years back; I am sure my portfolio would be
much larger now. Considering how many stocks are out there and how many variables
are involved, it is a no-brainer to realize how beneficial it is to be part of such an
‐ 49 ‐ 

 
informed and supportive community of investors. You guys are a wealth of knowledge
and advice. Thanks for a great course and keep up the good work.

N. Parker
Velarde, NM

The momentum trading course is inspired! You have found a way to simplify a complex
system. We highly recommend your course to anyone interested in entering the stock
market game and intending to win.

Karen and Michael Wagner

Roswell, Georgia

The Surfer’s Guide Momentum Trading Course, along with some advice from the
brilliant author, paid for itself within a week.

A. Waldman
Annandale, New Jersey

I am now on my third reading of the manual and will probably read it again and again.
The charts used are within our recent economic cycle and are easy to pull up on any
charting program to study how the stocks behaved before and after the studies in the
manual. Many may think this course to be a very short term trading system because it is
a momentum course. Yes some trades will be, but true to Darvas the real winners will
last much longer. The simple logic of using money management and price behavior to
dictate your behavior helps take the emotion out of trades and is a great lesson. I think
your program would benefit a novice or a veteran trader.

Wesley D. Black
Austin, Texas

I almost got a double on a B.E.W. trade-TXCO-bought at $6.25 it reached a high of

$13.09 but I stayed a little long and ended up selling at $10.20. I made 63% in 5 months.
This sure beats my mutual fund...I thoroughly endorse this product.

Diane Mertz, MS, RHIA

Senior Healthcare Project Director
‐ 50 ‐ 

 
US Air Force
Marietta, GA

Paul's Bonsai Elite Wavetrader course is more than just manuals; it can be a stock trader's
means to riches. With reading, re-reading and experience, it can redefine the way you
look at charting and investing, both long term and short term. Paul takes what you may
think you already know and shows you how to translate it to more focused real trading
with much better risk/reward. He provides many concrete examples of how you can get
in on those high-flying stocks that you thought had already moved past you, to make
great gains, and how you can on many occasions anticipate the huge upswings before
they happen. This is not a "magic" course or "Holy Grail"; it is a way that by redefining
or refocusing what one looks for in a trade, anyone can build a solid foundation of
knowledge that can result in large profits.

Seymour Singer, Esq.

Miami, Florida

This email is to let you know that although I have not made it completely through all of
the disks yet, the video course has helped to turn the light on. I only had the reading
material a short time when you decided to do the videos. With the amount of information
there is to digest, I was planning on reading the books several more times. The video
course has eliminated that need. With all of the examples and explanations the light is
beginning to come on. I know that I will have to go over some of the discs more than
once but the examples and explanations make the study a lot easier.

Richard W. Stewart
Graham, Washington

I'm an old trader and have learned over the years to be one of the privileged who makes
money, and I can unequivocally state that Paul Lemal knows how to teach the best thing
in all of trading stocks, for quick, positive returns.

His printed and recorded instruction material, on the new videos on DVD’s, is easy to
understand and gives clear examples. I have had more success understanding and
applying his principles than with any other course or book I've ever purchased. I strongly
recommend these unique techniques to be successful in the market!

‐ 51 ‐ 

 
Juan Gozon
Caracas, Venezuela

I just wanted to send a note thanking you for all the great trading ideas that I have
benefited from in the last 6 months. I have never had so many explosive, positive stock
trades. Your system is a great way for anyone to make money in the market without a buy
and hold strategy. With trades like ERS I was able to capture an explosive short-term
move and liquidate at the right time. Thanks again.

Sean Patton
Rochester, NY

There is little new in technical analysis and many courses and e-books just repackage
each other. The BEW course material is new and unique. There is no doubt that after
reviewing the material and understanding the BMI indicator that any individual can easily
look for and identify high momentum stocks for large gains. The B.E.W. DVD’s were
extremely clear in presenting material that matched the manuals with numerous chart
examples re-enforcing all the concepts. This material will be the foundation for my future
stock trading and is a must have.

T. Sparlin
Fremont,CA

Shortly after receiving my copies of the B.E.W. Course materials, I was able to identify
the start of an ARM in CMGI and purchased shares on 3/8. I sold on 3/26 catching
almost the entire move for a gain of 47% - over 900% annualized. I have found the
material easy to follow and filled with excellent visual examples played out in historical
charts.

Joe Bunting
Washington, D.C.

Excellent materials, and as recommended, I read through Darvas's book first, and now,
have nearly completed the first 'Surfers Guide'. As you said, there's a lot of info there,
and it certainly warrants the double take on most of the concepts. Really, there's no way

‐ 52 ‐ 

 
to digest this mountain of useful info without reviewing & studying it. Breaking old
habit patterns will be tough though! : )

Mark Agliotta
West Haven, CT

Daryl, this morning you said, "YGE is gorgeous". I looked at the charts and quickly
bought 10 contracts of the November 30 calls. Cost $4.20. Was in the trade for one
hour and twenty minutes and sold at $4.70 for a nice $479.92 profit after all expenses.

Shortly thereafter at 12:14 pm I realized that I got out too soon and bought another 10
contracts of the November 30 calls at $5.00. Got out at 1:27 pm with a nice gain of
$379.91 after expenses, total gain on the one stock for the day $859.83.

As you know I just signed up for the program this morning. I didn't quite get it paid for
today but will, hopefully, tomorrow. Not too shabby. Have only traded four of
your reco’s so far, no losers yet……remember the other day when I subscribed to your
additional service and almost paid for it in a couple of days? Well I have been very busy
lately and only did one more of your trades (CROX) and placed a stop while I was gone
today. I got stopped out for a $230.04 profit. I am now $90 ahead and have my paid for
the program in just a few days. I'd say that return was pretty quick!

John Scheffler
Huntington Beach, CA

If you only buy ONE course, then the Bonsai Elite Wavetrader course is the one I
recommend you purchase. I did not learn about this one until just recently, had I known
about it 2 years ago, my account size would be many times what it is today! And I could
have saved hundreds & hundreds of dollars spent on so-so courses & often worthless
seminars, but that's ok, my account is growing faster than ever now :-). This course is
more easily understood by those who have been trading for awhile and are at least
familiar with charting. However, since it presents a way of viewing the market not
offered by any other course I have found, it is probably best to learn this methodology
from the beginning...before bad habits develop. This course will show you how to
uncover the mega-movers in stocks that are happening nearly every day if you just know
how to look for them. The course is absolutely invaluable.

Linda Paolicci
Annapolis, MD
‐ 53 ‐ 

 
I'm really excited about the system and this group. I told my husband I haven't been this
enthusiastic in my 20 years of trading/investing. I have found the Bonsai Elite
Wavetrader course to be an extremely innovative and straight-forward approach to
trading. Given the challenging market environment, I find being better equipped to
identify stock formations just prior to explosive moves to be invaluable. I'm very excited
about the entire package!”

Elaine Snyder
Oceanside, CA

Paul Lemal's trading concepts are more comprehensive than any others I've examined.
He takes a long-term approach to the analysis of stock charts, often including more than a
year of performance data to determine the quality and expected performance of an
individual stock. And, by doing so, he's identified repeatedly those rare instances where
the gains ultimately exceed 50% or 100% within weeks and, at times, days. Paul's ability
to readily recognize so many complex chart formations truly is incredible.

Dave Gotthardt
Fort Worth, TX

"I have been investing for 7 years now, and I have never had the types of returns that I
have had in the 6 months or so since reading "The Bonsai Elite Wavetrader" course. The
information contained in the books gives incredibly intelligent and fresh insight into the
driving forces behind high momentum stocks, and exactly what to look for to identify
them. My portfolio is currently up just over 120% in the last 6 months, and I could not
be happier with the B.E.W. products and services. By far the best investment I ever
made."

J. Lane
San Diego, California

From just trying to make about 3% a month, I am now trying to double every 6 months.
I still have a lot to learn about entries, but the B.E.W. course has taught me how and why
stocks move. Before I just didn't know what caused one stock to pop and another unable

‐ 54 ‐ 

 
to hold a breakout. Now I know. Although I have reviewed the material for only a few
months, I feel more confident about my trades and have a much better understanding
about why stocks do what they do.

Bryan Bryson
San Antonio, TX

I have 9 years of experience in trading stocks on a full-time basis and I wish I would have
had this course when I started. It would have sped up my learning curve dramatically. I
would highly recommend this course to not only the beginning trader, but to the more
experienced trader as well.

S. Rosenberger
St. Paul, Minnesota

I have been trading for 13 plus years and consider myself well versed in trading. "The
Bonsai Elite Wavetrader" course has taught me many new techniques that have made me
lots of money. The insights about stock behavior that Paul Lemal provides through his
extensive research on stock patterns are nothing short of amazing. Outstanding stuff!

Barton Frets
Rocklin, CA

I made 172% in PRW. Somehow I think that is going to pay for the B.E.W. course.

John Wahl

You’re amazing Paul in putting all this together. I used to subscribe to IBD in LA home
delivery from days when circulation was only 2000 -3000 papers a day, but could never
get the entry points to work. You make it so very clear on top of all the years of looking
at tech analysis charts. Thanks again.

Marvin Mochel
San Diego, CA

Thank you for the tremendous, ground-breaking information you have provided via the
Bonsai Elite Wavetrader course. I have been trading, with mixed success for about 15
‐ 55 ‐ 

 
years. In that time I have subscribed to countless newsletters, purchased dozens of books
and attended live seminars and training courses.

Upon receiving the “B.E.W.” course material I was immediately taken by the depth and
precision of your analysis. However, the material was non-technical and even a novice
investor would feel just as at home with your course as a seasoned veteran. This last point
is important, as too many investment and trading methodologies are highly technical.
After a couple of hours with the material it seems almost like a light bulb went on and I
said to myself, “duh, how did I not see this before.”

The impact that “B.E.W.” momentum trading course has made on my investing and
trading is phenomenal and I would like to personally thank you for sharing this important
information with individual investors. I wish you continued success.

Mark B. Moline
Park Ridge, IL

Unlike most systems, which are trend-following, swing, or breakout, the BEW strategy
follows a long term view of stocks with the potential for strong moves. Most momentum
systems jump in after a strong move, but BEW measures its entry trying to catch stocks at
lower prices, tilting the risk/reward potential in the trader’s favor. The potential seems
great, and I look forward to following your work in the coming weeks and months.

Victor Escobar
Calgary, Alberta-Canada

*No representation is being made that these results can or will be obtained in the future, or that
losses were not incurred subsequent to the date on which the testimonial was provided. There is
a substantial risk of loss associated with trading futures, forex, stocks, and options. Only risk
capital should be used.

Wow! I told you there was a lot of information there. And, truth be told, we’re getting
more and more of these types of accolades each and every day as the course becomes
more well-known.

I’m so convinced that you’ll benefit from my new course, that I offer a money-back
guarantee which will let you evaluate the entire course in the privacy of your own home.

Well, that’s it for your introduction to the Bonsai Elite Wavetrader trading system and its
principles. I hope you’ve enjoyed what you’ve read so far, and are intrigued to investigate
this amazing system even further.

‐ 56 ‐ 

 
Don’t forget to watch the video trade examples and check out the long letter I wrote for
you that exposes all the details of Bonsai Elite Wavetrader

Here’s the web page again:

www.bonsaielitewavetrader.com
Yours for better trading and investing,

Paul Lemal

Daryl Thompson

P.S. I know that such a brand-new, large body of information that’s contained in the
complete Bonsai Elite Wavetrader system can be intimidating for some people, and I can
empathize with that.

So that’s why we’ve created an 8-video online series called the “Introduction to the
Bonsai Elite Wavetrader Trading System.” While obviously not going into nearly the
amount of detail the complete course goes into, it will quickly “get you up to speed” on
what the system is all about, and you’ll be able to “hit the ground running” if and when
you go for the complete B.E.W. system.

If that’s something you might be interested in, check this page out here:

www.bonsaielitewavetrader.com/surf1

P.S.S. Finally, I realize that some of you may still have questions regarding the course.
We’ve compiled the most commonly asked questions, and I’ve attached those FAQ’s
(Frequently Asked Questions) as an addendum to this eBook below.

But if you don’t see the answers to your questions there, feel free to email us at
service@BonsaiEliteWavetrader.com.

Good trading!

‐ 57 ‐ 

 
Addendum - More FAQ’s About Bonsai Elite
Wavetrader…
Q: What about ongoing support? What can I expect as far as assistance
should I have questions about the course material?

A: The trading course and video material were written for the layman and is easy
to understand. Additionally, I will have ongoing weekly Trading Pond analysis for
subscribers, breaking down individually the top stocks on the radar at that given
point in time so that you can follow along and learn from the current momentum
stocks. Also, if you still need assistance, just e-mail me and I will answer
questions as soon as I am able. Many of these questions will be compiled and
distributed in a monthly video format for those interested.

Q: I would like to ask if the course is suitable for trading in markets

other than the US. If I can be assured that this is so, I will give serious
consideration to purchasing the course.

A: Although I haven’t personally traded any foreign accounts, I don’t see why that
wouldn’t be the case. It works on every American index including the pink sheet
stocks. Even thinly traded American stocks, which may be the case with many
foreign indexes and stocks.

This system can even be applied to other forms of investing like real estate
investing. The basic premise of this system is that you are looking for a “change
of character.”

What constitutes a “change of character” is what this course is all about. It is not
rocket science stuff….but it works. And unlike many other vendors who simply
talk about how good their system is, we’ve actually spent the last few years in the
World-Class Bottomspringers Trading Club proving it.

Q: This sounds like a busybody course, where I have to be constantly

looking for stocks. Is that true?

‐ 58 ‐ 

 
A: This form of stock trading can be as busy as you want to be. If you prefer a
laid-back style of momentum stock trading, there are a few types of trades you
may prefer. If you like a lot of action, there are several other types of trades. You
get to pick. The main thing I suggest is that you pick a style of trading that suits
your own personality, and not try to be a type of trader that you are not.

Q: As I am 70 and not as fast at pulling the trigger, can one auto-trade

recommendations coming from your approach?

Unfortunately this is not a black box system. But there are scans and PCF's
(personal criteria formulas) you can use to filter out these trades, but if you are
referring to a mechanistic approach where the computer generates the buy and
sell signals, this is not one of those types of systems.

Q: Is this stand-alone, completed disclosure method, i.e., do I need to

subscribe to anything else such as monthly membership?

A: Yes, it’s a stand-alone system. All you need to successfully trade the system
is in the courses and videos - although we have a subscription based weekly
Trading Pond report where we do the work for you, but that’s not necessary for
you to trade this system…it is an additional convenience we offer to subscribers.

Q: You talk about your stock trading club, is this part of the service I
would get if I buy the trading courses and or subscribe to the Trading
Pond service?

A: Unfortunately, we are not accepting any new trading club subscribers during
2008. This has been a separate service for more active traders, and due to the
fact that Daryl and I have both been in pretty much “burn-out” mode for the last
few years during the writing and research phase, we are going to spend a good
part of 2008 resting, re-grouping, vacationing, and for me personally moving out
West. We will have limited involvement in the trading club for much of this year.
This combined with the fact that we have been approached about managing a
hedge fund, we may be pretty busy with that late in the year if we work out all the
details.

Q: How many trades per week do you give with your weekly service
and do you have any plans to bring back your daily Trading Pond
service in the future?
‐ 59 ‐ 

 
A: The weekly Trading Pond service will generally post up to 3-4 trades per
week depending on market conditions. Although this may not seem like much
that is 150+ trades per year, and our goal is to isolate only the top potential
momentum plays at any given point in time. Remember, under-trading and being
highly selective about the stocks you choose more than over-trading leads to
stock market success.

As far as the daily Trading Pond service, due to our previously mentioned
schedule constraints during 2008, we have no plans to bring it back in the
immediate future.

The new weekly Trading Pond service posts up to 3-4 trades per week, with
specific entry and exit points based on our stock cycle analysis. Our goal with
this service is to identify those stocks heading into longer-term cycles. During
periods of market malaise there may be fewer trades posted, but when market
conditions are good our goal is to distill the 7,000 or so stocks in the market
down to the top trading prospects saving you significant time filtering for these
trades on your own.

Q: Does the method also work with higher price stocks as well? Or will
it only work for penny stocks?

A: It works especially well with higher priced stocks because the setups are easy
to spot. GOOG at $250 was one of our momentum plays - so was HANS at $100
and NYX near $58, TIE, etc.

Q: Is the manual downloadable, or do I have to wait for the shipping?

A: The 3 trading manuals, bonus charting manual, 8 videos, free reports and
bonuses will be shipped within 2-3 business days of your order. It is not a
download.

Q: How easy is it to find the set-ups per your manuals? Do I need

expensive charting packages to find these set-ups?

A: No, you don't need an expensive charting program. There are even free sites
you can use - but I don't believe these have search capabilities. Worden.com has
a $29 per month service that works excellent for this type of trading. I'm sure
there are others - but I haven't personally used those so I can't recommend them.

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Q: Why should I believe the types of trades you say are possible with
the Bonsai Elite Wavetrader system? I get a lot of stuff in the e-mail
and it all sounds great until you get the information and then doesn’t
pan out - why should I believe this is different?

A: First of all, let’s get something straight. There is no Holy Grail for trading. If
there was, everyone would use it and then it would stop working for sure. We
understand that people are “war-weary” with the constant battle from Internet
spam, product hype and just all around dishonest people marketing every
product imaginable. This course may or may not be for you - I don’t know what
your trading goals are.

But I will say that if you are truly interested in a system that works in the market
every day and is capable of identifying stocks that have the potential to go up 50-
100%+ in days, weeks or months, not years like many trading systems out there,
then I know of no better system for identifying these stocks.

My own personal background, besides being a real estate investor, was that for
many years I was in the contracting business - remodeling, painting and then
later renovating houses. I know about hard work and wanted value for every
dollar I spent, and looked suspiciously on anything that sounded too good to be
true. So I understand the skepticism. But as I said before, I don’t just talk about
how good this system is. My trading partner Daryl Thompson and I have spent
the last few years in our stock trading chat room with professional traders looking
over our shoulders, proving it worked.

Our stock selection system is second to none - with the majority of the stock
market’s top performing stocks of the last few years cycling through our Trading
Pond service. That doesn’t mean every stock we recommend goes straight up. If
the trade doesn’t show signs that it will do what we expect, then we move on the
next one. That’s why it’s called “Stock Surfing.” We go where the waves are. No
waves, no surf.

Q: Is this course breaking any new ground here? I see a lot of courses
out there and they all seem to be re-hashes of other courses. What
makes this one so different?

A: This is where we think we excel. It is definitely not a rehash of every course

you may have studied. Between Daryl Thompson and me we have invested tens
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of thousands of dollars into trading systems, and we know of no other trading
system out there like ours. There is no other trading system that has so
completely broken down the internal cycles of the stock market’s top performing
stocks like this one has. Our money-back guarantee backs it up. Daryl was so
impressed with the trading course when he first saw it that he became like the
Remington razor guy and wanted to “buy the company”. He didn’t have to. I was
so impressed by his stock trading calls that I invited him to joint venture with me
for the last few years in the Bottomspringers trading club to help refine, improve
and perfect the trading system.

The combination of the B.E.W. stock selection criteria with Daryl’s “candlesticks
on steroids” approach to stock trading took this style of trading, especially the
swing trading aspects of it, to a whole new level. Daryl swears that “It’s the last
trading course you will ever need.” I take a less simplistic approach to it and I’ll
say that it is a nice tool to have in your trading tool kit. If there was only one
trading system you could ever use, of course ours is the one I would recommend
- but there are many trading systems out there that are good and have value.
And, like the painter who uses a paint sprayer for the big areas and a paint brush
for cutting in the edges, you just have to decide what type of trader you want to
be. Then you can either choose several different tools to use (depending on what
market you are in) or only one tool that does it all.

I would say that if there was one type of trader this particular style of trading was
geared to more than the others, it would be the trader who is less interested in
day to day trading, and is more interested in finding the right stock to trade
through several weeks to 2-3 month plus cycles or longer, without constantly
checking on the stock. Someone who would like to trade the longer-term cycles
with some of the market’s top potential momentum plays.

To summarize, the primary difference I see is that many trading courses are
either heavily weighted towards short-term trading, scalping small percentages
here and there and requiring a much more extensive knowledge of technical
analysis. And others are too focused on fundamental analysis, without regards to
the current trading action of a particular stock. Our form of trading acknowledges
the role of fundamentals in choosing quality trades, yet we pay much more
attention (at least in the short-term) to the trading action of the stock.

If you have heard the saying “buy the rumor, sell the news,” this is no accident.
Smart money and insiders pay much closer attention to the internal company
fundamentals, their industry and broad market trends. So they usually have a
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head start on the general public when it comes to news that will positively affect
the company. By the time the news becomes public knowledge, many of these
investors sell into the mad rush to lock in their profits. This often leaves the
public “holding the bag” while the price slides back due to profit taking by the
smart money crowd.

This is all the more reason to observe the trading action to look for signs of
accumulation and become a “silent partner” with the smart money crowd. With
7,000 companies in the stock market, it is much easier to identify changing
fortunes in a company’s stock by looking at a snapshot of the company’s chart
vs. poring over extensive financial records.

Our system is uniquely designed to capture the big moves in the market. It is
based on a study of some of the stock market’s biggest movers and is evidenced
by the system’s ability to identify potentially explosive breakouts well in advance
of their moves.

Our simple and proprietary BMI indicator helps us harvest some of the best
performing stocks in the today's market. No, we don't catch every big breakout,
and we don’t always get out at the best price possible. But we dramatically put
the odds in our favor. If there is a big mover in the stock market, it may be on our
radar.

Hey, let’s face it. There is not any kind of “stock market college” out there where
they teach you how to trade stocks. You are more or less at the mercy of the
marketplace in sifting through gobs of information on trading systems. We spent
over two years tweaking and improving this system before we foisted it on the
masses. We proved it worked like gangbusters to a small group of professional
traders. Now we are expanding this opportunity to the public.

To summarize, without giving away the whole system, I can tell you that it is a
unique form of stock trading and has several basic premises. Using momentum
analysis, cycle analysis, pattern quality analysis, fundamentals and timing
models, this system is able to isolate some of the best potential stocks in the
market. These are stocks like TASR, HANS, ERS, IIIN, etc. all mega-movers that
show up on our screening filters based on how they fit the aforementioned
criteria.

Q: When you refer to stock market waves, are you referring to Elliot
Waves?
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A: For those of you who aren’t familiar with it, the Elliot Waves system is a
technical analysis tool based on mathematical ratios. No, I am not referring to
those kinds of waves. The kind of waves I am talking about are based on price
thrusts. There are a consistent number of waves that often form during a
breakout or pullback in a high momentum stock cycle, and understanding how
and where these waves set up can lead to near perfect trade entries and exits. 

www.bonsaielitewavetrader.com

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