Guy Cohen 
The Insider Edge 
How to Follow the Insiders for Windfall Profits

Bestselling trading author Guy Cohen introduces the OVI
indicator to stock trading

More fortunes are made from trading stocks than any other
financial instrument, and these windfalls are available to anyone
who has access to the right information.

Presenting the methods used by the best traders in the
market, The Insider Edge: How to Follow the Insiders
for Windfall Profits uses options transaction data to reveal
what ‘informed traders’ are doing, and how anyone can take
advantage of these techniques.

Whether the markets are choppy or trending, it always pays to
wait for a clear opportunity. Any good trader knows that they need
an Edge to excel, and this book demonstrates how the combination of
specific chart patterns, author Guy Cohen’s proprietary OVI
indicator, and a robust trading plan, when combined, will deliver
success.

In The Insider Edge, Guy Cohen reveals:

* How you can profit from options without having to trade or even
understand them!

* Why the smart money often gravitates to the options
markets.

* How options transactions can often reveal the direction of the
stock price.

* How you can trade using information typically reserved for the
pros.

* A trading plan the delivers maximum safety and windfall
profits.

* How to use his proprietary OVI indicator online for free, so
you can start to follow the insiders.

The author emphasises that The Insider Edge is for anyone
who wants to trade stocks. No options knowledge is required
to benefit from this book. His method involves observing what
the smart options traders are doing, and then following them.
This is what gives you The Insider Edge.

Table of Content

Preface vii

Acknowledgments xiii

Introduction 1

March 8, 2008 3

March 2008 5

March 2009 6

April 26, 2010 7

March 2011 8

Summer 2011 9

September 7, 2011 10

‘Informed Trading’ and the OVI 11

The Insider’s Rationale 12

Trading Breakouts 13

Chapter 1 The Most Popular Chart Patterns: Why Chart Patterns Are So Important 15

Price Bars 16

Support and Resistance 20

Trends 30

Flag Patterns and Consolidations 33

Head and Shoulders 43

Indicators 48

Learning Points 51

Chapter 2 The OVI: Guide to the Insiders: Introduction to the OVI 53

What Is the OVI? 59

When to Use the OVI and When Not to Use It 64

The OVI with Stocks 78

Learning Points 105

Chapter 3 Flags and Channel Breakouts in Detail: Focusing on the Patterns That Work Best with the OVI 109

Bull Flags 110

Bear Flags 118

Flags with a Strong OVI Signal 127

Channel Breakouts 128

Setting the First Profit Target 134

Learning Points 146

Chapter 4 The Trading Plan: The Complete Trading Plan 151

Order Types 153

The Trading Plan 155

Learning Points 214

Chapter 5 Putting It All Together 217

Summary of the OVI Trading Method 219

A Few More Examples 221

Action Steps 226

Summary of Tools for You to Use 239

Take the Next Step Now! 240

About the Author 241

Index 243

About the author

An innovator in financial trading, Guy Cohen is the creator and originator of the unique OVI Indicator, Flag Trader, and Option Easy, among other trading tools. Guy is also an established bestselling author, commentator, and entertaining speaker on trading and the financial markets.

Guy specializes in trading stocks and options, with his hallmark user-friendly approach and liberal use of illustrations. His published work is complemented by pioneering breakthroughs in the areas of trading and technical indicators, especially the OVI. With Guy’s market-tested innovations, you will find proven techniques to succeed, complemented by industry-leading customer service.

Guy earned an MBA in finance from Cass Business School, City University London.